Reference no: EM134010124

COGSA's Per-Package Liability Limitation

Imagine that you travel to England in search of antiques for sale in your antique store in the United States. You find many pieces from the late eighteenth century. You purchase regency tables, writing desks, chairs, settees, decorative objects, and other smaller pieces from the George II period. You arrange with a reputable freight forwarder to package everything and ship it to you in the United States. The forwarder packages everything individually in cardboard and then places them with other items on wooden pallets for wrapping with heavier cardboard and fastening with steel bands. There are 200 pieces of furniture and decorative objects on 26 pallets. The forwarder arranges for an ocean carrier to deliver a steel container to your warehousing agent for loading. On delivering the container to the carrier, the forwarder receives an ocean bill of lading showing the receipt of "2 × 40 ft. container STC [said to contain] 26 pallets antique furniture." The bill of lading contains no value for the goods, and the forwarder does not object, because the value appears on other customs documentation. You return to the United States and await delivery. Unfortunately, as your container was being unloaded, it was dropped from the crane and the contents were completely destroyed. You request reimbursement from the carrier in the amount of $250,000, based on the actual value of the antiques. The carrier says that it is only responsible for $13,000 and no more.

Questions

1. Do you think that the $500 per package limitation applies to the container, to each wooden skid, or to each of the individually wrapped pieces of furniture or objects fastened onto the skid?

2. What could have been done differently, if anything, to avoid the confusion and problems in this case?

3. Discuss the ramifications of this case.