Wording for a Warehouse Legal Liability Contract

A warehouse legal liability contract establishes the terms for a relationship between a warehouse owner or a shipper of goods and the individuals operating the warehouse, also known as warehousemen. Because the operation of a warehouse and the handling of fragile and precious goods come with inherit risks, legal liability must be clearly addressed and established for all aspects of warehouse operations. Certain liability aspects cannot necessarily be waived by contract as they may be governed by state law.

All warehouse legal liability contracts will contain many similar terms such as the names and addresses of the parties, a brief description of the relationships of the parties, the term of the agreement and all boilerplate terms related to the operation of the agreement. An introduction to a warehouse legal liability contract might state, "In consideration of the services provided by XYZ corporation, hereinafter, 'Warehousemen,' and the compensation provided by ABC corporation, hereinafter, 'Owner,' the parties agree that the following legal liability contract shall take effect from the date of signature for a term of one year."

Typically, a warehouseman company is liable for the damage caused to goods that are in its control or custody. As a result, the warehouseman company is typically required to obtain certain insurance policies to cover this risk. An insurance clause in a warehouse liability agreement could state, "Upon the execution of this agreement the Warehousemen shall be required to obtain a comprehensive liability insurance policy in the amount of $5 million. A copy of the policy shall be submitted to the Owner and the policy shall be subject to the Owner's approval. Failure to maintain the insurance policy shall be grounds for termination of this agreement."

Because the goods being handled may require specific care, a warehouse legal liability contract may contain conditions about how the warehouse must be maintained and a description of the minimum requirements of the warehouse. The wording of a warehouse description might state, "The Owner shall be required to maintain a facility comprising approximately 200,000 square feet at all time for the benefit of the Warehousemen. This facility shall remain in a state of good repair suitable for storing dry goods, and the Warehousemen shall notify Owner immediately of any conditions requiring repair." Depending on the type of goods being stored, a warehouse description clause might also contain provisions for cold storage of food or access for large industrial vehicles. The warehouse description clause may also establish the potential legal liability of the owner for failure to maintain the warehouse in an operable condition.

One of the key provisions of a warehouse legal liability agreement is an indemnification clause. These clauses establish which party shall provide a legal defense and pay any costs resulting from harm to a third party or financial damage. Multiple indemnification clauses may be used in the same agreement depending on the issue being addressed. An indemnification clause in a warehouse legal liability agreement could read, "The Warehousemen hereby agree to indemnify, defend and hold harmless the Owner from all claims from third parties for damages that result from the Warehousemen's use of the premises or handling of goods therein."