Year: 1993
Type: article
Abstract: In London Drugs Ltd v Kuehne and Nagel International Ltd,' the Supreme Court of Canada faced the question whether, when A has a contract with B, it is open to C, one of B's employees, to rely on the terms of the contract between A and B in order to answer a negligence action brought by A. By holding that, in principle, it is open to a negligent employee (C) to rely on the protective terms of his employer's (B's) contract with a customer (A), the majority of the Court has taken both a measured and a welcome step towards an open relaxation of the doctrine of privity of contract -'that pestilential nuisance'* as La Forest J aptly put it.Not only is the decision in London Drugs a milestone in Canadian common law jurisprudence, it is a development of obvious significance for the current English debate concerning the relaxation of the privity doctrine. London Drugs: The Facts and DecisionThe facts of London Drugs were as follows.Pursuant to a warehousing contract, London Drugs delivered a transformer to Kuehne and Nagel for storage.Section 1 l(b) of the contract provided:The warehouseman's liability on any one package is limited to $40 unless the holder has declared in writing a valuation in excess of $40 and paid the additional charge specified to cover warehouse liability.Instead of making the appropriate declaration and paying the additional charge, London Drugs included the transformer in its own all-risks insurance cover.The transformer was unloaded safely enough.However, when London Drugs gave the order for the transformer to be loaded up for delivery to their new factory, two of Kuehne and Nagel's employees negligently damaged the transformer by attempting to lift it with forklift trucks.The transformer toppled over, occasioning damage of nearly $34,000.London Drugs sued inter alios both Kuehne and Nagel (in contract and in negligence), and the two careless employees (in negligen~e).~The trial judge, Trainor J, having found that the two employees were negligent, and having ruled that Kuehne and Nagel's liability was limited to $40 (in accordance with section 1 1 (b) of the warehousing contract), declared that the main issue was whether the negligent employees were entitled to invoke section 1 1 (b) to limit their liabilit~.~Whilst Trainor J had some sympathy for the employees' submission (that they, too, should be shielded by section 1 lo>)), he ruled that the *Professor of Commercial Law, University of Kent. 1 [1993] 1 WWR 1. 2 ibid at pp 60-61.3 **Professor of
Source: Modern Law Review
Authors: Johan N. Adams, Roger Brownsword
Institutions: University of Kent, University of Sheffield
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W2118610617