Contract for Warehouse
A warehouse contract is a legal agreement between a warehouse operator and a business or individual utilizing their services. For businesses that use warehousing as a part of their supply chain, a warehouse contract is important because it defines the legal parameters between the parties involved. Whether a company needs perpetual storage for large quantities of goods or a temporary place to store seasonal items, clearly defining the services provided is essential.
Elements common to many warehouse contracts include:
Location of the warehouse
Length of the contract and termination clause
Specific limitations of liability in case of theft , damage, or other events
Person or persons in charge at the facility
Hours of operation for access
Charges for transportation of goods to and from the warehouse
Time frames for receipt and delivery of shipments
Clearly defining each party’s responsibilities in a warehouse contract is essential for protecting all involved. For example, if a company seeks to hold a third party liable for the loss of their property, the warehouse contract should include language that describes how dispute resolution is to be handled for cases such as this.
Essential Components of a Warehouse Contract Template
One of the fundamental components of any warehouse contract template is the responsibilities of both the warehouse operator and the customer (client). These obligations must be clearly set out and should include clear agreements as to who will be responsible for damage to property and who will be responsible for items that are lost or go missing.
It is also not uncommon for warehouse contracts templates to expressly provide that the storage location operator will be entitled to limit or exclude liability for damage or even destruction of goods where it is caused, for example, by fire or water damage.
In addition, warehouse contract templates will almost always contain provisions relating to the duration of the contract. It is common for warehousing contracts to have a duration of between one and two years and for them to have automatic renewal provisions (subject to the discharge of any notice requirements by both parties). In such cases, the warehouse contract template will necessarily include reasonable notice periods for termination.
The payment provisions in a warehouse contract template will also be of great importance. Almost all warehouse contract templates provide for advance payment of fees and/or rental costs. It is also common for warehouse contract templates to set out the consequences in the event of late payment. Common penalties include the payment of interest at the statutory judgment interest rate and the right of the warehouse operator to immediately cease providing storage services until payment is received.
Advantages of a Warehouse Contract Template
The most significant benefit of utilizing a pre-designed warehouse contract template is undoubtedly the massive amount of time it will save you and your legal team. Though it can take days or even weeks for a legal team to create a custom-made warehouse contract from scratch, it will only take a matter of minutes to plug your information into a warehouse contract template for a storage facility. This maximizes efficiency on your end and has the added benefit of driving down unnecessary costs. Regardless of whether you are representing the storage facility or a client storing goods, you absolutely must have a binding contract in place to protect all parties involved. In some cases, custom contracts may be necessary for specific regulations or special circumstances, but in the vast majority of storage agreements, a warehouse contract template will be all you need. Not only does this pre-existing template ensure that all of the legal terminology necessary for full legal coverage is in place, but it also gives the parties peace of mind by ensuring that nothing important has been overlooked. Another way in which the use of a pre-existing warehouse contract template maximizes efficiency for both the storage facility and the client is that it establishes a quality control system for the storage provider. It is not uncommon for employees to make mistakes or forget certain provisions when faced with the task of writing a warehouse contract from scratch. Conversely, the storage provider will be able to expect that, no matter who is creating the contract, all contracts will contain the same terms and conditions as outlined in the warehouse contract template. Thus, both parties are able to enter into their agreement with confidence and certainty for all future transactions.
Customizing a Warehouse Contract Template
Finding the right warehouse contract template can save your business valuable time. However, it’s highly unlikely that you’ll find a template that perfectly fits all your unique business needs. You can adjust your warehousing contracts for varying home sizes and types, in addition to modifying them to include relevant legal terms. The following are some guidelines for tailoring a warehouse contract template with which you feel comfortable:
Consider your unique warehousing situation when reading through potential warehouse contract templates. Consider how you would change the template to better suit your business and discuss these changes with your attorney—ask for feedback on the language you’re using and the clauses you plan to add or remove. Your attorney’s particular field of practice may be helpful in ensuring that you’re covering all your bases.
Once you’ve outlined your desired changes, begin altering your warehouse contracts. For instance, the standard warehouse contract template likely will include simple daily fees. How will these fees be determined in your case? Will you charge clients simply for storage , or will you charge them for all services offered? Think about all the different services you offer, then write these in the contract.
This is also a good time to customize contract language. For instance, you may want to omit a particular clause (say, a limitation of liability clause). In this case, you need to be specific about which clause you’d like to remove. You also must write language that applies to the particular situation at hand to ensure you’ll be fully protected. Should anything go wrong, you want to be prepared.
With the appropriate paperwork in place, you’ll have an easier time dealing with many of the day-to-day responsibilities of running a warehousing business. Consider an attorney’s help as you finalize your contract modifications to ensure you’re meeting state and local legal standards. Ensuring that your contract’s language meets the legal standards can make all the difference when it comes to how enforceable the contract is.
Typical Errors to Avoid in Warehouse Contracts
There are a number of common mistakes that businesses make when using warehouse contract templates. Because templates may be hard to understand, and mistakes in interpretation can have drastic effects, it’s important to know what some of the most common mistakes are so they can be avoided. One of the most common mistakes is having unclear terms within warehouse contracts. Businesses will sometimes use templates from other sources that don’t have the proper terms, or think they can add new terms to existing templates that will be easy to understand. In both scenarios, the missing clarity in documents can lead to performance problems between the business and the warehouse owner, and lead to additional business costs as a result of having to rewrite contracts, sort out problems, and pursue potential legal remedies. Another mistake companies make is forgetting to provide proper documentation. This goes along with the previous example: businesses will use an old document that lacks the proper terms, or fail to update terms as necessary to provide supporting documentation for their arguments. If there are requirements for reporting damage to goods, for example, or specifying how refunds need to be issued, they need to be documented to ensure they don’t forget about them or just fail to follow through on them. Finally, businesses will often ignore updates to the law. Like many legal documents, warehouse contract templates need to be updated when changes in the industry occur. This can include changes to laws, such as updates to statutes, increased expectations among suppliers, and even amendments and new rules for organizations such as the American National Standards Institute. If you’re not aware of these changes, you’ll fall behind the rest of the industry and may leave yourself open to punitive damages.
Where to Locate Authentic Warehouse Contract Templates
Fortunately, there are plenty of resources to help you find a reliable warehouse contract template. The first place most businesses will go is the world wide web; this is usually a good idea, but only if you know where to look. Many free legal advice websites and online services offer downloadable templates. Be warned that many of these materials may not have been prepared by licensed attorneys or even reviewed, so don’t consider them your golden ticket to legal peace of mind. If you do choose to go this route, you can find reliable sources if you do your homework; look for sites that are supported by large or reputable law firms, or for documents that have already been reviewed or written about by legitimate sources.
If you want to skip the contract law research and preparation or just don’t have the time for it, you could always pay a licensed, reputable attorney to do the work for you. Whether or not this is a good idea depends on the complexity of the contract, the size of your business, and your own approach to business . For large companies with frequent entry into legally complicated arrangements, hiring an attorney every time to prepare a contract may not be the best use of time and money. A compromise might be to hire an attorney to review standard contracts every once in a while, so you start off with a solid foundation for future contracts.
There are also a number of industry associations that offer standard contracts for businesses as one of the benefits of membership. If there’s a recognized industry association in your field – such as the International Warehouse Logistics Association – it’s worth it to become a member and take a look at what they have to offer. Similar to retaining expertise through hiring an attorney, having a general contract template that has been approved by a trusted third-party association can save time and effort on top of providing assurance that the document will meet your needs.