No-cure no-pay is a type of contract commonly used in salvage operations. Under this agreement, the salvor, who is responsible for recovering property, will not receive any payment if they are unsuccessful in saving the property. Payment is only made if the salvor successfully claims or recovers the property in question.
This term is primarily used in maritime law and salvage operations, where individuals or companies attempt to recover lost or damaged property, often at sea. The no-cure no-pay contract incentivizes salvors to act efficiently, as their payment depends on their success. It may also be relevant in insurance claims, where recovery efforts are necessary to secure compensation.
Here are a couple of examples of abatement:
Example 1: A company specializes in recovering sunken ships. They enter into a no-cure no-pay contract with the ship owner, agreeing to recover the ship for a percentage of its value. If they do not find the ship, they receive no payment.
Example 2: An individual hires a salvor to recover a lost yacht. The salvor agrees to a no-cure no-pay contract, meaning they will only be compensated if they successfully locate and retrieve the yacht. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Notes |
|---|---|
| California | No specific regulations on no-cure no-pay contracts, but general contract law applies. |
| Florida | Commonly used in salvage operations, with established case law supporting these contracts. |
| Texas | Recognizes no-cure no-pay contracts, but enforcement may vary based on specific circumstances. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| No-Cure No-Pay | Contract where payment is contingent on successful recovery of property. | Payment only if successful; no obligation if unsuccessful. |
| Fixed Fee Contract | Contract with a predetermined payment regardless of outcome. | Payment is guaranteed regardless of success. |
| Contingency Fee Agreement | Common in legal cases, where payment is based on winning a case. | Typically used in legal contexts, not salvage operations. |
If you are considering entering into a no-cure no-pay contract, it is essential to:
Browse our library of 85,000+ state-specific legal templates.
If the salvor does not successfully recover the property, they will not receive any payment under a no-cure no-pay contract.