Werksmans Brief: The constitutionality of a time-limitation clause in a contract

Facts

Barkhuizen had insured his motor vehicle with Napier, a syndicate representing Lloyd’s Underwriters of London in South Africa. The vehicle was involved in an accident, and Barkhuizen timeously lodged a claim with Napier. Napier repudiated the claim. Two years later, Barkhuizen instituted action against Napier. Napier raised a special plea alleging that Napier had been released from liability because Barkhuizen had failed to serve summons within 90 days of being notified of the repudiation of his claim. The special plea was based on a clause in the contract (the ‘time-limitation clause’) which provided that:

‘(I)f we reject liability for any claim made under this policy we will be released from liability unless summons is served . . . within 90 days of repudiation…’

Click here to read more (PDF file 140kb)