Definition
A memorandum clause is a standard provision in a marine insurance policy that exempts underwriters from liability for two categories of loss: (1) damage to goods of a peculiarly perishable nature, and (2) minor or average damages falling below a specified threshold. The clause operates as a built-in limitation on the insurer's exposure, carving out losses that were considered, by the trade's custom, too ordinary or too inherent in the nature of the cargo to be insurable at standard premiums.
The clause typically begins with the word "memorandum" — hence its name — and then enumerates specific commodities (historically: grain, fish, salt, fruit, and similar perishables) that are excluded from average (partial loss) coverage unless the damage reaches a defined percentage of value, or unless the loss results from the ship's sinking, stranding, or similar enumerated catastrophes.
In practical effect, the memorandum clause was a marine insurance term of art that shifted the risk of ordinary spoilage and incidental damage back onto the cargo owner. Only extraordinary partial losses, and total losses, remained within the underwriter's obligation.
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Common Confusion
The term "memorandum clause" can mislead researchers accustomed to the general contract law sense of "memorandum," where the word typically refers to a written record evidencing an agreement (as in the Statute of Frauds context) or an integration/merger clause confirming the completeness of the written instrument. Those functions are entirely distinct from the marine insurance memorandum clause, which is not a statement about the agreement's completeness but a substantive limitation on coverage. Researchers encountering "memorandum clause" in historical commercial documents must determine whether they are reading a marine policy or a general contract before applying any interpretive framework.
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Why It Matters in Research
The memorandum clause is a term bound tightly to marine insurance practice and its historical corpus. Several navigational points deserve attention:
First, the clause is predominantly a term of historical significance. Modern marine insurance policies have largely replaced the traditional memorandum clause structure with franchise clauses, excess clauses, and negotiated average terms. Researchers working with policies from the eighteenth through early twentieth centuries will encounter the memorandum clause frequently; those working with contemporary forms should not expect to find the term in active use without qualification.
Second, the clause's scope varied by commodity. Historical policies often contained extended memoranda listing specific goods by name, each with its own damage threshold. Grain might require a higher percentage of loss before underwriters became liable than, say, silk. Failing to identify which commodity is at issue can produce a misreading of coverage.
Third, "average" terminology intersects here. The memorandum clause is closely tied to the distinction between general average and particular average — concepts that carry their own historical freight and corpus entries. A researcher who does not understand average doctrine will struggle to interpret any coverage dispute involving the memorandum clause.
Fourth, because Bouvier's cites Maude & Pollock on Shipping, and because Rapalje & Lawrence's entry is truncated at "It begins," researchers relying solely on dictionary definitions will be working with incomplete descriptions of the clause's operative language. The clause's actual opening formula and the enumerated commodity list were where disputes arose; the dictionaries capture the concept but not the working text.
Finally, do not conflate the memorandum clause with integration or merger clauses in general contract law — a confusion addressed above. The encyclopedia entry contracts_48 covers the latter doctrine, which is analytically separate.
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Historical Dictionary Support
All three source dictionaries agree on the clause's core function: preventing underwriter liability for perishable-goods damage and minor losses. The agreement is tight enough that these entries appear to derive from a common tradition of marine insurance commentary rather than from independent legal analysis.
Black's entry is fragmentary in the available text but aligns with the others. Rapalje & Lawrence adds the useful detail that the clause "begins" with identifying language — suggesting that courts and practitioners identified the clause by its opening words, making textual recognition a practical skill in policy interpretation disputes. Bouvier's is the most concise, directing readers to a separate MEMORANDUM entry for elaboration and citing Maude & Pollock on Shipping as authority, which was a standard treatise reference for nineteenth-century marine insurance practice.
None of the dictionaries address what happens when the memorandum clause conflicts with a separate rider or endorsement extending coverage to perishable damage — a gap that practitioners and courts filled through case law rather than dictionary definition. Researchers should treat the dictionary entries as orientation to the concept, not as a complete account of how the clause was interpreted in contested cases.
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Jurisdictional Note
The memorandum clause developed primarily in English marine insurance practice and was carried into American commercial usage through Lloyd's-style policies and the adoption of English marine insurance conventions. American courts generally interpreted the clause consistently with English authority, making English treatise sources (including Maude & Pollock) relevant to U.S. disputes. Modern American marine insurance is governed in part by federal admiralty jurisdiction, which adds a layer of uniformity that state law variations rarely disturb.
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Encyclopedia Cross-Reference
contracts_48 — Interpretation: Integration Clauses, Merger Clauses, and No Oral Modification Clauses (The Law Mind Contracts & Commercial Law Encyclopedia). Consult for the distinct doctrine of clauses that define or limit the operative written agreement in general contract law — useful background for understanding why "memorandum clause" carries different meaning in that context than in marine insurance.
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