Legal Definitions - memorandum articles

Memorandum articles refers to specific types of cargo identified within a marine insurance policy's "memorandum clause."

These are goods that are typically more vulnerable to minor damage, spoilage, or partial loss during sea transit, such as perishable items, fragile goods, or certain bulk commodities. The memorandum clause sets out particular conditions for these articles, often stipulating that the insurer will only pay for losses if the damage exceeds a certain percentage of their value (known as a "franchise"), or if the loss is total. This approach helps manage the inherent risks associated with these goods and prevents numerous small claims for minor, expected deterioration.

• Example 1: Fresh Produce Shipment

  A company ships a large consignment of fresh berries from South America to Europe. Due to the perishable nature of the fruit, the marine insurance policy lists "fresh berries" as memorandum articles. The policy's memorandum clause specifies that the insurer will only cover spoilage or damage if it affects more than 10% of the total shipment's value, acknowledging the inherent risk of some minor deterioration during a long voyage.

• Example 2: Delicate Electronic Components

  An electronics manufacturer transports a container full of sensitive circuit boards across the Pacific Ocean. Given their fragility, the insurance policy identifies "delicate electronic components" as memorandum articles. The memorandum clause states that the insurer will only be liable for breakage if the damage exceeds 5% of the total value of the components, recognizing that a small degree of minor damage might occur despite careful handling.

• Example 3: Bulk Coffee Beans

  A coffee importer arranges for a bulk shipment of green coffee beans from Africa to North America. The marine insurance policy designates "bulk coffee beans" as memorandum articles. The memorandum clause stipulates that the insurer will only compensate for weight loss due to moisture or minor spoilage if it exceeds 2% of the total shipment weight, accounting for normal shrinkage and minimal expected damage during transit.