Limited Liability ‘paramount’ in Warehousing Conditions of Contract, says UKWA legal specialist

September 27, 2021

In the second of UKWA’s Autumn Bitesize Briefing sessions, Layla Barke-Jones, senior associate solicitor in the Dispute & Insolvency Team at UKWA’s specialist legal advisors Aaron & Partners explained the importance of Limited Liability in warehouse operator’s contracts with customers.

Layla stated that this is a delicate area of law and involves reducing the liability of warehouse keepers for any damage to customers’ goods whilst in the warehouse.

Her key point was that a warehouse operator’s contract with a customer is to provide space and services, it does not underwrite the value of the goods held and therefore it is crucially important that warehouse operators limit their liability to their customers.

“UKWA Conditions of Contract, drawn up by Aaron & Partners and exclusive to UKWA members, provides for the role of insurers in assessing allocation of risk and liability. Including limitation of liability is paramount to striking the balance of fairness for both parties,” she said.

The value nominated by the customer for limit of liability can be underwritten by a separate insurance policy, which provides cover where the warehouse operator is at fault and requires the customer to pay the insurance premium. If no figure is nominated, or insurance cannot be obtained, UKWA Conditions of Contract defaults to £100 per tonne.

Layla added, “Customers should be notified that the services are provided subject to the Conditions of Contract before goods are accepted to ensure they are incorporated. A clause limiting a party’s liability must be deemed ‘reasonable’ under the law to enable that party to rely on it. The way the limitation of liability is drafted in UKWA Conditions of Contract has been tested in court previously and found to be reasonable.”

In the next Bitesize Briefing, to be held at 12.30-1pm on Friday 8th October, Layla will be considering further the role of insurers in her presentation ‘Interaction with insurance’.

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