Definition
A "following basis" is a clause or agreement specifying the method and foundation upon which a general average adjustment shall be calculated, particularly in maritime law. When parties agree that an adjustment shall be made on the following basis, they designate specific valuations — typically of the ship, freight, and cargo after a collision or maritime casualty — as the starting point from which contributions to general average will be proportionally assessed.
The phrase signals a procedural and mathematical agreement: the stated valuations are to serve as the base figures from which contributory shares are derived. Critically, agreeing to a following basis does not alter the nature of what is being valued or transform gross figures into net figures (or vice versa). It establishes the foundation for calculation, not the method of valuing each component independently.
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Common Confusion
"Following basis" is sometimes read as a substantive agreement about how individual items will be valued — for instance, whether freight is valued gross or net. This is incorrect. A following basis clause takes valuation figures as given and uses them as the computational foundation for apportioning contributions. It does not resolve disputes about how those figures were themselves derived. Researchers encountering the phrase in adjustment agreements should look separately for any governing rule or convention (such as the York-Antwerp Rules) that dictates valuation methodology; the following basis clause operates downstream of that question, not in place of it.
The term also has surface resemblance to "follow the fortunes" or "follow the settlements" clauses in reinsurance, which are distinct concepts governing a reinsurer's obligation to accept the cedent's good-faith claims decisions. These are unrelated doctrines that happen to share directional language.
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Why It Matters in Research
Researchers working in maritime law and insurance sources will encounter "following basis" most often in the context of general average adjustment disputes, where the phrase appears in post-casualty settlement agreements and average adjustment documents. The key research trap is treating the clause as doing more work than it actually does. Courts and adjusters have consistently held that a following basis agreement establishes the computational platform — not the underlying valuation rules — meaning that disputes about how the ship, freight, or cargo was valued survive a following basis agreement and must be resolved by reference to applicable rules or custom.
For historical sources, Bouvier's entry is notably truncated, and researchers relying on it alone will encounter an incomplete statement of the doctrine. The entry cuts off mid-sentence, leaving the key distinction (that "following basis" concerns the foundation for adjustment, not the gross or net character of freight valuation) only partially articulated. Supplement with York-Antwerp Rules commentary and general average adjustment treatises for a complete picture.
In insurance reinsurance research, be alert to the terminological overlap with "follow the fortunes" clauses. The two appear in overlapping source materials — particularly in marine reinsurance — and can be conflated by researchers unfamiliar with the specialized vocabulary of each doctrine. The encyclopedia cross-reference to insurance_95 addresses the reinsurance context directly and is the recommended starting point for distinguishing the two.
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Historical Dictionary Support
Bouvier's Law Dictionary provides the only historical dictionary treatment located in the Law Mind corpus. Bouvier frames the following basis as an agreement concerning general average adjustment, specifically in the collision context, and draws the essential distinction that the clause establishes the valuation as "the foundation upon which the adjustment is made" — not a directive about gross versus net freight valuation. The entry is substantively correct but incomplete as preserved, cutting off before the full doctrinal consequence is stated.
No other historical shelf source treats this term directly. The absence is consistent with its character as specialized maritime commercial vocabulary, more at home in Lloyd's adjustment practice and treatises on general average than in general legal dictionaries. Researchers should weight Bouvier's as a useful pointer rather than a complete authority.
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Jurisdictional Note
The doctrine arises primarily in admiralty and maritime law, where federal jurisdiction predominates in the United States. In international shipping practice, adjustment methodology is frequently governed by the York-Antwerp Rules (as periodically revised), which operate by contractual incorporation into bills of lading and charter parties regardless of the forum. English admiralty practice and commentary are historically influential and remain relevant in U.S. maritime research.
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Encyclopedia Cross-Reference
insurance_95: Reinsurance — Treaty and Facultative, Follow the Fortunes, Cut-Through Clauses, and Arbitration (The Law Mind Insurance Law Encyclopedia) — for the distinct but terminologically adjacent "follow the fortunes" doctrine and its role in reinsurance agreements.
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