In Institute of London Underwriters v. Sea-Land Services, Inc. the Ninth Circuit determined the effect of the Carriage of Goods by Sea Act (COGSA) when it is incorporated by contract for goods not ordinarily within COGSA's scope rather than if it applied ex proprio vigore. The court held that in such a contract, COGSA is effective as a contractual term only; inconsistent terms are, therefore, also valid. The Ninth Circuit then set forth a method by which to calculate a customary freight unit (CFU) for on-deck cargo because COGSA limits damage liability to $500 per "package" or CFU. The district court had determined that a yacht shipped on the deck of a vessel was forty-five CFUs, therefore liability had been assessed at $22,500. The Ninth Circuit reversed, finding that the yacht was one "package" and liability should have been limited to $500.
Admiralty Law - Institute of London Underwriters v. Sea-Land Services, Inc.: Good Things Do Not Always Come In Small Packages, 21 Golden Gate U. L. Rev.