The keys are in the Porsche

The keys are in the Porsche

Good transport operators always have their clients accept their carefully drafted terms and conditions, which usually acts to exclude liability for their negligence. In an industry where margins are tight, prices are often set on the basis of zero liability.

A recent case showed how these careful procedures can be undone by the words of the sales team or an amendment that does not take into account the whole of the original agreement. In Red Earth Automotive v CEVA Logistics (Australia) Pty Ltd [2018] the County Court of Victoria had to consider the liability of the transporter (CEVA) in circumstances where a Porsche to be transported from Melbourne to the Northern Territory was stolen from CEVA’s Melbourne storage facility.

There was no dispute that CEVA had been negligent. The theft occurred in circumstances where the keys had been left in the Porsche. However, the consignee had signed a liability waiver in relation to the transport that included the words:

…CEVA Logistics will be excluded from any liability/warranties incurred to such vehicle(s), including … any loss .., even where such loss … is a result of the negligence of CEVA.

The liability waiver could not be clearer – CEVA would not be liable, even if the cause of any loss was its own negligence. However, where there is an agreed act of negligence, the Court will work hard to prevent the negligent party relying on legal fine print to avoid liability.

In this case the Court found that the liability waiver was not effective for the following reasons:

  • the liability waiver referred only to ‘transport’ and not the storage of the goods. The general terms and conditions referred to handling, transport and storage. This difference was said to be deliberate and the court confined the operation of the waiver to transport only
  • in circumstances where CEVA told the consignee that the waiver only related to stone and ship damage, it could not now change its position and try to use the waiver more broadly.

The lessons from this case:

  • your staff can undo the benefit of exclusion clauses if they incorrectly represent its effect
  • any amendments to your standard terms and conditions need to tie in perfectly with the original document
  • if you make statements to a customer and that customer relies on those statements in requesting your services, you will find it hard to rely on any inconsistent fine print.

Your terms and conditions, and how you use that document, needs to be regularly reviewed.  Please contact our transport team to find out how we can help.