A salvage agreement, also known as a salvage contract, is a legal agreement that outlines the terms and conditions between a salvor and an owner of a distressed vessel or cargo. A salvor is a person who retrieves a vessel or cargo that has been lost, damaged or in danger of being lost. The owner is the person or entity who owns the vessel or cargo.
Salvage agreements are usually entered into when a vessel or cargo is in danger of being lost or damaged beyond repair. The agreement specifies the terms and conditions of the salvage operation, including the payment of salvage services, the allocation of salvage rewards, and any other specific requirements that may be necessary to ensure the successful recovery of the vessel or cargo.
Salvage agreements are typically classified into two categories, namely, pure salvage and contract salvage.
Pure Salvage
Under pure salvage, the salvor voluntarily comes to the aid of the vessel or cargo in distress without any pre-existing agreement with the owner. The salvor is entitled to a salvage reward, which is a percentage of the value of the vessel or cargo saved. The salvage reward is based on several factors, including the extent of the peril, the value of the property saved, the skill and efforts of the salvor, and the risk of the salvage operation.
Contract Salvage
Contract salvage, on the other hand, is an agreement entered into between the salvor and the owner of the vessel or cargo before the salvage operation commences. The agreement specifies the terms of payment and the scope of the salvage operation. The salvor is entitled to payment based on the terms of the agreement, regardless of the success or failure of the operation.
The parties may enter into a contract salvage agreement for various reasons, including when the vessel or cargo is in danger of being lost or damaged, or when the owner wants to ensure the safety of their property and minimize risks and losses.
Conclusion
In conclusion, salvage agreements are essential legal documents that govern the terms and conditions of salvage operations. They help ensure that the salvor and the owner of the vessel or cargo have a clear understanding of their rights and obligations. If you are an owner of a vessel or cargo, it is crucial to understand the different types of salvage agreements and their implications to make informed decisions. As a salvor, it is essential to seek legal advice before entering into any salvage agreement to ensure that all the terms and conditions are fair and balanced.