Harbutt's "Plasticine" Ltd v Wayne Tank and Pump Co Ltd

Last updated

Harbutt's "Plasticine" Ltd v Wayne Tank and Pump Co Ltd [1970] is an English contract law case involving the quantum of damages and the concept of fundamental breach. [1] It was heard in the Court of Appeal by Lord Denning MR, Widgery LJ and Cross LJ. [2]

Contents

The concept of fundamental breach has not proved to be durable, and that aspect of this case was disapproved in the House of Lords' decision in Photoproductions v Securicor . [3]

The case

The plaintiff company engaged the defendants to design and install in their factory, an old mill, a pipe system to convey hot molten wax used in the production of Plasticine. The defendants unwisely chose to use plastic piping. Once installed, the defendants chose to initiate the new system at night, but without any supervision. The system had a faulty thermostat and molten wax overheated. The plastic pipes melted and the molten wax escaped and caught fire, causing a huge conflagration. By the morning, the entire factory was destroyed. This led to one of the biggest-ever claims for damages in England. The defendant sought to rely on a clause in the contract that purported to limit their liability for breach of contract.

In the Suisse Atlantique , [4] the House of Lords had previously declared that whether or not a fundamental breach extinguishes any protection of a limitation clause was a question of construction and not a question of law. [5]

Following Karsales Ltd v Wallis (and ignoring Suisse Atlantique) the Court of Appeal held that the breach was so gross as to be "fundamental breach", and that the exemption clause thereby "automatically" became ineffective, so that the defendants were liable in full.

Also, since the company had to build a new factory (because it was not feasible to repair the old), Lord Denning said that (contrary to the usual rules of damages and ‘betterment’ in insurance claims), the defendant was liable to pay for a new replacement. [6]

Subsequently, the House of Lords in Photoproductions v Securicor criticised the Harbutt's decision and reaffirmed their earlier view expressed in the Suisse Atlantique.

Related Research Articles

Breach of contract Type of civil wrong in contract law

Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. Breach occurs when a party to a contract fails to fulfill its obligation(s), whether partially or wholly, as described in the contract, or communicates an intent to fail the obligation or otherwise appears not to be able to perform its obligation under the contract. Where there is breach of contract, the resulting damages have to be paid to the aggrieved party by the party breaching the contract.

Misrepresentation Untrue statement in contract negotiations

In common law jurisdictions, a misrepresentation is a false or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.

Fundamental breach of contract, is a controversial concept within the common law of contract. The doctrine was, in particular, nurtured by Lord Denning, Master of the Rolls from 1962 to 1982, but it did not find favour with the House of Lords.

In the English law of negligence, the acts of the claimant may give the defendant a defence to liability, whether in whole or part, if those acts unreasonably add to the loss.

In English law, remoteness between a cause of action and the loss or damage sustained as a result is addressed through a set of rules in both tort and contract, which limit the amount of compensatory damages available for a wrong.

<i>Photo Production Ltd v Securicor Transport Ltd</i>

Photo Production Ltd v Securicor Transport Ltd[1980] UKHL 2 is an English contract law case decided by the House of Lords on construction of a contract and the doctrine of fundamental breach.

A Himalaya clause is a contractual provision expressed to be for the benefit of a third party who is not a party to the contract. Although theoretically applicable to any form of contract, most of the jurisprudence relating to Himalaya clauses relate to maritime matters, and exclusion clauses in bills of lading for the benefit of employees, crew, and agents, stevedores in particular.

<i>George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd</i> 1983 British court case

George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1982] EWCA Civ 5 and [1983] 2 AC 803 is a case concerning the sale of goods and exclusion clauses. It was decided under the Unfair Contract Terms Act 1977 and the Sale of Goods Act 1979.

English contract law Law of contracts in England and Wales

English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.

<i>Transfield Shipping Inc v Mercator Shipping Inc</i>

The Achilleas or Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48 is an English contract law case, concerning remoteness of damage.

<i>J Spurling Ltd v Bradshaw</i>

J Spurling Ltd v Bradshaw[1956] EWCA Civ 3 is an English contract law and English property law case on exclusion clauses and bailment. It is best known for Denning LJ's "red hand rule" comment, where he said,

I quite agree that the more unreasonable a clause is, the greater the notice which must be given of it. Some clauses which I have seen would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient.

Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 is a landmark English contract law decision of the House of Lords, concerning the notions of fundamental breach of contract and inequality of bargaining power.

Interpreting contracts in English law is an area of English contract law, which concerns how the courts decide what an agreement means. It is settled law that the process is based on the objective view of a reasonable person, given the context in which the contracting parties made their agreement. This approach marks a break with previous a more rigid modes of interpretation before the 1970s, where courts paid closer attention to the formal expression of the parties' intentions and took more of a literal view of what they had said.

<i>Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd</i>

Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978] QB 791 is an English contract law case, concerning remoteness of damage. In it, the majority held that losses for breach of contract are recoverable if the type or kind of loss is a likely result of the breach of contract. Lord Denning MR, dissenting on the reasoning, held that a distinction should be drawn between losses for physical damage and economic losses.

<i>Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd</i>

Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574 is an English contract law case, concerning misrepresentation. It explains the test of "reasonable grounds for belief" under the Misrepresentation Act 1967 s 2(1), and raises the issue of the reasonableness test under s 3.

Deviation (law)

The doctrine of deviation is a particular aspect of contracts of carriage of goods by sea. A deviation is a departure from the "agreed route" or the "usual route", and it can amount to a serious breach of contract.

<i>Karsales (Harrow) Ltd v Wallis</i>

Karsales (Harrow) Ltd v Wallis [1956] EWCA Civ 4 is an English Court of Appeal decision which established fundamental breach as a major English contract law doctrine. Denning LJ MR gave the leading judgment replacing the Rule of Strict Construction, which require a literal approach to the construction of contract terms.

<i>Bunge Corp v Tradax Export SA</i>

Bunge Corporation v Tradax Export SA[1981] UKHL 11 is an English contract law case, concerning the right to terminate performance of a contract.

<i>DHL International (NZ) Ltd v Richmond Ltd</i>

DHL International (NZ) Ltd v Richmond Ltd [1993] 3 NZLR 10 Is a leading case in New Zealand case law allowing exclusion of liability clauses even for fundamental breach. It effectively incorporates the English case of Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 into New Zealand case law.

<i>Glynn v Margetson</i> English case on the law of carriage of goods by sea

Glynn v Margetson is an English case on the law of carriage of goods by sea which established the "Main Purpose Rule" in relation to deviation.

References

  1. ↑ Harbutt's "Plasticine" Ltd v Wayne Tank and Pump Co Ltd [1970] 1 QB 447, [1970] 1 All ER 225, [1970] 2 WLR 198, [1970] 1 Lloyds Rep 15
  2. ↑ Case report
  3. ↑ 'Photo Production Ltd v Securicor Transport Ltd' [1980] UKHL 2
  4. ↑ Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361
  5. ↑ Article on fundamental breach
  6. ↑ NLJ article
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.