New Zealand Shipping v AM Satterthwaite (The Eurymedon)

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This case is concerned with the consideration and exclusion clause chapter in contract law

Facts of the Eurymedon Case

There was a contract between New Zealand shipping and the owner who wanted to load a machine on their boat. The shipping company had an agreement which said that none of our workers will be liable for the damages caused while loading or un-loading the machinery, till one year.

The carriers while un-loading the machine damged it. The claimant brought an action after one year, the carrier wanted to rely on the exclusion clause written in the agreement. The claimant argued that he can’t rely on the clause , as he provided no consideration.

Issue:

The issue before the Privy Council was whether or not the Carrier had provided consideration for the claimant’s promise not to sue them

Decision:

It was held that when he unloaded the machine it was good consideration for the claimant’s promise not to sue them. And the carrier can rely on the exclusion clause , so hence he was not liable and the claimant’s claim failed.

Important Point to remember about Eurymedon case

Lord Wilberforce Said

“English law having committed itself to a rather technical and schematic doctrine of contract. In application takes a practical approach. Often at the cost of forcing the facts to fit un-easily into the marked slots of Offer, Acceptance and consideration.”

Related Readings

Stilk V Myrick

Hartley v Ponsonby