Insurance terminology explained in simple terms
Cardinal obligations are essential obligations of a contract that must be fulfilled in order to achieve the specified contractual objective. This also includes secondary obligations, the violation of which can lead to a contractual objective not being achieved.
Example: A typical cardinal obligation of a software developer is that she must deliver the object of the contract (the software) free of material and legal defects. If a third party owns copyrights to the software sold or licensed (or parts thereof), this software is not free from legal defects. The software developer has thus violated a cardinal obligation and can generally be made liable for the resulting damage according to the law of obligations.
Term: Cardinal Obligations
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