Under the ancient law of admiralty, the finder of an abandoned shipwreck becomes
ID: 388236 • Letter: U
Question
Under the ancient law of admiralty, the finder of an abandoned shipwreck becomes the owner
according to the Law of Finds. Use this information to answer the following questions.
a.
What type of legal rule is this?
b. In general, is this legal rule efficient? (i.e. discuss both the good and bad incentives
created by this legal rule).
c.
The Abandoned Shipwreck Act of 1987 (43 U.S.C. 2101-2106) abrogated admiralty law
for wrecks found in U.S. waters, awarding ownership instead to the state in whose
waters a wreck is found. The state can then develop its own reward scheme. Can we say
that the reward scheme will be efficient? Explain your answer.
d. States have been able to develop their own reward schemes since the Abandoned
Shipwreck Act of 1987 (43 U.S.C. 2101-2106). Indicate the theoretically optimal reward
scheme. How, might the state achieve this in practice? Explain your answer.
2. According to the economic theory of fair use, book reviewers are allowed to quote brief
passages from the book being reviewed, because the author and publisher, if asked, would
consent to such a use. In this explanation, quotations in unfavorable reviews would not qualify
as fair use. Why is this distinction unlikely to be efficient? Explain your answer.
Explanation / Answer
1A. This rule was formed under the ancient law of Admirality and was adopted by most of the states using the water-based mode of transport. This law was different from the civil law and commom law legal system.
1B. This rule was not efficient in all aspect, as this was a law made during the ancient times. Not many countries had formed a formal law to operate with in the sea water. Different lands had different laws as the Europian countries, England, US of America, Muslim / Islamic countries, etc... Later Admiralty Law was widely accepted by a lot of nations and had gained concencess.
The water boundries of the state were not defined by this time in the world, so it was more propogated that the shipwreck would belong to finder and not to the state.
1C. Under the new Act of 1987, the shipwreck was declared the property of the state under whose boundaries it is found. This had many advantages as the pirates in the sea had done more distruction in the sea, to life and property. The state was given the ownership and responsibility of the shipwreck and the authority to deal with the debris of the ship and its cargo and other contents. The state later developed a reward system Contract salvage :- is reward that is agreed upon and signed before the expidition is started. Usually it is 50% of the value of the goods / cargo. and
Pure salvage:- where the reward is not predefined or assured. The jury decides and distributes the rewards after the journey has been completed.
1D. It was clearly mentioned in the law of finds" that the finder of the vessel may acquire the title of the ship as the reward. But in the marine environment, the salvage law is preferred over the law of finds.
2. Quotations in unfavourable reviews should not qualify as "fair" use. Firstly, it should not be qualified as it does not have concent of the author. Originally, they are the owner of the book, so book- reviewers cannot be given the liberty to republish the literature written by others.
Secondly, if a book - reviewer is republishing a part of a book with a concent of the author is fair. This might also give new meaning to the literature, in maybe a different context.
So, it is always important to get the consent of the author and publisher for review or republishing the part of a book.
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