7-204 - Duty of Care; Contractual Limitation of Warehouseman's Liability.
Section 7--204. Duty of Care; Contractual Limitation of Warehouseman's Liability. (1) A warehouseman is liable for damages for loss of or injury to the goods caused by his failure to exercise such care in regard to them as a reasonably careful man would exercise under like circumstances but unless otherwise agreed he is not liable for damages which could not have been avoided by the exercise of such care. (2) 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, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehouseman shall not be liable; provided, however, that such liability may on written request of the bailor at the time of signing such storage agreement or within a reasonable time after receipt of the warehouse receipt be increased on part or all of the goods thereunder, in which event increased rates may be charged based on such increased valuation, but that no such increase shall be permitted contrary to a lawful limitation of liability contained in the warehouseman's tariff, if any. Subject to subsection (3), no such limitation is effective with respect to the warehouseman's liability for conversion to his own use. (3) For the purpose of the last sentence of subsection (2), if the bailor is a merchant with respect to the bailed goods and the goods are not used or bought for use primarily for the personal family or household purposes of the bailor: (a) establishing only the failure of the warehouseman to deliver the goods as required under section 7--403 does not establish a prima facie case of conversion to the warehouseman's own use; and (b) the burden of establishing that the warehouseman has converted goods to his own use is on the bailor. (4) Reasonable provisions as to the time and manner of presenting claims and instituting actions based on the bailment may be included in the warehouse receipt or tariff.