Untitled Deck

Question 1

What is a Bill of Lading?

Answer 1

A document issued by the carrier responsible for transporting or forwarding the goods.

(Reference pg. 4-6)

Question 2

What is Agreed Value?

Answer 2

A fair value of the shipment agreed to in advance by the insured and insurer.

(Reference pg. 4-8)

Question 3

What is Freight?

Answer 3

The money payable either for the hire of a vessel or for the conveyance of cargo from one port to another.

(Reference pg. 4-9)

Question 4

What is Actual Total Loss?

Answer 4

A loss in which the subject property is totally lost or is so badly damaged that it has no value left.

(Reference pg. 4-16)

Question 5

What is Constructive Total Loss?

Answer 5

Occurs when the cost of salvaging the cargo is too high relative to the value saved.

(Reference pg. 4-16)

Question 6

What is Particular Average?

Answer 6

Involves a partial loss to a specific shipment, other than a General Average.

(Reference pg. 4-16)

Question 7

What is General Average?

Answer 7

Deals with payment for marine losses voluntarily incurred for the safety of the entire venture. The parties whose property was saved shall contribute to the losses of the parties whose property was sacrificed.

Question 8

What is Surety?

Answer 8

State of being sure, certain and secure.

(Reference pg. 5-1)

Question 9

What is Suretyship?

Answer 9

The guarantee of performance made by one person or entity for another.

(Reference pg. 5-1)

Question 10

What is a Surety Bond?

Answer 10

An undertaking by the surety to become accountable to the obligee for the performance of an obligation or undertaking by the principal. It is a promise to provide credit, if and when needed, to ensure the faithful performance of an obligation.

(Reference pg. 5-1)

Question 11

Who is the Obligee?

Answer 11

The party to whom someone else is obligated under a contract or the party to whom the bond is given.

(Reference pg. 5-2)

Question 12

Who is the Principal?

Answer 12

The person primarily liable.

(Reference pg. 5-2)

Question 13

What is a Penalty in the context of Surety?

Answer 13

The amount of credit given to the principal by the surety; or the amount which the surety is prepared to pay in the event the principal should default.

(Reference pg. 5-4)

Question 14

What is a Statutory Bond?

Answer 14

One that is required by a municipal ordinance, or federal or provincial regulation or statute.

(Reference pg. 5-3)

Question 15

What is a Non-Statutory Bond?

Answer 15

Not required by law but flows from the contract or agreement between the parties.

(Reference pg. 5-3)

Question 16

What is a Contract Bond?

Answer 16

Guarantees the fulfilment of certain obligations required under public and private contracts.

(Reference pg. 5-7)

Question 17

What is the Consent of Surety?

Answer 17

A letter assuring the owner that if the principal is the successful bidder, the surety will issue such other bonds as are specified to ensure the performance of the contract.