LAWCOMM 442 - Personal Property LN.docx-...
LAWCOMM_442_-_Personal_Property_LN.docx-Don Lye 171346040 LAWPUBL 442: PERSONAL
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LAWCOMM 442 - Personal Property LN.docx-Don Lye 17...
LAWCOMM_442_-_Personal_Property_LN.docx-Don Lye 171346040 LAWPUBL 442: PERSONAL
LAWCOMM 442 - Personal Property LN....
LAWCOMM_442_-_Personal_Property_LN.docx-Don Lye 171346040 LAWPUBL 442: PERSONAL
Page 76
Don Lye
Shipping goods example
Goods are taken away by the freight forwarder and presented to the port
together with 9 other containers. The shipping clerk receiving the 10
containers from the freight forwarder will assume that any terms that are
reasonable have been consented to by the owner of the goods contained.
Assume that unlike the other 9 cargo owners, head bailor inform the freight
forwarder (head bailee) that you do not consent to the freight forwarder
agreeing to any exemption or limitation clauses with a third party (including a
Goods are subsequently lost at sea.
Head bailor can sue the head bailee freight forwarder potentially for
deviating from the terms of the bailment.
Head bailor can also sue the sub-bailee sea carrier directly.
However, would be unfair for the head bailor to rely on the
communication with the head bailee (no consent to third party
exemption/limitation clauses) against the sub-bailee. Nothing to
alert the sub-bailee (e.g. shipping clerk who received the
containers) that when the 10 containers were presented, in
respect of one of them, the owner has told the freight forwarder
not to commit the owner to any provisions in bill of laden that
are prejudicial to bailor.
Situation may be different if the sub-bailee has knowledge/awareness of the
head bailor’s restrictions imposed on the head bailee (freight forwarder).
E.g. painting the side of the containers – no exemption or limitation
Don – does Peter’s ostensible authority example work here? If ostensible
authority applies – there would be privity of contract because the sub-bailor
would be acting as the agent and entering into a contract on behalf of the
head bailor directly with the sub-bailee.
Devonshire – if ostensible authority is applied in an agency context,
then the head bailor can sue the shipping company directly through
privity of contract (no sub-bailment relationship). Would depend on the
arrangements between the head bailor and head bailee and whether
the head bailee is constituted an agent for that purpose.
“I think that ostensible authority as discussed in
may be wider than that. The PC did not specifically
limit ostensible authority to agency; had they done so then it
would not have been necessary to address the head bailor’s
ability to sue the sub-bailee directly and whether the latter could
invoke non-contractual terms.”
“Note that the PC emphasised that there was no privity or other
relationship between cargo owners and the sub-bailees, so
agency was not in issue.”
“Ostensible authority was mentioned in a very general sense to
connote the fact that (vis-à-vis the sub-bailee) the head bailee
has the appearance of being able to enter into the sub-

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