If you don't get a new relay clean the old relay contact up too. They can get carboned up from the high current. The relay will run much cooler.

The British Volvo club work this one through a few years ago. The problem with hot fuel relays and melted plugs is wire to terminal connection loosening and corrosion on the incoming wires. Where the wire seats in the spade terminal, I mean. Clean those up, add some solder for extra conduction from clean wire to the spade and the problem leaves.

Scorch has it right. If the connector was partly melted and the connector looks corroded, you need to replace the connector as well as the relay. If you don't, the new relay connector lugs will overheat, corrode, and fail again. I use Sil-Glide silicone grease on my connectors and fuses. Helps prevent this sort of thing. Heck, I use that stuff on connectors, spark plug boots, distributor cap towers, the back of brake pads, and my morning toast, it's that good.

On your '83, all the headlight current goes through the headlight switch. These switches have the same failure pattern as the fuel pump relay. It's a corrosion, heat, more corrosion cycle. Eventually the headlight switch will fail and the connector to the switch will also melt and fail. I've had to replace the switch and connector on both our '83 and '84. When I went through the junkyard, I had to go through about 5 or 6 240s before I found one without corroded switch connectors and melted plastic on the connectors.

I'd recommend connecting and disconnecting the headlight switch several times to wipe the contacts of corrosion, then put some silicone grease on the contacts and reconnect. The best solution would be to install relays to carry the current and just have the relay current go through the switch. Volvo went to this in '85 or '86. As recommended, do the grease thing on all connectors except the O2 connector. Volvo came out with a TSB to do this on my '940.

It wasn't necessarily a short, especially if you don't have any blown fuses. It could be just some corrosion building up on the terminals, increasing resistance and heat, causing more corrosion, causing more resistance and heat, etc etc. Make sure that every couple of years you go through all of the relays that you can easily get to and clean up the terminals with sandpaper, and put them back in with a little dialectric grease. Another relay that could do the same to you is your headlight relay. I don't know about your year but in my car it's above my left foot behind the driver's side knee bolster. Consider doing the same to just about every electrical connection you can find under the hood. You might also want to take out all of your fuses and really clean up the terminals well, with a wire brush or something like that. Then replace the fuses with fresh ones. Every oil change reach up and spin the fuses around a little in their terminals so you know they are always making good connections.

Every couple of years you should also resolder your fuel pump relay, as well as your OD relay.