Transportation Law - Commercial Law Review Exam

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| By Izabel Serina
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Izabel Serina
Community Contributor
Quizzes Created: 1 | Total Attempts: 361
Questions: 7 | Attempts: 361

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Transportation Law - Commercial Law Review Exam - Quiz

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Questions and Answers
  • 1. 

    Mark Anthony imported three crates of bus spare parts from Japan. The crates were shipped by the supplier from Japan to Manila on board a vessel owned by Verdon Shipping Lines. Upon arrival in Manila, it was discovered that one of the crates costing P1,500,000.00 was missing. The carrier offered to pay only P100,000.00, the maximum amount stipulated under Clause 18 of the covering Bill of Lading which limits the liability of the carrier. Mark Anthony claimed that he was not bound by such clause since he was not a signatory to the Bill of Lading. (a) Was the limited liability clause in the Bill of Lading binding on the consignee? (5 pts) (b) Was the stipulation in the Bill of Lading limiting the common carrier’s liability binding considering that it was a contract of adhesion? (5 pts)

  • 2. 

    Clarissa Marie was a passenger in a bus. The bus driver negligently bumped a car owned by Erika Joy, thereby causing damage to the car and injuries to Clarissa Marie. Clarissa Marie and Erika Joy filed separate actions for damages against the owner of the bus. The common carrier raised the defense that it exercised the diligence of a good father of the family in the selection and supervision of its drivers. Is such defense appropriate? (10 pts)

  • 3. 

    When is the “prior operator” or “protection of investment” rule not applicable? (10 pts)

  • 4. 

    M/V Martel collided with M/V Trevans due to the negligence of the captain of the former. M/V Martel sunk, resulting in the death of several passengers. The heirs of the passengers filed an action for damages against the ship owner on the ground that the latter was guilty of breach of contract of carriage. The ship owner, on the other hand, raised the defense that since the vessel sunk, he is no longer liable for damages. Is the defense tenable? (10 pts)

  • 5. 

    A cargo ship of X Shipping, Co. ran aground off the coast of Cebu during a storm and lost all its cargo amounting to Php50 Million. The ship itself suffered damages estimated at Php80 Million. The cargo owners filed a suit against X Shipping but it invoked the doctrine of limited liability since its vessel suffered an Php80 Million damage, more than the collective value of all lost cargo. Is X Shipping correct?

    • A.

      Yes, since under that doctrine, the value of the lost cargo and the damage to the ship can be set-off.

    • B.

      No, since each cargo owner has a separate and individual claim for damages.

    • C.

      Yes, since the extent of the ship’s damage was greater than that of the value of the lost cargo.

    • D.

      No, since X Shipping neither incurred a total loss nor abandoned its ship.

    Correct Answer
    D. No, since X Shipping neither incurred a total loss nor abandoned its ship.
    Explanation
    The doctrine of limited liability allows a shipowner to limit their liability to the value of the ship and its freight after a maritime accident. However, in order for the doctrine to apply, the shipowner must have either incurred a total loss or abandoned the ship. In this case, X Shipping did not incur a total loss nor did they abandon the ship. Therefore, they cannot invoke the doctrine of limited liability and are not correct in their defense against the cargo owners' suit.

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  • 6. 

    P, a sales girl in a flower shop at the Ayala Station of the Metro Rail Transit (MRT) bought two tokens or tickets, one for her ride to work and another for her ride home. She got to her flower shop where she usually worked from 8 a.m. to 5 p.m. At about 3 p.m., while P was attending to her duties at the flower shop, two crews of the MRT got into a fight near the flower shop, causing injuries to P in the process. Can P sue the MRT for contractual breach as she was within the MRT premises where she would shortly take her ride home?

    • A.

      No, since the incident took place, not in an MRT train coach, but at the MRT station.

    • B.

      No, since P had no intention to board an MRT train coach when the incident occurred.

    • C.

      Yes, since she already had a ticket for her ride home and was in the MRTs premises at the time of the incident.

    • D.

      Yes, since she bought a round trip ticket and MRT had a duty while she was at its station to keep her safe for her return trip.

    Correct Answer
    B. No, since P had no intention to board an MRT train coach when the incident occurred.
    Explanation
    P cannot sue the MRT for contractual breach because she had no intention to board an MRT train coach when the incident occurred. The fact that she had a ticket for her ride home and was within the MRT premises is irrelevant in this case. The incident took place at the MRT station, not inside the train coach, so it does not fall under the MRT's duty of care towards passengers. Therefore, P does not have grounds to sue the MRT for contractual breach.

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  • 7. 

    C Company shipped 20,000 bags of soy beans through S/S Melon, owned and operated by X Shipping Lines, consigned to the Toyo Factory and insured by the Surety Insurance Co., against all risks. C Company hired the entire vessel, with the option to go north or south, loading, stowing and discharging at its risk and expense. The owner and shipper agreed on a stipulation exempting the owner from liability for the negligence of its agents. When the cargo was delivered to the consignee, there were shortages amounting to P100,000.00. The insurance company paid for the damage and sought reimbursement from X Shipping Lines as carrier. Is the carrier liable? The carrier is:

    • A.

      Liable, because the stipulation exempting its owner from liability for the negligence of its agent is against public policy, hence, void.

    • B.

      Liable, because in case of loss, destruction or deterioration of goods, common carriers are presumed at fault under Article 1735 of the Civil Code.

    • C.

      Not liable, because it exercised due diligence in stowing the goods.

    • D.

      Not liable, because it is not a common carrier and the parties to a contract, as such, may enter into a stipulation exempting the owner from liability for the negligence of its agents.

    Correct Answer
    D. Not liable, because it is not a common carrier and the parties to a contract, as such, may enter into a stipulation exempting the owner from liability for the negligence of its agents.
    Explanation
    The correct answer is "Not liable, because it is not a common carrier and the parties to a contract, as such, may enter into a stipulation exempting the owner from liability for the negligence of its agents." The explanation for this is that the carrier in this case, X Shipping Lines, is not considered a common carrier. As a result, they are not subject to the same level of liability as common carriers. Additionally, the owner and shipper agreed on a stipulation that exempted the owner from liability for the negligence of its agents. This stipulation is valid and enforceable under the contract between the parties. Therefore, the carrier is not liable for the shortages in the delivered cargo.

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  • Current Version
  • Mar 19, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 21, 2020
    Quiz Created by
    Izabel Serina
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