Photo Production Ltd v Securicor Transport Ltd  AC 827
The appellant, Securicor Transport Ltd, was contracted by the respondents to provide security services on its premises. On one Sunday night, an employee of Securicor Transport deliberately started a fire which ended up burning the factory of Photo Production Ltd. In a suit for damages by Photo Production Ltd, Securicor Transport Ltd sought to rely on an exclusion clause which stated that “under no circumstances shall the company be responsible for any injurious act or default by any employee of the company unless such act or default could have been foreseen and avoided by the exercise of due diligence on the part of the company as his employer…” However, Photo Production Ltd contended that Securicor, through their agent, was in fundamental breach of contract and could not rely on the exclusion clause.
At the trial court, judgement was made in favour of Securicor Transport. On appeal by Photo Production Ltd, the court of appeal, relying on the doctrine of fundamental breach, allowed the appeal. Securicor Transport appealed to the House of Lords.
1. Whether or not the exclusion clause was effective in limiting the liability of Securicor Transport under the contract with Photo Production Ltd.
1. That the exclusion clause was effective in limiting the liability of Securicor Transport in the present contract.
The House of Lords, per Lord Wilberforce, rejected the application of the doctrine of fundamental breach and stated that “the question whether, and to what extent, an exclusion clause is to be applied to a fundamental breach, or a breach of a fundamental term, or indeed to any breach of contract, is a matter of construction of the contract”. Upon a construction of the contract, the exclusion clause was found to have covered the liability for damages and ought to be given effect.