Rust v Abbey Life Assurance Co ltd: CA 1979

Delay in objection indicated assent to contract

The court was asked whether a binding contract had been concluded between an applicant for an investment in property bonds and the insurance company offering such bonds when, in response to an application form submitted by the applicant, accompanied by a cheque in the appropriate amount, the insurance company allocated units in the relevant fund to her and sent her a policy of insurance.
Held: A binding contract had been made in such circumstances. The failure by the proposed insured to reject the insurance policy offered to her for seven months, was enough to justify an inference that he had accepted the policy.
Brandon LJ said: ‘If I am wrong about that, however, it seems to me that the learned Deputy Judge’s decision should in the alternative be upheld on the second basis relied on by him. The plaintiff held the policy in her possession at the end of October 1973. She raised no objection to it of any kind until some seven months later. While it may well be that in many cases silence or inactivity is not evidence of acceptance, having regard to the facts of this case and the history of the transaction between the parties as previously set out, it seems to me to be an inevitable inference from the conduct of the plaintiff in doing and saying nothing for seven months that she accepted the policy as a valid contract between herself and the first defendant.’
Brandon LJ
[1979] 2 LLoyd’s Rep 334
England and Wales
Cited by:
CitedVitol Sa v Norelf Ltd HL 10-Jul-1996
(The Santa Clara) The seller was to deliver propane by a ship set to leave on a certain date. The market was falling. The buyer, when it was clear that the ship would be unable to leave on the day fixed, sent a telex to say that the contract was . .
CitedCooper v National Westminster Bank Plc QBD 7-Dec-2009
. .
CitedShaw v James Scott Builders and Company and Another SCS 26-May-2010
. .
CitedNew Hampshire Insurance Company and Others v MGN Ltd and Others ComC 6-Sep-1996
. .
CitedArts and Antiques Ltd v Richards and Others ComC 5-Nov-2013
The court was asked whether the findings of a private arbitration could be relied upon as between other parties in an abuse of process argument. . .

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Updated: 17 June 2021; Ref: scu.266199