BUSINESS 5005 Unit 6 Assessment Questions with answers

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Unit 6 Assessment Questions 1.) In the case of Eastman Kodak Company vs Westway Motor Freight, damage occurred to a shipment of film when the temperature rose above 50 degrees, and Westway was liabl... e for the value of the shipment. However, the damaged film has some value. What did the court decide? A.) Eastman Kodak was required to sell the damaged film and use the proceeds to reduce the amount owed to it by Westway Motor Freight B.) Eastman Kodak did not have to sell the damaged film to reduce Westway’s burden, since doing so would have potentially harmed Eastman Kodak’s reputation C.) The court required Eastman Kodak to sell the film as damaged, then prove actual harm to its reputation 2.) In writing a prohibition against back solicitation, a broker should A.) Avoiding defining what is meant by “confidential information”, since this issue will be best left to the court. B.) Include language that expressly indicates that even if the carrier has previously conducted business with shipper, that fact should not constitute an exception to the back solicitation prohibition. C.) Trick question the broker should not include a back solicitation prohibition clause since this is clearly a restraint of trade. 3.) In the case of Schramm vs Foster, one of key issues upon which summary judgement was granted in favor of the defendant (broker) was that A.) The carrier was viewed as being under the direct control of the broker B.) The carrier was specifically identified in a written agreement as an independent contractor C.) The accident was the responsibility of the driver alone, and neither the broker nor the carrier were liable for the actions of the driver 4.) Which of the following is TRUE? A.) If an individual is hired as your agent, there is an increased risk the employee could be considered to be a statutory employee for tax and workers compensation purposes B.) It is unwise to specify in an independent sales representative (ISR) agreement that the ISR is an independent contractor – this increased risk he/she could be considered a statutory employee 5.) In the case of Oak Harbor Freight Lines vs Sears Roebuck and National Logistics Corp (NLC), Sears (shipper) contracted with NLC to broker a shipment of Sear’s goods. NLC brokered the load to a trucking company, Oak Harbor was to be paid by the broker, NLC. NLC described itself in the contract as the “Broker/Shipper. “NCL refused to pay Oak Harbor due to another dispute between the two companies, even though Sears had already paid NLC for the freight costs. Sears did not include/sign a Section 7 provision in the straight bill of lading that was used. The court ruled that Sears was liable for NLC’s nonpayment for the freight costs to Oak Harbor, even though Sears had already paid NLC for the freight. What was the principal reason why the court held Sears to be liable? A.) Sears was considered to be a “deep pocket” defendant and would be less adversely impacted than NLC. B.) The concept of vicarious liability was applied C.) The straight bill of lading used by Sears makes the shipper (Sears) primarily liable for freight charges 6.) An intoxicated tractor trailer driver struck another vehicle which killed three individuals and injured two. The families of the deceased and injured sued Container South, a brokerage company which contracted with Knight Trucking (Knight Trucking employed the driver) One of the key issues in the Container South case was? A.) Brokers are always liable for the actions of carriers when a contract exists B.) The carrier was an independent contractor, indicating Container South has little control over the carrier’s actions. C.) Container South was considered to be a “deep pocket” by the courts. 7.) The following question is based on Jones vs D’Souza in which the driver of a tractor trailer lost control, crossed the median, and stuck the plaintiff’s tractor trailer head-on, killing the driver of the truck that had crossed the median and seriously injured the driver of the second truck. The plaintiff sued the broker, claiming that the broker had been negligent in the hiring of the trucking company. The broker stated that the carrier was an independent contractor, so the broker was not responsible for the hiring practices of the trucking company which of the following is a lesson that should be learned from Jones vs D’Souza? A.) Anyone hiring a motor carrier should exercise due diligence when qualifying carriers B.) Brokers are protected from liability for the hiring practices of carriers when the carrier is an independent contractor C.) SafeSat scores may not be used by juries when determining whether a broker was negligent in hiring a particular carrier. 8.) True or False: Most broker/carrier transportation agreements do not include a clause prohibiting back solicitation A.) True B.) False 9.) Which of the following would NOT be appropriate for inclusion in an independent sales representative (ISR) agreement? A.) An acknowledgement that the ISR is an independent contractor and not an employee B.) A statement of how the ISR is to represent your business to the public, including how your name may or may not be used C.) A statement that all services will be performed under the principal’s operating authority D.) All of the above are appropriate for inclusion in an ISR agreement 10.) In the case of Oak Harbor Freight Lines vs Sears Roebuck and National Logistics Corp. (NLC), Sears (shipper) contracted with NLC to broker a shipment of Sears’ goods. NLC brokered the load to a trucking company, Oak Harbor. Oak Harbor was to be paid by the broker, NLC. NLC described itself in the contract as the “Broker/Shipper.” NLC refused to pay Oak Harbor due to another dispute between the two companies, even though Sears had already paid NLC for the freight costs. Sears did not include/sign a Section 7 provision in the straight bill of lading that was used. The court ruled that Sears was liable for NLC’s non-payment of the freight costs to Oak Harbor, even though Sears had already paid NLC for the freight. One way to avoid the problems of Oak Harbor, Sears, and NLC is to use language from the TIA broker/carrier model agreement. Which of the following is NOT one of the ways the model agreement protects the interests of all parties? A.) The model language states that the broker is liable to pay the carrier’s freight charges B.) The broker’s responsibility to pay the carrier is dependent upon the broker’s receipt of payment from the shipper C.) The model language obligates the broker to pay the carrier within a defined number of days D.) The carrier agrees not to seek payment from the shipper if the shipper can prove payment to the broker 11.) Assume a driver is injured moving a load, and the carrier has no worker’s compensation insurance. If a broker who scheduled the load with the carrier is viewed by the court as having accepted the load and subcontracted the load to a carrier (rather than merely arranging transportation). A.) The broker is always protected, since the driver was an employee of the carrier and not of the broker B.) The broker is protected form a worker’s compensation claim if the carrier is viewed as a subcontracting from the broker C.) The broker is potentially liable for a worker’s compensation claim as a statutory employee of the broker 12.) Which of the following would NOT be appropriate for inclusion in an independent sales representative (ISR) agreement? A.) An acknowledgement that the ISR is an independent contractor and not an employee B.) A statement of how the ISR is to represent your business to the public, including how your name may or may not be used C.) A statement that all services will be performed under the principals operating authority D.) All of the above are appropriate for inclusion in an ISR agreement. 13.) True or False: A non-solicitation agreement is generally more difficult to enforce than a noncompete decision A.) True B.) False 14.) Assume a carrier calls a broker while in transit with a load booked by the broker. The carrier refuses to deliver unless he receives additional compensation for the load. The load remained parked for two days until the carrier finally gave up and completed the delivery. The consignor who received the delivery was not upset with either the broker or the shipper, and the consignee indicated it would not affect her future business with either the broker or the shipper. Under the legal theory of conversion A.) The broker should pursue a claim of conversion, since the carrier had held the good for two days B.) The broker should not pursue a claim of conversion since no damages occurred C.) The broker should contact law enforcement authorities and have the driver arrested 15.) A shipper contracted with a broker (Two Brothers Trucking, from California) for the transport of machinery from California to Illinois. Two Brothers contracted with American Riggers to prepare and load the machinery and with Mielec Express to transport the shipment to Illinois. The machinery arrived in Illinois damaged condition. The broker was based in California with all offices and employees residing in California, while the plaintiff was based in Illinois. The plaintiffs sough jurisdiction with the Illinois court. The decision was A.) Since the defendant was based in California, jurisdiction lied with the California federal courts B.) Since the defendant engaged in business in Illinois and the broker had previously conducted business in Illinois, Illinois courts would have jurisdiction C.) Since the shipment originated in California, jurisdiction lied with the California federal courts. 16.) True or False: If a broker requires that a carrier’s driver call the broker directly to receive dispatch information, this act alone means the driver will be viewed as an employee of the broker and the broker can be held as liable for the actions of the driver. A.) True B.) False 17.) Which of the following statements concerning agreements prohibiting the disclosure of confidential information is TRUE? A.) Customer lists are always considered to be confidential B.) For information to be considered confidential, a company must have actively treated the information as confidential, (for example, through training, limiting access to it, storing it in a secure location, etc.) C.) A company policy regarding confidentiality that is printed in an employee handbook will NOT aid a plaintiff in a suit concerning disclosure of confidential information (it is prohibited from being an element of evidence proof) 18.) Which of the following is TRUE? A.) An agent agreement would generally be preferable to an independent sales representative (ISR) agreement for a broker seeking to boost sales B.) An independent sales representative (ISR) agreement would generally be preferable to an agent agreement for a broker seeking to boost sales C.) There is no difference between an agent agreement and an independent sales representative agreement 19.) True or False: Shippers are subject to FMCSA safety rules, which makes them automatically liable if a carrier violates the hours of service (HOS) regulations of the FMCSA A.) True B.) False 20.) A carrier calls a broker while transporting goods for a shipper and indicates to the broker that they will not deliver the contracted load without first being compensated for deliveries the carrier will make for the broker next week. The upset broker calls police to tell them “the load has been stolen.” Since the carrier obtained the shipment legally, however, the load technically hasn’t been stolen. What’s the correct legal term for what the carrier has done? A.) Fraud B.) Conversion C.) Misappropriated of assets 21.) Kawasaki Motors attempted to prevent double payment by claiming “equitable estoppel” which means it should not have to pay twice because it is unfair and unjust. What did the court decide about Kawasaki’s use of this defense? A.) Equitable estoppel may not be used as a defense against double payment B.) The court did not reject this equitable estoppels defense, but it refused to apply it to protect Kawasaki in the case based on the case facts. 22.) The lesson(s) to be learned from Schramm vs Foster is/are A.) Brokers must conduct due diligence on safety records of carriers B.) No matter how diligent a broker is in selecting a carrier, a catastrophic loss umbrella insurance policy is the best protection. C.) A broker is liable for the actions of a carrier’s driver if the broker provides dispatch information directly to the driver D.) All of the above are true E.) Only A and B are true 23.) In Emerson Electric Supply Company vs Estes Express Lines Corp., the carrier quoted the shipper a single shipping price for a load and did not inform the shipper of other shipping rates with corresponding levels of reliability. The declared value section of the bill of lading was left blank, so the shipper assigned a tariff for uncrated new equipment which provided a released value of 10 cents per pound. The price of the equipment being shipped was $158,360, and the liability coverage under the tariff applied was $1,020. The carrier claimed that since the passage of the interstate commerce commission termination act (ICCTA), it is no longer required that a carrier offer a shipper different levels of liability with a different rate for each level. Did the court agree with this? A.) Yes, ICCTA eliminated the requirement for offering two or more levels of liability with different rate levels. B.) The court determined that a shipper may impose a released rate if the declared value space is left blank on a bill of lading C.) No. A released rate may only be applied after the shipper has been given a choice of two or more levels of liability (as well as other conditions). 24.) In the C.H. Robinson/AKJ case involving Schramm type liability asserted by the plaintiff against C.H. Robinson (broker) due to the actions of AKJ (carrier), a major concern to the brokerage industry regarding the plaintiff’s negligence claim was: A.) The court did not issue a summary judgement in favor of the broker against a claim of vicarious liability, as it had previously done in Schramm. B.) The court allowed the plaintiff to change the venue to one more sympathetic to the plaintiff. C.) The court decided to completely set aside the Schramm decision 25.) Back solicitation refers to: A.) A carrier requiring a broker to arrange a backhaul before delivering a contracted load. B.) A broker providing a backhaul opportunity to the shipper, at a discounted rate C.) A carrier seeking business directly from a shipper (and not through the broker) as a result of contact with the shipper first arranged by broker 26.) In the case of Schramm vs Foster, the broker (C.H. Robinson) was found to be potentially liable under a theory of… A.) Respondent superior B.) Negligent entrustment C.) The driver was considered to be a statutory employee of the broker D.) The broker was negligent in hiring the carrier 27.) True or False: Assume a driver works for a carrier, the driver was at fault in an accident, and the driver was in violation of hours of service requirements. Unless the broker has control over a driver’s driving time and the conditions in which the driver drove, the broker is not vicariously liable for the drivers actions. A.) True B.) False 28.) A “long arm” statute allows: A.) A plaintiff to sue not just a corporation, but to sue the stockholders of the corporation B.) A plaintiff to sue for actions which occurred over 12 months ago C.) Courts in one state to exercise jurisdiction over non-residents doing business with “contacts” in the state 29.) A refrigerated shipment is “sealed” and the carrier’s driver does not participate in loading and does not inspect the trailer: When this happens, the burden of proving “good condition” on delivery to the carrier falls on… A.) The carrier B.) The shipper 30.) The following question is based on Jones vs D’Souza in which the driver of a tractor trailer lost control, crossed the median, and struck the plaintiff’s tractor trailer head-on, killing the driver of the truck that had crossed the median and seriously injuring the driver of the second truck. The plaintiff sued the broker, claiming that the broker had been negligent in the hiring of the trucking company. The broker stated that the carrier was an independent contract, so the broker was not responsible for the hiring practices of the trucking company. Which of the following statements is TRUE? A.) SafeSat scores should not be used by brokers inquiring into the safety records of carriers, since the SafeSat website has a disclaimer stating the information may be inaccurate and should not be relied upon B.) SafeSat scores should be checked when a broker uses a carrier with a conditional rating C.) SafeSat scores are not relevant when considering the safety ratings of a carrier 31.) A shipper contracted with a broker (Two Brothers Trucking, from California) for the transport of machinery from California to Illinois. Two Brothers contracted with American Riggers to prepare and load the machinery and with Mielec Express to transport the shipment to Illinois. The machinery arrived in Illinois in damaged condition. As stated in the analysis, what is the major lesson to be learned regarding “long arm statute” and how a broker does business? A.) It is unwise to do business across state lines, since the jurisdiction may fall in the state other than your own. B.) You should carefully choose which states in which you do contract with shipper customers in order to avoid jurisdiction falling to another venue C.) A broker would be wise to have an agreement with shipper customers which clearly provides that in the event of a dispute, any legal action must be venued in the broker’s home state or county. 32.) True or False: If a broker plans to pay their shipper’s freight damage claims as an accommodation to the shipper, the broker should obtain from the shipper a written assignment of the shipper’s rights against the carrier A.) True B.) False 33.) True or False: Load/Rate confirmations should make clear that all directions given to a carrier are for informational purposes only and should include a carrier acknowledgement that the carrier is solely responsible for compliance with HOS and other FMCSA regulations A.) True B.) False 34.) Who should supply a signed affidavit when a broker is taking assignment of a shipper’s damage claim? A.) The broker who scheduled the shipment B.) Any person(s) who observed the condition of the freight at the point of loading C.) The shipper’s traffic manager D.) All of the above 35.) An intoxicated tractor trailer driver struck another vehicle which killed three individuals and injured two. The families of the deceased and inured sued Container South, a brokerage company which contracted with Knight Trucking (Knight Trucking employed the driver) what did the court decide? A.) A judgement in favor of Container South – the broker had insufficient involvement in how its goods were shipper B.) A judgement in favor of the plaintiffs – the concept of vicarious liability was applied to Container South since they contracted with Knight Trucking. 36.) The following question is based on Jones vs D’Souza in which the driver of a tractor trailer lost control, crossed the median, and struck the plaintiff’s tractor trailer head-on, killing the driver of the truck that had crossed the median, and seriously injuring the driver of the second truck. The plaintiff sued the broker, claiming that the broker had been negligent in the hiring of the trucking company. The broker stated that the carrier was an independent contractor, so the broker was not responsible for the hiring practices of the trucking company. True or False: The standard in Jones vs D’S A.) True B.) False 37.) In the case of Oak Harbor Freight Lines vs Sears Roebuck and National Logistics Corp. (NLC). Sears (shipper) contracted with NLC to broker a shipment of Sear’s goods. NLC brokered the load to a trucking company, Oak Harbor. Oak Harbor was to be paid by the broker, NLC. NLC described itself in the contract as the “Broker/Shipper.” NLC refused to pay Oak Harbor due to another dispute between the two companies, even though Sears had already paid NLC for the freight costs. Sears did not include/sign a Section 7 provision in the straight bill of lading that was used. The court ruled that Sears was liable for NLC’s nonpayment of the freight costs to Oak Harbor, even though Sears had already paid NLC for the freight. Which of the following is NOT one of the lessons to be learned from this case? A.) Parties to a contract should avoid using a straight bill of lading as published in the NMFC B.) A broker should identify himself/herself in the contract as the “shipper.” C.) The contract should contain terms that indicate that if there is a discrepancy between the contract and the bill of lading, the terms of the contract will be applied. 38.) Before a broker takes assignment of a shipper’s damage claim, they should: A.) Obtain from the shipper a signed affidavit establishing proof of condition for the goods being shipped. B.) Only require a copy of the bill of lading for the shipment C.) Truck questions – brokers should never take assignment of a shipper’s freight damage claims. 39.) As discussed in the case of Hams Farms Trucking vs Kawasaki Motors, what is meant by a double payment liability? A.) Harms Farms trucking directly billed Kawasaki both prior to a load being shipped and after a load was delivered B.) Harms Farms trucking billed both the consignor (woodland Container) and the consignee (Kawasaki Motors) in an attempt to be paid by both parties for the same series of loads (to be paid twice). C.) Kawasaki Motors paid Woodland Container for goods and shipping, but when Woodland Container became insolvent, Kawasaki was forced to pay the freight charges to Harris Farms trucking (effectively paying the freight twice – once to Woodland, once to Harris.) 40.) True or False: A non-solicitation agreement drafted for use in one state is likely to be equally enforceable in all states. A.) True B.) False 41.) [Show More]

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