International Insurance law Essay Example | Topics and Well Written Essays - 4000 words

International Insurance law - Essay Example The specific principle has been related mostly to the insurance law. The introduction of the above principle was considered as a measure for increasing the validity of marine contracts, a target that has been achieved but not fully. The examination of the principles’ aspects led to the assumption that the specific principle has led to the introduction of a series of rules; these rules are critically presented in this paper; appropriate literature and case law have been used in order so show the actual characteristics of the principle of good faith and its implications for the marine insurance contracts, to which the principle of utmost good faith is mostly related. It is concluded that the principle of utmost good faith has played a key role in the increase of validity of marine insurance contracts, at least for the side of insured. The weakness of the principle to provide a clear plan of action when a violation has occurred in regard to one or more terms of the contract invol ved is clear. The efforts that the Law Commission developed recently in regard to the protection of consumers in the particular field, could help to control the violations in marine insurance contracts – which are critical for the entire market – and to improve the performance of the principle of utmost good faith, as an element of the relevant agreements. 2. Utmost good faith in the English law 2.1 The context of the principle of utmost good faith The principle of utmost good faith has been derived from the principle of good faith – a common element of contracts. For this reason, in order to understand the elements and the rules of the principle of utmost good faith it would be necessary to refer primarily to the framework of the principle of good faith – as used in the common law. The principle of good faith can be characterized as an indispensable element of contracts. The above principle has been recognized as a valuable criterion for deciding on the validity of a contract – especially in cases where the intention of the parties involved is not easily identified.1 In the Scots law, the principle of good faith, or else the ‘bonae fidei’ is a prerequisite for all contracts,2 even if opposite views have been periodically developed.3 Theorists and researchers have used similar approaches in order to describe good faith. In accordance with the most common view, the good faith can be characterized as ‘acting on the assumption of honest dealing’4. The principle of good faith is not accepted as a general principle; it is rather used in specific types of contracts, like ‘the insurance and employment contracts’;5 Conflicts have been often developed regarding the potential value of the principle of good faith for contracts. In Scotland, the most recent trends, lead to the limitation of the necessity of good faith for contracts; however, there are opposite views supporting the value of good fait h in contracts. The supporters of good faith in Scotland refer to the need for continuation of civilian traditions, as an argument for promoting the use of good faith in contracts.6 It should be noted that the principle of good faith is not strongly supported in the context of the common law; on the contrary, in the civil law, emphasis is given on the use of the principle