Contract Interpretation

Question 1

Hartos v Colin & Shields:

Answer 1

• unilateral mistake

Hartog v Colin & Shields:
•S offered 3,000 hare skins at a price “per pound” when he meant to say “per piece”; there were about 3 pieces per pound (so if taken literally S’s offer was for a price 1/3rd of that which he intended).
•B purportedly accepted this offer.
•S refused to deliver at the lower price.
 Held: B’s claim for damages rejected as B “must have realised, and did in fact know, that a mistake had occurred” as to how S had expressed the offer. The customs of the trade as well as the parties’ previous negotiations meant it would have been obvious that S meant to state a price “per piece” and not “per pound”.

Question 2

canada steamship/ EE Caledonia (1994)

Answer 2

Explicit Reference to Negligence
Does the clause specifically refer to “negligence” or a synonym?
If yes, the clause excludes liability for negligence.
Wide Language Covering Negligence
If negligence is not explicitly mentioned, are the words used in the clause wide enough to cover negligence?
If yes, liability for negligence might be excluded.
Alternative Ground for Liability
If the clause could apply to grounds other than negligence (e.g., strict liability or breach of a non-negligent duty), the clause will not cover negligence.
The presence of an alternative basis for liability means the exclusion is limited to that basis.
Application to This Case:
The exclusion clause did not explicitly mention “negligence.”
The language was broad enough to potentially include negligence, but it could also apply to non-negligent causes of fire.
Because there were alternative grounds for liability (e.g., a fire caused by other means), the clause did not exclude liability for negligence.
Significance:
This case created a clear framework for interpreting exclusion clauses.
It ensures that parties cannot avoid liability for negligence without explicitly or clearly stating their intention.
The judgment balances freedom of contract with the need for clarity in excluding negligence.
Modern Implications:
While the test remains influential, modern courts often emphasize contextual interpretation and the overall intent of the parties rather than rigidly applying the Canada Steamship test