Reference no: EM133938009

John Smith wanted to submit a tender (offer) for a government contract. It contracted FedEx Courier to arrange a delivery of the offer to the government office. FedEx collect the envelope of the offer to the government office. FedEx collect the envelope at 6:00pm on October 1st. At that time, John Smith told FedEx's employee that the envelope contained a "tender" and stressed that it had to be delivered by 3:00pm on October 2nd. It then signed a bill of lading, which was presented by the FedEx employee, and which created a contract between John Smith and Fedex. That contracted contained a paragraph that said, "FedEx's liability for any loss or damage to the package shall be limited to $1.50 per kg based on the weight of the envelope." Because of the employee's carelessness, John's envelope was not delivered to the government office until 3:17 pm on October 2nd. As a result, the government refused to consider John's offer. The evidence that indicates that if the envelope had been delivered on tie, John would have received the government contract and would have earned a net profit of $700,000. John has therefore sued Fedex for breach of contract. In defense, FedEx says that (a) since the package weighed only 1 kilogram, damages must be limited to $1.50, and (b) even if the exclusions clause does not apply, it should be liable for $700,000 because it did not know all the details concerning the contract that John hoped to receive from the government.

Question

What will the court decide? Provide legal reasoning upon which the court could probably base its decision.