Lesson 35: Rights and Obligations of Warehousemen

Welcome to Lesson 35 of our comprehensive guide on the Uniform Commercial Code (UCC). In this lesson, we will explore the rights and obligations of warehousemen as outlined in Article 7 of the UCC, particularly in the context of warehouse receipts and bills of lading.

Understanding Warehouse Receipts

Warehouse receipts are documents that provide evidence of the storage of goods in a warehouse. These receipts play a crucial role in commercial transactions, as they signify the holder’s right to the goods and can be transferred to others.

Note: Warehouse receipts can be negotiable or non-negotiable, affecting the transferability and rights associated with the receipt.

Rights of Warehousemen

Under the UCC, warehousemen have several rights, including:

  • Right to Payment: Warehousemen have the right to payment for the storage and handling of goods.
  • Right to Lien: They have a lien on the goods for charges related to storage, preservation, and other services.
  • Right to Sell: If charges are not paid, warehousemen can sell the goods to recover the costs.

Example Diagram: Warehouseman's Lien

graph TD A["Goods Stored in Warehouse"] B["Warehouse Receipts Issued"] C["Charges Incurred"] D["Payment Not Received"] E["Warehouseman's Lien"] F["Goods Sold"] A -->|Storage| B B -->|Charges Applied| C C -->|Non-Payment| D D -->|Lien Applied| E E -->|Goods Sold| F

Obligations of Warehousemen

Now, let's delve into the obligations that warehousemen must fulfill:

  • Duty of Care: They must exercise care in the storage and handling of goods.
  • Delivery Obligation: They must deliver goods to the holder of the warehouse receipt upon proper presentation and payment of charges.
  • Record Keeping: They are required to maintain accurate records of the stored goods and transactions.

Mathematical Representation of Storage Charges

Warehousemen often calculate storage charges based on multiple factors, including time and volume. The formula can be represented as:

\[ \text{Total Charges} = \text{Storage Rate} \times \text{Volume} \times \text{Time} \]

Conclusion

Understanding the rights and obligations of warehousemen under the UCC is essential for both legal practitioners and businesses involved in warehousing. For a deeper dive, consider reading Uniform Commercial Code Made Easy. For more information on related topics, please refer to other lessons in this instructable:

« Previous
Next »