Qantas Airways Ltd v Aravco Ltd

Qantas Airways Ltd (Qantas) appealed to the High Court of Australia against a decision of the Full Federal Court concerning the interpretation of a contractual indemnity clause in the context of the *Trade Practices Act 1974* (Cth) (TPA). The dispute arose from a contract for the supply of services, where Qantas sought to rely on an indemnity clause to limit its liability for breach of an implied statutory warranty of due care and skill under s 74(1) of the TPA.

The central legal issue before the High Court was whether the indemnity clause in the contract had the effect of modifying, or could be construed as having the effect of modifying, Qantas's liability under the statutory warranty of due care and skill implied by s 74(1) of the TPA. This required the Court to consider the operation of ss 68 and 68A of the TPA, which render void any term that purports to exclude, restrict, or modify liability imposed by certain provisions of the Act, including s 74(1).

The High Court held that the indemnity clause did not have the effect of modifying Qantas's liability under s 74(1). The Court reasoned that the indemnity clause operated independently of the statutory warranty and did not seek to limit or exclude the obligation to exercise due care and skill. Instead, it dealt with the allocation of risk between the parties in the event of a claim by a third party. The Court distinguished between a term that modifies liability and a term that allocates responsibility for the consequences of liability, finding that the indemnity clause fell into the latter category. Therefore, the indemnity clause was not void under s 68 or s 68A of the TPA.