• General average is an unwritten, non-statutory, international maritime law which is universally recognized and applied. It is founded on the principle that vessel and goods are parties to the same venture and share exposure to the same perils, which may require sacrifice or the incurring of extraordinary expense on the part of one for the benefit of the whole venture. It is an arrangement which will be applied when the vessel is encountering serious accidents caused by force majeure.
  • General Average is defined in the York-Antwerp rules as: There is a General Average act when, and only when, any extraordinary sacrifice expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure. When a cargo ship encounter a serious accident at sea, e.g. grounding, the vessel owners may ha to incur additional costs to salvage the ship and its cargo, and may resort to declaring General Average.
  • General Average requires that all parties with an interest in saving ship, the cargo, etc. share proportionately the cost of saving the common adventure . This means that cargo owners would be responsible a proportion of the costs equal to the proportion of the value of the cargo to the common adventure. General Average is applied according to an internationally acknowledged set of rules, the York-Antwerp rules.