Abstract

Time of Inception of Contract

Article

In QBE Insurance (International) Ltd v Alliance Australia Insurance Ltd [2018] NZCA 239, the Court had to decide the commencement date of a policy which was to follow the termination of the policy of another insurer. The new policy’s Schedule was prepared at some time after the negotions between the insured’s broker andd the insurer, and the casualty intervened. The insurer argued that the cover incepted only when the Schedule was prepared, and there was some support for that in its terms.

The Court held that the Schedule was not part of the agreed contract, though it might have some use in construing it. The contract was complete when the broker and the insured agreed upon it, both intending that the it should incept on the termination of its predecessor. The production of the Schedule was merely the implementation of what had been concluded. This is an example of  the application of business practicality in the construction of the contract.