Hatton National Bank Limited v. Hithanarchchi and Another – sllr 2001 volume 1 page 252

In the case between Hithanarchchi and another (lessees/respondents) and Hatton National Bank Limited (the bank/appellant), the court addressed whether the appellant bank had a continuing obligation to insure a leased bus after the termination of the lease agreement due to default in payment. It was held that the bank’s duty to insure the bus was confined to the subsistence of the lease, and that obligation ceased upon lawful termination following the lessees’ default. The decision reaffirmed the principle that obligations under a contract, such as maintaining insurance, are governed by the express terms of the agreement and terminate when the agreement itself is lawfully ended. Reliance was placed on the lease agreement’s terms and the evidence of default and termination, emphasizing that