An insurance company granted a policy insuring water trustees against loss arising from failure on the part of a contractor duly to complete the laying of certain water-pipes. The policy contained conditions declared to be conditions-precedent to the right of the water trustees to recover thereunder, and, inter alia, this – ‘The surety shall be notified in writing of any non-performance or non-observance on the part of the contractors of any of the stipulations or provisions contained in the said contract, and on their part to be performed and observed, which may involve a loss for which the surety is responsible hereunder.’
The contract for laying the water pipes provided for the work being begun on a particular date, that so much should be done each week, and that the whole should be completed within a defined time. The contractor had not begun by the date specified, nor for some months after, and after beginning continued to fall more and more into arrear. No notice of this was sent to the insurance company. When about half the work was done and sometime after the time for completion was passed the contractor became bankrupt. The water trustees took over the work and gave notice of his failure to the insurance company. In an action by the water trustees to recover the amount contained in the policy of insurance, held ( aff. judgment of the First Division) that the contractor’s delays were non-observances of the contract of which the insurance company was entitled to notice, that the giving notice was a condition-precedent to the right to recover, and therefore that the insurance company was freed
Judges:
The Lord Chancellor (Buckmaster), Lord Atkinson, Lord Shaw, Lord Parker, and Lord Sumner
Citations:
[1915] UKHL 106, 53 SLR 106
Links:
Jurisdiction:
Scotland
Contract
Updated: 26 April 2022; Ref: scu.620702