Week 6 I.E. [COGSA] + Assessment

A letter of credit whose payment is assured by two banks is a(n): A. Confirmed Letter of Credit. B. Irrevocable Letter of Credit. D. Standby Letter of Credit. C. Letter of Credit with Stipulations.

A. Confirmed letter of credit

The bank that is responsible for inspecting the documents to be sure they are in order, remitting payment to the seller, and negotiating the documents to the buyer is called: A. Issuing bank. B. Negotiating bank. C. Advising bank. D. Lading bank.

A. issuing bank

Under 1303, a carrier must do all of the following except: A. all of the choices are required of a carrier. B. carry million-dollar liability insurance per shipper. C. Maintain, equip and man the ship D. have a seaworthy ship E. make sure holds and compartments for carring the goods are in working order and safe.

B. Carry million-dollar liability insurance per shipper

Ocean carriers are liable for damages resulting from which of the following: A. All of the other choices are correct. B. Providing a seaworthy ship at the beginning of the voyage. C. Errors in navigation that cause a mid-ocean collision. D. Mismanagement of the ship that causes a shipwreck.

B. Providing a seaworthy ship at the beginning of the voyage.

Ocean carriers are not liable for more than $500 per package where the shipper has had: A. The opportunity to purchase marine insurance. C. The opportunity to declare the value of the goods on the export license. D. The opportunity to repackage the goods before shipment. B. The opportunity to indicate the nature and value of the goods on the bill of lading.

B. The opportunity to indicate the nature and value of the goods on the bill of lading.

A holder in due course, as defined by the U.C.C., includes which of the following? A holder in due course: A. Must have given a "just price" as consideration for the document or instrument. B. Must be unrelated to the original document holder. C. Must have taken the instrument for value and without notice it is overdue or has been dishonored. D. All of the other choices are correct.

C. Must have taken the instrument for value and without notice it is overdue or has been dishonored.

In order to prove the carrier's liability under COGSA in court, the plaintiff must prove that the goods were loaded in a good condition and unloaded in a damaged condition or lost. This is usually done by: B. Testimony from the shipper that the goods were in good condition when loaded into the container. D. There is a rebuttable presumption that the goods were damaged when they were unloaded, and the carrier must prove that they were not. C. Producing a clean bill of lading as evidence A. Questioning the captain of the ship as to the condition of the goods

C. Producing a clean bill of lading as evidence

The rule that usually prevails for interpreting documents that are submitted to a bank for payment under a letter of credit is commonly called the: C. Strict compliance rule. D. Holder in due course rule. B. Reasonable compliance rule. A. Good faith rule.

C. Strict compliance rule

Ocean carriers are exempted from liability for which of the following: B. Errors in the navigation or management of the ship. C. Acts of God. A. Insufficiency of packing. D. All of choices are correct. Ocean carriers are exempted from liability in each of the other choices.

D. All of choices are correct. Ocean carriers are exempted from liability in each of the other choices.

In the event that a discrepancy is found in the documents presented under a letter of credit, the bank may request a waiver or: D. Refuse to pay against documents. B. Void the transaction. C. Refuse delivery. A. Resubmit the draft.

D. Refuse to pay against documents.

The U.S. law that governs the liability of an ocean carrier for transporting goods from one U.S. port to a foreign port is the: Group of answer choices A. The Hague Rules. D. The Carriage of Goods by Sea Act. C. The Harter Act. B. The Uniform Commercial Code.

D. The Carriage of Goods by Sea Act.

Under Section 1312, COGSA is the law that will be applied for: A. the transport of goods by sea between the New York and Miami. B. the transport of goods by air between the U.S. and Peru. C. In all of the other situations, COGSA is always applicable. D. the transport of goods by sea between the U.S. and Europe.

D. Transport of goods by sea between the U.S. and Europe.

A letter of credit is a contract between: C. The sellers and their own bank. A. The seller and the buyer's bank. D. The buyers and their own bank. B. The buyer's bank and the seller's bank.

D. the buyer's and their own bank

Under 1301, the term "goods" includes all except: A. appliances B. all of the other choices are correct. C. cars D. clothing E. cattle

E. cattle

Marine insurance policies usually cover losses due from acts of war. Group of answer choices True False

False

Under Section 1301 The term "carriage of goods" covers the period from the time when the transport contract is entered into until they are unloaded. True False

False

An "all risks policy" covers all risks except those specifically excluded in the policy. Group of answer choices True False

True

If the issuing bank buys documents that contain a discrepancy, the bank cannot seek reimbursement from the account party, its customer. True False

True

Section 1301 defines a carrier as one who enters into a contract for carriage with a shipper. True False

True

The Harter Act governs the liability of carriers for damage to goods being transported from one U.S. seaport to another U.S. seaport. True False

True

The issuing bank will honor the draft as long as the documents appear to be in good order on their face and correspond to the terms of the letter of credit, regardless of the conditions of the goods received. True False

True

Ocean carriers are liable if cargo is damaged as a result of errors in the navigation of the ship. True False

false

Letters of credit are recognized in all modern legal systems of the world. True False

true

Ocean carriers are liable if cargo is damaged because it was left exposed to rain during the journey. True False

true

The basic risks of an ocean voyage are covered in the perils clause. True False

true