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25 Cards in this Set
- Front
- Back
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Application of Harter Act
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a. Between US ports (including intercoastal/coastal trade) AND Between US and foreign ports
b. From the time carrier RECIEVES CARGO into its custody until proper DELIVERY i) Delivery—when carrier or its agent discharges cargo (1) Onto a fit wharf (2) Gives notification to the consignee, and allows consignee reasonable opportunity to take possession of the cargo (3) Also when cargo is turned over to a designated authority as stipulated in a regulation or by custom of the port c. Does not apply to live animals |
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Essential Elements of Harter Act
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(1) Outlaws EXCULPATORY clauses
(2) Obligates carrier to issue bills of lading if shipper requests (3) Provides defenses to the carrier as long as carrier exercises DUE DILIGENCE to make the ship SEAWORHTY (before voyage commenced). |
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Exculpation under Harter
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a. EXCULPATION—carrier’s cannot exculpate themselves from liability
i) Cannot insert provision in bill of lading to avoid liability for damage arising from its NEGLIGENCE in loading, stowage, custody, care or proper delivery |
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Due Dilligence Duties under Harter Act
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b. DUE DILIGENCE—Ship-owner was relived from liability for negligence IN NAVIGATION or in the MANAGEMENT of the vessel if he used DUE DILIGENCE to make his vessel SEAWORTHY at port of loading.
i) Due Diligence means to make the ship seaworthy by properly (1) Manning (2) Equipping (3) Supplying the vessel ii) If carrier does these three things, then carrier and vessel are not liable for loss or damage arising from ERROR IN NAVIGATION or MANAGEMENT of the vessel |
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Where must due diligence be shown?
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a. Due Diligence of cargo must be show AT THE PORT OF LOADING
i) When ship makes multiple stops, carrier need only show it exercised due diligence for cargo loaded at port 1 at port 1; need not show additional due diligence for that cargo at port 2. |
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Permissible Limitation of Liability under Harter
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b. Carrier cannot insert provision into bill of lading that relieves it from liability for its own negligence and cannot insert provision that relives it from exercising due diligence to make vessel seaworthy.
c. Carrier may insert into a K a clause that provides that it is liable ONLY for damage caused by its fault; not for damage not caused by its fault i) May insert clause to limit liability to a specific amount, if that amount is REASONABLE. ii) Court have held that limited liability in exchange for a reduced freight rate is valid if it is REASONABLE (1) Reasonable—where bill of lading stipulates value of cargo, gives shipper opportunity to declare higher value for a higher freight rate, but the shipper chooses not to, that stipulated value is usually reasonable. |
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Due Diligence Burden Under Harter Act
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Burden of showing due diligence is on the Carrier
i) Must show due diligence exercised PRIOR to the voyage ii) In order to show Due Diligence, vessel must be Seaworthy |
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Seaworthy Definition Under Harter Act
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Fit for its intended voyage (properly manned, equipped, and supplied)
(1) Relative term meaning vessel is REASONABLY FIT to carry the cargo she has undertaken for the given voyage (2) Factors: cargo materials, construction of ship, equipment, officers and crew for the trade or service for which vessel was employed, route to be traveled, weather likely to be encountered. |
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Carrier Defenses under Harter
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a. Once carrier exercised Due Diligence PRIOR to the voyage to make the vessel seaworthy (reasonably fit for intended voyage), carrier is entitled to these defenses for lost/damaged cargo:
(1) Errors of navigation or management of vessel (2) Perils of the sea (3) Acts of G-d (vis majeur) (4) Acts of public enemies (5) Inherent defects, qualities or vices of the cargo (6) Insufficient packing (7) Seizure under process of law (quarantine) (8) Loss resulting from any act or omission of the shipper or owner of the cargo (9) Saving or attempting to save life or property at sea or from any subsequent delays encountered in rendering such service. |
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COGSA application as a matter of law
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a. First Issue: Does COGSA apply as a matter of law or by K?
b. COGSA applies as a matter of LAW, when there is (three things): (1) Contract of carriage (2) Bill of lading issued (3) Between US and foreign ports (not between US ports) |
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Application of COGSA to bills of lading
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d. All bills of lading or similar document of title in US-foreign trade are subject to COGSA
i) Exception: Charter parties are not statutorily subject to COGSA (1) Bill of lading issued to the charterer by owner is just a RECEIPT while in possession of charterer. It is NOT a K of carriage, and thus not subject to COGSA. ii) Third parties—when bill of lading transferred to consignee, bill of lading is subject to COGSA. (1) If charterer is involved, the charter party controls the legal relations between owner and charterer and COGSA controls legal relations between carrier and consignee. (a) If charter party wants, it can incorporate COGSA as a K provision |
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Incorporation of COGSA into terms of K
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e. Allows parties to incorporate the provisions of COGSA into their K for carriage for voyages between US ports. (COGSA as a K TERM, rather than by force of law [statute])
i) If COGSA is a K term, it should be treated simply as another term in the K (1) Parties can incorporate by REFERENCE all of COGSA, or only selected provisions (a) Ex in bill of lading: “COGSA should apply during entire period of time that carrier is responsible for goods” (i) Carriers would want this in there b/c COGSA is pro-carrier (ii) If there is a conflict between the K and the statutory terms of COGSA, the statute prevails |
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Time of COGSA application
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TACKLE TO TACKLE
i) Time goods are LOADED ON BOARD the vessel, to time of DISCHARGE (1) Could be extended by agreement between parties ii) Harter Act remains in effect before loading and after unloading (1) Unless parties agree that COGSA will govern the entire period the goods are in custody of the carrier (a) Harter applies to preloading (receipt) and post-discharge (delivery) iii) Liability ends when carrier has made PROPER DELIVERY |
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COGSA Carrier
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owner, charterer, or vessel itself
i) “Carrier”—owner or charterer who enters into a K of carriage with the shipper (1) Shipowner who enters in to a K of carriage and issues a bill of lading to a shipper is a COGSA CARRIER (2) Charterer which issues its own bill of lading to a consignee, will be regarded as a COGSA carrier and subject to in personam liability regardless of whether or not he shipowner might also be classified as a COGSA carrier. (3) Generally, charter parties, per se, are excluded from the terms of COGSA. Any dispute between owner and charterer must be resolved according to terms of charter party. (i) Since parties are free to K, they can incorporate terms of COGSA by reference in the charter party, and therefore COGSA would apply 1. They can also modify or exclude certain provisions, as long as COGSA does not apply by operation of law. (4) When a shipowner carries goods for a person who has chartered its vessel for a voyage, the voyage charter party is the K of carriage, which are not subject to COGSA (unless expressly agreed to be incorporated in the charter party). |
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i) Shipowner enters into K of carriage with shipper and issues bill of lading
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shipowner is COGSA carrier
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Time Charterer enters in to a K of carriage with shipper and issues a bill of lading singed ‘by’ or ‘for the master’ WITHOUT authority of the shipowner
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Charterer is COGSA carrier/ shipowner is not
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Time Charterer enters in to a K of carriage with shipper and issues a bill of lading singed ‘by’ or ‘for the master’ as is AUTHORIZED by shipowner in the time charter K between the Shipowner and the Charterer
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both Charterer and Shipowner are COGSA carriers.
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Due Dilligence Elements Under COGSA
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(1) Provide seaworthy ship—fit for intended voyage (this cargo, this time of year, on this route, for this length of time). Can offer expert testimony to prove this, and look at custom.
(2) Properly man, equip, and supply the ship (3) Make holds, refrigeration and cooling chambers, and all other areas of the vessel where the goods are carried, fit and safe for their reception, preservation, and carriage |
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When does the duty to excercise due care apply under COGSA
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ii) Duty to exercise due care is imposed BEFORE and at COMMENCEMENT of the VOYAGE.
(1) When vessel pushes out from port, voyage is commenced, and duty to exercise due diligence has come to an end (a) From the time of loading until the voyage commences (vessel leaves port) (2) Latent defect—If not reasonably discoverable upon normal inspection, or if arose after voyage commenced, carrier is not liable from the unseaworthy condition (3) Carrier has burden of proving due diligence when shipper makes out prima facie case b. Other Duties (ss3) |
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Other Carrier duties under COGSA
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i) Issue bill of lading after receiving goods and upon demand of shipper
ii) Properly and carefully handle, stow, care for, and discharge goods |
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(2) Hypo If there is a collision because of an error in navigation and refrigeration goes out
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(i) Carrier—argues that met requirement of due diligence to make vessel seaworthy prior to leaving port
(ii) Shipper—vessel not seaworthy when broke ground because carrier could have discovered deficiency before voyage. It was thus negligent, did not exercise due diligence to ensure vessel was seaworthy, so cannot bring itself within a COGSA defense |
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Indemnity under COGSA
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i) Carrier (charterer) has claim for indemnity against vessel owner when vessel is unseaworthy and the carrier must pay out to a subcharterer (ie like in the practice test).
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Carrier Defenses under COGSA
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(a) act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation of management of the ship
(b) fire, unless caused by the actual fault of the carrier (if there is a fire, burden is on automatically on shipper to show carrier was negligent. No need for carrier to prove due diligence to prevent fire) (c) perils, dangers and accidents of the sea or other navigable waters (d) act of god (e) act of war (f) act of public enemies (g) arrest or restraint of princes, rulers, or people, or seizure under legal process (h) quarantine restrictions (i) act or omission of shipper or owner of goods, his agent or rep. (j) Strikes or lockouts (k) riots and civil commotions (l) saving or attempting to save life or property at sea (m) Inherent Vice—wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the good (n) insufficiency of packing (o)insufficiency or inadequacy of marks (p)latent defects not discoverable by due diligence |
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Catch All Omnibus Exception under COGSA
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any other cause arising w/out actual fault and privity of carrier w/out fault or neglect of the agents or servants of the carrier, the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agent or servants of the carrier contributed to the loss or damage.
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Carrier Limitation of Liability Under COGSA
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$500 limit of liability per package or customary freight unit unless the nature and the value of goods has been declared by the shipper.
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