Chapter 2Warehouse Receipts: Special Provisions
Section § 7201
This law states that any warehouse can issue a warehouse receipt, which is a document proving that goods are stored there. Additionally, if goods like distilled spirits or agricultural products are kept under special rules that require a bond or license, anyone issuing a receipt for those goods—whether or not they own them or are a warehouse—is considered to be issuing a proper warehouse receipt.
Section § 7202
This law section talks about what's needed in a warehouse receipt, which is a document detailing goods stored in a warehouse. The receipt doesn't need to follow a specific template, but it must include certain details to avoid making the warehouse responsible for any harm caused by leaving them out. These details include the warehouse's location, issue date, a unique ID, who the goods are for, storage fees, a description of the goods, the warehouse's signature, any ownership by the warehouse, and a statement on any liens or claims about the goods. Warehouses can add extra terms to the receipt as long as they don't conflict with specific legal duties.
Section § 7203
If you're buying or relying on a document that describes goods, like a receipt or title, and the goods are not as described, you can get damages from whoever issued that document. However, you can't claim damages if the document clearly states that the issuer does not really know if the goods were received or match the description, or if you already knew about the problem when you bought it.
Section § 7204
This law outlines the responsibilities of a warehouse in caring for goods. Warehouses must exercise the same care a careful person would in similar situations to prevent loss or damage. If a warehouse fails to do so, it is liable. However, a warehouse can limit its liability through the storage agreement, except in cases where it misuses the goods for itself. Additionally, warehouses can agree to higher liability limits if requested by the goods owner, which may result in higher fees. The law also allows for terms on how and when claims can be made in the agreement, but it does not change other specific laws like those in the Civil Code or regulations related to utilities and agriculture.
Section § 7205
If you buy goods like grains or oil from a warehouse that regularly sells those types of goods, you own them outright, even if someone else holds a legal document claiming ownership of those goods.
Section § 7206
If you store your goods in a warehouse, the warehouse can ask you to pick them up and pay any storage fees once the storage period ends. If you don't pick them up, they might be sold. If the goods could spoil or drop in value quickly, the warehouse can shorten the deadline for pickup and sell them sooner. Dangerous goods can be sold or disposed of without notice if they weren’t aware of the risk when stored. Before selling, you can claim your goods by making a demand. Any leftover money from selling your goods after the warehouse covers its costs will be yours to claim.
Section § 7207
This law says that a warehouse must keep each customer's goods separate so they can be easily identified and delivered, unless the goods are fungible, meaning they are interchangeable like grains or oil. Fungible goods can be mixed together, and if they are, they belong to everyone with a claim, and the warehouse is responsible for each person's share. If there aren't enough goods to match the receipts issued, everyone with a legitimate receipt, including those with receipts issued by mistake, has a right to their share.
Section § 7208
If someone fills in a blank on a paper warehouse receipt without permission, a buyer who purchases it in good faith and doesn't know about this issue can assume it's correct. Otherwise, any changes made without permission won't affect what was originally agreed upon in the receipt, whether it's electronic or paper, and the issuer has to stick to the original terms.
Section § 7209
This law gives warehouses a right, called a lien, on the goods they store. It's like a claim to make sure they get paid for things like storage, transport, or selling the goods if needed. The lien also applies to charges relating to other items stored in the same warehouse, as long as it's stated in a storage agreement or receipt. For some charges, the warehouse can claim a special kind of interest called a security interest, which is like additional protection for getting paid. If goods are given to the warehouse with the owner's permission, the lien still holds even if the owner pledged the goods to someone else. But if the person with the goods didn't have the right to pledge them, the lien won’t apply to previous owners who didn't know about it. Special rules apply to household goods, which are things like furniture and items used at home. Importantly, if the warehouse gives the goods back or unjustly refuses to return them, they lose their lien.
Section § 7210
This law outlines how a warehouse can sell goods to enforce its lien, meaning the right to keep possession of property belonging to another person until a debt owed by that person is discharged. The warehouse must follow specific steps, like notifying anyone with an interest in the goods and selling them in a commercially reasonable way, which usually involves public auction. The notice must detail the amount owed, the sale's time and place, and be sent in various possible ways. If a lien is on goods stored by a merchant for business, extra rules apply, such as advertising the sale with a newspaper announcement or postings if no newspaper is available. Before the sale, anyone can pay off the lien to stop the sale. A good faith buyer gets the goods free of claims, but the warehouse must still fulfill its obligations to others involved. If a warehouse doesn't comply, it may face penalties like damages or, if intentional, conversion claims, which means wrongfully taking control of someone's property. Warehouses can also buy at their public sales.