Chapter 22 Question 9) Buffett sent a violin to Strotokowsky by International Pa

Question

Chapter 22 Question 9) Buffett sent a violin to Strotokowsky by International Parcel Service (IPS), a common carrier. Buffett declared the value of the parcel at $500 on the pick-up receipt given him by the IPS driver. The receipt also stated; “Unless a greater value is declared in writing on this receipt, the shipper hereby declares and agrees that the released value of each package covered by this receipt is $100.00, which is a reasonable value under the circumstance surrounding the transportation.” When Strotokowsky did not receive the parcel, Buffett sued IPS for the full retail value of the violin-$2,000. IPS’s defense was that it was liable for just $100. Decide which party it right.

Explanation / Answer

IPS is a common carrier of the product so they have the right to limit their liability through contract even for the negligently loss of item, which they validly did on pick-up receipt. However, Buffet also validly declared a higher value on the receipt. Therefore limitation of liability of IPS would be $500.

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