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Legal Needs
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| Dec 07, 2008 1:58 pm |
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re: re: re: re: Insurance Law |
| charuhasan
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All insurance agreements are contracts and they are subject to the provisions of Indian Contract Act. Whatever clauses you enter in the agreement they are subject to scrutiny of the Judiciary by application of the “law of contracts.”
Let us take for instance a sale agreement for rupees one hundred thousand by the buyer paying an advance of rupees seventy five thousand. If the buyer does not pay the balance in the appointed date the vendor can send a notice for non fulfillment of agreement and may sell to a third party. Now how much the buyer is liable to recover from the seller depends upon the loss incurred by the seller and the clause in the agreement that the buyer shall forfeit the entire advance may not be enforced. If the buyer goes to court to recover the advance the court will decide what the buyer should lose for non performance.
Now in the instant case, consider the value of work done the insurance company till the completion of agreement. Their liability arises only when the travel is completed and any claim is made. The insurance company has not failed to fulfill any part of the contract. If the insured makes any claim towards the premium paid the court could consider whether the forfeiture clause of the premium is unreasonable in which case the court would order refund. On the other hand if the insurance company had entered a clause that the premium is refundable in case of cancellation of ticket the insurer can claim for a refund.
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