Legal Definitions - warehouse receipt

A warehouse receipt is a formal document that serves as proof of ownership for goods that are being stored by a third party, typically a professional warehouse or storage facility, for a fee. It legally represents the goods themselves, meaning that whoever holds the receipt is considered the owner of the items it describes. This document is often used in business transactions because it allows for the transfer of ownership of the stored goods without physically moving them, and it can also be used as collateral for loans.

Here are a few examples to illustrate the concept of a warehouse receipt:

• Business Financing: A large electronics distributor imports thousands of computer components from overseas. Upon arrival, these components are immediately moved to a commercial warehouse for storage, as the distributor's own facility is at capacity. The warehouse issues a detailed warehouse receipt to the distributor, listing the quantity, type, and condition of the components. The distributor then takes this warehouse receipt to a bank to secure a short-term loan, using the stored components as collateral. The bank accepts the receipt as legal proof that the distributor owns valuable inventory, even though the physical goods are not on the distributor's premises.

  This example demonstrates how the warehouse receipt acts as a document evidencing title to goods stored by another party, and how it can be used for financing with inventory as security.

• Transfer of Ownership Without Physical Movement: A rare art dealer has acquired a collection of sculptures that are currently housed in a specialized, climate-controlled art storage facility. When the dealer finds a buyer for the entire collection, instead of arranging for the physical transportation of the sculptures to the buyer, the dealer simply endorses and hands over the original warehouse receipt to the buyer. By receiving this receipt, the buyer legally becomes the owner of the sculpture collection and can then present the receipt to the storage facility to either take possession or continue storage under their own name.

  Here, the warehouse receipt functions as a document of title that can be transferred, allowing ownership of the goods to change hands without the goods themselves being physically moved from the storage facility.

• Proof of Ownership for Insurance Claims: A small craft brewery temporarily stores a large batch of specialty hops in a third-party cold storage warehouse during an expansion of their own facility. They receive a warehouse receipt detailing the type, quantity, and storage conditions of the hops. If, for instance, a refrigeration malfunction at the warehouse were to damage the hops, the brewery would use the warehouse receipt as definitive proof to their insurance company that they owned the damaged goods and that they were stored at the specified facility under the terms outlined in the receipt.

  This example highlights the fundamental role of the warehouse receipt as a document evidencing clear title to goods stored with someone else, providing essential proof of ownership and location for legal or administrative purposes.