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Legal Perspective – Courts Will Look to Contract Law Issues in Salvage Claims

When it comes to maritime salvage, the basic concept is an ancient one. The notion of coming to the assistance of an imperiled vessel is something that dates back to the days of sail-driven merchant ships hauling grain and oils across the Mediterranean.
Due to the inherent dangers of the sea, coming to the aid of a stricken vessel is the right thing to do. Today’s rescuer could be the one needing help tomorrow. But dropping everything to rush to the side of an imperiled vessel carries its share of risks. Merchant vessels often placed themselves in danger through this gesture of altruism. The rescue operation could have added to the cost of the voyage. It could have meant perished cargos, not to mention going into harm’s way.

To reward the undertaking of such a risk, maritime law created the principle of an award for the rescuer, perhaps part as compensation for one’s troubles, and part as an incentive to render assistance. If certain elements were met, the rescuer could have the basis for a salvage claim, and with it, a money award based on the percentage of the ship and cargo saved.
To earn such a prize, the rescuer would need to show three things. These are a (1) marine peril, (2) voluntary act by the salvor, and (3) salvor’s efforts to save the vessel are successful. But instead of a percentage of a vessel, the parties could enter into a contract where they agree to certain terms for the operation. This happened in a recent case involving a 36-foot powerboat that had run aground on a lake.
A commercial towing company responded and assessed the situation. The towing company described a setting where it used its vessel to churn up the waterbed in front of the stricken yacht to help dig it out, afterward tucking their boat under the yacht’s bow and pulling it into the channel. The process took about half an hour. The salvage company described the situation as one of high winds.
However, this did not align with the account of the yacht owner, who said that the endeavor took about ten minutes. Additionally, the yacht owner said that the wind and water were calm. There was also a disagreement as to cost, where the salvage company said it was $250 per foot, while the yacht owner said they agreed to somewhere between $1,000 and $1,200. The yacht owner said that the $250 per foot was handwritten, and not on the document he signed.
The matter was litigated and the lower court ruled in favor of the yacht owner. On appeal, the higher court upheld the decision in favor of the yacht owner. The case underscores a distinction that arises in salvage law, which is whether something is soft grounding or a hard grounding. If a small boat cruising at low speed gently runs up a sandbar in Great South Bay, that would be considered a soft grounding. The cost of the operation would reflect the minor efforts needed.
On the other hand, if a boat just topped off with 2,000 pounds of fuel and ran aground on a rocky shoal in Long Island Sound during an outgoing tide and strong winds, that would likely be deemed a hard grounding. The difference is the price tag of rescue and possible damage to hull, struts, propellers, and rudders.
While the situation here was one where the parties entered a contract based on firm prices, despite the dispute, there are situations where the matter ends with a salvage claim against the stricken boat for a percentage of its value.
The concept of salvage in this case arose on a tranquil lake with a recreational vessel. But maritime salvage operations may also bring to mind large ships, such as the tanker Amoco Cadiz off the coast of France during a fierce March gale in 1978. Instead of the serene setting of a protected lake, negotiations were going back and forth between the tanker and the salvage tug in very rough sea conditions.
Speaking of rough seas, the pandemic continues to present marine perils in the form of personal and financial hardship. Hopefully, the dawn of a new year will bring the hope of brighter days ahead. Please support our local businesses, and may the year ahead hold happiness, health, and the best of everything for all of you and your loved ones… Happy New Year! Tim, Erol

Tim is a NY-based maritime attorney and has taught law at SUNY Maritime College. Erol is a graduate of CUNY School of Law and Farmingdale State College.