The interpretation of insurance contracts in South African and English law

Abstract

The principles relevant to contract interpretation concerning South African law experienced substantial development. Although a contract of insurance is subject to the general law of contract, the insurance industry in South Africa has become highly regulated, resulting in additional duties and obligations enforced against insurers. Conversely, contracts are not governed by statute but by the common law. South African common law is primarily based on Roman Dutch law, but South African law has also been significantly influenced by English law, especially in areas such as procedure, evidence, company law, and insurance. To this day, English law decisions are persuasive to the South African courts, and the principles of the English law of insurance profoundly influence South African insurance law. This research considers the fundamental principles of interpreting a commercial contract in South Africa, how an insurance agreement will be interpreted under South African law, and the differences and similarities between interpreting a commercial contract and a contract of insurance. Since South African common law has been influenced by English law, this study also considers the position regarding interpreting an insurance agreement under English law and the differences and similarities between interpreting an insurance agreement under South African law and English law.