London Drugs Ltd v Kuehne & Nagel International [1993] 97 DLR (4th) 261

• Defendant was storing a transformer owned by Plaintiff valued at $32,000. The agreement between the parties included a limitation of liability clause which limited liability for damage to the transformer to $40.

• Two employees were moving the transformer with a forklift and negligently dropped it.

• London Drugs sued the two employees on the basis that they owed a separate duty of care and could not seek protection under the contract.

• Supreme court held that the employers, despite not being mentioned themselves in the contract, were exempted. Exemption clauses could be relied on by employees of a company where:

(1) the limitation of liability clause must, either expressly or impliedly, extend its benefit to the employee(s) seeking to rely on it; and

(2) the employee(s) seeking the benefit of the limitation of liability clause must have been acting in the course of their employment and must have been performing the very services provided for in the contract between their employer and the plaintiff when the loss occurred.