A Reexamination of 'Glanzer v. Shepard': Surveyors on the Tort-Contract Boundary

Abstract

In international commodity transactions, intermediary certifiers of quantity and quality play a crucial role. Sometimes they err, and when they do, the aggrieved party can pursue remedies against the counterparty or against the intermediary, either in contract or tort. The remedy against the intermediary has depended, at least in part, on whether the plaintiff was in privity. Even absent privity, the aggrieved party could possibly recover in tort (or perhaps as a third-party beneficiary). So held Cardozo in the leading New York case Glanzer v. Shepard. Section I of this paper reviews the Glanzer litigation, with special emphasis on how the court suppressed many of the significant facts. Section II then turns to restitution by the principals. Section III explores the courts’ general hostility to intermediaries’ attempts to limit their liability by contract, and Section IV considers the judiciary’s sporadic efforts to place extra-contractual limits on intermediaries’ liability. Section V examines the surveyors’ response.