Chanakya National Law University,patna

Contract of
Uberrima fides

SUBMITTED TO SUBMITTED BY
Mrs Susmita ADITYA SAURAV
Law Of Torts ROLL NO.1506
SEMESTER.2nd

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 SESSION.2016-2021
Introduction
Uberrimae Fidei Contract is a legal agreement requiring the highest standard good faith.
"Uberrimae fidei" or "uberrima fides" is Latin for "utmost good faith." Insurance contracts
are the most common type of uberrimae fidei contract. Because the insurance company
agrees to share the risk of loss with the policyholder, it is imperative that the policyholder act
in good faith by fully disclosing all information that affects the insurance company's level of
risk. Full disclosure allows the insurer to protect itself by charging the policyholder a
premium that accurately reflects the level of risk it is undertaking or even refusing to issue a
policy if the risk is too high.

A higher duty is expected from parties to an insurance contract than from parties to most
other contracts in order to ensure the disclosure of all material facts so that the contract may
accurately reflect the actual risk being undertaken. The principles underlying this rule were
stated by Lord Mansfield in the leading and often quoted case of Carter v Boehm (1766).
Insurance is a contract of speculation... The special facts, upon which the contingent chance
is to be computed, lie most commonly in the knowledge of the insured only: the under-writer
trusts to his representation, and proceeds upon confidence that he does not keep back any
circumstances in his knowledge, to mislead the under-writer into a belief that the
circumstance does not exist... Good faith forbids either party by concealing what he privately
knows, to draw the other into a bargain from his ignorance of that fact, and his believing the
contrary.
Therefore, the insured must reveal the exact nature and potential of the risks that he transfers
to the insurer (which may, in turn, be sold onto a reinsurer), while at the same time the insurer
must make sure that the potential contract fits the needs of, and benefits, the insured.
Reinsurance contracts (between reinsurers and insurers/cedents) require the highest level of
utmost good faith, and such utmost good faith is considered the foundation of reinsurance,
which is an essential component of the modern insurance marketplace. In order to make
reinsurance affordable, a reinsurer cannot duplicate costly insurer underwriting and claim
handling costs, and must rely on an insurers absolute transparency and candor. In return, a
reinsurer must appropriately investigate and reimburse an insurers good faith claim
payments, following the fortunes of the cedent.

Research Methodology

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This project is based upon doctrinal method of research. This project has been done after a
thorough research based upon intrinsic and extrinsic aspects of the project.

Sources of Data:
The following secondary sources of data have been used in the project-
1. Articles.
2. Books
3. Journals
4. Websites

Whether Doctrinal or Non Doctrinal?

My research is a blend of doctrinal research. Doctrinal in the sense that i have collected
theoretical material from different sources such as text books and Internet resources.

Whether Primary or Secondary?

Now coming on to whether my research is primary or secondary. Our research is a totally

based on secondary material as it is totally based on Text books, articles and Internet
research (secondary source)

Aims & Objectives

The researcher intends to;
1.Know what is the need of uberimma fides contact in insurance contract.

Hypothesis

Tentative chapterization
1-Introduction

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2-Importance of uberimma fides contract
3-Cases
4-conclusion
Bibliography

Books.

Law of contract by r.k. bangia

Websites

http://manupatra.com/

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