parties have expressly provided that the insurer will be liable to bear the risk of loss. In Associated Japanese Bank v Crédit du Nord SA, the facts and the decision insofar as it relates to the issue of mistake are considered above. However, the ratio in this case is based on the issue of construction of the contract: Associated Japanese Bank v Crédit du Nord SA [1988] 3 All ER 902, p 908

doi:10.4324/9781843141518-129

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ABSTRACT

The first question to be considered is whether the guarantee was expressly made subject to a condition precedent that the four machines existed. The factual matrix, which is relevant to this question of construction, is that both parties, the creditor and the guarantor, were induced to commit themselves by information supplied by the lease brokers employed by Mr Bennett. That information included the statement, which was made expressly or by necessary implication, that the four machines existed. And it matters not that AJB thought that Mr Bennett owned the machines, while CDN thought that AJB owned the machines. The fact is that both parties were informed, and believed, that the machines existed. Against that contextual scene, CDN provided a guarantee to AJB: ‘In consideration of your leasing four Textile Compression Packaging machines to British Consolidated Engineering Company ... pursuant to a Leasing Contract dated 29 February 1984 ...’