An honorable engagement clause is a provision commonly found in reinsurance contracts. It allows arbitrators to interpret the agreement in a way that aligns with its overall purpose, rather than strictly adhering to legal rules or overly technical language. This flexibility is intended to ensure that the resolution of disputes reflects the intentions of the parties involved.
This clause is primarily used in the context of arbitration, particularly within the realm of reinsurance and insurance contracts. It provides a framework for arbitrators to make decisions that are fair and reasonable, based on the spirit of the agreement rather than its letter. Users may encounter this clause when dealing with disputes in civil law, particularly in contracts involving insurance and reinsurance. Tools like US Legal Forms can assist users in drafting or understanding such agreements.
Here are a couple of examples of abatement:
For instance, if two insurance companies enter into a reinsurance agreement with an honorable engagement clause, and a dispute arises regarding the interpretation of coverage, the arbitrators can consider the intent behind the contract rather than just the specific wording. This allows for a more equitable resolution. (hypothetical example)
| Term | Description |
|---|---|
| Arbitration Clause | A general provision that outlines how disputes will be resolved through arbitration, without the specific flexibility of an honorable engagement clause. |
| Discretionary Clause | A clause that allows one party to make decisions at their discretion, which may not necessarily align with the intent of both parties. |
If you find yourself involved in a dispute that includes an honorable engagement clause, consider reviewing the contract closely to understand its intent. You may benefit from consulting with a legal professional who can guide you through the arbitration process. Additionally, using US Legal Forms can help you find templates or resources to manage your legal documents effectively.
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It is a provision in a reinsurance contract that allows arbitrators to interpret the agreement based on its overall purpose.