Section C-Case Study - Answer all questions (212 marks - 4 marks) John and Sara ran a gift and flower shop selling wide range of items. The shop was located in a famous shopping mall. The owners of the company took a Fire Insurance policy on the shop in the name of the company. Johan signed the insurance policy contract on behalf of the company. Under the disclosure clause of insurance law John gave all the information about the owners, company, risks involved and other business detail. However, he did not give one important information about himself. In the past he was found guilty of fraud from a company he worked for 10 years ago as a manager. A fire occurred on the premises of the shop and most of the shop was burned. The owners of the company lodged a claim of $10,000 but the insurance company refused to pay the money. The owners filed a case against insurance company claiming that since they have signed a contract therefore insurance is bound to pay the claim of $10,000. The lawyers of insurance company argue that since Johan did not disclose the information about his past record therefore the insurance contract in invalid. John's lawyers argue that his 10 year old record has got no relation with this case. 1. What do you understand by duty of disclosure? Do you think that this is breach of duty of disclosure in this case? 2. Do you think that Insurance Company has a legal right to refuse claim? And why