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Photo Productions Ltd v Securicor
A security guard burned down the factory he was guarding. The contract between his employers and the factory owners included a clause excluding liability for injurious acts and defaults of guards.
The court decided that the clause was clear and unambiguous and effectively limited their liability even for this fundamental breach.UCTA 77 (Unfair Contract Terms Act 1977):
It states that a clause exempting liability for:
– death or personal injury due to negligence is void,
– OTHER LOSS DUE TO NEGLIGENCE IS VOID UNLESS REASONABLE.My question is about the the second statement of UCTA in capital letters (other loss due to negligence is void unless reasonable). It is not sufficient unreasonable to burn down a factory??? Was it not a negligence???
Thanks
HI Good question
Answer:
Fundamental breach – dead! Facts arose before 1977 & UCTA didn’t apply to these facts.
Securicor was engaged by Photo Productions to guard their factories overnight. One of Securicor’s employees lit a fire to keep his hands warm, and negligently managed to burn the factory down – vicarious liability. Plaintiff claimed, but the defendants said that there was an exclusion clause – under no circumstances was Securicor liable for anything. House of Lords couldn’t apply the Act to the facts (facts arose before 1977), but applied the “spirit” of the act. The said that the clause was a perfectly reasonable clause to have in the contract.
Why?
1) It was a commercial contract and the firms were on a level playing field
2) Lord Wilberforce – risks borne by insurance, non-interventionist approach, efficiency of insurance cover ® reasonableness
3) If Securicor offered a service for a particular price, then the additional cost (of insurance?) for Securicor would push their price upBest Wishes
KCP
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