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Roberts v. Express Courier Services

1.1 Aim of the report

To assist the judge in deciding whether to uphold or override the original decision

1. Method

Order Custom Essay on Exclusion clauses in contract law

- Library

- Precedent cases

- Internet

1. Background information

A contract is an agreement between two or more parties that creates legal rights and obligations, which the law will enforce. If three essential elements are present, a binding agreement or valid contract will be created.

These are

1. Agreement, which is made up of offer and acceptance;

. Intention to create legal relations;

. Consideration.

In some cases, exclusion clauses are written into contract because one party wants to reduce or remove their liability if something goes wrong.

Courts tend to be hard on parties to the contract trying to hide behind their exclusion clause. The courts will not allow an exclusion clause if

1. Reasonable notice was not given,

. There was a breach of contract,

. There was misrepresentation,

4. The clause is carelessly worded-will not cover the action that caused the

damage,

5. The party wanting to hide behind exclusion clause does a breach that is

"outside the four corners of the contract",

6. The problem might be because of negligence.

1.4. Glossary

appeal a formal request by a party to review, re-hear or reconsider the decision of a lower court.

appellant a person who brings an appeal.

bailee a person who is in possession of goods.

damages (also called compensation) a court-awarded sum of money to a party in relation to compensate for loss or damage caused by another person.

defence a document filled in a court registry in a civil case outlining the facts on which a defendant relies in opposing the plaintiff's claim.

defendant a person against whom a court action is brought. Sometimes it used to refer to the accused in a criminal matter.

plaintiff a party who commences the court action.

respondent a person against whom an appeal or application is brought.

.1 Facts of the Case

Mr. Roberts hired Express Courier Services to transport his goods, which were urgently needed by customers in other states. Mr. Roberts phoned to book the service and he was assured that the delivery service was non-stop door-to-door. When the driver collected Mr. Roberts' goods, he issued an invoice to Mr. Roberts, which Mr. Roberts did not read. Several clauses written on the back of the invoice claimed to exempt Express Courier Services from liability for any loss or damage to the goods whilst in transit.

Because it was Christmas time and Express Courier Services was extremely busy, they had hired a subcontractor to transport Mr. Roberts' goods. Because Express Courier Services' Depot was shut, the subcontractor stored the goods overnight in his garage. During the night, his garage burned down and Mr. Roberts' goods were destroyed. Mr. Roberts sought legal advice.

. Legal Issues

• Can Express Courier Services hide behind the exclusion clauses?

• Was there a breach of contract?

• Was there a misrepresentation of the terms of the contract?

• Does the subcontractor liable for the loss of the goods?

. Sources

Contract Law is based on the use of precedent cases such as

Thomas National Transport (Melbourne) Pty. Ltd. v. May & Baker (Australia) Pty. Ltd. (166) 115 CLR 5.

Bontex Knitting Works Ltd. v. St. Johns Garage (14) A11 ER 60.

Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. (15) AC 576, at p. 588.

Hain Steamship Company Ltd. v. Tate & Lyle Ltd. (16) A11 ER 57.

.4 Application Of Legal Principles

The appellant must prove that they can use the exclusion clause in the contractual statements to protect themselves, whereas the respondent must prove that the cause of the damage was of that goes to the root of the contract.

Prior to Roberts v. Express Courier Service, the contract law is established in the precedent case Thomas National Transport (Melbourne) Pty. Ltd. v. May & Baker (Australia) Pty. Ltd. (166) 115 CLR 5.

The majority of the judges, Barwick C.J., McTiernan, Taylor and Owen JJ, of this case found that TNT impliedly undertook to take all reasonable care of the goods. Nothing shows that the contract permitted a servant or agent of TNT to take goods home overnight. That was inconsistent with TNT's primary obligation. It was implicit that the goods would go to the depot. This is unaffected by the clause in the contract giving TNT a discretion as to the 'method' of carriage. A breach of contract like this, where what happened was neither authorised nor permitted by the contract is outside 'the four corners of the contract'; it stops parties using their exclusion clause to remove themselves from liability. Referring to the decision made by the Judicial Committee in Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. (15) AC 576, at p 588, Barwick C.J. stated, "The effect of this conclusion is, of course, that T.N.T. cannot protect itself by seeking to rely upon the exemption clauses…"

Judge Windeyer, however, found in his finding that there was no express obligation for TNT to take goods to the depot. This is said to be implied from TNT's working practices, but at best for May & Baker it can only be said that the contract was for goods to be handled by TNT according to their customary methods. That does not help May & Baker, because on the evidence TNT's customary methods included sub-contractors like Pay keeping goods overnight.

Express Courier Service breached the contract and it is outside 'the four corners of the contract'; however, as an executive who often transport goods, Mr. Roberts should have known better that in some cases where the depot is closed, the merchandise might be stored in the subcontractor's garage.

Misrepresentation of the term of the contract occurred when Mr. Roberts expected the goods to arrive in other states from where it was picked-up as soon as possible. As he was assured by Express Courier Service on the phone when he booked the service that the delivery service was non-stop door-to-door; without mentioning the possibility of storing the merchandise in subcontractor's garage. Appellant could not rely on the exclusion clause because the subcontractor innocently misrepresented the nature of the exclusion clause by storing the merchandise in his garage.

Defences

In the case of T.N.T v. May & Baker, TNT tried to use the defence that the subcontractor, Pay, was responsible for the damages. According to Barwick C.J., the respondent had no contract with Pay. The situation was self-induced in that Pay continued to pick-up other goods when he should have know that in doing so, he would be late in delivering respondent's goods to TNT's depot. In Hain Steamship Company Ltd. v. Tate & Lyle Ltd. (16) A11 ER 57 Lord Wright said (16) A11 ER, at pp 607, 608, "An unjustified deviation is a fundamental breach of a contract of affreightment. Owing to the peculiar…"

A common carrier by land is deemed to contract to carry by his customary route if no route be expressly stipulated. An illustration is Bontex Knitting Works Ltd. v. St. Johns Garage (14) A11 ER 60; aff'd (144) 1 A11 ER 81 The goods were stolen from a van when the driver left it unattended for an hour and went to lunch. An exemption clause did not avail the defendants because the contract had expressly provided for the delivery of the goods "forthwith and immediately". Lord Wilberforce, in Suisse Atlantique Societe case said "The decision may be justified on the basis that there was a breach…". His ratio then used as the ground for the judges' decisions in the Bontex Knitting Works Case (14) A11 ER 60; (144) 1 A11 ER 81, Scott L.J. saying that there had been "a radical departure from the terms of the contract". That there was a "breach of an express agreement for immediate delivery".

The second situation, though, when he found the goods were burned in his garage at 5.40 p.m. was not self-induced; the onus of proof was on him to show that he took proper care of the goods. However, there is no evidence that he was careless, and he had no reason to foresee a fire. Therefore, the subcontractor's liability would be as a bailee of the goods, the same as that of Pay's in T.N.T v. May & Baker (166). The subcontractor in Express Courier Services is not liable, and Express Courier Services must pay the damages.

.0 Conclusion

The court would find for the Appellant as Express Courier Service has breached the contract. For the subcontractor, the court would find that his liability is as a bailee of the goods. He would not get any compensation from Express Courier Service for the loss of his truck; nevertheless, he does not have the responsibility to compensate Mr Roberts as he had no contract with Mr Roberts, and he had no reason to foresee a fire. However, Mr. Roberts contributed to his own loss by not reading the exclusion clauses written on the back of the invoice. Therefore, he is 0% to be blame, and damages, less 0%, would be awarded in the form of compensatory damages in the form of general damages for loss of merchandise and suffering.

4.0 Recommendation

TNT already has greater bargaining power than May & Baker, using the exclusion power would increase their bargaining power even more. When signing the contract, May & Baker intended their goods to be arrived at the consignee within the time in the contract, not stored overnight in Pay's garage. Examining the nature of dispute in Thomas National Transport (Melbourne) Pty. Ltd. v. May & Baker (Australia) Pty. Ltd. (166), the judges' decision, that parties to a contract cannot hide behind exclusion clause if they breached the term of the contract, has made contract law more fair. Therefore, TNT v. May & Baker should be used as a precedent case for new cases with similar facts.

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