igation, along with the ship and freight. In
consideration of the risks assumed by the lender, the bottomry premium
(sometimes termed _maritime interest_) is usually high, varying of
course with the nature of the risk and the difficulty of procuring
funds.

A bottomry contract may be written out in any form which sufficiently
shows the conditions agreed on between the parties; but it is usually
drawn up in the form of a _bond_ which confers a maritime lien (q.v.).
The document must show, either by express terms or from its general
tenor, that the risk of loss is assumed by the lender,--this being the
consideration for which the high premium is conceded. The lender may
transfer the bond by indorsation, in the same manner as a bill of
exchange or bill of lading, and the right to recover its value becomes
vested in the indorsees. (See BOND.)

According to the law of England, a bottomry contract remains in force so
long as the ship exists _in the form of a ship_, whatever amount of
damage she may have sustained. Consequently, the "constructive total
loss" which is recognized in marine insurance, when the ship is damaged
to such an extent that she is not worth repairing, is not recognized in
reference to bottomry, and will not absolve the borrower from his
obligation. But if the ship go to pieces, the borrower is freed from all
liability under the bottomry contract; and the lender is not entitled to
receive any share of the proceeds of such of the ship's stores or
materials as may have been saved from the wreck. Money advanced on
bottomry is not liable in England for general average losses. If the
ship should _deviate_ from the voyage for which the funds were advanced,
her subsequent loss will not discharge the obligation of the borrower
under the bottomry contract. If she should not proceed at all on her
intended voyage, the lender is not entitled to recover the bottomry
premium in addition to his advance, but only the ordinary rate of
interest for the temporary loan. As the bottomry premium is presumed, in
every case, to cover the risks incurred by the lender, he is not
entitled to charge the borrower with the premium which he may pay for
_insurance_ of the sum advanced, in addition to that stipulated in the
bond.

The contract of bottomry seems to have arisen from the custom of
permitting the master of a ship, when in a foreign country, to pledge
the ship in order to raise money for repairs, or other extraordinary
exp