In the case of Finlay McKinlay and Alexander Garriock, composing the firm of McKinlay, Garriock & Co., Appellants v. William Morrish, Master and Claimant of the Ship Pons Aelii on behalf of Robert and Edward Formby, Owners of said ship; a dispute arose over whether or not an insurance policy taken out by McKinley & Garriock was valid. The court found that it was invalid due to certain conditions in their agreement with Formby which had been breached. Specifically, they failed to provide adequate security for payment as required by law at the time. As such, they were unable to collect any damages from Morrish or Formby for losses incurred during a voyage made under false pretenses. This decision set an important precedent regarding insurance policies in maritime law going forward - namely that all parties must adhere strictly to contractual obligations if they wish them be enforced legally in court proceedings

In the case of McKinlay, Garriock & Co. v. William Morrish, the Supreme Court was asked to decide whether a shipowner could be held liable for damages caused by an independent contractor hired to repair their vessel. The majority opinion found that since the owner had no control over the work performed by the contractor and did not benefit from any negligence on his part, they were not responsible for any resulting damage or injury suffered by third parties as a result of said negligence. However, in dissent Justice Nelson argued that when one hires another person to perform services which may affect others’ property or safety it is reasonable to assume some degree of responsibility should such harm occur due to negligent performance on behalf of said contractor; thus he believed that owners should be held accountable if they knew or ought reasonably have known about potential risks associated with hiring such contractors and failed take proper precautions against them.