New Zealand Shipping Co Ltd v A M Satterthwaite and Co Ltd (The Eurymedon): PC 25 Feb 1974

The Board considered the extent to which an exclusion clause in a bill of lading could be relied on by the third party stevedore, an independent contractor employed by the carrier, who was sued by the consignees of goods for negligently damaging the goods while unloading them.
Held: (Majority) The board gave effect to the clause by regarding the shipper as having made an offer of a unilateral contract to the stevedores to unload the goods on terms incorporating the exclusion clause. This offer was accepted by the stevedores by commencing work.
Lord Wilberforce said that the bill of lading: ‘ brought into existence a bargain initially unilateral but capable of becoming mutual, between the shipper and the [stevedores], made through the carrier as agent. This became a full contract when the [stevedores] performed services by discharging the goods. The performance of these services for the benefit of the shipper was the consideration for the agreement by the shipper that the [stevedores] should have the benefit of the exemptions and limitations contained in the bill of lading.’ The exclusion clause was entered into by the carrier as agent for its servants, agents and independent contractors, and therefore ‘the exemption is designed to cover the whole carriage from loading to discharge, by whomsoever it is performed: the performance attracts the exemption or immunity in favour of whoever the performer turns out to be’. Also ‘In the opinion of their Lordships, to give the appellant the benefit of the exemptions and limitations contained in the bill of lading is to give effect to the clear intentions of a commercial document, and can be given within existing principles. They see no reason to strain the law or the facts in order to defeat these intentions. It should not be overlooked that the effect of denying validity to the clause would be to encourage actions against servants, agents and independent contractors in order to get round exemptions… ‘


Lord Wilberforce


[1975] AC 154, [1974] UKPC 1, [1974] UKPC 4


Bailii, Bailii


England and Wales

Cited by:

CitedThe Mahkutai PC 24-Apr-1996
(Hong Kong) The question was whether shipowners, who were not parties to the bill of lading contract between the charterers and carriers on the one part, and the cargo-owners, the bill of lading being a charterer’s bill, could enforce against the . .
CitedButler Machine Tool Co Ltd v Ex-Cell-O Corporation CA 25-Apr-1977
The plaintiff offered to sell a machine tool to the defendant. The offer said that its terms had precedence over any terms in the buyer’s order, and contained a clause allowing a price variation. The defendant’s order form allowed no variation, and . .
Lists of cited by and citing cases may be incomplete.

Contract, Transport, Commonwealth, Contract

Updated: 29 June 2022; Ref: scu.221974