2.2 The Wave of Harter-Style Domestic Legislation Prior
to the Hague Rules (1892–1919)
Courts in different jurisdictions viewed the exculpatory clauses under the regime of
freedom of contract in various ways. The courts, particularly those of the UK, gave
predominance to freedom of contract, even disregarding the different bargaining
powers of the parties.
29 In the US and other jurisdictions, judicial attitude was
tempered by public policy considerations.
30 As pointed out by one distinguished
author, “in countries where cargo interest dominated, ‘negligence’ clauses were
declared invalid; in other countries, where hull interests prevailed, such clauses
were given effect under the cover of an almost unlimited freedom of contracting.”
31
Cargo interests increasingly detested the carriers’ abuse of their untrammelled
power over exculpatory clauses.
32 The resistance against freedom of contract came
not only from shippers, but also from others with cargo interests, such as bankers and
underwriters.
33 In 1890, the British cargo interests, for example, the Glasgow Corn
Trade Association, complained to the British Prime Minister that carriers’ “bills of
lading are so unreasonable and unjust in their terms as to exempt [the carriers] from
almost every conceivable risk and responsibility.”
34 French
35 and American cargo
interests also shared this concern.
36 Despite the hostility of the US courts to these
exculpatory clauses, carriers continued benefiting from them, because the choice-oflaw and choice-of-forum clause required all cargo claims to be brought in the UK
under UK law.
37 American cargo interests started to lobby the US Congress to
oppose the European carriers.
38 In the late nineteenth century, the rise of the United
States as a trading power equal to Europe increased the influence of American
29 Yiannopoulos (1958), pp. 609–627.
30 In re Missouri Steamship Company (1889) LR 42 ChD 321, 322, it was for the court to decide if it
was the English law or the US law which governed the contract of carriage in question, whereas the
negligence clause would be enforceable in England but void in the United States in light of public
policy. The Hague Rules afford protection to the underdog with weaker bargaining power,
especially when a third party is engaged, who is necessarily bound by the contract of carriage
without having had any chance to negotiate the contract under the public policy protection for them.
31 Yiannopoulos (1958), p. 609.
32 Knauth (1953).
33 Sturley et al. (2010a, b, c, d), pp. 8–9, paragraphs 1.027–1.033.
34 Petition of Glasgow Corn Trade Association (1890), reprinted in H.R. Rep. No. 1988, 52d Cong.,
1st Sess. 2 (1892), and cited in Sturley (1991).
35 See Dor (1956).
36 Knauth (1953), p. 116 (stating that US cargo interests regarded the bills of lading in North
Atlantic trade as where a carrier “accepted goods to be carried when he liked, as he liked, and
wherever he liked”).
37 See e.g., H.R. Rep. No. 1988, 2 and 24 Cong. Rec. 172 (1892) (‘Rep. Coombs’).
38 Mangone (1997), p. 79.
Lex Maritima in a Changing World: Development and Prospect of. . .
765
to the Hague Rules (1892–1919)
Courts in different jurisdictions viewed the exculpatory clauses under the regime of
freedom of contract in various ways. The courts, particularly those of the UK, gave
predominance to freedom of contract, even disregarding the different bargaining
powers of the parties.
29 In the US and other jurisdictions, judicial attitude was
tempered by public policy considerations.
30 As pointed out by one distinguished
author, “in countries where cargo interest dominated, ‘negligence’ clauses were
declared invalid; in other countries, where hull interests prevailed, such clauses
were given effect under the cover of an almost unlimited freedom of contracting.”
31
Cargo interests increasingly detested the carriers’ abuse of their untrammelled
power over exculpatory clauses.
32 The resistance against freedom of contract came
not only from shippers, but also from others with cargo interests, such as bankers and
underwriters.
33 In 1890, the British cargo interests, for example, the Glasgow Corn
Trade Association, complained to the British Prime Minister that carriers’ “bills of
lading are so unreasonable and unjust in their terms as to exempt [the carriers] from
almost every conceivable risk and responsibility.”
34 French
35 and American cargo
interests also shared this concern.
36 Despite the hostility of the US courts to these
exculpatory clauses, carriers continued benefiting from them, because the choice-oflaw and choice-of-forum clause required all cargo claims to be brought in the UK
under UK law.
37 American cargo interests started to lobby the US Congress to
oppose the European carriers.
38 In the late nineteenth century, the rise of the United
States as a trading power equal to Europe increased the influence of American
29 Yiannopoulos (1958), pp. 609–627.
30 In re Missouri Steamship Company (1889) LR 42 ChD 321, 322, it was for the court to decide if it
was the English law or the US law which governed the contract of carriage in question, whereas the
negligence clause would be enforceable in England but void in the United States in light of public
policy. The Hague Rules afford protection to the underdog with weaker bargaining power,
especially when a third party is engaged, who is necessarily bound by the contract of carriage
without having had any chance to negotiate the contract under the public policy protection for them.
31 Yiannopoulos (1958), p. 609.
32 Knauth (1953).
33 Sturley et al. (2010a, b, c, d), pp. 8–9, paragraphs 1.027–1.033.
34 Petition of Glasgow Corn Trade Association (1890), reprinted in H.R. Rep. No. 1988, 52d Cong.,
1st Sess. 2 (1892), and cited in Sturley (1991).
35 See Dor (1956).
36 Knauth (1953), p. 116 (stating that US cargo interests regarded the bills of lading in North
Atlantic trade as where a carrier “accepted goods to be carried when he liked, as he liked, and
wherever he liked”).
37 See e.g., H.R. Rep. No. 1988, 2 and 24 Cong. Rec. 172 (1892) (‘Rep. Coombs’).
38 Mangone (1997), p. 79.
Lex Maritima in a Changing World: Development and Prospect of. . .
765