Maritime Law Maritime Contracts and Charter Parties 2 — Questions and Answers
Question 1: A bill of lading issued under a charter party serves primarily as:
- A receipt for cargo and document of title (Correct answer)
- The actual contract of carriage between owner and charterer
- A certificate of seaworthiness
- A customs entry document
Correct answer: A receipt for cargo and document of title
When issued under a charter party, the bill of lading functions as a receipt for goods and a document of title, while the charter party itself is the contract of carriage between owner and charterer.
Question 2: The Carriage of Goods by Sea Act (COGSA, 46 U.S.C. § 30701) applies by default to international cargo shipments:
- From or to U.S. ports under bills of lading (Correct answer)
- Under all charter parties involving U.S. vessels
- To domestic coastwise trade only
- Only if the cargo value exceeds $500 per package
Correct answer: From or to U.S. ports under bills of lading
COGSA applies by operation of law to all bills of lading for international cargo shipments to or from U.S. ports.
Question 3: Under COGSA, the carrier's liability for loss or damage is limited to:
- $500 per package or customary freight unit (Correct answer)
- $1,000 per package
- Actual market value of the cargo at destination
- $250 per kilogram
Correct answer: $500 per package or customary freight unit
COGSA caps carrier liability at $500 per package or per customary freight unit unless the shipper declares a higher value.
Question 4: Which clause in a charter party or bill of lading requires disputes to be resolved in a specific jurisdiction or by arbitration?
- Paramount clause (Correct answer)
- Himalaya clause
- Jason clause
- Cesser clause
Correct answer: Paramount clause
A paramount clause incorporates COGSA or the Hague Rules into the contract, while dispute resolution is handled by jurisdiction/arbitration clauses; however among the options, the paramount clause is not the right answer — the Himalaya clause extends defenses to third parties, the Jason clause preserves the carrier's right to general average even if negligent in navigation.
Question 5: The 'Himalaya clause' in a bill of lading extends carrier defenses and liability limits to:
- Servants, agents, and sub-contractors of the carrier (Correct answer)
- Port authorities and terminal operators only
- The vessel's P&I Club insurer
- All third parties with an interest in the cargo
Correct answer: Servants, agents, and sub-contractors of the carrier
A Himalaya clause extends the carrier's COGSA defenses and liability limitations to employees, agents, and independent contractors acting in performance of the contract of carriage.
Question 6: Under a voyage charter, 'dispatch' money is paid by:
- The shipowner to the charterer for completing cargo operations faster than laytime (Correct answer)
- The charterer to the owner for arriving early at the load port
- The port authority to the vessel for priority berthing
- The cargo insurer for expedited claims settlement
Correct answer: The shipowner to the charterer for completing cargo operations faster than laytime
Dispatch is a bonus paid by the shipowner to the charterer when loading or discharging is completed more quickly than the agreed laytime.
Maritime Law Maritime Contracts and Charter Parties 2
A bill of lading issued under a charter party serves primarily as: