# Business Law Study Set 1

## Quiz 22 :Legal Aspects of Supply Chain Management

Question Type
What social forces are involved in the rule of law governing the liability of a common carrier for loss of freight
Free
Essay

The shipper entrust their shipment for the carrier in return the carrier gets payment for it. Hence, the carrier needs to be responsible from getting the good safely to destination. An effective business environment requires shipment to be on time and in the same state it was received. If carriers are not held responsible for most losses then businesses would have little trust to ship sold goods-stalling sales and growth of businesses.

Tags
Choose question tag
Compare the liens of carriers, warehouses, and hotels in terms of being specific.
Free
Essay

In general for a bailment, the bailee has a lien over the item(s) of the bailment to ensure payment for the bailee's service.
Hotels have the most general lien; they can place lien personal property of guests'. Carriers have a lien on goods it is shipping for payment of shipping services. Warehouse has a specific lien on only a stated property that is being used for storage, to pay for storage cost.

Tags
Choose question tag
Buffett sent a violin to Strotokowsky by International Parcel Service (IPS), a common carrier. Buffett declared the value of the parcel at $500 on the pick-up receipt given him by the IPS driver. The receipt also stated: "Unless a greater value is declared in writing on this receipt, the shipper hereby declares and agrees that the released value of each package covered by this receipt is$100.00, which is a reasonable value under the circumstance surrounding the transportation." When Strotokowsky did not receive the parcel, Buffett sued IPS for the full retail value of the violin-$2,000. IPS's defense was that it was liable for just$100. Decide.
Free
Essay

B asked carrier I to ship item. I have a limitation to liability clause which limits their liability of shipment to $100 or a declared value given by the shipper. B declared the value for$500. The shipment never arrived to its destination, B claimed damages of $2,000 the value of item. B will probably not get$2,000 but only $500 as the clause explicitly stated the amount owed as the declared value. However, I can't argue that they owed only$100 since they agreed on contract to pay damage up to the declared value amount.

Tags
Choose question tag
When de Lema, a Brazilian resident, arrived in New York City, his luggage consisted of three suitcases, an attache´ case, and a cylindrical bag. The attache´ case and the cylindrical bag contained jewels valued at $300,000. De Lema went from JFK Airport to the Waldorf Astoria Hotel, where he gave the three suitcases to hotel staff in the garage, and then he went to the lobby to register. The assistant manager, Baez, summoned room clerk Tamburino to assist him. De Lema stated, "The room clerk asked me if I had a reservation. I said, 'Yes. The name is Jose´ Berga de Lema.' And I said, 'I want a safety deposit box.' He said, 'Please fill out your registration.' " While de Lema was filling out the registration form, paying$300 in cash as an advance, and Tamburino was filling out a receipt for that amount, de Lema had placed the attache´ case and the cylindrical bag on the floor. A woman jostled de Lema, apparently creating a diversion, and when he next looked down, he discovered that the attache´ case was gone. De Lema brought suit against the hotel for the value of the jewels stolen in the hotel's lobby. The hotel maintained a safe for valuables and posted notices in the lobby, garage, and rooms as required by the New York law that modifies a hotelkeeper's common law liability. The notices stated in part that the hotel was not liable for the loss of valuables that a guest had neglected to deliver to the hotel for safekeeping. The hotel's defense was that de Lema had neglected to inform it of the presence of the jewels and to deliver the jewels to the hotel. Is the hotel liable for the value of the stolen jewels [De Lema v Waldorf Astoria Hotel, Inc., 588 F Supp 19 (SDNY)]
Essay
Tags
Choose question tag
Glen Smith contracted with Dave Watson, a common carrier, to transport 720 hives of live bees along with associated equipment from Idabel, Oklahoma, to Mandan, North Dakota. At 9:00 A.M. on May 24, 1984, while en route, Watson's truck skidded off the road and tipped over, severely damaging the cargo. Watson notified Smith about what had happened, and Smith immediately set out for the scene of the accident. He arrived at 6:00 P.M. with two bee experts and a Bobcat loader. They were hindered by the turned-over truck on top of the cargo, and they determined that they could not safely salvage the cargo that evening. The next day, an insurance adjuster determined that the cargo was a total loss. The adjuster directed a bee expert, Dr. Moffat, to conduct the cleanup; Moffat was allowed to keep the salvageable cargo, valued at $12,326, as compensation. Smith sued Watson for damages. Watson denied liability and further contended that Smith failed to mitigate damages. Decide. [Smith v Watson, 406 NW2d 685 (ND)] Essay Answer: Tags Choose question tag On March 30, Emery Air Freight Corp. picked up a shipment of furs from Hopper Furs, Inc. Hopper's chief of security filled in certain items in the airbill. In the box entitled ZIP Code, he mistakenly placed the figure "61,045," which was the value of the furs. The ZIP Code box was immediately above the Declared Value box. The airbill contained a clause limiting liability to$10 per pound of cargo lost or damaged unless the shipper makes a declaration of value in excess of the amount and pays a higher fee. A higher fee was not charged in this case, and Gerald Doane signed the airbill for the carrier and took possession of the furs. The furs were lost in transit by Emery, and Hopper sued for the value of the furs, $61,045. Emery's offer to pay$2,150, the $10-per-pound rate set forth in the airbill, was rejected. Hopper claimed that the amount of$61,045, which was mistakenly placed in the ZIP Code box, was in fact part of the contract set forth in the airbill and that Emery, on reviewing the contract, must have realized a mistake was made. Decide. [Hopper Furs, Inc., v Emery Air Freight Corp., 749 F2d 1261 (8th Cir)]
Essay
Tags
Choose question tag
Compare the limitations of the liability of a warehouse and of a hotelkeeper.
Essay
Tags
Choose question tag
Richard Schewe and others placed personal property in a building occupied by Winnebago County Fair Association, Inc. Prior to placing their property in the building, they signed a "Storage Rental Agreement" prepared by the County Fair Association, which stated: "No liability exists for damage or loss to the stored equipment from the perils of fire...." The property was destroyed by fire. Suit was brought against the County Fair Association to recover damages for the losses on the theory of negligence of a warehouse. The County Fair Association claimed that the language in the storage agreement relieved it of all liability. [Allstate Ins. Co. v Winnebago County Fair Ass'n, Inc., 475 NE2d 230 (Ill App)]
Essay
Tags
Choose question tag
Compare warehouse receipts and bills of lading as to negotiability.
Essay
Tags
Choose question tag
Under the UCC, a warehouse receipt: a. Is negotiable if, by its terms, the goods are to be delivered to bearer or to the order of a named person b. Will not be negotiable if it contains a contractual limitation on the warehouse's liability c. May qualify as both a negotiable warehouse receipt and negotiable commercial paper if the instrument is payable either in cash or by the delivery of goods d. May be issued only by a bonded and licensed warehouser
True False
Tags
Choose question tag
Under a nonnegotiable bill of lading, a carrier who accepts goods for shipment must deliver the goods to: a. Any holder of the bill of lading b. Any party subsequently named by the seller c. The seller who was issued the bill of lading d. The consignee of the bill of lading
True False
Tags
Choose question tag
American Cyanamid shipped 7,000 vials of DPT-a vaccine for immunization of infants and children against diphtheria, pertussis, and tetanus-from its Pearl River, New York, facility to the U.S. Defense Department depot in Mechanicsburg, Pennsylvania, by New Penn Motor Express, a common carrier. Cyanamid's bill of lading included a "release value," which stated the value of the property was declared as not exceeding $1.65 per pound. Cyanamid's shipment weighed 1,260 pounds. The bill of lading accepted by New Penn on picking up the DPT vaccine on February 6 also clearly stated that the shipment contained drugs and clearly warned to "protect from freezing." The bill further recited "rush... must be delivered by February 8, 1989." New Penn permitted the vaccine to sit in an unheated uninsulated trailer while it gathered enough other merchandise to justify sending a truck to Mechanicsburg. The DPT vaccine was delivered on February 10 in worthless condition, having been destroyed by the cold. New Penn admitted it owed$2,079 in damages pursuant to the bill of lading ($1.65 1,260 lbs.). Cyanamid claimed that the actual loss was much greater,$53,936.75. It stated that because New Penn breached its contract with Cyanamid, it could not invoke the benefits of that same contract, namely, the release value clause. Was it ethical for New Penn to hold the vaccine while waiting for enough merchandise to justify the trip How would you decide the case [American Cyanamid Co. v New Penn Motor Express, Inc., 979 F2d 301 (3d Cir)]
Essay
Tags
Choose question tag
Garrett and his wife checked into the St. Louis Airport North Holiday Inn on March 29, taking advantage of the hotel's "Park and Fly" package, which provided one night of lodging to individuals, provided a shuttle service to Lambert International Airport, and allowed individuals to keep a vehicle on the hotel's parking lot for up to two weeks. When the Garretts returned from their vacation on April 17, they discovered that their vehicle was stolen. They sued the hotel, contending that a special relationship of an innkeeper and guest was created by the "Park and Fly" marketing package, and that the hotel's knowledge of criminal activity on its parking lot created a duty to warn the Garretts, which it failed to do. What status did the Garretts have with the hotel regarding the protection of their vehicle after boarding the plane on their vacation trip Was there a bailment of the vehicle under the "Park and Fly" marketing package [ Garrett v. IMPAC Hotels Inc., 87 S.W.3d 870 (Mo. App.)]
Essay
Tags
Choose question tag
Under the Documents of Title Article of the UCC, which of the following acts may limit a common carrier's liability for damages to the goods in transit a. Vandalism b. Power outage c. Willful acts of third person d. Providing for a contractual dollar liability limitation
True False
Tags
Choose question tag
A common carrier bailee generally would avoid liability for loss of goods entrusted to its care if the goods are: a. Stolen by an unknown person b. Negligently destroyed by an employee c. Destroyed by the derailment of the train carrying them due to railroad employee negligence d. Improperly packed by the party shipping them
True False
Tags
Choose question tag
Frosty Land Foods shipped a load of beef from its plant in Montgomery, Alabama, to Scott Meat Co. in Los Angeles via Refrigerated Transport Co. (RTC), a common carrier. Early Wednesday morning, December 7, at 12:55 A.M., two of RTC's drivers left the Frosty Land plant with the load of beef. The bill of lading called for delivery at Scott Meat on Friday, December 9, at 6:00 A.M. The RTC drivers arrived in Los Angeles at approximately 3:30 P.M. on Friday, December 9. Scott notified the drivers that it could not process the meat at that time. The drivers checked into a motel for the weekend, and the load was delivered to Scott on Monday, December 12. After inspecting 65 of the 308 carcasses, Scott determined that the meat was in off condition and refused the shipment. On Tuesday, December 13, Frosty Land sold the meat, after extensive trimming, at a loss of $13,529. Frosty Land brought suit against RTC for its loss. Decide. [Frosty Land Foods v Refrigerated Transport Co., 613 F2d 1344 (5th Cir)] Essay Answer: Tags Choose question tag Motorola manufactured cell phones for Nextel of Mexico at its facility in Plantation, Florida. Nextel used Westwind International to arrange transportation of the cell phones. Westwind utilized Transpro Logistics to administer the transportation process and Transpro entered a Broker Transportation Agreement (BTA) with Werner Enterprises, a common carrier, to transport the phones from Florida to Texas on a regular basis. The BTA incorporated Werner's tariff giving shippers the option of selecting Carmack Liability full-value coverage or the carrier's limitation of liability of a maximum of$200,000 per truckload shipment. In its contract with Nextel, Westwind notified Nextel that thirdparty carriers might limit their liability for loss, and stated that it would request excess valuation coverage only upon specific written instructions from Nextel. Nextel simply relied on Westwind to handle shipping issues. On October 8, 2004, a shipment of 7,958 cell phones valued at $1,251,673 was stolen from one of Werner's trucks. Werner contended it owed a maximum liability of$200,000 under its tariff. Nextel's insurer, Ace Seguros SA, sued Werner for the full value of the shipment, contending that contracts downstream by Westwind and Transpro cannot be imputed back to Nextel-and that the cargo owner Nextel had not been given the opportunity to choose between two or more levels of liability as required by the Carmack Amendment. Can intermediaries like Westwind and/or Transpro negotiate an enforceable agreement with a carrier it engages Was Nextel given a reasonable opportunity to choose between two or more levels of liability Decide. [Werner Enterprises, Inc. v Ace Seguros SA, 554 F3d 1319 (11th Cir)]
Essay