Charnock v Liverpool Corporation and Kirbys (Commercial) Ltd: CA 1968

When an insured Vehicle was sent for repairs with the assent of an insurer, there were two separate contracts which arose in respect of the repairs. The first contract was between the insurer and the repairer that the insurer would pay for the repairs. The second contract was between the insured and the repairer that the repairs would be carried out by the repairer with reasonable care and expedition. Where the contract does not specify the time within which works are to be completed a term will be implied which binds the contractor to complete within a reasonable time.
Harman LJ said: ‘the judge held that the repairers were liable because they had impliedly contracted with the plaintiff to do the work within a reasonable time and, not having done so, they were in breach of their contract in that respect.
The fact that the insurance company will indemnify the owner is well known in all insurance cases to both parties. The practice has grown up that the insurance company shall agree the sum for which they will stand surety and a contract is very often made by the repairer with the insurance company. Let it be so in this case. That does not in my view at all rule out the existence of a contract between the person who owns the car and the repairers. The owner takes the car in to the repairers and he asks them to repair it, at whatever cost the insurance company will be willing to go to, and everybody knows that the insurance company will within that limit pay. Whether there is any obligation on the owner himself to pay if the insurance company does not is another matter; but I cannot see why there is, as regards the owner, not a contract on which the repairers are liable first, if they do not do the work with reasonable skill and secondly, if they do notdo it within a reasonable time; and it is on that contract that the present case turns.
The court I think, was inclined to take the view that the judge, who held that there were two contracts, one between the insurers and the repairers and one between the plaintiff and the repairers, was clearly right.
It seems to me that it is quite reasonable to leave standing the view that there was a contract between the repairers and the insurance company and that the only person liable to pay on that
was the insurance company.’


Salmon, Harmon LJJ


[1968] 1 WLR 1498, [1968] 3 All ER 473


England and Wales

Insurance, Contract

Updated: 17 May 2022; Ref: scu.259332