Howard v. Federal Crop Ins. Corp. 540 F.2d 695 (4th Cir. 1976)
The Howards grew tobacco and insured it with Federal crop insurance. Their crop was damaged in a storm and they claimed to have lost $35k. Howard filed a claim with the FCIC, but before the adjuster arrived, Howard plowed under the fields so that they could plant rye to cover and preserve the soil. o There was a clause in the contract that tobacco stalks shall not be destroyed until inspected or coverage will be forfeited. o This type of provision is a called a condition. The adjuster denied the claim on the basis that Howard had violated a condition in their insurance policy that said that no stalks may be destroyed until they are inspected by the insurer. Howard sued to recover their claim. The Trial Court granted summary judgment for FCIC, Howard appealed. The Appellate Court reversed the decision and remanded the case for trial. o The Appellate Court found that plowing under the stalks does not, in itself, operate to forfeit insurance coverage under this policy. This was not a condition, since there were other ways for FCIC to assure that the crop had actually been damaged. Provisions that are not conditions are promises (which is not the same as a naked promise though). Breaching a promise is indeed a breach of a contract, but it does not excuse performance of the other party. The other party still must perform, although they can sue for damages due to the breach. In this case, FCIC could claim that they had to do a special analysis to determine what the damages were, and that analysis cost more money than a visual
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inspection, therefore, they should be able to recover that money. When a provision in a contract is a condition, then breaching that provision excuses the other party from performance of their end of the contract.