In August 2025, a US court found that the pilot of a Learjet did not have authority to bind the owner of the jet when he signed a landing card which included a clause which limited damages to direct damages and denied the right to claim indirect, consequential, special or exemplary damages.
When the Learjet landed at a Nevada airport, the pilot signed a landing card without reading it. The landing card included the limitation that the flight support company would not be liable to the customer “for indirect, consequential, special or exemplary damages, whether in contract or tort (including strict liability and negligence), such as but not limited to, loss of revenue, loss of use or anticipated profits, diminution or loss of value, or costs associated with substitution or replacement aircraft”. The service company damaged the Learjet when its employees towed another aircraft which hit the Learjet. The claim for repairs to the Learjet of about $61 000 was settled. Payment of the claim for loss of use and rental aircraft expenses of about $280 000 was rejected by the service company.
The court found that the pilot had neither actual nor apparent authority to bind the Learjet owner to the limitation of liability provisions. Proof of apparent authority under Nevada law requires proof of a subjective belief in the agent’s authority. The objective reasonableness enquiry asked whether a person of ordinary prudence, conversant with business usages and the nature of the particular business, acting in good faith, and giving heed not only to opposing inferences but also to all restrictions that are brought to their notice, would reasonably rely on the existence of such authority.
Briefly put, the question is whether it was reasonable to believe the agent was acting within the scope of the agent’s authority. According to the evidence, it was not common practice in the industry for landing cards to contain limitation of liability provisions nor for pilots to consent to such provisions.
It was alleged on behalf of the aircraft owner that the provision was in any event unconscionable and unenforceable. The court said there was no evidence to show that it was one-sided or oppressive and against public policy. Under Nevada law a contract is unconscionable only when the clauses of that contract and the circumstances existing at the time of execution of the contract are so one-sided as to oppress or unfairly surprise an innocent party.
The test for ostensible authority under South African law is similar. As to the unconscionability finding, a court in South Africa can refuse to enforce a provision which is against public policy. However, clauses limiting damages claims to direct losses, but not indirect, consequential, special, or exemplary damages are common and commonly enforced.