G H Renton & Co Ltd v Palmyra Trading Corpn of Panama [1957] AC 149 HOL
Citation:G H Renton & Co Ltd v Palmyra Trading Corpn of Panama [1957] AC 149 HOL
Rule of thumb:If you are contracting with party A to supply goods, and a sub-contractor fails to perform their duties properly for party A so the goods are not properly delivered, can party escape liability for the damage caused to you? No, party A is jointly and severally liable for all the sub-contractors they used, and it is up to Party A to bring them into the action rather than you.
Judgment:
Where a person contracts with a shipping company to transfer goods for them, clauses in this contract which transfer liability to sub-contractors they use to carry out certain fundamental tasks are invalid. Fundamental duties cannot be contracted out of and this exemption clause is invalid. Carriers have to put in place a “sound system” that is capable of successfully delivering the goods. Where independent entities are working together towards a common end they are all jointly & severally liable for each other.
Ratio-decidendi:
‘(did not impose an obligation to achieve a particular outcome, but to load, carry and discharge) “in accordance with a sound system”, ‘It is, in my opinion, directed and only directed to the manner in which the obligations undertaken are to be carried out. Subject to the later provisions, it prohibits the shipowner from contracting out of liability for doing what he undertakes properly and with care. This question was considered by Devlin J in Pyrene Co Ltd v Scindia Navigation Company Limited in relation to the words ‘shall properly and carefully load’. I agree with his statement, which has already been cited’, Lord Somervell
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