law of general average

The law of general average is a longstanding and widely recognized doctrine in maritime law. The doctrine provides that when a party to a maritime venture intentionally and reasonably makes an extraordinary sacrifice or incurs an extraordinary expenditure for common safety, the parties to the venture share in the resulting loss proportionately. Some sources trace the doctrine to approximately 900 B.C., although the Rhodians undoubtedly practiced a form of general average as early as 300 B.C. The doctrine has ancient roots and continued to develop through the Middle Ages and into modern maritime law. See: Sea-Land Service, Inc. v. Aetna Ins. Co., 545 F.2d 1313 (2d Cir. 1976). Although the law of general average was recognized by many maritime nations, there was no uniform set of rules governing its application. In 1860, this lack of uniformity led to a British movement to achieve an “international consensus on basic principles of general average.” See: Eagle Terminal Tankers, Inc. v. Insurance Co. of U.S.S.R., 637 F.2d 890 (2d Cir. 1981). In 1890, the International Law Association adopted the York-Antwerp Rules, which established internationally recognized contractual rules governing general average. Rule A identifies the basic requirements for a general average act:

A common maritime adventure exposed to peril,
An extraordinary sacrifice or expenditure intentionally and reasonably made for the common safety, and
The preservation of property from the peril as a result of the sacrifice or expenditure.

Traditionally, courts applying the law of general average required that the peril to the maritime venture be imminent and inevitable. See: Barnard v. Adams, 51 U.S. 270 (1870). Courts later shifted their focus to the seriousness of the danger created by an accident or hazard at sea rather than the immediacy. Courts tend to apply a more flexible real and substantial danger standard, which may be satisfied even when “the catastrophe may be distant or indeed unlikely.” See: Navigazione Generale Italiana v. Spencer Kellogg & Sons, 92 F.2d 41 (2d Cir. 1937).

The second element requires that the sacrifice or expenditure be both voluntary and extraordinary. A loss resulting from an ordinary maritime accident, such as “the breaking of a mast in a tempest,” is insufficient to support a claim for general average. See: 9 U.S. Op. Atty. Gen. 447. By contrast, a sacrifice made intentionally to protect a common maritime venture, such as cutting away a mast to make a vessel more manageable, may qualify. To be extraordinary, the loss or expenditure must fall outside the ordinary costs of operating a vessel at sea. See: Star of Hope, 76 U.S. 203 (1869). A classic example is the intentional jettisoning of cargo to prevent a vessel from capsizing during a storm. The sacrifice or expenditure must also be deemed reasonable in light of the peril.

The third element traditionally requires that the general average act contribute to the preservation of the common maritime venture. As the U.S. Supreme Court explained in Star of Hope, the attempt to avoid the common peril “must be to some practical extent successful” because if nothing was able to be saved, then there cannot be contribution. Thus, the mere intent to protect the vessel or cargo is insufficient if the sacrifice or expenditure ultimately preserves nothing from the hazard. There is, however, an important limitation involving “unseaworthiness.” Under traditional general average principles, a carrier may be unable to recover contribution when the vessel “was unseaworthy at the start of the voyage, and the unseaworthiness was the proximate cause” of the general average act. See: Deutsche Shell Tanker Gesellschaft v. Placid Refining Co., 993 F.2d 466 (1993).

The Supreme Court’s decision in The Jason, 225 U.S. 32 (1912) established an important contractual exception to this rule. In that case, the Court upheld a clause in a bill of lading that permitted a shipowner to recover general average from cargo interests even when negligence by the shipowner or crew contributed to the peril, provided that the shipowner had exercised due diligence to make the vessel seaworthy at the beginning of the voyage. The clause became known as the “Jason Clause” and subsequently became common in bills of lading.

Congress later enacted the Carriage of Goods by Sea Act (COGSA) in 1936. COGSA established a statutory framework governing the liability of ocean carriers for cargo damage and provided carriers with certain defenses and limitations on liability. Importantly, COGSA does not provide carriers with blanket immunity from negligence. Instead, it establishes specific circumstances in which a carrier is not liable and imposes liability for unseaworthiness when the carrier failed to exercise due diligence to make the vessel seaworthy. Following COGSA, bills of lading commonly incorporated a modified version of the Jason Clause known as the “New Jason Clause.” The New Jason Clause generally permits a carrier to recover general average from cargo interests while incorporating COGSA’s allocation of liability between carriers and cargo owners.

General average claims involving the New Jason Clause generally follow a three-step scheme:

The carrier must establish that a general average act occurred;
The cargo owner may avoid liability for the general average contribution by demonstrating that the vessel was unseaworthy at the beginning of the voyage and that the unseaworthiness was a proximate cause of the general average act; and
Even if the cargo owner establishes unseaworthiness and causation, the carrier may still recover by demonstrating that it exercised due diligence to make the vessel seaworthy at the beginning of the voyage. See: Deutsche Shell Tanker Gesellschaft v. Placid Refining Co., 993 F.2d 466 (1993).

This reflects the interaction between traditional general average principles, the Jason Clause, and COGSA’s allocation of responsibility for unseaworthiness and cargo loss. See also: 19 CFR § 141.112 - Liens for Freight, Charges, or Contribution in General Average.

[Last reviewed in August of 2026 by the Wex Definitions Team]

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