Clause 26

In any proceedings taken in any court in respect of any difference or dispute arising out of a contract of insurance connected with goods comprised in a hire-purchase agreement if it appears to the court that a failure by the insured or the hirer to observe or perform a term or condition of the contract of insurance may reasonably be excused on the ground that the insurer was not prejudiced by the failure, the court may, unless an order excusing the failure has already been made under subsection (2) of this section, order that the failure be excused.

Where a difference or dispute has arisen out of a contract of insurance connected with goods comprised in a hire-purchase agreement the insured or the hirer or any guarantor in respect of that hire-purchase agreement may, unless an order excusing the failure concerned has already been made under subsection (1) of this section, apply to the court for an order that the failure to observe or perform a term or condition of the contract of insurance be excused; and if it appears to the court that the failure may reasonably be excused on the ground that the insurer was not prejudiced by the failure, the court may order that the failure be excused.

Where an order of the nature referred to in subsections (1) and (2) of this section has been made under either of those subsections the rights and liabilities of all persons in respect of that contract of insurance shall be determined as if the failure, the subject of the order, had not occurred.