SECTION 71

A statement in a policy, of a matter relating to the person or thing insured, or to the risk, as
a fact, is an express warranty thereof.

Statement relating to the person or thing insured, or to the risk must be as a fact not as an
opinion, or belief, to constitute an EXPRESS WARRANTY.

A statement in the policy which, from the very nature of the subject matter of the inquiry,
can only be an expression of an opinion is NOT a warranty of its truthfulness.

SECTION 72
A statement in a policy, which imparts that it is intended to do or not to do a thing which
materially affects the risk, is a warranty that such act or omission shall take place.

refers to a PROMISSORY WARRANTY

breach of promises or agreements as to future acts will NOT AVOID a policy UNLESS
the promises are material to the risk.

act or omission is material to the risk if it increases the risk, and under the law, ONLY
substantial increase of risk works forfeiture of the policy which is avoided for increase in
hazard.

SECTION 73
When, before the time arrives for the performance of a warranty relating to the future, a
loss injured against happens, or performance becomes unlawful at the place of the contract,
or impossible, the omission to fulfill the warranty does not avoid the policy.
General Rule: A violation of a warranty avoids a contract of insurance.
Exceptions: (Section 73)
1.) When loss occurs before time for performance
2.) When performance becomes unlawful.
3.) When performance becomes impossible.
-failure to comply with a promissory warranty may be due not only to legal impossibility
but also to physical impossibility.
WAIVER - an intentional relinquishment of a known right
- may be express or implied

As a rule, breach of warranty operates to discharge the insurer from liability UNLESS the
insurer is liable because of a waiver of the warranty or an estoppel.

The omission to fulfill a warranty or condition will likewise be excused where there is a
waiver on the part of the insurer.

Failure on the part of the insurer to assert a forfeiture upon breach of warranty or
condition, after knowledge thereof, amounts to a waiver or estoppel.

If waiver is to be implied from conduct, said conduct must be clearly indicative of a clear
intent of the insurer to waive his right under the policy.

Under Estoppel, the insurer is precluded, because some action or inaction on its part,
from relying on otherwise valid defense against the insured who has been induced to
enter into the contract by the insurers representation or conduct.

-the ground of estoppel is that it would be against equity and good conscience for the
insurer to assert such defense.
ESTOPPEL as distinguished from WAIVER
-In estoppel, the conduct of insurer prevents it from avoiding liability, while in waiver, the failure
of the insurer to assert defense prevents it from asserting that defense in the event of a claim filed
by the insurer.
-But whether it estoppel or waiver, the result is much the same.
-Actually, waiver is a type of estoppel.

QUESTION: What is the effect if the insurer fails to assert a forfeiture upon breach of
warranty or condition after knowledge thereof?