Question

Fiona owns and operates 'Fiona's Futons' (an importer of bedroom furniture and accessories located in Fremantle, Western Australia). Fiona ordered 20,000 queen size futon mattresses from Jaki, a sole trader and exporter of mattresses located in Yokohama, Japan. The mattresses were to be delivered to Fiona's business premises in two instalment shipments of 10.000 mattresses each: The first instalment on board The Pacifica in July (the July shipment) and the second on board The Oceania in November (the November shipment). The parties have incorporated a clause into their contract that the law of Australia (or Western Australia, as applicable) shall be the governing law should a dispute arise.

The following issues arose:

4: The November shipment of 10,000 mattresses arrived three days late.

Discuss which principle(s) and source(s) of law Fiona may rely upon to obtain a remedy, if any. Also outline possible remedies.

Answer 1

Private carriers in Australia can also be held liable for loss caused as a result of damage to goods during transport. The rights and obligations of a private carrier are determined by the relevant contractual terms which have been entered into with the private carrier as well as the common law principle known as the laws of bailment.

Bailment occurs when possession of the goods is transferred by the owner to another party (known as the bailee) to be dealt with in a particular way. While possession of the goods is transferred, ownership of those goods is not. For example, private carriers are generally considered bailees when possession in the goods is transferred to them by the owner for the purpose of transporting the goods.

Private carriers have a responsibility to take reasonable care for the safety of the goods they are transporting and to take reasonable care to deliver those goods to their destination. Private carriers can therefore be liable for loss or damage resulting from any deliberate act or a failure to take reasonable care in transporting and delivering the goods. Private carriers can also be liable for acts of their employees which are undertaken in the course of their employment, including in certain cases of theft by the employee.

Private carriers are able to limit their liability through exclusion and limitation clauses in the relevant contract for the transport of the goods. However, these terms will be subject to standard contracting law and in particular, laws relating to unfair contract terms. Further, the use of limitation and exclusion clauses has limitations and generally cannot be used to avoid liability for negligence, deliberate acts of misconduct or misleading and deceptive conduct.