Courier’s liability might not be as limited as contract says

$125,508 worth of bank property disappeared

Conventional wisdom has it that when you sign a contract, you’re bound by all of it, even the proverbial “fine print.” A recent case reminds us, however, that if a contract term is unusual, you or your employees are bound by it only if your attention has been drawn to it specifically.

Last year, $125,508 worth of property went missing while it was in the custody of Purolator, a large courier company, on behalf of the Canadian Imperial Bank of Commerce. The bank brought a lawsuit for the full amount, alleging that Purolator had been negligent in handling the property.

In its defence, Purolator claimed that its liability was limited to $1,766, which it already had paid the bank in compensation.

It said in court that it had won the bank’s business by giving a presentation which included the advice that, unless the bank stipulated a specific value of goods in transit, Purolator’s liability was limited by statute law regulating commercial carriers, and by the contract with CIBC, to two dollars per pound.

Purolator claimed that it included this information in the contract for services and that, for several years, day by day the bank signed bills of lading containing the same information.

However, the bank employee responsible for the contract contended that he did not remember the presentation, nor had he read the bills of lading or recall any other information about Purolator’s suppose limitations on liability.

The bank said that it had relied solely on Purolator’s pre-contractual representations of safe and superior service —which, interestingly enough, would have been part of the courier’s presentation pitch.

The Ontario Court has dismissed Purolator’s motion to end the matter before a full trial. The contract by itself is not sufficient, the court says, to resolve the matter.

A full hearing is necessary, the court concludes, because it is unclear that the bank was aware of Purolator’s stipulations of limited liability. The bank’s claim of misrepresentation raised a triable issue as to whether Purolator was bound by a contractual guarantee of safe and superior service.

In other words, a trial court must decide whether the parties had a “meeting of the minds” on the issue of limited liability.

For more information:

Canadian Imperial Bank of Commerce v. Purolator Courier Ltd., Ontario Superior Court file 96-CU-105457, Jan. 4/00.

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