Chapter 23
Legal Aspects of Supply
Chain Management
Twomey, Business Law and the
Regulatory Environment (14th Ed.)
Warehouse Receipts [23-1]
Nonnegotiable
To whom goods are
delivered as stated
on receipt
Purposes of
receipt
Deliver to Jane
Doe
(c) 2000 West Legal Studies
Deliver to the bearer
Or
Deliver to the order
of John Doe
1. Contract for storage
1. Contract for storage
2. Receipt for goods
2. Receipt for goods
3. Document of title
3. Document of title
Is receipt
required
for delivery of
goods?
Negotiable
Yes—If receipt says, “Deliver
to the order of John Doe,” it
must be indorsed by John Doe
for holder of receipt to receive
goods
Yes
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Due Negotiation of Warehouse Receipt
[23-2]
WAREHOUSER
(Issuer)
(Bailee)
SELLER
(Depositor)
(Bailee)
WAREHOUSE
RECEIPT
GOODS
WAREHOUSE
RECEIPT
BUYER
Indorsement and
delivery
right to goods
Once purchaser has duly negotiated receipt, seller
can’t take back the goods.
Purchaser of duly negotiated warehouse receipt takes
priority over bfps and original owner.
(c) 2000 West Legal Studies
value/good faith
due negotiation
PURCHASER OF
WAREHOUSE
RECEIPT
or right to
negotiate further
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Common Carriers [23-3]
Consignor:
Delivers
goods to the carrier
Carrier:
Transports goods
Consignee:
Receives
shipped goods
Common Carrier:
transports goods of
general public without
discrimination
Contract Carrier:
transports goods under
individual contracts
Private Carrier:
only transports its
company’s own goods
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4
Chapter 23 Summary
A warehouser stores the goods of others for
compensation and has the rights and duties of a
bailee in an ordinary mutual benefit bailment. A
warehouser issues a warehouse receipt to the
depositor of the goods. This receipt is a document of
title that ordinarily entitles the person in possession
of the receipt to receive the goods. The warehouse
receipt can be bought, sold, or used as security to
obtain a loan. A nonnegotiable warehouse receipt
states that the goods received will be delivered to a
specified person.
(c) 2000 West Legal Studies
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Chapter 23 Summary [2]
A negotiable warehouse receipt states that the
goods will be delivered “to the bearer” or “to
the order of ” a named person. If a negotiable
warehouse receipt is duly negotiated, the
transferee may acquire rights superior to
those of the transferor.
(c) 2000 West Legal Studies
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Chapter 23 Summary [3]
A warehouser may limit its liability for loss or
damage to goods due to its own negligence to an
agreed valuation of the property stated in the
warehouse receipt provided the depositor is
given the right to store the goods without the
limitation at a higher storage rate.
(c) 2000 West Legal Studies
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Chapter 23 Summary [4]
A common carrier of goods is in the business of
transporting goods received from the general
public. It issues to the shipper a bill of lading or
an airbill. Both of these are documents of title
and provide rights similar to those provided by a
warehouse receipt.
(c) 2000 West Legal Studies
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Chapter 23 Summary [5]
A common carrier is absolutely liable for any
loss or damage to the goods unless the carrier
can show that the loss was caused solely by an
act of God, an act of a public enemy, an act of a
public authority, an act of the shipper, or the
inherent nature of the goods. The carrier may
limit its liability in the same manner as a
warehouser.
(c) 2000 West Legal Studies
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Chapter 23 Summary [6]
A factor is a special type of bailee who has
possession of the owner’s property for the
purpose of sale. The factor, or consignee,
receives a commission on the sale.
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Chapter 23 Summary [7]
A hotelkeeper is in the business of providing
living accommodations to transient persons
called guests. Subject to exceptions, at
common law hotelkeepers were absolutely
liable for loss or damage to their guests’
property. Most states, however, provide a
method of limiting this liability. A hotelkeeper
has a lien on the property of the guest for the
agreed charges.
(c) 2000 West Legal Studies
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