Freedom of contract and the binding force of contracts are the fundamental principles in English and French contract law. While these principles have been undermined by various rules which regulate the terms of certain contracts in both systems, the price agreed by the parties to the contract is generally considered to be sacrosanct. However, the price agreed in salvage contracts is one important exception in both systems. In both English and French law, courts can intervene in salvage contracts on the ground that the price is too low or too high.
This exception is interesting for two reasons. First, the rules in French law are transplants from English law. This is quite surprising given that unlike the common law and equity courts, the Court of Admiralty generally applied principles of law which were derived from the civil law. Secondly, in both English and French law, salvors and salvees seek to avoid these rules by using standard form contracts which provide that an arbitrator will determine the price to be paid. The Lloyd’s Form is commonly used in both systems.
Salvage contracts emerged in the nineteenth century when developments in shipbuilding made salvage more feasible. This talk will consider the origin of these rules in English law in the middle of the nineteenth century, the ways in which French courts struggled with salvage contracts at the end of the nineteenth century, the transplantation of the English rules into French law via the 1910 Salvage Convention and the use of similar standard forms in both systems to avoid these rules.