The defendants had carried previously goods aboard ship for the plaintiffs. This time, they were asked for and gave an oral re-assurance to the plaintiffs that the goods would be carried below deck. This did not happen and the goods were swept overboard.
Held: The collateral promise overrode the printed conditions. The carrier could not rely on his usual exceptions (including a limitation of liability to andpound;50 per ton) The oral undertaking that the goods would be carried under deck amounted to a collateral contract.
Lord Denning said: ‘The judge held there was no contractual promise that these containers should be carried under deck. He thought that, in order to be binding, the initial conversation ought to be contemporaneous; and that here it was too remote in point of time from the actual transport. Furthermore, that, viewed objectively, it should not be considered binding. The judge quoted largely from the well known case of Heilbut Symons and Co. v. Buckleton [1913] AC 30, in which it was held that a person is not liable for damages in innocent misrepresentation; and that the courts should be slow to hold that there was a collateral contract. I must say that much of what was said in that case is entirely out of date . . But even in respect of promises as to the future, we have a different approach nowadays to collateral contracts. When a person gives a promise or an assurance to another, intending that he should act on it by entering into a contract, and he does act on it by entering into the contract, we hold that it is binding.’ and ‘it seems to me plain that Mr Spano gave an oral promise or assurance that the goods in this new container traffic would be carried under deck. He made the promise in order to induce Mr Leonard to agree to the goods being carried in containers. On the faith of it, Mr Leonard accepted the quotations and gave orders for transport. In those circumstances the promise was binding. There was a breach of that promise and the forwarding agents are liable – unless they can rely on the printed conditions.’
Roskill LJ said: ‘The real question, as I venture to think, is not whether one calls this an assurance or a guarantee, but whether that which was said amounted to an enforceable contractual promise by the defendants to the plaintiffs that any goods thereafter entrusted by the plaintiffs to the defendants for carriage from Milan to the United Kingdom via Rotterdam and thence by sea to England would be shipped under deck.’
Lord Denning MR, Roskill and Geoffrey Lane LJJ
[1976] 1 WLR 1078, [1976] 2 All ER 930
England and Wales
Citing:
Cited – Heilbut Symons and Co v Buckleton HL 11-Nov-1912
In an action of damages for fraudulent misrepresentation and breach of warranty, the plaintiff founded on a conversation between himself and the defendants’ representative. In this conversation the plaintiff said-‘I understand that you are bringing . .
Cited – Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd CA 3-Mar-1965
When a person gives a promise or an assurance to another, intending that he should act on it by entering into a contract, and he does act on it by entering into the contract, it is binding.
Lord Denning MR said of a collateral warranty: . .
Cited by:
Cited – Frans Maas (Uk) Ltd v Samsung Electronics (Uk) Ltd ComC 30-Jun-2004
A large volume of mobile phones were stolen from a warehouse. The owner claimed damages from the bailee. The defendant said that standard terms applied limiting their responsibility to value calculated by weight.
Held: There was a bailment . .
Cited – Brikom Investments v Carr 1979
A reversioner can grant rights in respect of covenants in the lease which bind reversioners by way of a collateral contract. When a person makes a representation intending that another should act on it: ‘It is no answer for the maker to say: ‘You . .
Cited – Rock Advertising Ltd v MWB Business Exchange Centres Ltd SC 16-May-2018
The parties disputed whether a contract (licence to occupy an office) had been varied by an oral agreement, where the terms prohibited such.
Held: The ‘no oral variation’ clause applied. Such clauses were in common commercial use and served a . .
Lists of cited by and citing cases may be incomplete.
Updated: 20 July 2021; Ref: scu.181085
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