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Exclusion of Liability for Negligence

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Law and Sea.
Carriage of Goods by Sea

There are two main types of contract which are in wide use when we speak about transportation of goods by sea: a charterparty contract and a bill of lading contract. Speaking of bill of lading contract, however, one shall bear in mind that in some cases the bill of lading can be no more than a receipt for goods loaded on board, in some it may serve as an evidence to the charterparty contract and, finally, it imposes contractual obligations for safe custody of the cargo on the carrier before the person taking delivery of the goods.

Carrier of Goods, Liability of
Last updated: 21-Jun-2015

Per Holt CJ in Coggs v Bernard (1703) 2 Ld. Raym 909:

As to the fifth sort of bailment, viz., a delivery to carry or otherwise manage, for a reward to be paid to the bailee, those cases are of two sorts; either a delivery to one that exercises a public employment, or a delivery to a private person. First, if it be to a person of the first sort, and he is to have a reward, he is bound to answer for the goods at all events. And this is the case of the common carrier, common hoyman, master of a ship, &c.; which case of master of a ship was first adjudged, 26 Car. 2, in the case of Mors v. Slew, Raym. 220. 1 Vent, 190, 233. The law charges this person thus entrusted to carry goods, against all events, but acts of God, and of the enemies of the king. For though the force be never so great, as if an irresistible multitude of people should rob him, nevertheless he is chargeable. And this is a politic establishment, contrived by the policy of the law, for the safety of all persons, the necessity of whose affairs oblige them to trust these sort of persons, that they may be safe in their ways of dealing; for else these carriers might have an opportunity of undoing all persons that had any dealings with them, by combining with thieves, &c, and yet doing it in such a clandestine manner as would not be possible to be discovered. And this is the reason the law is founded upon in that point.

Per Mansfield CJ in Powell v Layton, 2 NR 365:

The word duty is introduced into this declaration; but let us see what is meant by the defendant’s duty. How did he undertake any duty, except by his agreement to carry and deliver the goods? The duty of a servant, and the duty of an officer, I understand, but the duty of a carrier I do not understand, otherwise than as that duty arises out of his contract.

Paterson Steamships Ltd v Canadian Co-operative Wheat Producers Ltd [1934] A.C. 538 per Lord Wright at 544-545

It will therefore be convenient here to state in very summary form the simplest principles which determine the obligations attaching to a carrier of goods by sea or water. At common law, he was called an insurer, that is he was absolutely responsible for delivering in like order and condition at the destination the goods bailed to him for carriage. He could avoid liability for loss or damage only by showing that the loss was due to the act of God and the King’s enemies. But it became the practice for the carrier to stipulate that for loss due to various specified contingencies or perils he should not be liable: the list of these specific excepted perils grew as time went on. That practice, however, brought into view two separate aspects of the sea carrier’s duty which it had not been material to consider when his obligation to deliver was treated as absolute. It was recognized that his overriding obligations might be analysed into special duty to exercise due care and skill in relation to the carriage of the goods and a special duty to furnish a ship that was fit for the adventure at its inception. These have been described as fundamental undertakings, or implied obligations.

Per Scott LJ in Beaumont-Thomas v Blue Star Line Ltd. (1939) 3 All ER 127, at pp 130 - 131:

In order to construe any exception of liability for events happening in the performance of the contract, where the words of the exception are not so clear as to leave no doubt as to their meaning, it is essential first to ascertain what the contractual duty would be if there were no exception. In the contract of a common carrier by land, or of a shipowner for the carriage of goods by sea, broadly speaking, the carrier is an insurer of the safe delivery of the goods. If they are damaged on the way, he is liable. That is his primary duty. There is also a secondary duty, however - namely, the duty to use skill and care. That duty comes into play in case of the carrier invoking some term of an exception clause as a protection against liability. In such a case, if the excepted peril has been occasioned by the negligence of the carrier’s servants, the failure to perform the secondary duty debars him from reliance upon his exception.

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