The importance and impact of careful drafting of contracts is exemplified in this UK Supreme Court decision. While the ruling brings clarity to English law, it represents congruence with other jurisdictions. It is most prudent to be deliberate in documenting law and jurisdiction choices in contracts.
This judgment sets out a useful analysis of contracts where a court will examine the conduct of the parties and surrounding circumstances to reach a conclusion. Carriers should be alerted to the importance of knowing who they are dealing with, ensuring that the shipper on a bill of lading is correctly identified.
The logistics world is fraught with potential risks, and claims are perhaps inevitable. The exposure to such claims can be minimised, however, by maintaining a robust risk mitigation policy. Risk mitigation extends not only to the physical steps taken to improve operational safety and security, but also to ensuring, from the outset, that adequate contractual protections are in place.
This case highlights the importance of careful drafting in order to communicate terms and conditions to customers and suppliers and to ensure that they are sufficiently wide to cover extra-contractual services where necessary and appropriate.
The importance of implementing robust due diligence procedures, incorporating all aspects of your business, cannot be underestimated as key risk mitigation. If something appears too good to be true, then it probably is.
