London Drugs delivered a transformer to the respondents for storage until it was to be used. In transfer, two employees of Kuehne & Nagel (Bassart and Vanwinkel) negligently dropped the machine causing $33,000 of damage. There was a clause in the contract stating that the "warehouseman's liability was limited to $40" unless specifically stated otherwise. No further statements had been made. The employees were found liable in trial, but their appeal was allowed at the Court of Appeal and London Drugs appealed to the Supreme Court.
a. Did the employees owe London Drugs a duty of care?
b. Were the employees covered under the limitation of liability clause