Liability for Goods

Common Carriers

Persons and entities which carry goods or passengers for hire or gratuitously are described as carriers at common law.  There are common carriers and private carriers.  A common carrier is an ancient concept referring to a person who exercises the business of carrying goods or passengers by land water or both.  The same criteria applied to common carriers, whether of goods or persons.

A common carrier is one who stands ready to carry for hire, goods or persons, whomsoever they may be.  He must carry on business on a continuous rather than an occasional basis.  If the carrier carries only certain persons or classes of persons, he is not a common carrier and his relationship is governed by the contract.

A common carrier may carry one particular type of goods, in which case he is a common carrier in respect of those goods.  He may be a common carrier between particular locations, but not a common carrier in respect of intermediate or other locations.

Non-Common Carriers

A person who carries on the business of the carriage of goods ancillary to his principal business is not a common carrier, such as for example, a warehouse keeper.  A person is not a carrier if he does not take possession of the goods, as when he hires out vessels.

A person who is not a common carrier may undertake the liabilities of a common carrier for a particular contract.  Whether or not a person is a common carrier is a question of fact determined by the characteristics and circumstances of the business.  Certain classes of carriers of goods or persons are usually common carriers in the circumstances.

Historically, railway companies were recognised by the Railway Clauses Consolidation Act 1845 as common carriers.  However, they now carry goods which on their standard conditions specified under law.

Air carriers are not generally common carriers, although they may do so with respect to certain categories of goods or in certain contexts.

Private Carrier

A common carrier is not bound to be a common carrier in every context.  He may enter into special contracts as to carry as a private carrier.  He may limit his liabilities without ceasing to be a common carrier.  If the contract removes the key characteristics of a common carrier, then he is not a common carrier in the circumstances.

A private carrier is the bailee of the goods.  General principles of liability applicable to bailees apply. In the absence of a specific term in the contract, he is bound to take due and proper care of the goods.  A lesser level of obligation is required of a gratuitous bailee relative to a carrier for reward.

The loss of the goods is presumptive evidence of negligence. Negligence is the absence of the degree of care that would be shown by a reasonable carrier in the circumstances.  A gratuitous carrier is not obliged to carry, but if he does so, he is liable for a loss resulting from his employees’ negligence and his negligence.

Similar principles apply to a private carrier of passengers, whether for reward or gratuitously.  They owe a duty of care to the passengers. If there are special risks, they have a duty to warn the passenger.  The vehicle must be fit for the purpose as reasonable care and skill will permit.

Duties of Common Carriers

A common carrier exercised a public employment at common law.  It is bound to receive all goods which are offered for carriage in the absence of a lawful excuse.  He is liable to be indicted at common law for refusal to do so.

The common carrier need not carry goods if they are not of the types that which he holds himself out as carrying.  He may refuse carriage if he does not have room, is not in a position to carry them safely, or if they are not tendered at a reasonable time, not being unreasonably before the journey.

Goods which require packing or special packing must be properly packed.  They must meet the requirements of the state of destination.

The carrier must be paid on demand the full price of carriage. If he accepts goods without demand, he may not recover the price until the goods have been carried.

There is no obligation to charge all comers the same.  If whoever he demands an unreasonable sum or unreasonable conditions this may amount to a refusal.  If a reasonable sum was tendered and he demands more which is paid under protest, the excess may be recovered.

Carriage

The carrier is bound to carry by his usual and customary route.  He must not deviate unnecessarily.  This need not be the shortest route.  If there is an unjustifiable deviation, the benefit of an exemption clause contained in the contract may be lost regardless of whether the loss is a consequence of the deviation or otherwise. He may also lose certain force majeure excuses.

The carrier, in an emergency, may undertake expenses not contemplated in order to preserve the goods.  He can recover the price from the owner.

Where goods are not possible to be carried safely, or it is not reasonably possible to obtain instructions from the consignor, he may be entitled to sell them in some circumstances and be not liable for damage for breach of contract or for failure to deliver the goods.

Time

A carrier is bound to deliver within a reasonable time.  What is reasonable depends on what ought to be achieved with due diligence.  The carrier is bound to carry the goods by the ordinary route, and he is liable for damages for delay caused by unnecessary deviation if the delay arises from the fact that the carrier has not dealt with the goods in the ordinary course of his business.

This may be presumptive evidence of unreasonable delay.  If the delay is due to an accident or circumstances outside the carrier’s control, he is not liable.  His duty to carry without delay is subject to the circumstances.

It is the duty of the consignor to address the goods with a proper address.  The carrier is not responsible for delay due to incorrect or incomplete addressing.

Safety of Goods

The common carrier is responsible for the safety of goods except where the loss results from force majeure, acts of enemies or inherent defects in the goods themselves.  He remains liable even if he is robbed by an irresistible number of persons.

The responsibility as quasi-insurer is imposed on the common carrier by custom.  It is not necessary to prove a contract.  This is a common law duty.  Breach gives an action in tort.  The contract may, however, limit the liability.

The liability of the common carrier extends to loss caused by negligence of persons of whom he is not responsible or has no control. A common carrier must take reasonable care to avoid excepted risks.  He may be liable for damage occurred by failure to avoid excepted risks.

An act of god is an extraordinary circumstance or occurrence.  The carrier may be liable if his negligence has contributed to that circumstance or event.  He must take reasonable means to protect goods if he is to rely on the defence.

The common carrier is not liable for loss or injury caused by the consignor or third party bought about by the consignor unless the carrier has been negligent.

Issues with Goods

The carrier warrants that goods are not dangerous, and they are not likely to cause delay unless the carrier is or could be aware of by examination of the nature of the goods.  Goods must be properly packed.  The carrier is not liable to damage due to improper packing unless he accepts them, when they are patently, improperly packed.

If the goods are accepted without question, the carrier is generally liable for the full value.  If the carrier asks questions and false information has been given, the consignor may be guilty of fraud and the carrier may not be bound by the contract for loss.

If a consignor secures a lower rate by representing the goods to be of a lower value, then he may not claim their actual higher value.  If the consignor agrees to protect the goods, then the carrier is not liable.  If the goods have some inherent fault which causes the loss, then the carrier is not liable. Although he is quasi insurer in respect of matters arising from circumstances beyond his control, he is not liable for faults emanating in the goods themselves.

The inherent defect must not have been caused by negligence on the part of the carrier.  The carrier is liable for damage, which could have been avoided by reasonable care even where this is attributable to the inherent defect.  Where goods require certain measures and conditions in transit, the carrier must take them.

Delivery

The liabilities of the carrier commence on acceptance of the goods.  He is responsible from the time that they are actually or constructively delivered to him or to his agent, employee or representative. A particular custom or practice may indicate at what point the carrier receives the goods.  In the case of baggage, the goods are received when handed to the representative of the carrier or deposited with them.

The liability continues until the safe delivery of the goods.  The carrier is responsible for the safe delivery of the goods to the relevant destination, even if this requires a longer route due to circumstances outside his control.  The liability remains until the point at which they are delivered to the consignee.

The terms of the contract determine, expressly or impliedly, where the delivery is to take place.  There may be an express or implied term of the contract as to who has the authority to receive and take delivery of the goods.  A consignor delivers to a place other than that authorized, at his risk.

Where the delivery is to take place at the offices of the carrier or its station, it is ordinarily obliged to give notice of arrival.  In the case of carriage of goods by sea, apart from a contract or closer to the country, it is the consignee’s duty to ascertain when the ship has arrived.

Delivery Issues I

If the carrier has given reasonable notice of the arrival of the goods (assuming this is in the contractual or customary position, then he is obliged to keep the goods for a reasonable time.  This depends on the circumstances.  If they are not collected within a reasonable time, his liability will end.

If the consignee is not present at the address of the consignment, the carrier’s liability may end.  Similarly, if the consignee refuses to accept the goods, the obligations are determined. Where goods have been refused delivery, the carrier must do what is reasonable under the circumstances.  This may require notification to the consignor.

If the goods delivery is refused because the consignee will not pay the cost of carriage, the goods should be kept at the place of destination for a reasonable time rather than returned.

Once the carrier ceases to be liable as such, he may become a warehouseman.  A warehouseman is liable to take care of the goods and take reasonable steps to protect them.  However, the stricter liabilities of the carrier do not apply.

The carrier may incur reasonable expenses in storing the goods and preserving them, which he may recover from the owner.  The carrier may exercise a lien for unpaid carriage. While the goods are in transit, the owner may give a new direction as to delivery.

Delivery Issues II

Generally, the carrier may assume that the consignee is the owner of the goods and that the consignor is his agent in making the contract of carriage.  Circumstances or documentation may indicate otherwise.

The carrier is liable for misdelivery of the goods or negligence in their delivery to another.  If the owner sues the recipient of the goods, he waives his right to sue the carrier for misdelivery. The carrier is not generally liable for the detention of the goods in the ordinary course of carriage.

If the carrier refuses to deliver goods to a person who has lawfully demanded them, even if he believes them to belong to a third party, the carrier may be liable for their detention. The carrier is liable for the delivery of the wrong goods if this is the result of his negligence.

If goods are demanded, the carrier may request a reasonable opportunity to ascertain the facts of the case.  If he refuses to deliver the goods absolutely, he is liable. A carrier may interplead; he may claim no right to the goods other than the right to his costs incurred and charges to be paid as the court directs.

Loss

When goods are lost or damaged by a common carrier, the damages recoverable is presumptively the value of the property lost.  It is the value ascertained in the trade at the trade, at the place of consignment.  If there is a market, it is the market value.  If there is no market, it is the cost price of the goods together with carriage and profits that might reasonably be made in the ordinary course of business, provided that the carrier has notice that the goods were to be resold.

Where a loss is caused by a delay in delivery of the goods or by non-delivery, then normal measures of damages apply;

• such losses may fairly and reasonably be considered as arising in the ordinary course of things from the breach of duty;
• alternatively, such loss as has been supposed to be in the contemplation of the parties as probable in the circumstances known to both.

As is the case under general principles, if the carrier is aware of the specific circumstances at the time the contract is entered, from which it is to be reasonably inferred, that special loss will arise, the damages are those that are the natural consequences of failure to deliver or to deliver in compliance with the contract in those circumstances.

Where there is a delay, the loss is the difference in the value at the time when they ought to have been delivered and the time when actually delivered. Where there is a ready market, it may be measured by reference to it.  Where a loss is referable to an onward sale, proof must be given of such  sale.

Loss of profits may not be recovered unless circumstances are brought to the attention of the carrier at the time of the contract. Expenses caused by the delay are recoverable.  There must be reasonable costs arising, including costs of enquiry.

Wasted expenditure caused by the delay in accordance with the ordinary nature of the business is recoverable.  In the usual way, the consignee is obligated to mitigate his loss. This may require buying alternative goods on an available market.