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LSDefine
Simple English definitions for legal terms
maritime loan
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A quick definition of maritime loan:
A maritime loan is a type of loan that is given to someone who is shipping goods across the ocean. If the cargo arrives safely, the borrower has to pay back the loan plus interest. But if the cargo is lost or damaged because of a navigational problem, the borrower doesn't have to pay back the loan. It's like a special kind of loan for people who take risks shipping things across the ocean.A more thorough explanation:
Definition: A maritime loan is a type of loan that provides that a lender will not be repaid if the cargo is damaged or lost due to a navigational peril, but the lender will be repaid plus interest if the cargo arrives safely or is damaged due to the carrier's negligence.
Example: A shipping company takes out a maritime loan to finance the transportation of a valuable cargo. If the cargo is lost due to a navigational peril, the lender will not be repaid. However, if the cargo arrives safely or is damaged due to the carrier's negligence, the lender will be repaid the loan amount plus interest.
Explanation: The example illustrates how a maritime loan works. The lender takes on the risk of the cargo being lost due to a navigational peril, but if the cargo arrives safely or is damaged due to the carrier's negligence, the lender will be repaid. This type of loan is commonly used in the shipping industry to finance the transportation of goods.