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NeCede's

Maxim 12.12.14

He at whose risk a thing is done, should receive the profits arising from it.

Source: Black's, 2d. 1182; Weisman, 35q Difficulty 3/5 — Intermediate

Explanation

(English-origin maxim.) Risk and reward travel together — the party who bears the risk of loss in a venture is entitled to receive the profits arising from it.

Where this applies

  • An investor puts up all the capital for a business venture while the other partner contributes only labor — the investor, bearing the financial risk, is entitled to the lion's share of the profits.
  • A shipowner who bears the entire risk of loss if cargo is damaged at sea is entitled to the freight charges, not the merchant who shipped risk-free.
  • A landlord who bears all the costs of maintaining and insuring a building is entitled to collect the rent — risk and reward belong to the same party.

Legal domains

Cite this maxim

NeCede Max. 12.12.14 — He at whose risk a thing is done, should receive the profits arising from it. — Black's, 2d. 1182; Weisman, 35q

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