About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1954 Ins. L.J. 151 (1954)
Forces Shaping the Insurance Contract

handle is hein.journals/inslj16 and id is 151 raw text is: Forces Shaping the Insurance Contract By FRIEDRICH KESSLER, Professor ol Law, Yale Law School The following six papers were presented at the University of Chicago Law School Conference on Insurance, January 15, 1954 N THE PREFACE of a well-known case- book on insurance which appeared 30 years ago we find a sentence with which I would like to open my report on the forces shaping the insurance contract: What do they know of the law of the insurance con- tract, the' author asks, who only the law of contract know.' There are, to be sure, still numerous cases which inform us that an insurance policy is no different from any other contract.' It owes its existence to the meeting of the minds of the contracting parties. Since it is a written document, the fundamental prin- ciple of the security of transactions and the integrity of contracts demands that, should it become the basis of litigation, a court of law must act on the agreement as it is. It cannot strike out or change any part so as 1o vary or contradict a statement in the written ag'recment. The function of a court is thus limited to the interpretation of its ambiguous terms only. ' The insured cannot, for instance, enforce his claim by testifying that he did not read the contract or that he did not understand the meaning of technical terms. Having signed the appli- cation or having accepted and retained the policy, he and, for that matter, the bene- ficiary are bound by statements and terms that it contains.' After all, in the language Woodruff, Selection of Cases on the Law of Insurance (2d Ed., 1924), p. 5, quoted by Pound, in Satz v.' Massachusetts Bonding c Insurance Company, 243 N. Y. 385, 153 N. E. 844, 846 (1926). I am indebted for this reference to Schultz, The Special Nature of the Insurance Contract: A Few Suggestions for Further Study, 15 Law and Contemporary Problems 376 (1950). Grateful acknowledgment is made to Thomas Aros, Yale Law School, second-year class, for his most discerning help.. -Drilling v. New York Life Insurance Com- pany, 234 N. Y. 234, 137 N. E. 314 (1922); Swen- tusky v. Prudential Insurance Company, 116 Conn. 526, 165 Atl. 686 (1933). The deplorable state of complexity and confusion which char- acterizes the law of insurance is in large meas- ure due to the mistake of ignoring the simple truth that an insurance policy is a contract. Ohio Farmers Insurance Company v. Cochran, 104 Ohio St. 427, 135 N. E. 537 (1922). 3 Barett v. Union Mutual Fire Insurance Com- pany, 7 Cush. (Mass.) 175 (1851); State ex rel. Conference on Insurance American Fire Insurance Company v. Ellison, 269 Mo. 410, 190 S. W. 879 (1916). 4 Bergholm v. Peoria Life Insurance Company, 284 U. S. 489 (1922); Vance on Insurance (An- derson Ed., 1951), p. 808. 5Ryan v. World Mutual Life Insurance Com- pany, 41 Conn. 168 (1874): Russo v. Metropoli- tan Life Insurance Company, 1 Life Cases 206, 125 Conn. 132, 3 Atil. (2d) 844 (1939); Dewees v. Manhattan Insurance Company, 35 N. J. L. 366 (1872): Spain, The Effect of the Failure of the Insured to Read His Policy, L. S. 1948 American Life Convention 109; Vance, cited at footnote 4, at pp. 257, 808: Anderson, What Constitutes the Policy Contract, in The Life Insurance Policy Contract (8th Ed., Krueger and Waggoner, 1953). A limitation upon the agent's authority contained in the policy only (and not in the application), although operative as to dealings subsequent to the delivery of the policy, has no retroactive effect. Bible v. John Hancock Mutual Life Insurance Company, 256 (Continued on following page)

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most