MGMT 346 EXAM 2 QUESTIONS WITH VERIFIED
ANSWERS 2026
Aviation and maritime law - answers - the legal aspects of moving goods and people by
air and sea
Liability of air carriers - answers - for death and bodily injury to passengers traveling
international and for loss or damage to baggage or air cargo
Liability of marine (ship) carriers - answers - for damage or loss to cargo
Liability of freight forwarders - answers - and other transport intermediaries
For maritime law it grew out of... - answers - customary law based on the traditions of
ancient and medieval mariners, ship owners, and merchants (enforced by early
maritime courts in port cities ie. Hamburg and rotterdam, whose judgements were
integrated into medieval maritime codes)
Warsaw convention of 1929 - answers - for more than 70 years was the most important
law governing the liability of air carriers for loss or damage to cargo or baggage during
international shipping and for death or bodily injury to passengers engaging in
international travel
Issues with the warsaw convention - answers - - liability for loss or damage to baggage
or cargo was limited
- damages of death or bodily injury were not as high as they would be in car accidents
- never modernized or adapted to electronic commerce and modern air transportation
methods
- damage to cargo was about 10$ per pound
- limitation on liability was $75,000 for death/bodily injury
Montreal convention of 1999 - answers - - replaces warsaw convention although about
50 countries still use warsaw
- eases restrictions and raises the limits on recovery from air carriers
- requires airlines to maintain adequate insurance for losses or damages that include
compensating passengers for flight or baggage delays
- applies to passengers ticketed for int travel where place of departure and place of
destination are countries who have ratified the convention
What is considered an "accident" according to the montreal convention of 1999? -
answers - - requires injury to be caused by some event peculiar to air travel and
'external' to the passenger (ie. Torts committed by terrorists, fall while boarding)
,Olympic airways v husain - answers - - passenger died of asthma attack after flight
attendant refused to move him from sitting near the smoking section of the plane
- decision: because of the flight attendants "unexpected or unusual" refusal to move the
passenger to another seat, contrary to airline policy and industry standards, was an
"accident" that was "external to the passenger"
Montreal convention (two-tiered liability system) - answers - first tier: carrier strictly liable
for all damages from death or personal injury up to $152,000 approx
Second tier: carrier may be liable for all proven damages above the strict liability limit if
damage was due to carrier's negligence, willfulness, or other wrongful act or omission or
to that of its employees or agents
Montreal convention (special drawing rights sdr) - answers - - is an international reserve
asset, created by the international monetary fund in 1969 to supplement its member
countries' office reserves
- the value of an sdr is based on five currencies (us$, chinese rnb, euro, yen, pound)
- sdr is neither a currency or claim on the imf but it is a potential claim on the freely
usable currencies of imf members
- facilitates easy conversion into any currency
"maritime" law refers to - answers - that body of law within the admiralty jurisdictions of
a court that governs private rights and obligations arising out of the operation of vessels
on navigable waters or in maritime commerce (ie. Includes maritime torts/contracts, bills
of lading, ship owners liability for cargo, maritime insurance, the law of collision salvage,
etc...)
Navigable waters includes - answers - not only oceans and seas but also large lakes
such as the great lakes that are (regardless of size) used or capable of being used for
commercial activity
The hague rules - answers - - helped develop uniform rules governing ocean bills of
lading
- carriage of goods by sea act (cogsa) helped by defining the responsibilities to cargo
and cargo owners, and limited the carriers liability for loss or damage to cargo by law
- these rules have been adopted by us, canada, uk, most of europe, japan, hong kong,
india, and singapore however the visby amendments have not been adopted by the us
Maritime carrier liability - answers - - responsible for cargo shortages
- stowing cargo
- must be a "seaworthy" ship at the beginning of voyage
- a clean bill of lading issued by carrier is constructive proof that goods were shipped in
good condition and not damaged
Ocean carrier responsibilities - answers - - properly and carefully load, handle, stow,
carry, keep, care for and discharge the goods carried
, - the rules are different if the cargo is lost or damaged due to a problem with the ship
itself
Carrier is not responsible for... - answers - - act, neglect, or default of the master, pilot
or other servant of the carrier in the navigation or in management of the ship
- fire (unless caused by the actual fault of the carrier)
- perils/dangers and accidents of the sea
- an act of god (unpreventable less from natural causes)
- an act of war
- labor strikes
- inherent defect, quality, or vice of the goods that causes wastage in build or weight or
other damage/loss
Z.k. marine, inc. V. Archigetis - answers - decision: the court held that each yacht
constituted one customary fright unit or "package" and that the shipper had been given
a fair opportunity to declare a higher value and therefore the carrier's liability for
damages to the yachts were 500$ per package. The purchasers of the bills of lading
were bound to the terms including the limitation provisions
Freight forwarders - answers - organize shipments for customers to get goods from the
manufacturer or producer to a market, customer or point of destination
- takes care of: export and import documentation, all arrangements with carriers,
packing, crating, and storage needs
- they are not carriers and are not liable for the cargo damaged during shipment
Methods of payment in international trade (ranked from least secure to most secure) -
answers - - consignment
- open account
- documentary collections
- letters of credit
- cash in advance
Negotiable instrument - answers - a signed writing containing an unconditional promise
to pay to order or to bearer on demand or at a definite time
Promissory note - answers - a two-party negotiable instrument that is an unconditional
written promise by one party to pay money to another party.
Draft - answers - three party instrument containing signed order of drawer, given to
drawee (ie. Bank) to pay a sum of money to the third party (payee) on demand or
definite time
"common" check - answers - special type of draft which is drawn on a bank and payable
on demand. There are three parties
1. Drawer (gave the order to pay)
2. Drawee bank (to whom the order to pay is given)
ANSWERS 2026
Aviation and maritime law - answers - the legal aspects of moving goods and people by
air and sea
Liability of air carriers - answers - for death and bodily injury to passengers traveling
international and for loss or damage to baggage or air cargo
Liability of marine (ship) carriers - answers - for damage or loss to cargo
Liability of freight forwarders - answers - and other transport intermediaries
For maritime law it grew out of... - answers - customary law based on the traditions of
ancient and medieval mariners, ship owners, and merchants (enforced by early
maritime courts in port cities ie. Hamburg and rotterdam, whose judgements were
integrated into medieval maritime codes)
Warsaw convention of 1929 - answers - for more than 70 years was the most important
law governing the liability of air carriers for loss or damage to cargo or baggage during
international shipping and for death or bodily injury to passengers engaging in
international travel
Issues with the warsaw convention - answers - - liability for loss or damage to baggage
or cargo was limited
- damages of death or bodily injury were not as high as they would be in car accidents
- never modernized or adapted to electronic commerce and modern air transportation
methods
- damage to cargo was about 10$ per pound
- limitation on liability was $75,000 for death/bodily injury
Montreal convention of 1999 - answers - - replaces warsaw convention although about
50 countries still use warsaw
- eases restrictions and raises the limits on recovery from air carriers
- requires airlines to maintain adequate insurance for losses or damages that include
compensating passengers for flight or baggage delays
- applies to passengers ticketed for int travel where place of departure and place of
destination are countries who have ratified the convention
What is considered an "accident" according to the montreal convention of 1999? -
answers - - requires injury to be caused by some event peculiar to air travel and
'external' to the passenger (ie. Torts committed by terrorists, fall while boarding)
,Olympic airways v husain - answers - - passenger died of asthma attack after flight
attendant refused to move him from sitting near the smoking section of the plane
- decision: because of the flight attendants "unexpected or unusual" refusal to move the
passenger to another seat, contrary to airline policy and industry standards, was an
"accident" that was "external to the passenger"
Montreal convention (two-tiered liability system) - answers - first tier: carrier strictly liable
for all damages from death or personal injury up to $152,000 approx
Second tier: carrier may be liable for all proven damages above the strict liability limit if
damage was due to carrier's negligence, willfulness, or other wrongful act or omission or
to that of its employees or agents
Montreal convention (special drawing rights sdr) - answers - - is an international reserve
asset, created by the international monetary fund in 1969 to supplement its member
countries' office reserves
- the value of an sdr is based on five currencies (us$, chinese rnb, euro, yen, pound)
- sdr is neither a currency or claim on the imf but it is a potential claim on the freely
usable currencies of imf members
- facilitates easy conversion into any currency
"maritime" law refers to - answers - that body of law within the admiralty jurisdictions of
a court that governs private rights and obligations arising out of the operation of vessels
on navigable waters or in maritime commerce (ie. Includes maritime torts/contracts, bills
of lading, ship owners liability for cargo, maritime insurance, the law of collision salvage,
etc...)
Navigable waters includes - answers - not only oceans and seas but also large lakes
such as the great lakes that are (regardless of size) used or capable of being used for
commercial activity
The hague rules - answers - - helped develop uniform rules governing ocean bills of
lading
- carriage of goods by sea act (cogsa) helped by defining the responsibilities to cargo
and cargo owners, and limited the carriers liability for loss or damage to cargo by law
- these rules have been adopted by us, canada, uk, most of europe, japan, hong kong,
india, and singapore however the visby amendments have not been adopted by the us
Maritime carrier liability - answers - - responsible for cargo shortages
- stowing cargo
- must be a "seaworthy" ship at the beginning of voyage
- a clean bill of lading issued by carrier is constructive proof that goods were shipped in
good condition and not damaged
Ocean carrier responsibilities - answers - - properly and carefully load, handle, stow,
carry, keep, care for and discharge the goods carried
, - the rules are different if the cargo is lost or damaged due to a problem with the ship
itself
Carrier is not responsible for... - answers - - act, neglect, or default of the master, pilot
or other servant of the carrier in the navigation or in management of the ship
- fire (unless caused by the actual fault of the carrier)
- perils/dangers and accidents of the sea
- an act of god (unpreventable less from natural causes)
- an act of war
- labor strikes
- inherent defect, quality, or vice of the goods that causes wastage in build or weight or
other damage/loss
Z.k. marine, inc. V. Archigetis - answers - decision: the court held that each yacht
constituted one customary fright unit or "package" and that the shipper had been given
a fair opportunity to declare a higher value and therefore the carrier's liability for
damages to the yachts were 500$ per package. The purchasers of the bills of lading
were bound to the terms including the limitation provisions
Freight forwarders - answers - organize shipments for customers to get goods from the
manufacturer or producer to a market, customer or point of destination
- takes care of: export and import documentation, all arrangements with carriers,
packing, crating, and storage needs
- they are not carriers and are not liable for the cargo damaged during shipment
Methods of payment in international trade (ranked from least secure to most secure) -
answers - - consignment
- open account
- documentary collections
- letters of credit
- cash in advance
Negotiable instrument - answers - a signed writing containing an unconditional promise
to pay to order or to bearer on demand or at a definite time
Promissory note - answers - a two-party negotiable instrument that is an unconditional
written promise by one party to pay money to another party.
Draft - answers - three party instrument containing signed order of drawer, given to
drawee (ie. Bank) to pay a sum of money to the third party (payee) on demand or
definite time
"common" check - answers - special type of draft which is drawn on a bank and payable
on demand. There are three parties
1. Drawer (gave the order to pay)
2. Drawee bank (to whom the order to pay is given)
