The German use of unrestricted submarine warfare was not justified under international law as it was generally understood at the time. During WWI, maritime warfare was mainly governed by the 1856 Declaration of Paris, the 1907 Hague Convention, and the 1909 Declaration of London. The last of these had been signed by the belligerents and never ratified, but was a useful guideline to acceptable behaviour. These placed limits on the actions of belligerent warships, but did not limit the actions of civilian ships to the same extent.

All three treaties permitted the capture of enemy merchant ships in all circumstances. Neutral merchants could also be captured, if they were carrying contraband. This was poorly defined up until the London Declaration, which split goods into three categories. Absolute contraband included things like weaponry, military uniforms and pack animals; things that had an obvious military use. Non-contraband goods were things that were useful to civilians, such as furniture, civilian clothing, toys and raw materials. Conditional contraband was more complicated. This covered things that had both civilian and military uses, and could only be seized if destined for a belligerent's military. Cloth is a good example of this, as it could be used for both civilian clothing or military uniforms. Food, fuel and railway equipment were similarly considered conditional contraband. Seized merchant ships could be sunk, but only if not doing so posed a risk to the safety of the ship that seized it. Before sinking the ship, the crew and any passengers had to be placed in a position of safety. Lifeboats were not considered a place of safety, unless the boats were close to land or another ship that could pick them up. This essentially ruled out unrestricted submarine warfare. Leaving a prize afloat could certainly be justified as a threat to the safety of a submarine, but sinking a ship without placing the crew and passengers in a safe place was expressly forbidden. Similarly, sinking neutral ships without searching them for contraband was a war crime.

The use of neutral flags (the so-called 'flag ruse') did not change this. After all, neutral ships could be stopped and searched, and doing so would reveal the use of the ruse. The flag ruse had long been a part of naval warfare, albeit one more frequently used by warships than by merchantmen. That said, it was understood that merchants might use it too. It was explicitly legal in British law, with the Merchant Shipping Act of 1894 counting it as a normal procedure. Britain also allowed vessels of other nations to use its flag to avoid capture or other harm. However, it was starting to become somewhat controversial. The US Navy had ceased to use the ruse in 1900, following the example of warfare ashore, where it was prohibited. In January 1915, the Admiralty advised merchant skippers to use the ruse. This drew protests from neutrals, but none denied the legality of the practice. Instead, they complained that it might lead to attacks on neutral ships. From the British perspective, the use of the flag ruse would, by forcing belligerents to properly stop and search ships rather than attacking without warning, actually increase the safety of neutral ships. The Germans, meanwhile, saw the use of false colours as inherently illegitimate, as it was on land. In doing so, they broke with precedent and the prevailing legal opinion.

The Germans also attempted to use the fact that the British armed merchant ships in self-defence to justify unrestricted submarine warfare. Again, the right of self-defence for merchants was long-established in international law, as it was a traditional maritime practice. Writing on international law throughout the 19th Century had upheld the right of self-defence. It was generally understood that there was a difference between auxiliary cruisers and merchant ships resisting capture - that one was only using force in self-defence. As such, it was not addressed by the Hague Convention or London Declaration. In 1913, the Institute of International Law met in Oxford to produce a complete overview of maritime law. This included a discussion of the legality of resistance, to which the Germans objected to the existing precedent. They argued that only military forces were allowed to use force of any kind on land, and that maritime law should be brought into line with it. The British, and all neutral powers, disagreed, citing the long-established precedent and the agreement of the vast majority of legal scholars. In 1915-16, the Americans attempted to persuade the Germans to stop carrying out unrestricted submarine warfare by getting the British to cease arming merchants in self-defence. They soon realised that they were asking the British to give up what was arguably a legal right while asking the Germans to follow international law.

So, how does the sinking of the Lusitania fit into this? She was carrying contraband, yes, but this was irrelevant. She was a British ship, flying a British flag, and thus a legitimate target for seizure, whether she was carrying arms or toys. As the process of finding a prize crew for a liner of that size would have been impossible for a submarine, sinking her would have been justified. However, the crew and passengers would have to be put into a position of safety. Sinking her without warning prevented this completely. No attempt was made to prevent civilian casualties. It was not the sinking that was the problem, but the manner of it.

In the post-war period, attempts were made to tighten international law in respect to submarines. The 1922 Washington Treaty applied a set of universal rules to both neutral and belligerent merchants. This made them subject to attack if they resisted searches, and subject to sinking only if the crew and passengers were safe. Submarines, like any other cruiser, were controlled by these rules. However, the Washington Treaty was not ratified. Nor were the London Treaties of 1930 and 1936, which contained the same language. During WWII, both sides participated in unrestricted submarine warfare. Part of the charges towards Erich Raeder and Karl Donitz at the Nuremberg Trials was that they had carried out such a campaign. However, by showing that the Allies had also carried out an unrestricted submarine campaign, they were found not guilty on those counts (though both were convicted on other charges).