Alabi v. DHL Airways, Inc.
583 A.2d 1358 · Superior Court of Delaware · 1990
Facts
Plaintiff Mabayomije Alabi shipped an envelope allegedly containing $15,000 cash via DHL to London, describing the contents as "documents regarding school bills" despite inquiring about $15,000 insurance and purchasing $10,000 coverage. The envelope went missing, and DHL moved for summary judgment, arguing the contract was void due to misrepresentation or liability was limited to $100 per the airway bill, which prohibited shipping currency and limited liability. Plaintiff, a frequent DHL user, claimed he was unaware of these terms.
Issue
Did the plaintiff's misrepresentation of the envelope's contents as "documents regarding school bills" (when it allegedly contained cash) render the contract of carriage and insurance voidable, or limit DHL's liability to $100, thereby entitling DHL to summary judgment?
Holding
The court denied DHL's motion for summary judgment, finding a material issue of fact existed regarding the reasonableness of DHL's reliance on the plaintiff's description of the contents. The court also held that DHL's liability was not limited to $100 under the "release value doctrine" because the plaintiff had elected to purchase additional insurance.
Rule
A contract may be voidable for misrepresentation if there was a misrepresentation, it was fraudulent or material, it induced the recipient to contract, and the recipient's reliance was reasonable; however, the reasonableness of reliance can be a question of fact if the recipient reserved the right to inspect. A carrier's liability is limited under the "release value doctrine" only if the shipper had the option of obtaining higher coverage but chose not to.
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