Kuwait Airways Held Responsible for Delay in Goods Delivery: Exploring the Theory of Vicarious Liability of Principal for the Agent’s Actions
Dr Prem Lata, Legal Head VOICE
The facts leading to the above judgment by NC are as hereunderThe complainant secured a contract with M/s. Williams Sonoma Inc., USA, for the supply of handicraft goods. Urgently, three shipments totalling 1538 packages were dispatched to the consignee, with the airways duly informed on 22.07.1996. The agent assured a 7 day delivery. The consignment, scheduled for Memphis by 31.07.1996, failed to reach its destination. Despite a revised delivery schedule on 05.08.1996, promising delivery on 06.08.1996, the goods did not arrive as scheduled. Even after rescheduling, some cartons remained missing, leading to a significant discrepancy in the consignment’s delivery and causing dissatisfaction with the service provided.
Referred clauses from Contract actSection 188 of the Contract Act “An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act.” Section 237 of the Contract Act “When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations.”
Arguments in Defence by OP Airways:
Time was not the essence of contract entered into between the parties. The complainant sent the consignment through Kuwait Airways, knowing fully well that it has various stops over at Kuwait, Chicago and Memphis, which would consume a lot of time period to deliver the consignment.
Commission observed and held- The fax message sent by agent through whom the consignment was booked to be shipped by the airways goes to show that the goods shall be delivered at Kuwait, Chicago and Memphis on 29.07.1996, 31.07.1996 and 31.07.1996. The airways never asserted that the agent lacked authorization or authority to provide the delivery schedule for the consignment. Consequently, the airways is vicariously responsible for the actions of its agent in this matter.The following relationships lead to Vicarious Liability:
Liability of the Principal for the act of his AgentWhen a principal authorizes an agent to carry out an act, the principal becomes liable for the agent’s actions if they are performed within the scope of duties. The determining factor is identifying the party who gave consent for the act to take place.
Liability of the PartnersFor the tort committed by a partner of a firm, in the normal course of business of that partnership, other partners are responsible to the same extent as that of the partner who is in fault. The liability thus arising will be joint and several. General terms of partnership deed make both liable.
Liability of the Master for the act of his ServantThe legal principle “He who does an act through another is deemed in law to do it himself” underscores the concept that actions performed by an agent are imputed to the principal. This relationship is typically formed through employment or specific task contracts for the master’s benefit. In instances like Maruti Udyog and its dealers, the relationship is characterized as principle-to-principle, not that of an agent, even though the manufacturer remains liable for manufacturing defects, highlighting the nuanced nature of such legal relationships.
Law laid down under Workman Compensation Act 1923The concept of vicarious liability holds an employer accountable for injuries, damages, or fatalities suffered by a worker during the course of employment. This liability is based on the condition that the incident must ‘arise out of and in the course of employment’. The “Doctrine of Notional Extension of Employer’s Premises”, as demonstrated in the case of Sourashtra Salt Manufacturing Company v Bai Valu Raju (1958 SC 881), further emphasizes the employer’s responsibility, extending the scope of the workplace to include situations that are reasonably connected with the employment, even beyond the physical premises.
The commencement and termination of employment hinge on the specific circumstances of each case. Employment doesn’t necessarily conclude when the ‘down’ signal is given or when the worker physically departs the workshop. Instead, there exists a notional extension both at the entry and exit points, considering factors such as time and space. This perspective acknowledges that the boundaries of employment extend beyond immediate physical locations and specific signals, recognizing a broader context for the determination of the employment period.