J.C. Durick Insurance v. Peter Andrus Law Case Essay

Facts

The defendant appealed an award to the plaintiff on an insurance premium dispute. The dispute was a result of changes made to the insurance cover policy, by the plaintiff without the consent of the defendant. The plaintiff had sent the policy renewal with changes which the defendant had refused, and as a result, failed to respond to the plaintiff.

The plaintiff subsequently charged the defendant premiums even though he had not responded, and therefore, the defendant failed to pay. The lower court ruled in favor of the plaintiff which lead to the appeal by the defendant who cited that there was no meeting of the mind thus the offer was not accepted. Therefore, the defendant had no contractual obligation to pay the plaintiff.

Issues

1. Was the lower court award to the plaintiff lawful?
2. Does the defendant have a contractual obligation to pay a premium to the plaintiff?
3. Are the changes made by the plaintiff in the insurance coverage contract, legally bidding?
4. Does the failure by the defendant to respond to the plaintiff constitute acceptance of changes in contractual terms?
5. Was there a meeting of the mind between the defendant and the plaintiff with respect to an increase in premium on renewal of insurance cover?

Holding and Rule (Daley)

1. No. The lower court award to the plaintiff was unlawful. The judgment was reversed since the defendant did not accept to renew the revised insurance policy.
2. No. The defendant has no contractual obligation to pay a premium to the plaintiff since there is no evidence of acceptance of the contract. Furthermore, the defendant’s silence can not be interpreted in a court of law as implying acceptance as claimed by the plaintiff.
3. No. The changes to the terms of the contract are not legally binding. First, the contract did not contain a provision for express renewal on the expiry date. As such the continuation of the contract after the expiry is subject to acceptance by the defendant of the offer made by the plaintiff on renewal. There is no evidence to indicate that the defendant accepted the terms of the renewal of the contract.
4. No. The failure by the defendant to respond to the plaintiff cannot be construed as acceptance in a court of law. The defendant had no obligation to speak on the expiry of the insurance contract.
5. NO. There was no meeting of the mind between the contracting parties. The plaintiff refused the defendant’s offer, as well as the defendant, rejected the plaintiff’s counter offer. The communication between the two parties does not entail acceptance of the offer.

Disposition

The defendant’s application is granted. The Judgment is reversed. The court decision was based on the rationale that an offeror in a contract cannot coerce the offeree to speak. Silence can only imply acceptance if there is an express duty to speak. Otherwise, in this case, there is no obligation to speak.

One of the principles of the law of contract states that parties are assumed to be in a bidding contract if there is evidence that the offeree receives valuable service with prior consent and knowledge. This is also lacking in this case. The court, therefore, found reasonable grounds to fault the lower court ruling. The award to the plaintiff lacked legal backing. The appeal court decision implied that the defendant had no contractual obligation to pay insurance premiums that was been sought by the plaintiff.