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Golden Rule

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Four Corners Rule
Last updated: 06-Oct-2014

Four Corners Rule requires to interpret the meaning and understanding of the provisions contained in the contract by considering the overall meaning and intention of that contact as a whole. Thus it is presumed that parties to a contract will not exclude liability for losses arising from acts not authorised under the contract. However, if acts of negligence occur during authorised acts, then the exclusion clauses shall still apply. In Suisse Atlantique Societe d'Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1966] 1 Lloyd’s Rep. 529 Lord Hodson said :

Thus, under a contract of carriage or bailment if the carrier or bailee uses a place other than that agreed on for storing the goods, or otherwise exposes the goods to risks quite different from those contemplated by the contract, he cannot rely on clauses in the contract designed to protect him against liability within the four corners of the contract, and has only such protection as is afforded by the common law. Lilley v. Doubleday (1881) 7 Q.B.D. 510, and Gibaud v. Great Eastern Railway Company, [1921] 2 K.B. 426, are examples of such cases all of which depend on the construction of the contract.

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