MGMT 346 Chapter 6

35. Ocean carriers are liable for damages resulting from which of the following? a. Providing a seaworthy ship at the beginning of the voyage. b. Mismanagement of the ship that causes a shipwreck. c. Errors in navigation that cause a mid-ocean collision. d. All of these are correct.

ANSWER: a

41. The type of loss covered by a marine insurance policy when cargo is damaged, destroyed, or sacrificed in the process of saving the vessel or the cargo of others is a: a. general average loss. b. weighted average loss. c. partial or particular average loss. d. rescued loss.

ANSWER: a

32. In the event of cargo damage, an action under COGSA must be brought within: a. a reasonable period of time. b. one year. c. two years. d. the time specified in the UCC.

ANSWER: b

37. Himalaya Clauses in bills of lading: a. protect the carrier for damage to cargo being transported over mountainous and rugged terrain. b. protect stevedores from liability in loading and unloading ships. c. protect only the shipper for improper packaging of goods for shipment. d. all of these are correct.

ANSWER: b

38. Ocean carriers are not liable for more than $500 per package where the shipper has had: a. the opportunity to purchase marine insurance. b. the opportunity to indicate the nature and value of the goods on the bill of lading. c. the opportunity to declare the value of the goods on the export license. d. the opportunity to repackage the goods before shipment.

ANSWER: b

39. Transporting new cars above deck on an ocean carrier would be considered: a. a peril of the sea. b. a material deviation from the bill of lading. c. an act of general average. d. all of these are correct.

ANSWER: b

43. The three types of losses generally covered by marine insurance policies include all but which of the following? a. Total losses of all or part of a shipment b. Weighted average losses c. General average losses d. Partial or particular average losses

ANSWER: b

48. In the history of maritime law, which of the following is one of the most influential and detailed medieval codes from the twelfth century? a. The Code of Normandy b. The Rolls of Oleron c. Rhodian Law d. The Mansfield Code

ANSWER: b

28. According to the Warsaw Convention, an air carrier is presumptively liable for all damage to air cargo unless it can prove: a. the damage did not occur as a result of its negligence. b. the loss was caused by the negligence of the shipper. c. either the damage did not occur as a result of its negligence or the loss was caused by the negligence of the shipper. d. none of these, since the convention only governs baggage claims.

ANSWER: c

31. Clauses in a bill of lading that attempt to exonerate the carrier from liability are void under which of the following? a. The Hague Rules. b. The Carriage of Goods by Sea Act. c. Both The Hague Rules and The Carriage of Goods by Sea Act. d. None of these are correct.

ANSWER: c

33. 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: a. questioning the captain of the ship as to the condition of the goods. b. testimony from the shipper that the goods were in good condition when loaded into the container. c. producing a clean bill of lading as evidence. d. there is a rebuttable presumption that the goods were damaged when they were unloaded, and the carrier must prove that they were not.

ANSWER: c

40. The proposed Rotterdam Rules differ from the Hague Rules in all of the following except: a. the expansion of carrier liability from "door to door." b. the elimination of errors in navigation as an exception from liability. c. the elimination of the requirement of written bills of lading. d. the elimination of perils of the sea as an exception from liability.

ANSWER: c

47. Unlike typical marine bills of lading, air waybills are: a. not legally binding. b. always electronic. c. non-negotiable. d. documents of title.

ANSWER: c

51. _____ is the term for goods carried aboard ships, and _____ is the term for the price charged to transport the goods. a. Freight; cargo b. Cargo; waybill c. Cargo; freight d. Freight; carriage

ANSWER: c

27. What was the holding in El Al Israel Airlines v. Tseng? a. The Warsaw Convention does not apply where the carrier waives its provisions. b. The defendant accepted an additional rate to ship the package based on its declared additional value. c. The Warsaw Convention limits the defendant's liability to $9.07 per pound. d. An international passenger may not bring a cause of action under local law against an airline when there is no bodily injury that satisfies the Warsaw Convention.

ANSWER: d

29. The first bill passed by the U.S. Congress defining the legal liability of an ocean carrier for the care of its cargo was: a. The Hague Rules. b. The Uniform Commercial Code. c. The Convention on the International Sale of Goods. d. The Harter Act.

ANSWER: d

30. 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: a. The Hague Rules. b. The Uniform Commercial Code. c. The Harter Act. d. The Carriage of Goods by Sea Act.

ANSWER: d

34. Which of the following are exemptions of the Ocean carriers' liability? a. Insufficiency of packing. b. Errors in the navigation or management of the ship. c. Acts of God. d. All of these are correct.

ANSWER: d

36. In J. Gerber & Co. v. SS Sabine Howaldt, a lawsuit brought by the owner of cargo (steel products) against an ocean carrier for damage to the cargo caused by sea water and moisture, the court ruled that: a. the turbulent seas and high winds were not sufficiently severe to constitute a "peril of the sea" under COGSA. b. the carrier was liable because the vessel was not seaworthy when it left port. c. the carrier was liable because it had not used usual good seamanship in handling the vessel. d. the carrier was not liable because it proved that the damage was caused by a peril of the sea. e. none of these are correct.

ANSWER: d

42. The type of marine insurance policy that allows the exporter to issue a certificate of insurance on a form provided by the insurance company is called: a. Unlimited policy. b. Shipment specific policy. c. Discretionary policy. d. none of these are correct.

ANSWER: d

44. The perils clause in a marine insurance contract covers which of the following? a. Explosion b. Pilferage c. Acts of war d. Jettison of the cargo during a storm

ANSWER: d

45. The ship Audie Murphy leaves the New York Port with a ship load of GMC pick-up trucks bound for the Port of Istanbul, Turkey. A fire breaks out aboard the ship and destroys the more than thirty GMC pick-up trucks. After an investigation it has been unable to determine the cause. Who is financially responsible to the owner of the cargo? a. Captain of the Audie Murphy b. Buyer c. The Owner of the ship - Jack Palace d. None of these are correct

ANSWER: d

46. An air waybill: a. is a contract between the consignor (shipper) and the carrier. b. states the freight charges and other conditions of transport. c. is a receipt stating that the carrier has received the goods in good condition and confirms the instructions for delivery. d. all of these are correct.

ANSWER: d

49. Under admiralty jurisdiction, what criterion is used to determine whether a waterway is "navigable"? a. The body of water must be wide and broad enough for today's shipping vessels. b. The body of water must have a port or dock. c. The body of water must currently be in use for commercial activity. d. The body of water is used or capable of being used for commercial activity.

ANSWER: d

50. Under admiralty jurisdiction, which of the following would not be considered a "vessel in navigation"? a. An international cargo ship b. A tugboat that never leaves its harbor c. A ferry capable of carrying up to 200 passengers d. An oil-drilling rig permanently affixed to the ocean floor

ANSWER: d

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

False

12. Ocean carriers are liable if cargo is damaged as a result of the ship being taken over by pirates, if the seizure or damage was foreseeable and the carrier failed to take necessary preventive measures.

False

15. In the United States, ocean carriers are not liable under the Uniform Commercial Code in amounts in excess of $500 per shipment.

False

16. Carriers are liable for damages equal to the value of the goods regardless of how their value is stated on the bill of lading.

False

17. Goods can be stored at any location on the vessel and the decision is left to the discretion of the captain.

False

20. If goods are sacrificed in the process of saving a ship from a substantial common danger, the owners of the goods are said to have incurred a particular average loss.

False

21. The law of general average is found in the Hague Rules permits a captain of a vessel to take timely action to avoid a disaster and claim average damages.

False

23. Only extra-ordinary risks of an ocean voyage are covered in the perils clause.

False

24. A carrier is liable to the buyer of cargo for a shortage if the amount of cargo in the container on arrival is less than that stated in the seller's commercial invoice.

False

26. The ship Darby O departed the Port of Yokohama, Japan to deliver Toyota parts to Miami, Florida through the Panama Canal. Due civil strife within Panama, the Canal is closed due to armed conflict. The carrier is entitled to claim increased expenses as a result to traveling the long route down South America under the "perils of the sea"?

False

3. Where the shipper fails to declare the value of the shipment on a clean bill of lading and the carrier has knowledge of the true value and does not advise the shipper to declare the value so, in the U.S. the carrier's liability will be unlimited liability per package.

False

4. Pilferage of goods in transit has been greatly reduced by the advent of break-bulk freight.

False

5. The Himalaya Clause governs the liability captains of carriers for damage to goods being transported from one U.S. seaport to another U.S. seaport.

False

6. COGSA governs the liability of ocean carriers for damage to goods while the goods are held in storage warehouses at the seaport.

False

7. Today, COGSA allows ocean carriers to put clauses in their bills of lading exonerating them from liability.

False

9. COGSA relieves carriers of liability for negligent care and handling of cargo.

False

1. A policy that is "free of particular average" is one that will not cover any partial and average losses.

True

10. A clean bill of lading establishes a rebuttable presumption that the goods delivered to an ocean carrier were in good condition.

True

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

True

14. A consignee can prove a shortage by showing that the quantity of the cargo unloaded at the destination is less than that listed on the bill of lading.

True

18. A provision in a bill of lading that extends the protection of the Hague Rules to stevedores is known as a Himalaya Clause.

True

19. If A's ocean cargo is thrown overboard in order to save a sinking ship and B's cargo is saved as a result, B must contribute to A for the loss.

True

2. Clean bill of lading is a carrier's guarantee, or warranty, of the condition of the goods it has delivered.

True

22. In order to recover for a general average claim, the claimant must prove that the ship was in imminent danger.

True

25. An Inchmaree clause in a marine insurance policy provides coverage to a cargo owner when a loss is due to an error in navigation or

True

8. An ocean carrier is liable for its failure to use due diligence in providing a seaworthy ship at the beginning of the voyage.

True