FACTS
How much was the jewellery stolen worth?
$50,000
What does Fraser Jewellers need to prove about the delay to win?
They must show that ADT’s delay likely caused or contributed to the loss, meaning the outcome might have been different if ADT had acted properly.
What is a fundamental breach in contract law?
It means the breach is so serious that it destroys the main purpose of the contract or takes away the main benefit the other party expected.
What is the purpose of a limitation of liability clause?
It is a term in a contract that limits how much one party can be required to pay if something goes wrong.
What went wrong during the robbery? What did ADT fail to do?
ADT failed to notify the police promptly after receiving the alarm signal, which was a key obligation under the contract.
Why did the court decide that causation was proven?
The court found there was enough evidence to suggest that a quicker police response could have led to the robbers being caught or the jewellery being recovered.
What did the trial judge say about fundamental breach?
The trial judge found that the failure occurred at the most critical moment and therefore went to the root of the contract.
Why did the trial judge refuse to enforce the clause?
The trial judge found it unfair and unreasonable, partly because it was not emphasized and there was an imbalance in bargaining power.
What type of service was ADT providing to Fraser Jewellers?
ADT was providing a monitoring service for the alarm system, not insurance coverage for the value of the jewellery.
Why did ADT argue that causation was not proven?
ADT argued that the robbers would have escaped regardless of any delay, meaning the breach did not materially contribute to the loss, and therefore the necessary causal connection was not established.
What did the Court of Appeal decide about fundamental breach?
The Court of Appeal held that this was only a single instance of negligent performance and did not destroy the entire contract, so it was not a fundamental breach.
Why did the Court of Appeal enforce the clause?
The court found the clause was clear, part of a voluntary agreement, and not unconscionable, so it should be enforced.