AVERAGE is a term used in commerce to signify a contribution made by ship freight and goods on board a ship, in to their respective interests, towards any particular loss or expense sustained for the general safety of the cargo and ship, in order that the particular sullerer may not in the end be a greater loser than the rest of the persons interested in the ship and goods on board. General average is the contribution so made by all parties towards a loss sustained by one tor the benefit of all. Special or particular average denotes any kind of partial loss happening to either ship or cargo, and does not usually come within the general subject of average. General average may denote an act voluntarily causing a loss, the loss consequent thereon, or the general contribution levied to make the loser's position nd worse than that of the others interested. The master of the ship is the only person' who can authorise a loss so as to give the loser a right to general average. And the loss can only be general average in certain cases. They are, for example, where the act is intentional and not caused by the power of the elements; where the act is for the general good andenot for the benefit of individuals ; where the intention is to avert a total loss ; and where there is no other alternative but to commit the act, if the danger is to be averted at all. These general average losses may be either by way of sacrifice of property or expenditure of money, and each class must be borne pro portionately by all interested. The question whether the ship itself or its equip ments may give rise to a general average loss, is generally one open to much debate. It may, however, be stated as a general rule that where such a loss is for the general benefit, the use of the ship and the equipments being for that purpose supplied differently than is usual, an arising loss is general average. It is not necessary that the judgment of the ship's master should be borne out when the facts of the case come to be examined into. He must exercise his judgment as to the necessity for the sacrifice ; but it is enough if he exercise it subject to all the circumstances. If the mast of a ship is cut away, it should not be because of its value as a mast, but because its condition is judged to be a source of danger to the vessel.
Now as to the ship or its equipment being put to some extraordinary and more hazardous use than under ordinary circumstances would be proper. In such a case, all loss arising in consequence of extraordinary sacrifices made, or expenses incurred, for the preservation of the ship and cargo come within general average, and must be borne proportionately by all who are interested.
Sacrifice of goods generally takes the form of jettison. It may be constructive, as in a case where goods are taken out of the ship and put into boats in order to lighten her, or float her if aground. Damage incidental to jettison would also be general average. Expenditure becomes a general average loss when necessarily and extraordinarily incurred for the general safety. It may be incurred in cases of salvage, as where the ship must be taken out of a position of peril ; or of compromise between belligerents and neutrals ; or of port of refuge expenses. Contributions to general average losses.—The liability to contribute does not arise from any contract at all, but from the old Rhodian laws, and has become incorporated into the law of England as the law of the ocean. It is not a matter of contract, but in consequence of a common danger, where natural justice requires that all should contribute for the loss of property which is sacrificed by one in order that the whole adventure may be saved. The principle upon which it becomes due does not differ from that upon which claims for recompense for salvage services are founded. In jettison the rights of those entitled to contribution have their origin in the fact of a common danger, which threatens to destroy them all ; and those rights and obligations are mutually perfected wherever the goods of sonic of the shippers have been advisedly sacrificed, and the property of the others has been thereby saved. Accordingly, all kinds of merchandise put on board for the purposes of traffic are liable to contribute. So also is deck cargo, and gold, silver, jewels, and precious stones not attached to the persons'of the passengers. But the latter when attached does not contribute. Nor do passengers' luggage, seamen's wages, or provisions.
The generalprinciple by which the amount of coniribution may be ascertained is as follows : The loss to the individual whose goods are sacrificed for the benefit of the rest is to be compensated according to the loss sus tained on the one hand and the benefit derived on the other. He must be placed in the position he would have held if the sacrifice had been made by another instead of by himself; his property being treated as if it remained on board the ship and formed part of the adventure antil the voyage ends. The contributory value of a ship is her worth to her owners at the time and place of adjustment ; that of freight, the amount thereof eventually saved ; and that of goods, their market price at the end of the voyage, less freight and expenses. See also ADJUSTMENT; MARINE INSURANCE.