A pattern recurs in almost every file in this line, and it is regular enough to deserve a mechanism rather than a remark. The piece that decides the outcome is almost never the policy: it is a condition report, a consignment agreement, a survey report, an acquisition declaration. What these documents have in common is that nobody drafted them as contractual pieces. That is no accident, it is a property of the line: the facts that decide, the state of the object, custody, value, ownership, are not observable at the time of the loss, so a document must have fixed them beforehand.
It remains to understand how a technical document acquires legal force, because there are three routes and they do not produce remotely the same consequences. Confusing them is the common error, and it is easy to commit because all three arrive in the same envelope, from the same surveyor or registrar, in the same format. Nothing in the document's appearance says which route it takes; only the policy wording says, and it says so elsewhere.
The first route is incorporation. The policy refers to the document, which then becomes part of the contract: an attached schedule of values, a survey report stated to form an integral part of the policy. The consequence is that its statements are contractual terms. An error in the document is an error in the contract, with the regime that governs contractual errors, and not a mere point of fact to be corrected. It is the most visible of the three, because it leaves a trace in the policy itself.
The second route is the condition. An accepted recommendation becomes a condition of the contract, sometimes a condition precedent to cover. It is the harshest route, because depending on the drafting and the applicable law a breach can defeat cover regardless of any causal link with the loss that occurred. It is also the route most often missed, precisely because the document looks technical: nobody rereads a survey report looking for which sentence became a condition, when that is exactly what should be done on receipt.
The third route is not strictly a route at all, and that is what makes it treacherous. The document forms no part of the contract and is a condition of nothing: it is merely the sole proof of a fact the contract makes decisive. A condition report predating the damage obliges nothing; it establishes the prior state, and nothing else can establish it. Its absence therefore constitutes no breach: it simply loses the argument. The financial consequence can be identical to that of an unmet condition, but the mechanism differs, and so does the remedy.
There is a simple test for sorting a document into the right route, and it fits in two questions. What happens if the document is WRONG, and what happens if it is MISSING? If it is wrong and that vitiates the contract, you are in incorporation. If it is missing and cover falls, you are in a condition. If it is missing and you merely lose the argument, you are in proof. Three regimes, three remedies, and one binder.
The practical consequence is an asymmetry worth seeing in order to allocate effort. The first two routes are negotiated at placement: one argues over what is incorporated, one argues over what is required rather than recommended, and a signature suffices to fix the result. The third cannot be negotiated at all, because no clause can create evidence: it is practised. The easiest of the three to secure is therefore the one that gets neglected, since it requires a habit where the others require a rereading. A collector who photographs and dates at every movement has settled the route their broker cannot settle for them.
A collection worth 5 million euros is insured. Three documents accompany the contract. The schedule of values is attached to the policy and stated to form an integral part of it; it contains a keying error, one work appearing at 80,000 euros instead of 800,000. The survey report requires, within six months, the replacement of a lock on the store, which the collector has not done. Finally, no condition report has ever been prepared for the works on display. A fire destroys three works and damages five, including the mis-keyed one. The collector, who filed everything in the same folder, does not understand why the insurer treats the three points differently.
The insurer treats them differently because they are three different mechanisms, and that is what the common folder conceals. The schedule error belongs to incorporation: the document forming an integral part of the policy, the 80,000 figure is a contractual term, and correcting it requires establishing a common mistake or a rectification, not producing a better estimate. The argument bears on the contract, not on the value of the work. The lock belongs to the condition route, and it is the gravest point although the cheapest to have handled: depending on the drafting and the applicable law, non-performance can be raised even though the fire has nothing to do with a lock, and it is precisely the absence of a causal link that surprises. The missing condition reports belong to neither: they breach nothing, they merely deprive the collector of the means to establish the prior state of the five damaged works, therefore to quantify depreciation. The financial result looks like a sanction; the mechanism is not one. The test that would have sorted the three pieces on receipt fits in two questions asked document by document: what happens if it is wrong, what happens if it is missing. The collector had the means to handle all three, and handled none, for want of seeing that a single folder held three natures of document.
- 01Three routes turn a technical document into a deciding piece: incorporation, condition, and sole proof of a fact the contract makes decisive.
- 02The test fits in two questions per document: what happens if it is wrong, what happens if it is missing.
- 03The condition route is the harshest and the most often missed, breach being arguable with no causal link to the loss that occurred.
- 04The absence of an evidential document breaches nothing: it loses the argument, which costs the same and is argued differently.
- 05The first two routes are negotiated at placement, the third cannot be negotiated and is practised: the easiest to secure and the most neglected.