Interlake Shipping Co.transports grain in large barges across Lake Michigan.In March,one of its barges was caught in an ice flow,where it "jammed," with the resultant destruction of its cargo.The carrier's property insurance refused to pay because the hazard was not covered under the policy.And the owner of the cargo had no insurance.Does this occurrence fall under the doctrine of frustration for the carrier?
A)Yes,it does,since it was an act of God.
B)Yes,it does,because it involved the perishing of the goods.
C)No,it doesn't,because the event was preventable.
D)Yes,it does,because Interlake had no insurance to cover its property.
E)No,it doesn't,since the event was due to carelessness.

Question

Quizplus · Accepted Answer

The situation falls under the doctrine of frustration for the carrier because the destruction of the goods was not preventable and was beyond the control of Interlake Shipping Co. This is known as the perishing of the goods. Option A is incorrect because the event being an act of God does not determine if it falls under the doctrine of frustration. Option C is incorrect because the event was not preventable. Option D is incorrect because the carrier's lack of insurance is not relevant to the doctrine of frustration. Option E is incorrect because there is no indication that the event was due to carelessness.