Date: Mon, 14 Feb 2005 17:43:13

From: Michael Furmston

Subject: Remoteness: taxis

The taxi case.

I agree where the fare is fixed. Indeed where the fare is fixed and the taxi has to pick up everyone who flags him down one might argue that it is not a contract at all. when setting this problem I have usually tried to move the facts outside the controlled area.

I should have thought that the case for greater liability was strong whenever the taxidriver asks for extra payment whether it was £50 or £10000.

Michael Furmston

Adam Kramer wrote:

1 If the fare to the airport is legally controlled then that does make a difference. It is analogous to the common carrier cases which may be explained on the basis that the compulsion to enter the contract limits the assumption of responsibility that can be inferred from the fact of entering the contract in full knowledge of the loss that may result from breach: Haultain CJS makes this point in Rivers v George White and Sons Co Ltd (1919) 46 DLR 145 (Sask CA), and Mayne makes it in Mayne on Damages (3rd edition, 1877). This would mean that the taxi driver has lost a key method of signalising acceptance of risk, and indeed of making the acceptance of risk worth his while. I would say that where a price has been fixed in advance and the human you are dealing with does not really have the power to alter it (in this case the taxi driver who has no legal power to vary, more often the employee selling to a consumer in a large chain store who has almost no authority or de facto power to vary), then no special knowledge communicated to the human promisor can give rise to the inference of an assumption of risk by the promisor, short of a very explicit assumption of risk that would satisfy the sorts of requirements needed for a contract (intention to create legal relations, unequivality, certainty). The question in the consumer and controlled fare taxi case then becomes one as to the risk that it is reasonable to infer the promisor has undertaken generally, e.g. ignoring the special communication. This will depend upon the broad factors likely to (appear to the promisee to) be relevant in pricing or insurance. Of course it is difficult to draw the line in such cases- no one said interpretation of contracts was easy. In this case the taxi driver would probably not be able to (be understood to) assume responsibility for Bill's possible loss without being very clear indeed.

2 Yes it might make a difference- if the chance of him arriving on time appears to one in Bill's position to appear to the driver to be high, and/or the price asked for appears to appear to the driver to signalise an appreciation of the risk (e.g. if he has gone up from £15), then that may be enough to infer an assumption of responsibility (i.e. to infer that the driver took the risk because he was taking a gamble or even, if he was litigation savvy, figured he wouldn't be sued for the money anyway as he was not a defendant of substance).

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