Pneumatic Type Co Ltd v Selfridge & Co Ltd  AC 847 (HL), 853 (Viscount Haldane); Midland Silicones v Scruttons  AC 446 (HL), 467 (Viscount Simonds). 158 (C.A. 140 upon which doubt was cast by counsel for the Appellants was rightly decided and that Mr. Justice Devlin's decision in Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd.  2 Q.B. The appellants were the stevedores responsible for unloading the cargo from the vessel. Readhead v Midland Ry Co (1869), LR 4 QB 379, 38 LJQB 169, sub nom Redhead v Midland Ry Co 9 B & S 519, 20 LT 628, 8 Digest (Repl) 75, 496. All that it required is that the contract is of a kind which the owner implicitly consented to. Scruttons Ltd v Midland Silicones Ltd UKHL 4, AC 446 is a leading House of Lords case on privity of contract. However, they claimed that they could take advantage of the carrier’s limitation clause. Scruttons Ltd v Midland Silicones Ltd AC 446 andR v Hinks UKHL 53 by assessing the merits of the judgements given, before deciding whether the law would, in fact, have been better served by following the dissenting opinion rather than that of the majority of judges in the case. Scruttons Ltd v Midland Silicones Ltd  AC 446. Scruttons Ltd v Midland Silicones Ltd  UKHL 4,  AC 446 is a leading House of Lords case on privity of contract. 4 clause. Scruttons Ltd. v. Midland Silicones Ltd., 1962 A.C. 446, 471 (1961). 2 The Mahkutai  AC 650 (PC) at 661 (Lord Goff). Their contract with the carrier specified that they should have ‘such protection as is afforded by the terms, conditions and exceptions of the bills of lading’. (3d) 372 (s.c. Facts. Adler v. Dickson (The Himalaya),  2 Lloyd's Rep. 267,  1 Q.B. All of Lord Reid's preconditions were satisfied in the subsequent case of New Zealand Shipping v Satterthwaite (The Eurymedon)  AC 154. The law on this point has been settled in England. See more information ... Scruttons Ltd v Midland Silicones. Similarly, only a contract party can take advantage of any defences or limitations claimed within a contract. Scruttons Ltd was shipping a load of crates through a carrier. He questioned the validity of the privity of contract rule as a matter of historical precedent, explaining that it arose before negligence was an independent tort. Dunlop Pneumatic Tyre v Selfridge & Co Ltd, Woodar Investment Development Ltd v Wimpey Construction UK Ltd, Contracts (Rights of Third Parties) Act 1999, Nisshin Shipping Co Ltd v Cleaves & Co Ltd, Dockray - "Cases & Materials on the Carriage of Goods by Sea" - Cavendish, Elder, Dempster & Co. Ltd. v. Paterson, Zochonis & Co. Ltd.  A.C. 522, Full text of House of Lords decision from BAILII.org, http://www.nadr.co.uk/articles/published/CommercialLawReports/Scruttons%20v%20Midland%20Silicones%201961.pdf, https://en.wikipedia.org/w/index.php?title=Scruttons_Ltd_v_Midland_Silicones_Ltd&oldid=867745822, Creative Commons Attribution-ShareAlike License, Privity of contract, bill of lading, agency, This page was last edited on 7 November 2018, at 19:04. References:  AC 446,  UKHL 4 Links: Bailii Coram: Viscount Simonds, Lord Reid Ratio: The defendant stevedores, engaged by the carrier, negligently damaged a drum containing chemicals. 9 Scruttons (n 7) Contract Law Essay 2012 : Privity of Contract pg. ATTORNEY(S) ACTS. Bailees can enter into contracts concerning the goods which bind their owners. 5 Smith and Snipes Hall Farm LD v River Douglas Catchment Board  2 KB 500, 514; Drive Yourself Hire Co v Strutt  1 QB 250, 272; Scruttons Ltd v Midland Silicones Ltd  AC 446, 483; Beswick v Beswick  Ch 538, 557. Midland were unaware of the relationship between the carriers and the stevedores. Upholding contractual intentions : Lord Denning's dissent in Scruttons Ltd v Midland Silicones Ltd (1962) AC 446 / Catharine MacMillan --6. Nevertheless, the loading itself will usually be done by the carrier himself or by a third party stevedore; (see Scruttons Ltd v Midland Silicones Ltd and NZ Shipping Co Ltd v A M Satterthwaite & Co Ltd - The Eurymedon). Can.). Contract law â Shipping contracts â Damages. Scruttons Ltd v Midland Silicones Ltd  UKHL 4,  AC 446 is a leading House of Lords case on privity of contract. Therefore, there was no privity between the appellants and respondents. 41, 14 D.L.R. There was no equivalent provision at the time this case was decided. 2 The principal authorities for the present rule are Scruttons Ltd v Midland Silicones Ltd  A.c. 446 (H.L. Scruttons v Midland Silicones (1962) Uncategorized Legal Case Notes August 23, 2018 May 28, 2019. Pyrene Co v Scindia Steam Navigation Co Ltd  2 All ER 158,  2 QB 402,  2 WLR 1005, 3rd Digest Supp. Scruttons Ltd v Midland Silicones Ltd  AC 446 A drum of chemicals was shipped in New York on a ship owned by United States Lines. Case Information. In the modern era, a third party may be able to take advantage of the Contracts (Rights of Third Parties) Act 1999 to enforce the terms of a contract. This is the rule of privity of contract. The stevedores were under contract with the shipping company which contained an exclusion clause. [Decided in Scruttons Ltd. V.Midland Silicones Ltd. â (1962) AC 446 (HL)] Privy Council Not bound by its own decisions, but great respect is paid. On the facts, the carrier had not acted as the appellants’ agents when making the carriage contract. Scruttons Ltd v Midland Silicones AC 446 A shipping company (the carrier) agreed to ship a drum of chemicals belonging to the plaintiffs. Scruttons Ltd v Midland Silicones United Kingdom House of Lords (6 Dec, 1961) 6 Dec, 1961; Subsequent References; Similar Judgments; Scruttons Ltd v Midland Silicones  UKHL 4  AC 446. The goods were damaged in transit due to the negligence of the stevedores. The Court looked at whether there was a bailment relationship but found none. There are many cases which have applied this principle but those most commonly referred to in England in recent times are Dunlop Pneumatic Tyre Co. v. Selfridge and Company, decided in 1915, and Scruttons Ltd. v. Midland Silicones Ltd., decided in 1962, both in the House of Lords. Scruttons Ltd v Midland Silicones Ltd  AC 446 and New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd (The Eurymedon)  AC 154. It was a test case in which it was sought to establish a basis upon which stevedores could claim the protection of exceptions and limitations contained in a bill of lading contract to which they were not party. Carriers contracted with stevedores to unload. With the Scruttons case, the issue of third party rights in a contract were made certain. CITATION CODES. The contract limited the carrier’s liability to Â£179 per package in the event of loss, damage or delay. The appellants accepted liability for negligence. The respondents were consignees of a bill of lading. The House of Lords held in favour of the respondents. 4.2. There was no evidence of an implied contract between the parties either. The leading authorities on the application of the doctrine of privity in the context of exemption clauses. And then to affect the consignee it would be necessary to show that the provisions of the Bills of Lading Act 1855 apply. The stevedores were under contract with the shipping company which contained an exclusion clause. The Scruttons case followed an earlier case with similar reasoning, Adler v Dickson (The Himalaya). 8  AC 58 (HL). This case' may be regarded as a re-assertion of the fundamental principle of English law that "our law knows nothing of a 'jus quaesitum tertio' arising hy way of ~ontract",~ and a rejection of certain views to the contrary that have grown up in more recent times. MIDLAND SILICONES LTD. v. SCRUTTONS LTD. Since 1966 the position has changed. This was because he considered the carriers to be the bailees of the respondents’ goods. Dunlop Penumatic Tyre Co. v. Selfridge & Co., 1915 AC 847; Scruttons Ltd. v. Midland Silicon Ltd., 1962 AC 446; Beswick v. Beswick 1967 (2) AER 1197 (HL). During the unloading process, they negligently dropped and damaged the drum, losing Â£593 worth of chemicals. For similar statements see Ferrari, F (2006) La vendita internazionale, Applicabilità ed applicazioni della Convenzione di Vienna del 1980 (2nd ed.) 6. Lord Denning also thought that the appellants could rely on the clause in their own contract with the carrier which entitled them to the same defences as the carrier. Lord Reid proposed that the stevedores could be covered under the contractual clause through agency if certain pre-conditions were satisfied. A good example is the case on privity of contract where the House of Lords in Scruttons Ltd. v. Midland Silicones Ltd.  AC 446 were compelled to follow Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd  AC 847, even though Lord Reid in particular was unhappy with the consequences. Claimants owned drum of chemicals. ); Midland Silicones Ltd v. Scruttons Ltd  AC 446 HL  The Hague-Visby Rules - The Hague Rules as Amended by the Brussels Protocol 1968. principles and other authorities. In the contract between the two parties there was a limitation of liability clause for $500 (£179) per box. I can see a possibility of success of the agency argument if (first) the bill of lading makes it clear that the stevedore is intended to be protected by the provisions in it which limit liability, (secondly) the bill of lading makes it clear that the carrier, in addition to contracting for these provisions on his own behalf, is also contracting as agent for the stevedore that these provisions should apply to the stevedore, (thirdly) the carrier has authority from the stevedore to do that, or perhaps later ratification by the stevedore would suffice, and (fourthly) that any difficulties about consideration moving from the stevedore were overcome. 1))  1 All ER 404 Scruttons Ltd v Midland Silicones Ltd  AC 446 Shaw v DPP  AC 220 Bound by its own decisions (Decided in 1944) Not bound when â Lord Denning therefore thought that the respondents were bound by the limitation clause in the contract between the carrier and the appellants. The goods were damaged in transit due to the negligence of the stevedores. Only a person who is a party to a contract can sue and be sued upon it. There had been much speculation on the meaning of Elder, Dempster but it became clear that there was no new rule from that case. The word ‘carrier’ did not include stevedores, so there was no indication that the limitation clause in bill of lading was intended to benefit the stevedores. The other Lords dismissed the case as obscure or inconsistent, and departed from it. Lord Reid noted that there are three instances in which the House of Lords (now the Supreme Court) can depart from its ratio in previous cases: Lord Denning dissented. Midland were unaware of the relationship between the carriers and the stevedores. 5.Upholding Contractual Intentions Lord Denning's Dissent in Scruttons Ltd v Midland Silicones Ltd  AC 446 / Catharine MacMillan 6.A Defence of Commercial Certainty in the Wake of Judicial Pragmatism Lord Bingham's Dissent in Golden Strait Corpn v Nippon Yusen Kubishika Kaisha (The Golden Victory)  UKHL 12 / Christopher Monaghan This case, among others, resulted in the change of practice in shipping contracts by adding Himalaya clauses to protect third parties. Horsfall 62 T.L.R. The cargo was a drum of chemicals. Clause (c) is perhaps the only real exception to this rule, very limited in its scope. Midland Silicones Ltd v Scruttons Ltd  1 QB 106 1960 CA Hodson LJ Contract, Agency 1 Cites 1 Citers Hilton v Thomas Burton (Rhodes) Ltd  1 WLR 705 1961 Diplock J Vicarious Liability, Agency 1 Citers Midland Silicones Ltd v Scruttons Ltd  AC 446;  UKHL 4 6 Dec 1961 HL Viscount Simonds, Lord Reid Agency, Contract He relied on a precedent in which the House had allowed stevedores to sue in this kind of case. Cedam at 10 f. 7. Scruttons Ltd v Midland Silicones Ltd – Case Summary, Contracts (Rights of Third Parties) Act 1999. Court of Civil Appeal Binds all inferior civil courts. The case turned on the application of the Elder, Dempster case which suggested that privity could be circumvented. The respondents sued the appellants in tort for the Â£593 of loss. But the greatest difficulty in the way of the widow's right to sue personallyis that two cases in this House, Dunlop Pneumatic Tyre Co. v. Selfridgeand Co.  AC 847 and Midland Silicones Ltd. v. Scruttons Ltd. A.C. 446 clearly accepted the principle that a third party cannot sue ona contract to which he was not a party. ), followed in Canadian General Electric Co Ltd v Pickford & Black Ltd  S.C.R. Privity doctrine affirmed by House of Lords. Facts. Scruttons Ltd was shipping a load of crates through a carrier. It was a test case in which it was sought to establish a basis upon which stevedores could claim the protection of exceptions and limitations contained in a bill of lading contract to which they were not party. Midland Silicones Ltd v Scruttons Ltd: HL 6 Dec 1961. 4 HL Deb vol 596 col 20-33 11 January 1999. The contract of carriage limited the liability of the carrier for damage to £179 per package. 402 can be supported only upon the facts of the case which may well have justified the implication of a contract between the parties. Could the appellants take advantage of the limitation clause, despite apparently not being a party to the contract? If the case is out of line with other authorities. In Scruttons Ltd v Midland Silicones ...  AC 446 (HL). Quinn v Leathem  AC 495, 70 LJPC 76, 85 LT 289, 65 JP 708, 42 Digest 971, 30. In the contract between the two parties there was a limitation of liability clause for £500 per box. 3 Nippon Yusen Kaisha v International Import and Export Co (The Elbe Maru)  1 â¦ 1. Citations:  AC 446;  2 WLR 186;  1 All ER 1;  2 Lloydâs Rep 365; (1962) 106 SJ 34;  CLY 2842. It was a test case in which it was sought to establish a basis upon which stevedores could claim the protection of exceptions and limitations contained in â¦  The Court outlined an exception to the privity rule, known as the Lord Reid test, through agency as it applies to sub-contractors and employees seeking protection in their employers' contract. Scruttons Ltd v Midland Silicones Ltd House of Lords. Citations:  AC 446;  2 WLR 186;  1 All ER 1;  2 Lloyd’s Rep 365; (1962) 106 SJ 34;  CLY 2842. Made contract of carriage with carriers. The authors assess the arguments for and against the final decisions, which leads to a discussion on whether the law would actually have benefitted from following the dissenting opinion as opposed to that of the majority of judges. Park Lane Estates Ltd and Gomba International  EWCA Civ 1227;  1 WLR 2460, 615â16 Midland Silicones v. Scruttons  AC 446, HL, 188 âThe Mihalis Angelosâ  1 QB 164, CA, 491 Miles v. At first blush, it was clear to the Court that the stevedores could not be exempted by the exemption clause as there was no privity of contract. No Acts. Examples are Scruttons Ltd v Midland Silicones Ltd  AC 446 and YL v Birmingham City Council  UKHL 27. Scruttons Ltd v Midland Silicones Ltd  UKHL 4,  AC 446, is a leading House of Lords case on privity of contract.The Court outlined an exception to the privity rule, known as the Lord Reid test, through agency as it applies to sub-contractors and employees seeking protection in their employers' contract. Midland Silicones Ltd v Scruttons Ltd  A.C. 446, HL applied. (10) There was no clear ratio in Bristol-Myers governing the present case and the Court was free to follow the EPO authority, subject to the cross-appeal on obviousness. The cargo was a drum of chemicals. As well as Haldane's judgment in Dunlop, the courts have stated a similar principle in other cases such as Scruttons Ltd v Midland Silicones Ltd  AC 446 and Beswick v Beswick - that privity is separate from consideration. The Court outlined an exception to the privity rule, known as the Lord Reid test, through agency as it applies to sub-contractors and employees seeking protection in their employers' contract.