Shipping Lawyer Maritime Contract Law 2 — Questions and Answers
Question 1: What is 'demurrage' in maritime law?
- A port entry fee
- Liquidated damages for detaining a vessel beyond laytime (Correct answer)
- A cargo inspection charge
- A customs duty
Correct answer: Liquidated damages for detaining a vessel beyond laytime
Demurrage is the agreed liquidated damages payable by the charterer when the vessel is detained beyond the allowed laytime.
Question 2: Under COGSA, what is the per-package liability limit for cargo damage?
- $100
- $250
- $500 (Correct answer)
- $1,000
Correct answer: $500
COGSA limits carrier liability to $500 per package or customary freight unit unless the shipper declares a higher value.
Question 3: Which COGSA defense exempts a carrier from liability when cargo damage results from an act of God?
- Negligence exception
- Perils of the sea defense
- Inherent vice defense
- Act of God defense (Correct answer)
Correct answer: Act of God defense
COGSA's Act of God defense excuses the carrier when damage results from extraordinary natural events beyond human control.
Question 4: What is a 'safe port' warranty in a time charter?
- A guarantee that the port has no piracy risk
- A charterer's undertaking that nominated ports are safe for the vessel (Correct answer)
- A warranty that port fees are capped
- An assurance of fast turnaround
Correct answer: A charterer's undertaking that nominated ports are safe for the vessel
Under a time charter, the charterer warrants that ports nominated for the vessel to call at will be safe for the vessel to reach, use, and depart.
Question 5: Which legal doctrine allows cargo to be substituted for lien payment in maritime disputes?
- Subrogation
- Lien on cargo (Correct answer)
- General average
- Arrest of vessel
Correct answer: Lien on cargo
A maritime lien on cargo allows carriers to hold or sell cargo as security for unpaid freight or demurrage charges.
Question 6: What does the 'Himalaya clause' in a bill of lading do?
- Limits cargo weight
- Extends carrier defenses and limitations to servants and agents (Correct answer)
- Specifies the governing law
- Requires arbitration in London
Correct answer: Extends carrier defenses and limitations to servants and agents
A Himalaya clause extends the carrier's defenses and liability limitations under the bill of lading to the carrier's servants, agents, and independent contractors.
Shipping Lawyer Maritime Contract Law 2
What is 'demurrage' in maritime law?