The Law School Authority

Threadgill v. Peabody Coal Co. Case Brief

Summary of Threadgill v. Peabody Coal Co.

Facts: P was an independent contractor hired by D to probe test holes; after the hoes were sunk to appropriate depth by D, p’ lowered a probing device into the hole; during the probing of one of the test holes, P’s probing device became stuck in the hole; D’s attempted to recover the probe but were unsuccessful; P claimed relief because the loss of the probe was due to the negligence in attempting to recover by D, and the D was obligated under K to pay the value of any equipment lost during the probing; D counterclaimed for expenses incurred in the recovery effort;

P/S: Trial court ruling, for P that he had satisfactory established that the industry standard places the risk of the probe loss on the driller, in the case the D, even though there was no express agreement on this issue between the two parties; dismissed P’s negligence claim and D’s counterclaim; D appeals

Issue 1: Whether there existed a industry custom that was binding on the D

Holding 1: Yes.  The industry custom would place on the D the responsibility for the loss of the probing device, FOR P

Rule: To be binding upon a party, a trade usage must be sufficiently general so that the parties could be said to have contracted with reference to it.

Rationale: the loss of equipment was generally considered to be a cost to the owner of the land being probed; in this case, D.  No express agreement is needed in order for the custom to be observed.

Issue 2:  Whether recovery is available is the P acted negligently

Holding 2: No.  The decision by the T.C. that the finding that negligence was made irrelevant by industry custom is rejected.  Remanded to determine P’s level of negligence, FOR D

Rule:  In order for a trade custom to be binding upon a person who has not expressly agreed to be bound by it, it must be reasonable.

Rationale:  Generally, parties cannot contract away their potential liability for their own negligence.  The trial court erred in ruling that the trade usage applied regardless of the negligence of the parties.


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