Abandonment and Salvage

(redirected from Abandonment Clause)

Abandonment and Salvage

A clause in a contract allowing one party to abandon (or forfeit ownership to) a property and thereby transfer ownership to another party, assuming the second party accepts. Abandonment and salvage clauses are most common in insurance covering goods being shipped overseas. That is, if the ship sinks and the owner does not wish to attempt to recover the goods, he may declare them abandoned, which would transfer ownership to his insurance company (though the insurance company may refuse to accept ownership). It is also present in some homeowner's insurance contracts. It should not be confused with an abandonment option.
References in periodicals archive ?
If a property is found to be vacant, the program requires that the lender exercise the abandonment clause within their mortgage contract, register the property with the city, and immediately begin to secure and maintain the property to the neighborhood standard.