Unrestricted liability could finish your firm
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The main reason most hauliers have terms and conditions is to exclude or limit their liability. That is not restricted to the value of the goods—the carrier's liability could include consequential or indirect losses.
For example, if a haulier is delivering to a factory and the goods are damaged the production line might have to be stopped. And if there is no exclusion clause the haulier could be responsible for the lost production, which could run into millions of pounds.
However, any clause in a contract which excludes or limits one party's liability will only he enforceable if the clause is "reasonable". This is governed by The Unfair Contract Terms Act, which lays down guidelines to test whether a clause is reasonable. These include: • What are the relative strengths of the parties? If a major manufacturer insists on an exclusion clause in your contract of carriage under which it has no responsibility or liability at all, on a "take it or leave it" basis, it might well be judged to be unreasonable.
• lf you are a small haulier and you impose your conditions on all your customers, and your customers are free to use any haulage contractor, your conditions are more likely to be judged reasonable.
• Could the customer reasonably be expected to have known about an exclusion clause? If you print your exclusion clause in pale grey writing which is so small that it can only be read with a magnifying glass, a court will probably decide that it is unreasonable, and therefore unenforceable. Any exclusion clause should be made prominent to avoid this.
• Conditions like the RHA Conditions of Carriage, which are well known in the industry, are likely to be accepted as being reasonable because most people in the transport industry are familiar with them.
• Was the contract specially negotiated? If a haulier negotiates a major contract with a manufacturer, any exclusion clause in the specifically negotiated contract is more likely to be accepted as being reasonable.
• Was the customer offered a choice? Some operators will offer limited liability at one price and unlimited liability at another. If the customer accepts the cheaper price, he can hardly complain that the clause was unreasonable.
What any operator should have in the forefront of his mind is that you should never try and hide the conditions away. Make the limitations of liability clear and obvious to the customer so the customer can accept them or reject them. When the contract is made most customers will take the cheapest price, but this will put the haulier in a much stronger position if and when things go wrong.