What term describes pro-rata sharing of a loss when a master sacrifices cargo to save the ship?

What term describes pro-rata sharing of a loss when a master sacrifices cargo to save the ship?

• A. Sue and Labor
• B. Particular Average
• C. General Average
• D. Demurrage

Answer: (C)

General Average applies when a sacrifice is made for the common safety of the voyage. When the master orders cargo to be jettisoned or other sacrifices are made to save the ship and remaining cargo, the loss (and the necessary expenses to secure the voyage) is shared pro rata among all the parties with an interest in the voyage. This means each owner contributes based on their share of value at risk, rather than absorbing the loss alone. This differs from particular average, which would involve a loss that affects only one interest and isn’t shared by others; and from sue and labor, which refers to the actions and costs taken to preserve the property (these costs are recoverable but not the loss-sharing mechanism itself); and demurrage, which concerns charges for delays in loading or unloading.

General Average applies when a sacrifice is made for the common safety of the voyage. When the master orders cargo to be jettisoned or other sacrifices are made to save the ship and remaining cargo, the loss (and the necessary expenses to secure the voyage) is shared pro rata among all the parties with an interest in the voyage. This means each owner contributes based on their share of value at risk, rather than absorbing the loss alone.

This differs from particular average, which would involve a loss that affects only one interest and isn’t shared by others; and from sue and labor, which refers to the actions and costs taken to preserve the property (these costs are recoverable but not the loss-sharing mechanism itself); and demurrage, which concerns charges for delays in loading or unloading.