The appellant sought full tort recovery against employees who negligently damaged a transformer while performing warehousing services under a storage contract containing a $40 limitation of liability clause.
The Court held that the employees owed a duty of care to the customer, but also held that the doctrine of privity should be relaxed to permit employees to rely on their employer's contractual limitation clause where the clause expressly or impliedly extends to them and they were acting in the course of employment while performing the contracted services.
Applying that framework, the employees' liability was limited to $40.
The appeal and cross-appeal were both dismissed, with one judge dissenting on the cross-appeal and concluding no duty of care existed.
