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International Business Law and Its Environment 9Th Edition Schaffer Solutions Manual Full Chapter PDF
International Business Law and Its Environment 9Th Edition Schaffer Solutions Manual Full Chapter PDF
International Business Law and Its Environment 9Th Edition Schaffer Solutions Manual Full Chapter PDF
CHAPTER 6
THE CARRIAGE OF GOODS AND THE LIABILITY
OF AIR AND SEA CARRIERS
CASES IN THIS CHAPTER
TEACHING SUMMARY
Once the buyer and seller have negotiated the contract for the sale of goods, and even,
perhaps, how those goods will get from point A to point B, an air, marine or land carrier must
actually transport those goods. While generally governed by a private contractual relation, in
aviation and maritime law there is greater uniformity than in other areas because international
conventions and treaties have helped to harmonize the effect of national laws. The chapter
focuses on the liability of air carriers for death or bodily injury to passengers on international
flights (Recall the 2013 summer crash of a flight from Korea that landed in San Francisco after
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
crashing into the seawall and then erupting in flames). Also examined are the loss or damage to
baggage and air cargo as well as the liability of marine carriers or transport intermediaries
(trucks, rail, etc.) for loss or damage of cargo. Some issues of insurance law are also noted.
Additional Background: Perils of Sea. The concept of a peril of sea is not uniform among
nations. In fact, the Anglo-Australian notion is different from the U.S. and Canadian conception. In
the U.S. and Canada, a peril of sea must be of an extraordinary nature “or arise from an
irresistible force or overwhelming power” and cannot be guarded against through ordinary
prudence. This is described by the 2nd Circuit in The Guila, 218 Fed. 744 (2d Cir. 1914) and The
Rosalia, 264 Fed. 285 (2d Cir. 1920). The U.K. and Australia, however, do not require that such a
burden be met. Instead, they require only that losses be extraordinary. Therefore, sea and
weather conditions that could reasonably be foreseen and guarded against may constitute a peril
of sea. (Great China Metal Industries Co. Ltd. v. Malaysian International Shipping Corp., High
Court of Australia Reports, vol. 98, no. 65 (1998)). Nevertheless, because the Hague rules are
intended to apply widely in international trade, courts strive for a relatively uniform construction of
them.
CASE QUESTIONS
1. Why was Tseng not able to pursue a remedy under New York state law?
Answer: The Warsaw Convention was applicable in this case. Under the Warsaw
Convention, 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 convention.
2. What policy reasons does the Court give for holding that the air liability convention
should preclude remedies under local or state law?
Answer: The primary policy reasons are to ensure uniformity in the rules governing
claims arising from air transportation and shield carriers from national differences in
liability laws.
3. Why would Tseng not be successful in an action against the airline in federal court under
the Convention?
Answer: Tseng did not suffer bodily injury as required by the Convention.
Answer: The events were deemed “unexpected or unusual” in this case because the
failure to move the passenger was contrary to accepted industry practice. This diversion
from industry practice was external to the passenger and was a link in the causal chain
that led to his death.
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
2. Why did the Court reject Olympic’s contention that the term “accident” refers only to
affirmative acts?
Answer: The Court rejected Olympic’s contention that the term “accident” refers only to
affirmative acts because it was too narrow of a construction of the terms “events” or
“happenings.” A failure to act, especially in contravention of industry standards, is an
event or occurrence. According to the Court, the Warsaw Convention was not limited to
affirmative actions.
3. What is the significance of the attendant’s failure to move the asthmatic passenger away
from smoke when that was contrary to airline industry procedures?
Answer: According to the Court, the Warsaw Convention was not limited to affirmative
actions. Thus, a carrier could be liable for a failure to act as long as it was “unexpected”
or “unusual” and was external to the passenger.
4. How does this case differ from Air France v. Saks and the British “deep vein thrombosis”
cases, cited in the text?
Answer: The opinion is consistent with Air France v. Saks with respect to the definition of
accidental injury. The case is also consistent with the deep vein thrombosis cases as the
condition is not an accident but rather is associated with usual, normal and expected
operation of an aircraft. By contrast, the failure to move the passenger in Husain was not
associated with the usual, normal and expected operation of an aircraft.
1. What is a “peril of the sea”? Why do you think maritime law relieves a carrier from liability
for damages resulting from a “peril of the sea”?
Answer: Generally, perils “are peculiar to the sea, and which are of an extraordinary
nature or arise from irresistible force or overwhelming power, and which cannot be
guarded against by the ordinary exertions of human skill and prudence” The Giulia, 218 F.
744, 746 (2d Cir. 1914). A similar definition phrased a little differently is: “a fortuitous action
of the elements at sea of such force as to overcome the strength of a well found ship or
the usual precautions of good seamanship” Gilmore & Black, The Law of Admiralty 3-32 at
140 (1957).
2. Describe the sea and weather conditions here and explain whether they amounted to an
exculpatory peril of the sea.
Answer: Here, the Sabine Howaldt encountered dangerous cross seas, hurricane-strength
winds, and suffered extensive damage. Although the lower court believed the ship
unseaworthy because it could not withstand this weather and had negligently failed to
cover the hatches, the Court of Appeals found that no ship could be expected to withstand
such unpredictable “destructive forces.” Furthermore, it was not regular maritime practice
to cover hatches with tarpaulins. Therefore, the ship was deemed seaworthy and the loss
was determined to have resulted from a peril of the sea.
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
3. If an insurance company pays a claimant for goods damaged during ocean transit, may
the insurance company bring the action against the carrier under COGSA?
1. Why might an unknowing or unadvised shipper have failed to properly value marine
cargo?
Answer: Reading COGSA literally, a shipper may not completely understand the definition
of a package pursuant to COGSA. For example, in this case, the plaintiffs asserted that
the slip was not really a “package” (something in which cargo is wrapped) as contemplated
by COGSA. Since it wasn’t a package but rather a cradle, the per package limitation did
not apply. The court, however, explained that package refers to a class of cargo, not
necessarily a package in which the goods are enclosed.
2. What is the proper role of the shipper’s freight forwarder in giving advice and in arranging
transport for ocean cargo?
Answer: Freight forwarders act as agents for shippers in contracting air, land or sea
carriers for the transportation of goods to a place of destination. One of their primary duties
is to advise shippers on packaging of goods including determining the proper number of
packages for purposes of COGSA.
Answer: A carrier is the entity responsible for the actual transportation of goods by air,
land or sea. A freight forwarder is an agent of the shipper in contracting air, land or sea
carriers for the transportation of goods to a place of destination. A NVOCC is responsible
for the issuance of bills of lading to each shipper.
Answer: A carrier may be liable for damage to or loss of cargo pursuant to COGSA. A
NVOCC issues the bill of lading to the shipper and is, therefore, liable should loss occur.
A freight forwarder simply secures a place on the ship for the cargo and arranges for its
movement.
3. Why did Panalpina’s contractual assurance that the shipment would “receive door to
door our close care and supervision” not subject them to liability?
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
Answer: Because the extent of legal liability is determined by virtue of the role that
Panalpina played, freight forwarder or carrier. Here, the facts made clear that Panalpina
was merely a forwarder who would have no liability.
1. Tell whether coverage was awarded or denied under each of the following insurance
provisions, and why or why not: the perils clause; the shore clause; the “Inchmaree”
clause; and the negligence clause.
Answer: Coverage was denied under the perils clause as the loss contamination
occurred at the time of loading and was not the result of forced disposition or jettison.
Coverage was denied under the shore clause as the loss occurred on board rather than
in a shore accident. Coverage was denied under the Inchmaree clause as the loss was
caused by fault in the care, custody and control of the cargo. Coverage was denied
under the negligence clause as the possibility of the barge sinking as a result of the
presence of the caustic soda were too far removed from one another to fall within the
clause.
Answer: The court noted that the plaintiff could have covered itself by purchasing more
expensive insurance coverage that could have covered its specific loss.
4. Answer: The court limited the carrier’s liability to 39 “big packs.” The court
defined a package as “a class of cargo, irrespective of size, shape or weight, to which some
packaging preparation for transportation has been made which facilitates handling, but which
does not necessarily conceal or completely enclose the goods.” Any grouping demonstrating
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
some preparation may be considered a package. However, the number of packages must be
fully and accurately disclosed and easily discernible by the carrier to prevent the incurrence of
unforeseen liability. The touchstone of analysis is the parties’ contractual agreement as set forth
in the bill of lading. The bill of lading in this case referenced “39 Big Packs.” This statement was
consistent with the customs declaration form. Neither form nor the cargo manifest utilized
Fishman’s unit of measurement. Thus, Fishman’s recovery was limited to $19,500, which
represented the number of “big packs” multiplied by $500.
6. Answer: COGSA does apply because it is a shipment from the U.S. to a foreign
port. The court said to look at the bill of lading to determine the number of COGSA packages.
The bill of lading said 1320 cartons (packages?). COGSA limits the damages to $500 per
package. Therefore, Sony would recover $500 1320.
8. Answer: In the first case, the court notes that the ship’s crew must help to save
merchandise if the ship is in danger. If they do so, they are to be paid and returned back to their
homes. If they do not help, they get zero and also lose their wages. This helps merchants by
making sure all hands on deck will try to save their merchandise. In the second case, if some
goods are tossed overboard to save the ship, it is not just the owners of those goods who are
affected. All owners of goods will lose a part of the value of what was lost as the proceeds from
sale of saved goods are shared among all merchants. In the final case, the merchants also help
to bear losses incurred by the ship’s owner. If the mast is cut or parts of ship sacrificed to save
the goods, the merchants are to reimburse the ship’s owner.
MANAGERIAL IMPLICATIONS
1. Answer: The pallets may qualify as packages as the furniture was placed on
such pallets, wrapped with heavier cardboard and fastened with steel bands. Students should
recall that the definition of a package is very broad and includes any “class of cargo, irrespective
of size, shape or weight, to which some packaging preparation for transportation has been
made which facilitates handling, but which does not necessarily conceal or completely enclose
the goods.” In this case, the pallets may thus qualify as packages. The shipper made two
primary mistakes in this case. First, the shipper should have declared the value of the furniture
before shipment and inserted this value into the bill of lading. The silence of the bill of lading as
to the value of the furniture favors the limitation of liability to $500 per pallet. Second, the
shipper should have insisted upon a clear statement of the number of packages prior to
shipment if it disagreed with the method of equating the number of packages with the number of
pallets. The number of packages should have been fully and accurately disclosed and easily
discernible by the carrier to prevent the incurrence of unforeseen liability.
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
2. Answer: The information needed will depend on the degree of risk assumed by the
importer. Whereas many risks can be insured against, some cannot. For instance, if supplies of
raw materials or component parts are interrupted, this may disrupt the firm’s manufacturing or
assembly process. Certainly the importer would want to be aware of this potential and plan
accordingly. Moreover, some risks would not be covered under usual marine provisions.
Students should consider what additional coverage this firm might need, whether war-risk
insurance would be required, would the seller incur additional or unexpected war-risk
surcharges above the ordinary freight rates, and what affect will this have on the importer's
future shipments.
ETHICAL CONSIDERATIONS
The importance of ocean shipping to international trade cannot be overstated; it is its lifeblood.
Any threat to shipping can have global economic, and often political, ramifications, whether it is
caused by the closure of a canal by war, a hurricane or tsunami, or piracy off the coast of Africa.
Another threat is maritime crime. One form of maritime crime that often goes unmentioned to
the public is that of marine insurance fraud, a befitting topic for this chapter.
In the spirit of Sherlock Holmes, and other great detective mysteries, we thought this would be a
fun question for students. Some may know more about ocean shipping than others, and some
of our readers have become merchant mariners, and others insurers. But this should be
challenging and educational for all. The story is completely hypothetical, but is based on
compilations of many actual reported cases.
What happened? O. L. Salt knew the sea, the shipping business, marine insurance, and how to
scam the system – and had it all planned – a retirement on the Greek Island of Corfu. He picked
an old ship, but one capable of being insured and carrying cargo, at least for a short time. Her
name is a giveaway, named for a ship belonging to another pirate, Blackbeard’s Queen Anne’s
Revenge. The voyage charterer in Venezuela had no idea that the oil would never make its
destination in Houston. Once out to sea, Salt painted over the name of the ship, changing it to
“Corfu Sunset,” another clue, and hoisted a Liberian flag, to disguise her as she entered a
Cuban oil port by night. There Salt sold the oil for cash, refilled the ship with seawater to give
the appearance that she was still loaded with oil, removed her false markings, and set sail. The
next morning the ship was seen by sailors on a passing ship “setting low in the water” – typical
for a ship laden with “cargo.” Salt scuttled her in the Cayman Trench, the deepest part of the
Caribbean Sea, where she could never be raised. It’s a giveaway that he and the crew were all
found dry and safe, “suitcases in hand,” in a Jamaican hotel. In the end, Salt not only sailed
away to Corfu with suitcases of cash, but also a check from his “hull and machinery” insurance
carrier.
Ask students to research the case of the supertanker, Salem, lost at sea in 1980. Examine the
problem of maritime hull and cargo frauds. What other maritime crimes threaten the shipping
industry? As noted in the text, students might begin their research with the International
Maritime Bureau of the International Chamber of Commerce. The Journal of Commerce is an
excellent source of daily information on current events affecting international shipping,
insurance, and maritime issues, and students who are interested in the subject must at least be
familiar with the Journal. If you would like to dramatically illustrate the magnitude of all types of
ocean and air losses, consider recommending that students look at the website,
http://www.cargolaw.com, presented by the law firm of Countryman and McDaniel. Look for the
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
Photo Gallery of Cargo Loss, a shocking photo compilation of recent air and ocean disasters.
Students will quickly realize the importance of cargo insurance!
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Another random document with
no related content on Scribd:
Jack-in-the-Pulpit. Indian Turnip.
Arisæma triphyllum. Arum Family.
JACK-IN-THE-PULPIT.—A. triphyllum.
The Indians were in the habit of boiling the bright scarlet berries
which are so conspicuous in our autumn woods and devouring them
with great relish; they also discovered that the bulb-like base or
corm, as it is called, lost its acridity on cooking, and made nutritious
food, winning for the plant its name of Indian turnip. One of its more
local titles is memory-root, which it owes to a favorite school-boy
trick of tempting others to bite into the blistering corm with results
likely to create a memorable impression.
The English cuckoo-pint yielded a starch which was greatly
valued in the time of Elizabethan ruffs, although it proved too
blistering to the hands of the washerwomen to remain long in use.
Owing to the profusion with which the plant grows in Ireland efforts
have been made to utilize it as food in periods of scarcity. By grating
the corm into water, and then pouring off the liquid and drying the
sediment, it is said that a tasteless, but nutritious, powder can be
procured.
Alum-root.
Heuchera Americana. Saxifrage Family.
Blue Cohosh.
Caulophyllum thalictroides. Barberry Family.
Stems.—One to two and a half feet high. Leaf.—Large, divided into many lobed
leaflets; often a smaller one at the base of the flower-cluster. Flowers.—Yellowish-
green, clustered at the summit of the stem, appearing while the leaf is still small.
Calyx.—Of six sepals, with three or four small bractlets at base. Corolla.—Of six
thick, somewhat kidney-shaped or hooded petals, with short claws. Stamens.—Six.
Pistil.—One. Fruit.—Bluish, berry-like.
In the deep rich woods of early spring, especially westward, may
be found the clustered flowers and divided leaf of the blue cohosh.
The generic name is from two Greek words signifying stem and leaf,
“the stems seeming to form a stalk for the great leaf.” (Gray.)
One to two feet high. Leaves.—Divided into many smooth, lobed, pale,
drooping leaflets. Flowers.—Purplish and greenish, unisexual. Calyx.—Of four or
five petal-like sepals. Corolla.—None. Stamens.—Indefinite in number, with linear
yellowish anthers drooping on hair-like filaments (stamens and pistils occurring
on different plants). Pistils.—Four to fourteen.
The graceful drooping foliage of this plant is perhaps more
noticeable than the small flowers which appear in the rocky woods in
April or May.
Lily-leaved Liparis.
Liparis liliifolia. Orchis Family (p. 17).
Beechdrops. Cancer-root.
Epiphegus Virginiana. Broom-rape Family.
A low fleshy herb without green foliage; tawny, reddish, or whitish. Flowers.—
Resembling in structure those of the Indian pipe, but clustered in a raceme.
The pine sap is a parasitic plant which is closely allied to the
Indian pipe (Pl. XXI.). Its clustered flowers are usually fragrant. The
plant is commonly of a somewhat tawny hue, but occasionally one
finds a bright red specimen. It flourishes in oak or pine-woods from
June till August.
Rattlesnake-root.
Prenanthes alba.
Achillea Millefolium, 94
Actæa alba, 50
Actæa rubra, 52
Agrimonia Eupatoria, 156
Aletris farinosa, 86
Alisma Plantago, 98
Althæa officinalis, 206
Amelanchier oblongifolia, 22
Ampelopsis quinquefolia, 65
Amphicarpæa monoica, 262
Anagallis arvensis, 226
Anaphilis margaritacea, 112
Anemone nemorosa, 24
Anemone Virginiana, 76
Anemonella thalictroides, 26
Antennaria plantaginifolia, 32
Anthemis Cotula, 71
Aphyllon uniflorum, 236
Apios tuberosa, 284
Apocynum androsæmifolium, 188
Aquilegia Canadensis, 214
Aralia nudicaulis, 42
Aralia quinquefolia, 40
Aralia racemosa, 42
Aralia trifolia, 40
Arctostaphylos Uva-ursi, 46
Arethusa bulbosa, 248
Arisæma triphyllum, 280
Asarum Canadense, 278
Asclepias Cornuti, 192
Asclepias incarnata, 193
Asclepias purpurascens, 193
Asclepias quadrifolia, 193
Asclepias tuberosa, 222
Asclepias verticillata, 110
Ascyrum Crux-Andreæ, 150
Aster cordifolius, 268
Aster corymbosus, 105
Aster ericoides, 105
Aster multiflorus, 106
Aster Novæ Angliæ, 268
Aster patens, 268
Aster puniceus, 268
Aster spectabilis, 268
Aster umbellatus, 105
Dalibarda repens, 84
Datura Stramonium, 104
Datura Tatula, 105
Daucus Carota, 96
Delphinium exaltatum, 240
Delphinium tricorne, 240
Dentaria diphylla, 29
Desmodium acuminatum, 196
Desmodium Canadense, 194
Desmodium Dillenii, 196
Desmodium nudiflorum, 196
Dianthus Armeria, 198
Dicentra Canadensis, 36
Dicentra Cucullaria, 34
Diervilla trifida, 134
Discopleura capillacea, 97
Draba verna, 29
Drosera Americana, 91
Drosera filiformis, 91
Drosera rotundifolia, 91
Galium Aparine, 76
Gaultheria procumbens, 72
Gaylussacia resinosa, 66
Genista tinctoria, 145
Gentiana Andrewsii, 272
Gentiana crinita, 274
Gentiana quinqueflora, 272
Geranium maculatum, 238
Geranium Robertianum, 193
Gerardia flava, 168
Gerardia maritima, 210
Gerardia purpurea, 210
Gerardia quercifolia, 168
Gerardia tenuifolia, 210
Geum album, 86
Gnaphalium polycephalum, 112
Goodyera pubescens, 94
Habenaria blephariglottis, 92
Habenaria ciliaris, 152
Habenaria fimbriata, 249
Habenaria lacera, 82
Habenaria psycodes, 249
Habenaria virescens, 82
Hamamelis Virginiana, 170
Hedeoma pulegioides, 249
Helenium autumnale, 166
Helianthemum Canadense, 140
Helianthus annuus, 166
Helianthus divaricatus, 164
Helianthus giganteus, 164
Hepatica triloba, 229
Heuchera Americana, 282
Hibiscus Moscheutos, 206
Hieracium aurantiacum, 224
Hieracium scabrum, 132
Hieracium venosum, 132
Houstonia cærulea, 232
Hudsonia tomentosa, 134
Hydrophyllum Virginicum, 72
Hypericum perforatum, 148
Hypoxis erecta, 142
Ilex verticillata, 52
Impatiens fulva, 154
Impatiens pallida, 154
Inula Helenium, 162
Iris versicolor, 244
Jeffersonia diphylla, 30
Magnolia glauca, 56
Maianthemum Canadense, 28
Malva rotundifolia, 206
Medeola Virginica, 127
Medicago lupulina, 144
Melampyrum Americanum, 136
Melilotus alba, 72
Melilotus officinalis, 145
Menispermum Canadense, 56
Mertensia Virginica, 234
Mikania scandens, 108
Mimulus ringens, 250
Mitchella repens, 80
Mitella diphylla, 38
Monarda didyma, 224
Monarda fistulosa, 256
Monotropa Hypopitys, 283
Monotropa uniflora, 74
Myosotis laxa, 235
Nemopanthes fascicularis, 52
Nepeta Glechoma, 238
Nuphar advena, 128
Nymphæa odorata, 88
Oakesia sessilifolia, 50
Œnothera biennis, 157
Œnothera fruticosa, 157
Œnothera pumila, 157
Opuntia Rafinesquii, 138
Opuntia vulgaris, 138
Orchis spectabilis, 176
Orontium aquaticum, 126
Osmorrhiza longistylis, 97
Oxalis Acetosella, 62
Oxalis stricta, 156
Oxalis violacea, 236