A trucking company can act as a common carrier-for hire to the general public at published rates. As a common carrier, it is liable for any cargo damage, unless the company can show that it was not negligent. If the company can demonstrate that it was not negligent, then it is not liable for cargo damage. In contrast, a contract carrier (a trucking company hired by a shipper under a specific contract) is only responsible for cargo damage as spelled out in the contract. A Claus Inc. tractortrailer, acting under common carrier authority, was in a 5-vehicle accident that damaged its cargo. A Nichols Inc. tractor-trailer, acting under contract carrier authority, was involved in the same accident, and its cargo was also damaged.
Explanation
Answer: C - The second sentence states the liability rule for common carriers: all common carriers are liable for cargo damage unless they can show that they are not negligent; if they can show that they are not negligent, then they are not liable for cargo damage. Claus Inc. is a common carrier, and accordingly this rule applies to it. From this rule it follows that if Claus Inc. can show it was not negligent, then it is not liable, Response C. Response A contradicts this rule by claiming that when Claus Inc. is liable it can show that it was not negligent. Response B contradicts this rule by claiming that Claus Inc. is not liable even when it cannot show that it is not negligent. Responses D and E concern Nichols Inc., a contract carrier. However, the terms of the Nichols Inc. contract were not disclosed in the paragraph, so neither response is supported.
