Good Faith and Insurance Contracts
Modification of the duty of disclosure at placing
9.01 The duty to disclose material facts, whether it arises as a matter of law or contract, exists or is made whole by virtue of the contract which is entered into, and so the scope of the material facts to be revealed naturally may be defined or modified by the contract itself. For example, the policy may provide that the duty is discharged in specified instances1 or the policy may state that specific facts must have been disclosed.2 The parties may agree in their contract that the assured’s duty of disclosure may be enlarged,3 restricted4 or waived,5 or that the remedies for a non-disclosure or misrepresentation are varied from those available at common law or under a statute (such as by means of an innocent non-disclosure clause).6 Even in such cases of modification, the practice of the relevant market may assist
Page 278in defining the duty on the assured.7 Where the duty of disclosure is sought to be modified by the contract, it will require unambiguous language to achieve that result, the clause being construed against the party who benefits from the intended modification.8
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