Cite as: 526 U. S. 358 (1999)
Opinion of the Court
notice-prejudice rule is an application of that maxim. But it is an application of a special order, a rule mandatory for insurance contracts, not a principle a court may pliably employ when the circumstances so warrant. Tellingly, UNUM has identified no California authority outside the insurance-specific notice-prejudice context indicating that as a matter of law, failure to abide by a contractual time condition does not work a forfeiture absent prejudice. Outside the notice-prejudice context, the burden of justifying a departure from a contract's written terms generally rests with the party seeking the departure. See, e. g., American Bankers Mortgage Corp. v. Federal Home Loan Mortgage Corp., 75 F. 3d 1401, 1413 (CA9 1996); CQL Original Products, Inc. v. National Hockey League Players' Assn., 39 Cal. App. 4th 1347, 1357-1358, n. 6, 46 Cal. Rptr. 2d 412, 418, n. 6 (4th Dist. 1995). In short, the notice-prejudice rule is distinctive most notably because it is a rule firmly applied to insurance contracts, not a general principle guiding a court's discretion in a range of matters.4
and relied in part on the water supplier's fault in inducing the late payment. See id., at 144-145, 69 P. 2d, at 853; cf. Restatement (Second) of Contracts § 229, Comment c, Reporter's Note (1979) (courts are likely to excuse obligor's failure strictly to adhere to a performance timetable where obligee has induced the failure).
These decisions support the uncontested propositions that the law disfavors forfeitures and that in case-specific circumstances California courts will excuse the breach of a time or notice provision in order to avoid an inequitable forfeiture. None of the decisions even remotely suggests that failures to comply with contractual notice periods are excused as a matter of law absent prejudice; none, therefore, suggests that the notice-prejudice rule is merely a routine application of a general antiforfeiture principle.
4 UNUM features § 229 of the Restatement (Second) of Contracts (1979), and urges that the notice-prejudice rule fits within its compass. Section 229 provides that "[t]o the extent that the non-occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange." The notice-prejudice rule, however, is mandatory rather than permissive; it requires California courts to excuse a failure to
371
Page: Index Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: October 4, 2007