By Daniel W. Raab, Esq.
Warehouse operators can limit their liability for damages. A warehouse receipt can limit its damages. In fact, your insurance carrier would prefer you to include such limitations of liability.
There are some Florida cases dealing with limitations of liability in a warehouse receipt. The case of San Fisket, Inc. vs. Atlanta Cold Storage, Corp., 347 Southern 2nd 647 Florida 3rd DCA 1977, is a Florida case that did hold a low limit of liability. There was also a case in New York entitled United States Gold Corp. vs. Federal Express Corp. 719 Fed. Sup. 1217, 1226 (S.D. NY, 1989), which specifically held that under the Uniform Commercial Code provisions adopted in both New York and Florida, a bailee(warehouse) may contractually limit its liability for negligence and refer to U.C.C. § S-309 (2). It should give the person depositing the cargo an opportunity to clear a higher value which typically will result in a higher storage charge. The party that owns the cargo should receive a warehouse receipt when the cargo is being deposited at the warehouse so that the owner is on notice of the terms and conditions.
If the warehouse itself was active in creating a conversion, then the limitation of liability might not apply to the loss. See the case of ICC Metals, Inc. vs. Municipal Warehouse Co., 50 New York 2nd 657 (New York, 1980). The warehouse cannot steal goods that are stored and then claim a limitation of liability.
There are organizations that are involved with creating standardized warehouse receipts such as the International Warehouse Logistics Association. The terms and conditions can be on the back of the warehouse receipt. The warehouse agreement should provide for an opportunity for the depositor to declare a higher value. Sometimes a warehouse receipt will refer the depositor to the conditions at an online location/website. The case of One Beacon Insurance Co. vs. Crowley Marine Services, 648 Fed. 3rd 258 5th Cir., 2011, did hold that you could incorporate online terms into a contract. Another case which held this specifically with regard to a bill of lading is the case of Ana Distrib. v. CMA-CGM (Am.) Inc., 329 F. Supp. 2d 565 (D.N.Y. 2004). There is no reason to see why these legal principles would not be extended to a warehouse. This would be consistent with advances in modern day technology.
The safest thing to do is to have all of the terms and conditions on the front and the back as well as online, however it is likely that either online and/or on the back of the document should provide adequate notice. Any terms and conditions on the back of a warehouse receipt need to be legible.
The warehouse owner should also be aware that alarm companies and security companies also have limitations of liability. The warehouse should carefully look at its contracts with third parties.
If you own a warehouse, then check to see if your warehouse has a standard warehouse receipt as well as warehouse liability insurance. It is a good practice for a party depositing cargo in the warehouse to have its own insurance given the limitations of liability that are often on warehouse receipts.
Daniel W. Raab, Esq. is an attorney with offices in Miami Dade County, Florida. His practice does include various aspects of transportation and logistics law. He is a graduate of the Johns Hopkins University and the University Of Miami School Of Law. He is the author of Transportation Terms and Conditions, Chapter 47 of the New Appleman Practice Law Guide, Chapter 5 dealing with Carriage of Goods of the Benedict on Admiralty Desk Reference Book, and a Contributing Author to Goods In Transit. He has taught as an Adjunct Professor of Law at the University of Miami School of Law, St. Thomas University School of Law, and the Florida International College of Law as well as Florida Coastal School of Law.