Date: Wed, 26 Feb 2003 12:12:08 -0500

From: Jason Neyers

Subject: New HL Case

Dear Colleagues,

The House of Lords has just released a new judgment (see "http://www.parliament.the-stationery-office.co.uk/pa/ld200203/ldjudgmt/jd030220/hih-1.htm") dealing, at least tangentially, with the issue of whether or not a principal may exclude liability for damages (and limit the remedy of rescission) for a fraud committed by an agent in concluding a contract. The context for the decision was a complicated film financing insurance scheme that defies short description.

Three of their Lordships (Hoffmann, Bingham, Steyn) thought that this might be possible but had not in fact been done on the facts of this case (i.e. the words "no liability of any nature" were not up to the task, even though the courts of NY thought that they were).

Lord Hobhouse thought that that such an ability was impossible as a matter of public policy and logic.

Finally, Lord Scott thought that there was no such rule of public policy and that it was quite possible that the principal in this case had in fact excluded all remedies for the fraud of the agent but that a final determination of the issue would have to await the facts adduced at trial.

Happy Reading,

--
Jason Neyers
Assistant Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

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