Bharti AXA INSURANCE GLOSSARY Breach of Contract Breach of Contract A breach of contract is said to have occurred when a party fails to fulfil its obligations as agreed upon in a contract. There are four types of breaches that can happen: A minor breach of contract occurs when the infraction does not impact the fulfilment of other contractual obligations. A material breach of contract seriously impairs the completion of contract as a whole, and defeats the purpose of the agreement. A fundamental breach of contract is a material breach that allows the non-breaching party to terminate the contract and take legal recourse to seek damages. An anticipatory breach occurs when a party informs the other that it will not be fulfilling its contractual obligations. The other party can immediately claim a breach and pursue remedies. The supreme court of India has ruled that an insurer need not award benefits if the insured has breached the policy terms and the breach is so fundamental that it contributed to the loss event covered. For example, in a 2016 case the supreme court rules that the compensation cannot be denied despite the fact that the insured vehicle was carrying more passengers than the permitted capacity. This is because the accident was caused by negligent driving by a third party, and not because of the breach – and, therefore, the breach cannot be considered fundamental. In another case, the court ruled that the driver holding an invalid licence is not in itself a defence available to the insurer to avoid liability. In other words, for the insurance contract to be voided, the breach has to be found to have contributed to the cause of the accident. Request Call Back Category * - Select -CarTwo WheelerHealthTravelPersonal Accident Buy Renew Claim submit Related Posts Disclaimer : The information published on this website is for the public's reference only. Content of this information is to provide an overview of your Travel needs and should not be relied upon for personal, medical, legal or financial decisions and you should consult an appropriate professional for specific advice. Bharti AXA General Insurance Company Limited makes no representations about the suitability, reliability, timeliness, and accuracy of the information, travel, services, or any other items mentioned on this subject for any purpose whatsoever.