parties working towards the fulfilment of the common objective of securing the sale and delivery of the goods from the seller to the buyer. In a typical contract of this kind, the seller will arrange for shipment of the goods through the medium of a carrier, the carrier may have arranged for the goods to be unloaded at their destination by a firm of stevedores. Moreover, the transaction may have been financed under the terms of a commercial credit, which will involve the participation of banks acting on behalf of the buyer and the seller. In this network of contractual arrangements, it is always possible that one party may perform a duty he already owes to another party in the network and it is quite possible that this performance may be regarded as consideration for a promise made by one of the other parties to the network. In New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, the terms of a bill of lading stated that the carrier was not responsible for loss or damage to the cargo unless the action was brought within one year of the date on which loss or damage occurred. The bill further provided that the same immunity should extend to the carrier’s servants, agents and independent contractors. The carrier was a wholly owned subsidiary of the stevedores who unloaded the ship in New Zealand. In the course of unloading a drill owned by the consignee, damage was caused by the stevedores who were then sued for their negligence more than a year from the date on which damage was caused. The principal issue was whether the stevedores were entitled to the protection of the immunity from suit provided for in the bill of lading. Standard commercial practice in this type of contract indicated that the consignee should be insured against transit risks, including damage resulting from the process of unloading the cargo. However, a literal application of the doctrine of privity of contract suggested that the stevedores were not parties to the bill of lading with the result that they might still be liable for the damage to the cargo caused by their negligence. In a supreme example of judicial pragmatism expounding market-realist considerations, Lord Wilberforce, expressing the majority view of the panel, was able to construct a contract between the stevedores and the consignee, based on a promise by the consignee to exempt the stevedores from liability if they were to fulfil their contractual obligation to the carrier to unload the ship on its arrival in New Zealand. On the issue of consideration, Lord Wilberforce observed: New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154, PC, p 167

doi:10.4324/9781843141518-63

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parties working towards the fulfilment of the common objective of securing the sale and delivery of the goods from the seller to the buyer. In a typical contract of this kind, the seller will arrange for shipment of the goods through the medium of a carrier, the carrier may have arranged for the goods to be unloaded at their destination by a firm of stevedores. Moreover, the transaction may have been financed under the terms of a commercial credit, which will involve the participation of banks acting on behalf of the buyer and the seller. In this network of contractual arrangements, it is always possible that one party may perform a duty he already owes to another party in the network and it is quite possible that this performance may be regarded as consideration for a promise made by one of the other parties to the network. In New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, the terms of a bill of lading stated that the carrier was not responsible for loss or damage to the cargo unless the action was brought within one year of the date on which loss or damage occurred. The bill further provided that the same immunity should extend to the carrier’s servants, agents and independent contractors. The carrier was a wholly owned subsidiary of the stevedores who unloaded the ship in New Zealand. In the course of unloading a drill owned by the consignee, damage was caused by the stevedores who were then sued for their negligence more than a year from the date on which damage was caused. The principal issue was whether the stevedores were entitled to the protection of the immunity from suit provided for in the bill of lading. Standard commercial practice in this type of contract indicated that the consignee should be insured against transit risks, including damage resulting from the process of unloading the cargo. However, a literal application of the doctrine of privity of contract suggested that the stevedores were not parties to the bill of lading with the result that they might still be liable for the damage to the cargo caused by their negligence. In a supreme example of judicial pragmatism expounding market-realist considerations, Lord Wilberforce, expressing the majority view of the panel, was able to construct a contract between the stevedores and the consignee, based on a promise by the consignee to exempt the stevedores from liability if they were to fulfil their contractual obligation to the carrier to unload the ship on its arrival in New Zealand. On the issue of consideration, Lord Wilberforce observed: New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154, PC, p 167

DOI link for parties working towards the fulfilment of the common objective of securing the sale and delivery of the goods from the seller to the buyer. In a typical contract of this kind, the seller will arrange for shipment of the goods through the medium of a carrier, the carrier may have arranged for the goods to be unloaded at their destination by a firm of stevedores. Moreover, the transaction may have been financed under the terms of a commercial credit, which will involve the participation of banks acting on behalf of the buyer and the seller. In this network of contractual arrangements, it is always possible that one party may perform a duty he already owes to another party in the network and it is quite possible that this performance may be regarded as consideration for a promise made by one of the other parties to the network. In New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, the terms of a bill of lading stated that the carrier was not responsible for loss or damage to the cargo unless the action was brought within one year of the date on which loss or damage occurred. The bill further provided that the same immunity should extend to the carrier’s servants, agents and independent contractors. The carrier was a wholly owned subsidiary of the stevedores who unloaded the ship in New Zealand. In the course of unloading a drill owned by the consignee, damage was caused by the stevedores who were then sued for their negligence more than a year from the date on which damage was caused. The principal issue was whether the stevedores were entitled to the protection of the immunity from suit provided for in the bill of lading. Standard commercial practice in this type of contract indicated that the consignee should be insured against transit risks, including damage resulting from the process of unloading the cargo. However, a literal application of the doctrine of privity of contract suggested that the stevedores were not parties to the bill of lading with the result that they might still be liable for the damage to the cargo caused by their negligence. In a supreme example of judicial pragmatism expounding market-realist considerations, Lord Wilberforce, expressing the majority view of the panel, was able to construct a contract between the stevedores and the consignee, based on a promise by the consignee to exempt the stevedores from liability if they were to fulfil their contractual obligation to the carrier to unload the ship on its arrival in New Zealand. On the issue of consideration, Lord Wilberforce observed: New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154, PC, p 167

parties working towards the fulfilment of the common objective of securing the sale and delivery of the goods from the seller to the buyer. In a typical contract of this kind, the seller will arrange for shipment of the goods through the medium of a carrier, the carrier may have arranged for the goods to be unloaded at their destination by a firm of stevedores. Moreover, the transaction may have been financed under the terms of a commercial credit, which will involve the participation of banks acting on behalf of the buyer and the seller. In this network of contractual arrangements, it is always possible that one party may perform a duty he already owes to another party in the network and it is quite possible that this performance may be regarded as consideration for a promise made by one of the other parties to the network. In New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, the terms of a bill of lading stated that the carrier was not responsible for loss or damage to the cargo unless the action was brought within one year of the date on which loss or damage occurred. The bill further provided that the same immunity should extend to the carrier’s servants, agents and independent contractors. The carrier was a wholly owned subsidiary of the stevedores who unloaded the ship in New Zealand. In the course of unloading a drill owned by the consignee, damage was caused by the stevedores who were then sued for their negligence more than a year from the date on which damage was caused. The principal issue was whether the stevedores were entitled to the protection of the immunity from suit provided for in the bill of lading. Standard commercial practice in this type of contract indicated that the consignee should be insured against transit risks, including damage resulting from the process of unloading the cargo. However, a literal application of the doctrine of privity of contract suggested that the stevedores were not parties to the bill of lading with the result that they might still be liable for the damage to the cargo caused by their negligence. In a supreme example of judicial pragmatism expounding market-realist considerations, Lord Wilberforce, expressing the majority view of the panel, was able to construct a contract between the stevedores and the consignee, based on a promise by the consignee to exempt the stevedores from liability if they were to fulfil their contractual obligation to the carrier to unload the ship on its arrival in New Zealand. On the issue of consideration, Lord Wilberforce observed: New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154, PC, p 167

ABSTRACT

In their Lordships’ opinion, the present contract presents much less difficulty than many of those above referred to. It is one of carriage from Liverpool to Wellington. The carrier assumes an obligation to transport the goods and to discharge at the port of arrival. The goods are to be carried and discharged, so the transaction is inherently contractual. It is contemplated that a part of this contract, viz discharge, may be performed by independent contractors – viz the appellant. By cl 1 of the bill of lading, the shipper agrees to exempt from liability the carrier, his servants and independent contractors in respect of the performance of this contract of carriage. Thus, if the carriage, including the discharge, is wholly carried out by the carrier, he is exempt. If part is carried out by him, and part by his servants, he and they are exempt. If part is carried out by him and part by an independent contractor, he and the independent contractor are exempt. The exemption is designed to cover the whole carriage from loading to discharge, by whomsoever it is performed: the performance attracts the exemption or immunity in favour of whoever the performer turns out to be. There is possibly more than one way of analysing this business transaction into the necessary components: that which their Lordships would accept is to say that the bill of lading brought into existence a bargain initially unilateral but capable of becoming mutual between the shipper and the appellant made through the carrier as agent. This became a full contract when the appellant performed services by discharging the goods. The performance of these services for the benefit of the shipper was the consideration for the agreement by the shipper that the appellant should have the benefit of the exemptions and limitations contained in the bill of lading.