7. Contract Limitations.—
To a considerable extent there may be an effective limitation of liability by special contract between the parties. The courts hold, generally, that limitations of liability in a contract must be reasonable if they are to be valid and they regard clauses which exempt the shipowner from liability for his own or his servants' negligence as unreasonable and also as contrary to public policy. At the same time, when the ship is not professing to be a common carrier and the contract is plain and on adequate compensation, such clauses may be, and are, enforced. Their efficiency will depend largely upon the contract itself and there is no hard and fast rule which prevents the private carrier from obtaining such limitations as he requires if the other party will agree thereto.
An illustration is found in the case of the Royal Sceptre, 187 Fed. 224, where the charter provided:
The ship is to be in no way liable for any consequences of ... perils of the sea, ... collisions, stranding, or other accidents or errors of navigation even when occasioned by the negligence, default, or error in judgment of the pilot, master, mariners, or other servants of the shipowners.
Judge Hough said:
The quoted charter provision delimits the obligations of the ship, in so far as it goes, when reasonably interpreted. If therefore the proximate cause of this loss be a peril of the sea (or river), a stranding, an error of the pilot or negligence of the master, it may be assumed that libellant cannot recover; for, without any written limitation of liability, all that the bailor-libellant could require or expect from the bailee-claimant was the use of ordinary care and skill and that expectation has been (in part) bargained away for a consideration presumably expressed in the rate of charter hire.