Occidental & Atlantic (OA) is a shipping company that offers to deliver goods for anyone anywhere in

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Occidental & Atlantic (OA) is a shipping company that offers to deliver goods for anyone anywhere in the world. Mediterranean Imports Ltd wished to have $500 000 worth of silk sent from a port in northeast Italy to Halifax. It entered into a contract with OA that included the following provisions:

  • The carrier shall use whichever route is the most appropriate in the circumstances.
  • The carrier's liability for loss or damage caused by fire, storm, or act of God shall be limited to $500 per shipment.
  • Any disputes arising between the parties shall be resolved under the laws of Canada.

Shortly before the journey began, an armed conflict erupted in a region of the Balkans, which lies to the east of Italy. Although carriers regularly passed through the affected area when transporting goods from northeastern Italy to North America, most carriers chose to adopt alternative routes during the course of the conflict. The captain of OA's vessel, however, realized that any deviation from the standard course would be costly and therefore decided to proceed as usual. Unfortunately, the entire cargo of silk was lost when OA's ship was caught in crossfire and sank. Mediterranean Imports did not purchase first-party insurance for its property and therefore is anxious to recover compensation from OA. Is it entitled to do so? Explain your answer.

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Related Book For  answer-question

Managing the Law The Legal Aspects of Doing Business

ISBN: 978-0133847154

5th edition

Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer

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