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86. Special contract must be found.—According to the early English casesø it was possible, by a mere notice to that effect, to relieve one's self from the insurance obligation. But today such notice is held insufficient in itself to make out a special contract, unless it may fairly be said to have been expressly incorporated in an actual contract between the parties. But a special contract, if it has all the requisite elements for a contractual obligation, may in almost all jurisdictions be made, and by its operation the normal common law liability may be limited to a greater or less extent.94 The

The company, it would seem however, may not force its patrons to make such special contracts; they should enter into them voluntarily. But, generally speaking, one who has common law rights may bargain them away, unless the contract is against public policy. The acceptance of an instrument commonly used to embody the contract, such as a bill of lading, will usually be conclusive proof of the contract it evidences. 95 The law presumes, in the absence of fraud or imposition, that the patron read it, or was willing to assent to its terms without reading it.96

87. Limitation of liability as insurer.—Exceptional liability—such as that making the common carrier of goods liable as an insurer-may be done away with by a special contract properly made. By the overwhelming weight of authority, it is conceded that a contract which goes no further than this is 93 Mayhew v. Eames, 3 B. & C. 601 (Eng.), LEADING ILLUSTRATIVE CASES. 94 Cau v. Texas & P. R. R. Co., 194 U. S. 427, 24 Sup. Ct. 663. 95 Railroad Co. v. Manufacturing Co., 16 Wall. 318 (U. S.). 96 Grace v. Adams, 100 Mass. 505.

not against public policy.or And, indeed, a contract which only relieves from liability a carrier who has exercised the utmost human foresight certainly cannot be said really to tend in any way to impair that efficiency which is requisite in a public service.98 According to modern notions of responsibility, there is very rarely reason enough to make a party to whom no fault can be attributed liable for a loss. Certainly there is no argument in favor of such responsibility strong enough to declare against public policy a contract limiting liability to blameworthy conduct. If there ever was any reason for making the carrier liable as an insurer, that reason no longer has sufficient force to set aside the contract of the parties. There is reason enough for holding those in public employment to the highest standard in performing that service. But there is no sufficient foundation for adding the insurance business to common carriage and making them inseparable."

88. Policy against excepting negligence.—Public policy demands of common carriers and all others in public employment that they shall exercise due care and all possible vigilance. Hence the carrier of goods is forbidden by the cases generally to limit its liability for negligence by contract with the shipper. It may not contract against the consequences of its own or its employees' negligence even if the shipper is willing—and such a contract will not relieve or excuse it from liability. The real reason for this seems to be that if such contracts were permitted they would be universally required; and this would result in an inevitable deterioration in public service. Indeed, that the invalidity of such exemptions is due to the public character of the service is shown by the fact that when the matter under contract does not directly pertain to the public service, as such, the contract is held valid. Jurisdictions are few indeed where a limitation upon liability for negligence in a public service is permitted; and even in those states the contract must be in the plainest language to cover negligence. The argument in favor of permitting such limitations is that parties should be free to contract as they please. But the overwhelming weight of authority against permitting such limitation is proof positive that it is against public policy.

07 Railroad Co. v. Lockwood, 17 Wall. 357 (U. S.), LEADING ILLUSTRATIVE CASES.

98 Hoadley v. Northern Transportation Co., 115 Mass. 304.
99 Davis v. Central Vt. Ry. Co., 66 Vt. 290, 29 Atl. 313.
1 Boorman v. American Express Co., 21 Wis. 152.
2 Bank of Ky. v. Adams Exp. Co., 93 U. S. 174.

89. Invalidity of special stipulations.-A provision in a special contract with a water taker that he would not hold the city liable for its negligence in supplying water, is void. Likewise a contract between an electric lighting company and its patron, stipulating that it should not in any event be liable for damage to person or property arising or resulting from the use of light, is against public policy."

3 Southern Exp. Co. v. Moon, 29 Miss. 822.
4 Maslin v. Baltimore & O. R. R. Co., 14 W. Va. 180.

5 Mynard v. Syracuse B. & N. A. R. R., 71 N. Y. 180, LEADING ILLUSTRATIVE CASES.

6 Dittmar v. New Braunfels, 20 Tex. Civ. App. 293, 48 S. W. 1114. 7 Denver Consolidated Electric Co. v. Lawrence, 31 Colo. 301, 73 Pac. 39. 8 Central Union Telephone Co. v. Swoveland, 14 Ind. App. 341, 42 N. E. 1035.


A stipulation by a telephone company that it would not be liable for messages delivered will not protect it against a suit for default if the service in question is shown to be part of its regular course of business. And a gas company is liable for an explosion notwithstanding a stipulation in the original application to the company exempting the company, from damages by explosion. A telegraph company cannot stipulate against liability for negligence;10 but most inconsistently it is generally held that liability for negligence may be excepted in the case of an unrepeated message.

90. Limitation of amount recoverable.—Stipulations limiting the recovery to an agreed amount in case of loss by negligence do not, however, necessarily tend to defeat public service, and therefore are not held against public policy by the great majority of cases. It is difficult to see how any considerations of sound public policy require that such contracts should be held invalid. It seems clear that a person, who in such a contract fixes a value upon his goods which he intrusts to the carrier, should be bound by his valuation. Furthermore, where a limitation is made to a set amount fixed by the company in the special contract for shipment at a certain rate, the patron (having the alternative to ask service upon a common law basis) is bound by the stipulation even in case of the carrier's negligence.13 In some jurisdictions, however, these rules are denied, the thoroughgoing doctrine being that it is always contrary to the policy of the law that a public servant should ever be permitted to stipulate for any exemption from liability for defaults for which he is to blame.14 And indeed it would probably be generally agreed that where the value set is so small as virtually to relieve the company from liability, such a stipulation should be set aside as practically the same thing as a limitation of liability for negligence. But if it is provided that the carrier is always chargeable in a substantial amount for negligence, that may well be enough to keep him sufficiently careful in the conduct of the service.15

9 Bastian v. Keystone Gas Co., 27 (N. Y.) App. Div. 584, 50 N. Y. Supp. 537.

10 Ayer v. Western Union Telegraph Co., 79 Me. 493, 10 Atl. 495.

11 Primrose v. Western Union Telegraph Co., 154 U. S. 1, 14 Sup. Ct. 1098, LEADING ILLUSTRATIVE CASES.

12 Southern Express Co. v. Owens, 146 Ala. 412, 41 So. 752.

91. Other stipulations as to liability.-In view of these general principles the usual stipulation in the contract of carriage, that notice of loss must be given to the carrier within a time fixed, should obviously be held valid. Such stipulations do not purport to relieve the companies from any part of their obligations as common carriers, for they are bound to the same diligence, fidelity, and care as they would have been required to exercise if such agreement had not been made.16 It is agreed that such stipulations are not against public policy if a reasonable

13 Hart v. Pennsylvania R. R., 112 U. S. 331, 5 Sup. Ct. 151, LEADING ILLUSTRATIVE CASES.

14 Everett v. Norfolk & S. R. R., 138 N. C. 68, 50 S. E. 557.
15 Missouri K. & T. R. R. v. Harriman Bros., 33 Sup. Ct. 397.

16 Express Co. v. Caldwell, 21 Wall. 264 (U. S.), LEADING ILLUSTRATIVE CASES.

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