ABSTRACT
General average loss is a loss caused by or directly consequential on a general average act. It includes a general average expenditure as well as a general average sacrifice. There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure. The word "average" means loss. General average acts are of two types: extraordinary sacrifices and extraordinary expenditures. The expression "general average" is therefore used in a number of senses, sometimes precisely and sometimes loosely. There is no single, authoritative explanation of the basis of the doctrine of general average. It has been justified in general terms on the grounds of mercantile custom, equity, convenience, utility and natural justice. The ancient doctrine of general average has been incorporated into the municipal law of different states.
