Happy Carrier Company (HCC)is in the Business of Shipping Goods

question 53

Multiple Choice

Happy Carrier Company (HCC) is in the business of shipping goods.Yesterday HCC agreed with John Smith to ship Mr.Smith's furniture from Toronto to Ottawa.Mr.Smith's furniture is worth $100 000.00.Just before loading the furniture onto its truck,HCC's driver had Mr.Smith sign a contract that contained a term that limited HCC's liability for destruction or damage to the furniture to $50.00 if it resulted from the negligence of HCC or its employees.On the way to Ottawa,HCC's driver lost control of the truck and Mr.Smith's furniture was destroyed by fire after the truck crashed into a brick wall.In this situation

• A)the limitation of liability in the contract is effective only against HCC,but not its employee,so Mr.Smith can sue the employee for the value of his furniture.
• B)the limitation of liability in the contract is permitted by law and Mr.Smith will receive only $50.00.
• C)Mr.Smith's contract with HCC is illegal by common law,so Mr.Smith will recover the full value of his furniture from HCC.
• D)although the contract with HCC is legal,the limitation on liability contained in it is not,so Mr.Smith will recover the full value of his furniture from HCC.
• E)the limitation of liability in the contract is not effective,because Mr.Smith did not see it before he signed the contract,so Mr.Smith will recover the full value of his furniture from HCC.

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Definitions:

External Suppliers

Companies or individuals who provide products or services to another company but are not part of that company.

Authorize Buyers

The process of giving approval or permission to purchasers to conduct transactions, often within specific guidelines or limits.

Extranet

A private network that uses Internet protocols, network connectivity, and possibly the public telecommunication system to share a part of an organization's information or operations with suppliers, vendors, partners, customers, or other businesses.

Private Internet

A network established within an organization or between specific entities that uses internet protocols but is restricted to authorized users.