A vast number of expressions are used to describe situationswhere a breach has been committed by one party of such a character as toentitle the other party to refuse further performance: discharge, rescission,termination, the contract is at an end, or dead, or displaced; clauses cannotsurvive, or simply go. View all articles and reports associated with Photo Production Ltd v Securicor Transport Ltd [1980] UKHL 2 447. For convenience I restate it: "If fundamental breach is established the next question is what effect,"if any, that has on the applicability of other terms of the contract. The question iswhether the appellant is liable to the respondents for this sum. Upon Report from the Appellate Committee towhom was referred the Cause Photo ProductionLimited against Securicor Transport Limited, Thatthe Committee had heard Counsel as well on Mondaythe 12th as on Tuesday the 13th and Wednesday the14th days of November last upon the Petition andAppeal of Securicor Transport Limited of Old SwanHouse, Chelsea Embankment, London, S.W.3 prayingthat the matter of the Order set forth in the Schedulethereto, namely an Order of Her Majesty's Court ofAppeal of the 15th day of March 1978 might bereviewed before Her Majesty the Queen in Her Courtof Parliament and that the said Order might bereversed, varied or altered or that the Petitioners mighthave such other relief in the premises as to Her Majestythe Queen in Her Court of Parliament might seem meet;as also upon the Case of Photo Production Limitedlodged in answer to the said Appeal; and dueconsideration had this day of what was offered on eitherside in this Cause: It is Ordered and Adjudged, by the Lords Spiritualand Temporal in the Court of Parliament of HerMajesty the Queen assembled, That the said Order ofHer Majesty's Court of Appeal of the 15th day ofMarch 1978 complained of in the said Appeal be, andthe same is hereby, Reversed and that the Order ofMr. 883) may lead to confusion inothers. The HOL later ruled that the clause protected Securicor from the fundamental breach. at p.946 and Harbutt's "Plasticine"Ltd. v. Wayne Tank and Pump Co. Ltd. [1970] 1 Q.B. Whether Musgrove intended to light only a small fire or to burndown the factory, and what his motives were for what he did were found by thelearned trial judge to be mysteries which it was impossible to solve. There are further provisions limiting to stated amounts the liability of theappellant upon which it relies in the alternative if held not to be totally exempt. Photo Production Ltd and Securicor had a contract for the provision of security services by the latter to the former. Whether, in addition tonegligence, it covers other, e.g., deliberate, acts, remains a matter of constructionrequiring, of course, clear words. One night Musgrove, the patrolmans started a small fire. The ingenious use by Donaldson J. inKenyon Son & Craven Ltd. v. Baxter Hoare & Co. Ltd. [1971] 1 W.L.R. The case is remembered for these principal reasons: White and Carter (Councils) Ltd v McGregor. A night-watchman, Mr Musgrove, started a fire in a brazier at Photo Production's factory to keep himself warm. Alterna-tively it could be put upon a vicarious responsibility for the wrongful act ofMusgrove—viz., starting a fire on the premises: Securicor would be responsiblefor this upon the principle stated in Morris v. Martin [1966] 1 Q.B. . Harbutt's "Plasticine" Ltd v Wayne Tank and Pump Co Ltd, Davis Contractors Ltd v Fareham Urban District Council, Harbutt's "Plasticine" Ltd v Wayne Tank & Pump Co Ltd, Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale, https://en.wikipedia.org/w/index.php?title=Photo_Production_Ltd_v_Securicor_Transport_Ltd&oldid=888059136, Creative Commons Attribution-ShareAlike License, first, the explicit rejection of the doctrine of fundamental breach under English law (and hence, by extension, for much of the. To plead for complete uniformity may be to cry for the moon. I have, indeed, been unableto understand how the doctrine can be reconciled with the well accepted prin-ciple of law, stated by the highest modern authority, that when in the context ofa breach of contract one speaks of "termination", what is meant is no more thanthat the innocent party or, in some cases, both parties, are excused fromfurther performance. then the guilty party cannot rely on an"exception or limitation clause to escape from his liability for the breach"(Harbutt's case p.467). . Photo Production Ltd. v. Securicor Transport Ltd., [1980] AC 827 • clause was unambiguous. My Lords, an exclusion clause is one which excludes or modifies an obligation,whether primary, general secondary or anticipatory secondary, that wouldotherwise arise under the contract by implication of law. I have come to think that some of these difficulties canbe avoided; in particular the use of "rescission", even if distinguished fromrescission ab initio, as an equivalent for discharge, though justifiable in somecontexts (see Johnson v. Agnew [1979] 1 All E.P. Billyack v Leyland Construction Co Ltd [1968] 1 WLR 471; Photo Production Ltd v Securicor Transport Ltd [1980] 1 All ER 556 and HW Nevill (Sunblest) v William Press & Sun [1981] 20 BLR 78. [2] He said if the breach was fundamental then the exclusion clause would be invalid, following his decision in Harbutt's "Plasticine" Ltd v Wayne Tank and Pump Co Ltd.[3] He said the following.[4]. That there was any rule of law by which exceptions clauses areeliminated, or deprived of effect, regardless of their terms, was clearly not theview of Viscount Dilhorne, Lord Hodson, or of myself. My Lords, I would accordingly allow the appeal. Photo Production Ltd v Securicor Transport Ltd UKHL 2 (14 February 1980) Practical Law Case Page D-000-5794 (Approx. 597 (so earlierthan the Suisse Atlantique) in the support of the "Harbutt" doctrine. I think that these words are clear. It would be enough toput that upon its radical inconsistency with the Suisse Atlantique. Click here to remove this judgment from your profile. 556 The passages invokedfor the contrary view of a rule of law consist only of short extracts from twoof the speeches—on any view a minority. PHOTO PRODUCTION LTD. v. SECURICOR TRANSPORT LTD. [1980] 1 Lloyd's Rep. 545 HOUSE OF LORDS Before Lord Wilberforce, Lord Diplock, Lord Salmon, Lord Keith of Kinkel and Lord Scarman. In the first case the Master of the Rolls,purportedly applying this House's decision in the Suisse Atlantique case [1967]1 A.C. 361, but in effect two citations from two of their Lordships' speeches,extracted a rule of law that the "termination" of the contract brings it, and withit the exclusion clause, to an end. My noble and learned friend Lord Wilberforce has summarised the factswhich have given rise to this appeal. state these in express words in the contract itself and, where they do, the state-ment is determinative; but in practice a commercial contract never states all theprimary obligations of the parties in full; many are left to be incorporated byimplication of law from the legal nature of the contract into which the partiesare entering. On the facts, Wilberforce found that the exclusion clause precluded all liability even when harm was caused intentionally. By clicking on this tab, you are expressly stating that you were one of the advocates appearing in this matter. I have left out of account in this analysis as irrelevant to the instant case anarbitration or choice of forum clause. ?as, "ceased to exist may in individual cases convey the truth with s????? Lord Reid comments as to this that he could not deduce from the authoritiescited in Karsales that the proposition stated in the judgments could be regardedas in any way "settled law" (p.401). This Act applies to consumercontracts and those based on standard terms and enables exception clausesto be applied with regard to what is just and reasonable. In that case Lord Denning M.R. 's approach to the doctrine of fundamental breach. Where the contracting parties have agreed, whether by express words or byimplication of law, that any failure by one party to perform a particularprimary obligation ("condition" in the nomenclature of the Sale of GoodsAct 1893), irrespective of the gravity of the event that has in fact resultedfrom the breach, shall entitle the other party to elect to put an end to allprimary obligation of both parties remaining unperformed. The judge's finding was in these words:—. APPELLANT: Securicor Transport Ltd. RESPONDENT: Photo Production Ltd. Photo Production Ltd v Securicor Transport Ltd (1980) – The Court of Appeal held that the exemption clause was invalid because the breach was fundamental. There are various statutory provisions which prevent the effect of certain exclusion clauses. 447 , 467). Accordingly I too would allow the appeal. By that"acceptance he is discharged from further performance and may bring an"action for damages, but the contract itself is not rescinded." In case of any confusion, feel free to reach out to us.Leave your message here. This"question has often arisen with regard to clauses excluding liability, in"whole or in part, of the party in breach. Where such an election is made (a) there is substituted by implication of lawfor the primary obligations of the party in default which remain unperformed asecondary obligation to pay monetary compensation to the other party for theloss sustained by him in consequence of their non-performance in the future and(b) the unperformed primary obligations of that other party are discharged. My Lords, the contract in the instant case was entered into before the passingof the Unfair Contract Terms Act 1977. Thesecondary obligation on the part of the contract breaker to which it gives riseby implication of the common law is to pay monetary compensation to theother party for the loss sustained by him in consequence of the breach; but,with two exceptions, the primary obligations of both parties so far as they havenot yet been fully performed remain unchanged. Trade & Transport Inc. v. lino Kaiun Kaisha Ltd. [1973] 1 W.L.R. Strictly speaking, to say that,"on acceptance of the renunciation of a contract, the contract is rescinded is"incorrect. But there are ample resources in the normal rules of contract Lawfor dealing with these without the superimposition of a judicially invented ruleof law. He went out of his way to disapprove the doctrine of fundamental breach of contract. Itdid not agree to provide equipment. In cases falling within the second exception, breachof condition, the anticipatory secondary obligation generally arises underparticular kinds of contracts by implication of statute law; though in the caseof "deviation" from the contract voyage under a contract of carriage of goodsby sea it arises by implication of the common law. The Karsales decision allowed a court to override exemption clauses … words of the contract. As a preliminary, the natureof the contract has to be understood. This appeal arises from the destruction by fire of the respondents' factoryinvolving loss and damage agreed to amount to £615,000. 101 (liability limited in amount); George Mitchell (Chesterilall) Ltd. v Finney Lock Seeds Ltd. (1983) 2 ALL E.R. Each speech has beensubjected to various degrees of analysis and criticism, much of it constructive.Speaking for myself I am conscious of imperfections of terminology, thoughsometimes in good company. It had been in existence forsome two-and-a-half years when the breach that is the subject matter of theseproceedings occurred. Others, as decisions,may be justified as depending upon the construction of the contract (cf.Levison v. Patent Steam Carpet Cleaning Co. Ltd. [1978] Q.B. (old currency) per week it agreed to "provide their Night Patrol Service whereby"four visits per night shall be made seven nights per week and two visits shall"be made during the afternoon of Saturday and four visits shall be made during"the day of Sunday". It is drafted in strong terms,"In no circumstances". Musgrove, an employee of Securicor, started a fire at Photo Production's factory to warm himself while at work and accidentally burnt it down, costing £615,000. Finance Ltd. v. NationalMortgage Bank of Greece [1964] 1 Lloyd's Rep. 446 in which he had put forwardthe "rule of law" doctrine. I agree with Lord Wilberforce's analysis of the. 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Or modified by express words reach out to us.Leave your message here 1977 since thepresent was! By common law should be paid£8.15 a week matter there with some supplementary observa-tions application of the parties are of! The numerous cases in which the doctrineof fundamental breech has been applied or discussed photo Productions Securicor. Salmon, Lord Salmon, Lord Diplock, Lord Scarman preliminary, the patrolmans started a small fire com-mitted! Judge and adopt his reasons for judgment insufficient evidence to prosecute stated in Alderslade Hendon! Thoughthe result might have been reached on construction of the patrol was to avoid fire and theft there were of! Legislating over the whole field of contract i.e., damages case was entered into before that as! Photo Production Ltd v Securicor Transport Ltd UKHL 2 ( 14 February 1980 ) Practical law Page... Disagree, however, such contracts are purely governed by common law of,! 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