In this judgment, the Supreme Court of Appeal upheld the defendant’s reliance on the disclaimer of liability provisions in its warehousing and distribution contract with the plaintiff.
After reviewing relevant judgments on disclaimer clauses and principles, the judgment once again confirms that in appropriate factual circumstances and disclaimer wording, South African courts will uphold reliance on an exemption clause.
The defendant had been sued in a delictual action for damages suffered as a result of theft of over $5 million of computer equipment by one of the defendant’s employees. It was conceded that at the time of the theft the employee acted in the course and scope of their employment and that unless liability was excluded in terms of the contract, the defendant was vicariously liable for the loss suffered as a result of the employee’s deviant conduct.
The defendant argued that on a proper construction of the relevant clauses the agreement excluded or limited liability for the delictual claim for the theft of goods.
The exemption clauses read:
“17. GOODS REQUIRING SPECIAL ARRANGEMENTS
Except under special arrangements previously made in writing [Defendant] will not accept or deal with bullion, coin, precious stones, jewellery, valuables, antiques, pictures, human remains, livestock or plants. Should [Claimant] nevertheless deliver such goods to [Defendant Schenker] or cause [Defendant] to handle or deal with any such goods otherwise than under special arrangements previously made in writing [Defendant] shall incur no liability whatsoever in respect of such goods, and in particular, shall incur no liability in respect of its negligent acts or omissions in respect of such goods. A claim, if any, against [Defendant] in respect of the goods referred to in this clause 17 shall be governed by the provisions of clauses 40 and 41.
. . .
- LIMITATION OF [SCHENKER’S] LIABILITY
40.1 Subject to the provisions of clause 40.2 and clause 41, [Defendant] shall not be liable for any claim of whatsoever nature (whether in contract or in delict) and whether for damages or otherwise, howsoever arising including but without limiting the generality of the aforesaid –
40.1.1 any negligent act or omission or statement by [Defendant] or its servants, agents and nominees; and/or
40.1.3 any loss, damage or expense arising from or in any way connected with the marking, labelling, numbering, non-delivery or mis-delivery of any goods; and or
. . .
- a) such claim arises from a grossly negligent act or omission on the part of [Defendant] or its servants; and
- b) such claim arises at a time when the goods in question are in the actual custody of [Defendant] and under its actual control; and
. . .
40.2 Notwithstanding anything to the contrary contained in these trading terms and conditions, [Defendant] shall not be liable for any indirect and consequential loss arising from any act or omission or statement by [Defendant], its agents, servants or nominees, whether negligent or otherwise.”
A disclaimer clause is a contractual modification of the common law rule as to risk which in the absence of a special agreement would apply to a contract between the parties. Where a party wishes to be absolved either wholly or partially from a liability which could arise at common law under a contract it is for that party to ensure that the extent to which they are absolved is plainly spelt out. Parties wishing to do so should not shy away from using language in such clauses which exempts them from liability in express and unambiguous terms. Where they do so effect must be given to that meaning.
The appeal court held that there was no ambiguity and the ordinary meaning of the words and the disclaimer clauses must be given effect to. The evidence was clear that the defendant and its employee dealt with and handled the goods and no special arrangements had been made for the valuable goods
The ambit of the clauses was wide enough to include intentional acts by employees of the defendant. A delict can arise through intentional or negligent acts.
The exclusion of liability under the relevant clause included loss, damage or expense arising from anything connected with the non-delivery or misdelivery of any goods and covered delictual claims.
Despite a popular misbelief to the contrary, our courts do hold contracting parties to their bargain and do enforce disclaimer of liability clauses in the right situation.