A warranty exclusion clause in an insurance contract can be contested, unlike the warranty limitation clause. The legal consequences are not the same.
Only the warranty exclusion clause must obey strict rules to be properly understood by the insured and it alone is likely to be abusive, according to a decision of the Court of Cassation delivered on September 27.
This ruling rejects the objections of an insured who considered abusive and unclear the clause which did not guarantee the chances of his credit only until the day of his retirement or until his 65th birthday.
Exclusion clause and limit warranty clause
Having been placed on total disability, then retired, he was unhappy because the insurer had ceased, on the day of retirement, to cover the chances of his loan.
If the contract provided for the termination of the guarantee these datesthe clause in question was not formal and limited as required by the Court of Cassation for any warranty exclusion clause, he argued, and it is a unfair clause because it reflects a significant imbalance between the rights of the two parties, insurer and insured.
But this reasoning is based on confusion, observed the appeal judges, approved without further explanation by the Court of Cassation.
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The clause which sets the limits of the guarantee is not an exclusion clause guarantee which should be formal and limited and which would be likely to be abusive. It indicates when the guarantee will end and not when it will be excluded. It is therefore a clause which concerns the definition of the contract itself, which sets the limits of the guarantee over time, which defines the main object of the contract and, as such, it cannot be abusive.
The insured was therefore definitively dismissed his claims.
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