Bisso v. Inland Waterway Corp.

Supreme Court of the United States · Contracts

ContractsAdmiraltyExculpatory ClausesTowagetowageadmiraltypublic policyexculpatory clause

Facts

Petitioner's oil barge Bisso was being towed up the Mississippi River by respondent's steam towboat Cairo when it collided with a bridge pier and sank. The barge had no motive power, steering apparatus, officers, or crew, and its movements were completely controlled by the Cairo. The collision was caused by negligent towage by those operating the Cairo. The towage contract contained a clause placing the towing at the barge's 'sole risk' and another providing that the towboat's masters, crews, and employees would become the servants of the barge during the service.

Issue

May a towboat validly contract against all liability for its own negligent towage? Specifically, are clauses making the towage the tow's 'sole risk' and deeming the tug's employees servants of the tow enforceable to relieve the tower from liability for negligent towage?

Rule

In admiralty, contracts that release towers from all liability for their own negligent towage are invalid as against public policy. This rule cannot be avoided by contractual language fictionally designating the towboat's employees as servants of the towed vessel when they remain in fact solely employees of the towboat owner.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Harbor Grain Logistics hired Lake Meridian Towing to move an unmanned grain barge from Toledo, Ohio, to Detroit, Michigan. The written towage agreement stated that the movement would be "at the barge owner's sole risk" and that Lake Meridian would not be liable for any damage to the barge. Lake Meridian's crew negligently misjudged a turn and grounded the barge.

If the barge owner sues for negligent towage, what is the strongest argument against enforcement of the clause?

Explanation. The majority adopted a public-policy rule in admiralty that contracts releasing towers from all liability for their own negligent towage are invalid. The rule does not depend on common-carrier status or fraud. A "sole risk" clause cannot excuse the tower from damages caused by its own negligent towing. (Derived from Bisso v. Inland Waterway Corp. (n.d.).)