Reference no: EM133638273

Transportation of Goods

Good For You Beer, an Australian company, arranged to sell 10,000 six-packs of low alcohol beer to Dan Merry Co, a US company, for US $30,000. Good For You Beer agreed to ship the beer CIF Los Angeles (Incoterms 2020) on the MV Minnow.

Good For You Beer then contacted Cargo Shipping, the German firm that owns the MV Minnow, to find out how the six-packs should be packaged. Cargo Shipping instructed Good For You Beer to put the beer in two standard 2 x 2 x 4 metre shipping containers. On receiving the two shipping containers, Cargo Shipping issued a bill of lading with the description "10,000 six-pack packages of low alcohol beer in two standard shipping containers".

Later, once the MV Minnow had reached Los Angeles as the containers were being moved around on the deck of the MV Minnow in Los Angeles harbour to ready them for off-loading, the ship's crew accidentally dropped them over the side. They were completely lost.

Good For You Beer now sues Cargo Shipping and the MV Minnow in a US court for the full amount of its loss. Cargo Shipping and the MV Minnow have answered in their defence that the US Carriage of Goods by Sea Act 1936 which makes the Hague Rules apply in the US limits their liability to only US $500 per container, or, in this case, to US $1,000.

Is Good For You Beer the correct party to sue Cargo Shipping and are Cargo Shipping and the MV Minnow correct in their legal position? (Please use the IRAC format)