Happy Carrier Company (HCC) is in the business of shipping goods. Yesterday HCC agreed with John Smith to ship Mr. Smith's furniture from Toronto to Ottawa. Mr. Smith's furniture is worth $100 000.00. Just before loading the furniture onto its truck, HCC's driver had Mr. Smith sign a contract that contained a term that limited HCC's liability for destruction or damage to the furniture to $50.00 if it resulted from the negligence of HCC or its employees. On the way to Ottawa, HCC's driver lost control of the truck and Mr. Smith's furniture was destroyed by fire after the truck crashed into a brick wall. In this situation,
a. the limitation of liability in the contract is effective only against HCC, but not its employee, so Mr. Smith can sue the employee for the value of his furniture.
b. the limitation of liability in the contract is permitted by law and Mr. Smith will receive only $50.00.
c. Mr. Smith's contract with HCC is illegal by common law, so Mr. Smith will recover the full value of his furniture from HCC.
d. although the contract with HCC is legal, the limitation on liability contained in it is not, so Mr. Smith will recover the full value of his furniture from HCC.
e. the limitation of liability in the contract is not effective, because Mr. Smith did not see it before he signed the contract, so Mr. Smith will recover the full value of his furniture from HCC.
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