We almost always hear these two words together as a phrase. It's typically used in the context of the beach and the sea, as well: "The flotsam and jetsam of the sea dotted the tide line." According to the AHD flotsam:

1. Wreckage or cargo that remains afloat after a ship has sunk.
   1. Floating refuse or debris.
2. Discarded odds and ends.
3. Vagrant, usually destitute people.

As the AHD points out, in maritime law, flotsam refers to wreckage or spilled cargo left floating on the sea after a ship capsizes. Jetsam refers to cargo, supplies, or equipment thrown overboard, deliberately, from a ship in distress (including smugglers fearing legal ramifications) that floats or washes ashore and lands on the beach. Lagan, a rather rare word today outside of maritime law, refers to items that are cast off deliberately, and sink; traditionally, such items were tied to a buoy or float. Legally, jetsam and ligan belong to their original owner; flotsam may potentially be considered salvage. Items that are derelict have been abandoned; all four categories of debris are, in the United Kingdom, regulated by law and under the control of a Receiver Of Wreck. Although the laws related to salvage and beaches are medieval in origin, they are still quite applicable today. Oddly enough, the Duke of Cornwall (AKA the Prince of Wales) has all right of wreck in the Duchy of Cornwall. That means, in broad terms, if you find something, you have to declare it. Given the history of wrecks off the rocky, often dangerous shore of Cornwall, this could have fairly important ramifications.

Etymologically speaking, flotsam comes to English via the Normans, and the Anglo-Norman floteson, from Old French floter, "to float," of Germanic origin, and ultimately from the Proto Indo-European root *pleu-. Flotsam, in English, was spelled flotsen until the middle of the nineteenth century, when it began to be spelled flotsam.

Jetsam was originally written jetson, from Middle English jetteson, cognate with Modern English jettison, to throw overboard. Lagan refers, technically, to an item attached to a float or buoy and thrown into the ocean, with the object of retrieving it later. Etymologically, lagan derives from Old French, and (probably) from Old Norse lögn, lagn- which goes back to the Proto Indo-European root *legh- "to lie down," the same root that gives us the Modern English verb "to lie" (down).

There are a surprisingly large number of idioms and phrases that are commonplace in Modern English, but which ultimately derive from legal terminology and even the medieval equivalent of boiler plate text from legal documents. Flotsam and jetsam is one of those phrases.