Legal Definitions - no cure, no pay

No cure, no pay is a fundamental principle, primarily found in maritime law, that governs compensation for salvage operations. It means that a salvor – an individual or company that attempts to rescue a vessel or its cargo from danger at sea – will only receive payment if their efforts are successful in saving some or all of the property. If the salvage attempt fails completely and no property is recovered or saved, no payment is owed for the services rendered. The compensation, when earned, is typically a portion of the value of the property successfully salvaged.

Here are some examples to illustrate this principle:

• Example 1: Successful Rescue of a Disabled Vessel

  A large container ship loses power in a busy shipping lane and begins drifting dangerously close to a reef. A specialized salvage company dispatches a powerful tugboat and crew, who work tirelessly through the night to establish a tow line and pull the container ship to safety in a nearby port. The ship and its valuable cargo are completely saved from potential disaster.

  Explanation: Under the "no cure, no pay" principle, the salvage company is entitled to compensation because they successfully "cured" the dangerous situation by saving the ship and its cargo. Their payment would be a negotiated percentage of the value of the successfully salvaged vessel and its contents.

• Example 2: Failed Attempt to Recover Sunken Cargo

  A fishing trawler capsizes in rough seas, and its valuable catch of tuna sinks with the vessel. A salvage team is hired to locate the wreck and recover the fish, hoping to preserve some of the cargo. Despite extensive searching and diving operations over several days, the team is unable to locate the sunken trawler or any of its cargo due to strong currents and poor visibility.

  Explanation: In this scenario, the "no cure, no pay" principle dictates that the salvage team receives no payment. Despite their significant effort and expense, they were unable to "cure" the situation by recovering any part of the cargo. Since no property was salvaged, no compensation is due.

• Example 3: Partial Salvage of a Grounded Yacht

  A luxury yacht runs aground on a sandbar during a storm, causing significant damage to its hull and threatening to break apart. A salvage crew arrives and works to refloat the yacht. They succeed in pulling the yacht off the sandbar and towing it to a shipyard, but during the process, some of the yacht's expensive electronic equipment and furnishings are washed overboard and lost.

  Explanation: According to "no cure, no pay," the salvage crew would be compensated for the value of the yacht that they successfully refloated and saved. However, they would not receive payment for the electronic equipment and furnishings that were lost at sea, as those items were not "cured" or salvaged.