The Gazette 1991

GAZETTE

JANUARY/FEBRUARY 1991

Implied contractual relations

between the purchaser of a

cargo and the servants, agents

and independent contractors of

the carrier.

Carriers have always the option of

including an exemption clause in

the contract that will limit their

liability to the cargo owner in the

event of damage being caused to

the goods by their servants, agents

and independent contractors. Such

clauses will have effect provided

they meet the ordinary require-

ments of contract law and do not

infringe the Hague Rules.

The cargo owner has the option

of suing the servants, agents and

independent contractors person-

ally. Since the defendant (usually a

stevedore) was not party to the

original contract this action will be

in Tort. The question therefore

arises from the defendant's point of

view as to whether he can claim

the benefit of the limitations

contained in the contract between

the carrier and the cargo owner.

Efforts to avoid the rigours of the

doctrine of privity and to bring such

parties within the limitations of the

contract have taken a number of

forms.

Vicarious immunity

This approach to the question was

stated by Scrutton LJ in

Mersey

Shipping and Transport Co. Ltd. -v-

Rea Ltd.

as follows:

"where there is a contract

which contains an exemption

clause, the servants or agents

who act under that contract

have the benefit of that

exemption clause.

While this concept has found

academic support in recent

times,

its reasoning is incon-

sistent with the doctrine of privity

in the sense that it would enable an

agent to rely by way of defence on

the terms of a contract to which he

was not a party. For this reason, the

concept of vicarious immunity has

been rejected by the House of Lords

in the case of

Scuttons Ltd. -v-

Midland Silicones Ltd.

However,

if priority were given to commercial

reality over the exigencies of the

doctrine of privity the concept

would be accepted.

Carrier as agent of the defendant

It has been standard practice for a

number of years for bills of lading to

include a clause known as the

"Himalaya Clause"

excluding any

liability on the part of the servants

or agents or independent contractors

of the carrier. In the two initial cases

Adier -v- Dickson

and

Scuttons

Ltd. -v- Midland Silicones Ltd.

such defendants failed to get the

protection of the limitations contain-

ed in the contract between the

carrier and the cargo owner. The

reason for the decision that was

adopted by the majority in both

cases was that the defendants were

not party to the original contract and

therefore they could not claim the

protection of the clause no matter

what it said. However, in both cases

Lord Denning restricted the grounds

for his rejection of the defendants to

the construction of the clause and

did not make the difficulty of privity

an absolute bar.

With time the clauses came to be

re-drafted with explicit reference

Annual Review of Irish Law 1989

RAYMOND BYRNE & WILLIAM BINCHY

This is the third volume in an annual review

series which provides practitioners,

academics and students with an analytical,

perceptive account of work by the courts, the

Oireachtas, scholars and practitioners during

the year.

Every decision of importance by the High

Court, Court of Criminal Appeal and Supreme

Court is discussed. Significant Circuit Court

decisions are also included.

Whether the decision is unreported or

reported, the Annual Review covers it,

providing assessment of over 200 judgments

per volume.

Every Act of the Oireachtas for the relevant

year is outlined. Where relevant, detailed

discussion is provided to explain the

background to and purpose of an Act.

Proposals for change in the law from the Law

Reform Commission are discussed. Statutory

instruments are also listed under the relevant

subject headings.

It 'provides an authoritative picture of each

and every legal nook and cranny. It is this

that ensures that the book will endure'

The

Cambridge Law Journal.

ISBN 0 947686-61-4;

ISSN 0791-1084

Price C55 00

(all 3 volumes 1987,

1988 and 1989 C135 00)

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