J Spurling Ltd v Bradshaw is one of the important UK company law cases. It is an English contract law as well as English property law case made on bailment and exclusion clauses. This law is best recognized for the red hand rule comment of Denning LJ.

The history:

J Spurling owned a storehouse in the region of East London. Mr. Bradshaw asked J Spurling to store his 8 barrels of orange juice. In the agreement it was mentioned as London lighterage clause that hooked off the liability of the warehouse because of their carelessness. When the time came to collect these barrels, they were found damaged. Due to these reasons Bradshaw refused pay to Spurling Ltd, and the company was sued for the money. At that time, Bradshaw claimed for the damages for breaking the term of an agreement of bail to take the proper care.

Judgment:

Denning LJ's judgment was - If the clause (London lighterage clause) is actually referred, it can let off the company from any compulsion to redeliver the products. He said that if the company’s managing director used the orange juice for his self purpose or sold it to anyone, by fraudulence or mistake, the company won’t be legally responsible; or if any person from company took the bung out of the barrel, the company wouldn’t be responsible.

He also added that the essence of agreement is to store goods and deliver them whenever demanded. But if the owner of the warehouse sells it to someone else or does not deliver it on time, then he is guilty. And if he does not deliver the goods to bailee in the correct condition, it’s his responsibility to show the correct and acceptable reasons. Otherwise there can be a tough condition for the company.