Presenting a live 90-minute webinar with interactive Q&A Drafting Commercial Goods Warehousing Agreements on Behalf of Warehousers or Customers Structuring Indemnity, Insurance, Limitation of Liability and Other Key Provisions to Minimize Risks and Liability Exposure WEDNESDAY, FEBRUARY 17, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: John F . Horvath, Principal, Horvath & Weaver , Chicago Mark D. Kimball, Founder, MDK Law, Bellevue, Wash. Joel F . Murray, MDK Law , Bellevue, Wash. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Drafting Commercial Goods Warehousing Agreements on Behalf of Warehousers or Customers JOHN F. HORVATH HORVATH & WEAVER, P.C. JHORVATH@HLPC-LAW.COM 312.419.6600
TERM 6 This Agreement shall become effective beginning February 1, 2016, and shall continue if effect through January 31, 2019 (hereinafter referred to as the “Initial Term”) . This Agreement may be renewed by agreement of the parties. Evergreen Provision Horvath & Weaver, P.C.
STANDARD OF CARE 7 Uniform Commercial Code 7-204 (a) A warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard to the goods that a reasonably careful person would exercise under similar circumstances. However, unless otherwise agreed, the warehouse is not liable for damages that could not have been avoided by the exercise of that care. Horvath & Weaver, P.C.
Insurance Provisions 8 Bad Standard of Care Provisions Company shall be liable for and agrees to indemnify and hold harmless Cargill, its officers, employees, and agents, from and against any and all losses, expenses, damages, demands, and claims (including reasonable attorney's fees) arising out of (i) Company’s performance of services under this Agreement, (ii) injury (including death) or alleged injury to any person, or (iii) damage or alleged damage to any property caused by or resulting from the Company's performance of this Agreement. Warehouseman shall be liable to Customer for all Goods lost, damaged, destroyed or otherwise rendered unfit for sale while in the care, custody or control of Warehouseman, or resulting from Warehouseman’s storage or handling of such Goods, provided, however, that Warehouseman shall not be liable if such Goods are lost, damaged, destroyed or otherwise rendered unfit for sale as the sole and direct result of the negligent acts of Customer or its employees, or the inherent vice or defect of the Goods. Horvath & Weaver, P.C.
Proper STANDARD OF CARE Provisions 9 COMPANY shall not be liable for any loss or destruction of or damage to GOODS, however caused, unless such loss, destruction or damage resulted from COMPANY'S failure to exercise such care in regard to the GOODS as a reasonably careful person would exercise under like circumstances. COMPANY shall not be liable for any loss or destruction of or damage to GOODS that could not have been avoided by the exercise of such care. Horvath & Weaver, P.C.
Limitation of Liability Provision 10 Customers want full replacement value. UCC 7-204 (b) Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage beyond which the warehouse is not liable. Such a limitation is not effective with respect to the warehouse's liability for conversion to its own use. The warehouse's liability, on request of the bailor in a record at the time of signing such storage agreement or within a reasonable time after receipt of the warehouse receipt, may be increased on part or all of the goods covered by the storage agreement or the warehouse receipt. In this event, increased rates may be charged based on an increased valuation of the goods. Why a limitation? Typical Limitation of Liability provisions. No liability for consequential damages. Horvath & Weaver, P.C.
Insurance Issues 11 Types of Insurance I. A. Workers Compensation B. Employers Liability C. Commercial General Liability D. Warehouse Legal Liability E. Property Additional Insured Requirements II. III. Certificates of Insurance Horvath & Weaver, P.C.
Description of the Goods 12 Hazardous Odor issues Temperature control Human food products Warehouse expenses Horvath & Weaver, P.C.
Description of the Services 13 Normal in/out handling Storage Physical inventory Cycle count Other services quoted on request Capital expenditures Horvath & Weaver, P.C.
14 UCC 7-204 Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the bailment may be included in the warehouse receipt or storage agreement. Claim Filing Provision. Suit Filing Provision. Horvath & Weaver, P.C.
Rates and Charges 15 Business Characteristics I. Annual Adjustment II. CPI Agreement Horvath & Weaver, P.C.
Indemnity Provision 16 Mutual Only as to third party liability Horvath & Weaver, P.C.
Exhibits 17 SOPs QA/QC Requirements Other Customer Manuals Horvath & Weaver, P.C.
Transportation Considerations 18 Transportation Broker Shipper’s Agent Dropped Trailer Liability Horvath & Weaver, P.C.
III. DEALING WITH LIEN ISSUES MARK K I MB ALL & JOE L MURRAY MDK LA W WW W . MDK LA W.COM BE LLE VUE , WASHI N G TON
CREATION OF LIEN UNDER ARTICLE 7 • 7-102 Definitions • 7-103 Relation of Article 7 to Treaty or Statute • 7-104 Negotiable & Non-negotiable Document of Title • 7-202 Form of Warehouse Receipt; Effect of Omission • 7-203 Liability for Nonreceipt or Misdescription • 7-205 Title Under Warehouse Receipt Defeated in Certain Cases • 7-209 Lien of Warehouse • 7-210 Enforcement of Warehouse Lien 20
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