Respond to the following questions.
1. You are the purchasing agent for a U.S. luggage manufacturer. You are asked to outsource some of the components, including steel strips used in the fabrication of the structural frames of the larger pieces of luggage. Your company’s manufacturing plant is located in Peoria, Illinois. Your research finds that the companies best able to supply the strips are located in Windsor, Canada; São Paulo, Brazil; and Padang, Indonesia. In asking for price quotations, what types of documents should you require? From your perspective, which trade term should be used in the price quotations?
2. A foreign buyer negotiates with a foreign exporter for goods to be shipped out of a foreign port. To protect itself from fraud in the transaction, the buyer requires that the exporter provide an inspection certificate as one of the documents to be presented for payment. When the documents were presented for payment, the buyer noticed that the date on the inspection certificate was later than the shipment date on the bill of lading. The certificate failed to state when the inspection occurred. Can the buyer refuse payment due to this discrepancy? Why or why not?
3. What is the purpose of international carriage conventions? Why are they needed? Why are they important? In what ways do they favor the shipping companies or common carriers? What benefits do the international carriage conventions provide to the shippers?
4. A shipper obtains a marine (cargo) insurance policy for $25,000 on goods that had a real or market value of $8,000. If the goods are lost at sea, is the insurance company liable for $25,000, $8,000, or nothing? Justify your response.
5. Plaintiff Tseng boarded an international flight from New York to Tel Aviv. Before being allowed to board, she was subjected to an intrusive security search. Tseng sued the airline in state court in New York for the torts of assault and false imprisonment. The Warsaw Convention does not address such an injury. Will Tseng be allowed to continue her action under New York law? El Al Israel Airlines, Ltd. v. Tseng, 119 Sup. Ct. 662 (1999).
6. The plaintiffs are Dutch importers of commodities that included industrial leather gloves. Four shipments of gloves were made in 1982 and 1983. The insurance contract contained the following clause: “This insurance shall in no case be deemed to extend to cover loss damage or expense proximately caused by inherent vice or nature of the subject matter insured.” The plaintiff claimed that the dropping of water from a source external to the goods damaged the gloves. The defendant asserted that the goods deteriorated as a result of their natural behavior. In short, the goods were damaged because the plaintiff did not properly dry the leather. Is this a case of inherent vice? Noten v. Harding, 2 Lloyd’s Law Report 283 (English Court of Appeal 1990).
