Question

Griffith Manufacturing ships 40 crates of goods by Trusty Shipping, a common carrier. Trusty offers Griffith a shipping rate of $725 for a limited liability of $5,000 or a rate of $975 for full liability for any harm to the goods. Griffith chooses the $725 rate. In transit, Trusty’s driver has an accident during an ice storm and all of Griffith’s goods are destroyed, causing a loss of $12,000. If Griffith sues Trusty,A. Trusty will be liable for only $5,000 because a common carrier is allowed to limit its liability by contract.B. Trusty will be liable for the full $12,000 because common carriers have strict liability.C. Trusty will automatically be liable for the full $12,000 under the Carmack Amendment.D. Trusty is subject to normal bailment rules and can escape liability for any damage to the goods by proving that it exercised due care of the property and that the loss was caused by an act of God.

Answer 1

Answer:

The answer is: D) Trusty is subject to normal bailment rules and can escape liability for any damage to the goods by proving that it exercised due care of the property and that the loss was caused by an act of God.

Explanation:

Under the Carmack Amendment, a motor carrier (Trusty Shipping) can deny liability for cargo damage under 5 circumstances:  

1. an Act of God  
2. the public enemy
3. Act or Default of Shipper
4. Public Authority
5. the inherent vice or nature of the goods transported

In this case, the ice storm would classify under exemption 1 (An Act of God).