Question

Scott Corporation (SC) is planning to import hand sanitizers into Trinidad and Tobago because of the increase in demand due to the Bird Flu influencer.

SC hired Trailblazer Corporation (TB) to transport the shipment of hand sanitizers from the Port of Pineapple on Monday 1^st October 2018 to SC’s warehouse in the Bamboo at a cost of TT$10,000. The shipment of hand sanitizers has to be stored at a particular temperature, to prevent it from been damaged during transportation, for which TB was duly informed.

At a meeting on 20^th September 2018 between SC and TB to discuss the transportation arrangement, TB’s CEO Mr. Right, presented SC’s CEO Mr. Wrong with a form containing an agreement to transport, which outlined the date and cost of delivery as stated above. The form also stated inter alia ”please read conditions of contract prior to signing” Mr Wrong signed the form, but failed to read the entire contents of the signed document. The conditions included an exclusion clause exempting TB from all losses however caused during the transportation of the sanitizers.

The shipment of hand sanitizers was subsequently damaged during transportation, because it was stored at the wrong temperature. SC on inspection the shipment thereafter, saw the damaged sanitizers and has indicated that they will seek damages via a legal action against TB. However, TB is seeking to rely on the exclusion clause mentioned above.

SC Corporation is arguing that they are not bound by the clause, because when their CEO signed the document, he was of the view that he was simply signing an agreement for the transport of the shipment of hand sanitizers. They also argued that if such clause is so critical to TB in terms of the exclusion of liability, merely stating ”please read condition of contract prior to signing” was not sufficient; indeed, some express notice of the exclusion clause should have given bearing in mind that the parties never contracted previously.

TB is holding strong to their view that they are protected by the exclusion clause and as such SC cannot sue them. Advise SC Corporation.

Answer 1

The exclusion clause should be a part of contract, and be known to both the parties before the contract begins. By signing the contract, Mr. Wrong is assumed to be in agreement of the contract irrespective of the fact that he did not read it, and it is assumed that both parties were aware of such clause. However, the contract also emphasised on the need to store the goods to be transported at a prescribed temperature and both parties were in knowledge of it ( TB was duly informed about it). THis clause was an essential part of the contract, which TB failed to comply to. As a result. TB is liable for the breach of the contract terms as it failed to keep the goods within predetermined temperature, which led to the damages due to negligence. The clause was also not consistent to the oral agreement between the parties, which mentioned this essential term, hence can not be enforced by the court.