Photo Production Ltd v Securicor Transport Ltd (1980) AC 827
In this case a Securicor Transport security guard was put in charge of guarding Photo Production's building. The agreement between Securicor and Photo Productions contained an exclusion clause that absolved Securicor from any liability for "injurious act or default by any employee of the company."
While the security guard was on patrol of the Photo Productions building he intentionally started a fire that destroyed the whole building.
Could Securicor rely on the exclusion clause to escape liability for their employee's conduct?
Photo Productions argued that the clause could not apply under the doctrine of fundamental breach. That is, the breach of the contract was so huge that it invalidated the whole agreement.
At the Court of Appeal, Lord Denning found that the doctrine of fundamental breach did apply.
However at the Court Of Appeal, Lord Wilberforce, overturned Denning and found that the exclusion clause could indeed be relied upon.
Lord Wilberforce explicitly rejected Denning's application of the doctrine of fundamental breach and opted for a "rule of construction" approach. Exemption clauses were judged to be interpreted the same as any other term regardless of whether a breach has occurred and the scope of the exclusion must be determined by examining the construction of the contract. On the facts, Lord Wilberforce found that the exclusion clause precluded all liability - even when harm was caused intentionally.
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