This is all very interesting. I, like David am of the view that it is wholly unacceptable that, in effect, you're forced to shell out to insure against them not performing the contract with reasonable skill. It's madness. They presumably have public liability insurance. Insurance is a normal expense of running a business, and is reflected in the end price. In short, why should you have to pay extra to protect yourself against their incompetence? This is a nonsense. In a business contract, you can (generally) agree what terms you like, fair or not. In a consumer contract, you have the protection of the raft of consumer protection legislation, including the Unfair Contract Terms Act.
They are obliged to carry out the performance of the contract with reasonable skill. Of that there is no doubt. There can also be no doubt that dropping the box fails that test. They are therefore liable because they have breached a fundamental term of the contract. The remedy for breach of contract is a claim in resulting damages. Here, the resulting damage is the cost of a new wheel. The question is whether their T+C's, seeking to limit liability to £20 or £50, is "reasonable". There are arguments both ways.
If you spend a tenner to send a package of diamonds worth £1m and they lose them, would you expect them to have to fork out £1m? Common sense dictates probably not. It would probably occur to you that you might need to consider specific tailored insurance.
However, in this case, they were aware of the value of the wheels as that was declared. They were aware that no additional cover was selected. Despite all this, they accepted the business. It is at least arguable that in doing so, they assumed the risk up to the value known to them in the event they were negligent. No-one forced them to take the order. They could have refused. They could insist that insurance to the value is mandatory and give you the price. They however seek to limit their liability. The issue is whether to do so is a breach of the Unfair Contract Terms Act. The danger for them is that to test this by allowing a punter to take them to Court risks a finding that it is a breach. That would have serious consequences for their business model, and the industry generally. I suspect a finding at first instance may be appealed, given the wider policy issues. It might be for example, that for such a model to be sustainable, their prices would have to increase significantly. Complex actuarial evidence would be required.
My personal view is that if they knew the value of the goods, and chose to take the business, but did not clearly and specifically draw the customer's attention (despite knowing) to the fact that their goods were only insured to 2% of the value (over and above the usual "tick here to confirm T+C's have been read - 99% don't and they know it) then they ought to be liable if they then damage the goods though their negligence. I think this is a reasonable UCTA argument. I think they would not want that tested in Court. I think the commercially sensible thing for them to do would be to pay for the damage they have caused. If they want to claim that back on their own insurance, that's a matter for them.
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7th May 2014, 09:42 PM
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