Warehouse Receipt And Storage Contract: Fill & Download for Free

A warehouse as a place used for the storage or accumulation of goods. The function of storage can be carried out successful with the help of warehouses used for storing the goods.Warehousing can also be defined as assumption of responsibility for the storage of goods. By storing the goods throughout the year and releasing them as and when they are needed, warehousing creates time utility.Functions of Warehousing:1. Storage:This is the basic function of warehousing. Surplus commodities which are not needed immediately can be stored in warehouses. They can be supplied as and when needed by the customers.2. Price Stabilization:Warehouses play an important role in the process of price stabilization. It is achieved by the creation of time utility by warehousing. Fall in the prices of goods when their supply is in abundance and rise in their prices during the slack season are avoided.3. Risk bearing:When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration, exploration, fire etc. Warehouses are constructed in such a way as to minimise these risks. Contract of bailment operates when the goods are stored in wave-houses. The person keeping the goods in warehouses acts as boiler and warehouse keeper acts as boiler. A warehouse keeper has to take the reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, warehouse keeper shall be liable to the owner of the goods4. Financing:Loans can be raised from the warehouse keeper against the goods stored by the owner. Goods act as security for the warehouse keeper. Similarly, banks and other financial institutions also advance loans against warehouse receipts. In this manner, warehousing acts as a source of finance for the businessmen for meeting business operations.5. Grading and Packing:Warehouses nowadays provide the facilities of packing, processing and grading of goods. Goods can be packed in convenient sizes as per the instructions of the owner.Importance of Warehousing In the Development of Trade and Commerce:Warehousing or storage refers to the holding and preservation of goods until they are dispatched to the consumers. Generally, there is a time gap between the production and consumption of products. By bridging this gap, storage creates time utility.There is need for storing the goods so as to make them available to buyers as and when required. Some amount of goods is stored at every stage in the marketing process. Proper and adequate arrangements to retail the goods in perfect condition are essential for success in marketing. Storage enables a firm to carry on production in anticipation of demand in future.A warehouse is a place used for the storage or accumulation of goods. It may also be defined as an establishment that assumes responsibility for the safe custody of goods. Warehouses enable the businessmen to carry on production throughout the year and to sell their products, whenever there is adequate demand.Need for warehouse arises also because some goods are produced only in a particular season but are demanded throughout the year. Similarly certain products are produced throughout the year but demanded only during a particular season. Warehousing facilitates production and distribution on a large scale.Benefits from Warehouses:1. Regular production:Raw materials need to be stored to enable mass production to be carried on continuously. Sometimes, goods are stored in anticipation of a rise in prices. Warehouses enable manufacturers to produce goods in anticipation of demand in future.2. Time utility:A warehouse creates time utility by bringing the time gap between the production and consumption of goods. It helps in making available the goods whenever required or demanded by the customers. Some goods are produced throughout the year but demanded only during particular seasons, e.g., wool, raincoat, umbrella, heater, etc. on the other hand, some products are demanded throughout the year but they are produced in certain region, e.g., wheat, rice, potatoes, etc. Goods like rice, tobacco, liquor and jaggery become more valuable with the passage of time.3. Store of surplus goods:Basically, a warehouse acts as a store of surplus goods which are not needed immediately. Goods are often produced in anticipation of demand and need to be preserved properly until they are demanded by the customers. Goods which are not required immediately can be stored in a warehouse to meet the demand in future.4. Price stabilization:Warehouses reduce violent fluctuations in prices by storing goods when their supply exceeds demand and by releasing them when the demand is more than immediate productions. Warehouses ensure a regular supply of goods in the market. This matching of supply with demand helps to stabilise prices.5. Minimisation of risk:Warehouses provide for the safe custody of goods. Perishable products can be preserved in cold storage. By keeping their goods in warehouses, businessmen can minimise the loss from damage, fire, theft etc. The goods kept in the warehouse are generally insured. In case of loss or damage to the goods, the owner of goods can get full compensation from the insurance company.6. Packing and grading:Certain products have to be conditioned or processed to make them fit for human use, e.g., coffee, tobacco, etc. A modern warehouse provides facilities for processing, packing, blending, grading etc., of the goods for the purpose of sale. The prospective buyers can inspect the goods kept in a warehouse.7. Financing:Warehouses provide a receipt to the owner of goods for the goods kept in the warehouse. The owner can borrow money against the security of goods by making an endorsement on the warehouse receipt. In some countries, warehouse authorities advance money against the goods deposited in the warehouse. By keeping the imported goods in a bonded warehouse, a businessman can pay customs duty in instalments.Type of Warehouses:There are three types of warehouses as described below:Private Warehouses:The private warehouses are owned and operated by big manufacturers and merchants to fulfill their own storage needs. The goods manufactured or purchased by the owner of the warehouses have a limited value or utility as businessmen in general cannot make use of them because of the heavy investment required in the construction of a warehouse, some big business firms which need large storage capacity on a regular basis and who can afford money, construct and maintain their private warehouses. A big manufacturer or wholesaler may have a network of his own warehouses in different parts of the country.Public Warehouses:A public warehouse is a specialised business establishment that provides storage facilities to the general public for a certain charge. It may be owned and operated by an individual or a cooperative society. It has to work under a license from the government in accordance with the prescribed rules and regulations.Public warehouses are very important in the marketing of agricultural products and therefore the government is encouraging the establishment of public warehouses in the cooperative sector. A public warehouse is also known as duty-paid warehouse.Public warehouses are very useful to the business community. Most of the business enterprises cannot afford to maintain their own warehouses due to huge capital Investment. In many cases the storage facilities required by a business enterprise do not warrant the maintenance of a private warehouse. Such enterprises can meet their storage needs easily and economically by making use of the public warehouses, without heavy investment.Public warehouses provide storage facilities to small manufacturers and traders at low cost. These warehouses are well constructed and guarded round the clock to ensure safe custody of goods. Public warehouses are generally located near the junctions of railways, highways and waterways.They provide, therefore, excellent facilities for the easy receipt, despatch, loading and unloading of goods. They also use mechanical devices for the handling of heavy and bulky goods. A public warehouse enables a businessman to serve his customers quickly and economically by carrying regional stocks near the important trading centres or markets of two countries.Public warehouses provide facilities for the inspection of goods by prospective buyers. They also permit packaging, grading and grading of goods. The public warehouses receipts are good collateral securities for borrowings.Bonded Warehouses:Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of custom duty. They are located near the ports. These warehouses are either operated by the government or work under the control of custom authorities.The warehouse is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty. The goods stored in bonded warehouses cannot be interfered by the owner without the permission of customs authorities. Hence the name bonded warehouse.Bonded warehouses are very helpful to importers and exporters. If an importer is unable or unwilling to pay customs duty immediately after the arrival of goods he can store the goods in a bonded warehouse. He can withdraw the goods in installments by paying the customs duty proportionately.In case he wishes to export the goods, he need not pay customs duty. Moreover, a bonded warehouse provides all services which are provided by public warehouses. Goods lying in a bonded warehouse can be packaged, graded and branded for the purpose of sale.Hope you got your Answer!

There is no fine involved. Your broker or futures commission merchant may have account charges if you fail to uphold your obligations, but these are not legal fines.If you go long a futures contract (you don’t buy it), then your economic position is that you have committed to paying a fixed amount of money at a future delivery date, in return for a fixed quantity of something. If this is a cash-settled trade, you don’t get the fixed quantity, but the money equal to its value. If this is a physical-settled trade, you get a warehouse receipt or similar document evidencing ownership of the thing itself (of course, very few people take actual physical delivery, they get out of the contract before delivery, effectively making it a cash-settled contract).Your actual obligation is to deposit initial margin to guarantee your performance, plus to pay variation margin if the price of the thing you agreed to buy goes down (if that price goes up, you receive variation margin).If you “fail to act” by not making a variation margin payment, your FCM or broker will close out your position and charge the loss against your initial margin. If the initial margin is not large enough to cover the loss, the FCM or broker will try to recover it from other assets in your account, or possibly by suing you.If you “fail to act” by doing nothing at delivery then the futures contract will be settled. If it’s cash settlement and there’s a gain, it will be credited to your account. If there’s a loss, it will be charged against your initial margin (if initial margin doesn’t cover it, then we’re back to the situation in the first paragraph). However the gain or loss will be small, because daily mark-to-market payments will have already covered all of the price move up to the day before settlement.If the contract is physically delivered, you will have to come up with the money to buy the underlying. If you don’t provide it, your FCM or broker will buy and then sell the goods and use the proceeds plus your initial margin to recoup the purchase price. If you have the money in your account to buy the underlying and give no instructions, you will own the underlying and start getting storage bills from the warehouse or other place it is stored. If you don’t pay the storage bills, the underlying will be sold to cover them.

If you are long a futures contract you are obligated to take the oil. Delivery would be in the form of a warehouse receipt for 1000 barrels of oil stored in a tank in Cushing Oklahoma. You will owe the owner of the tank rental fees. With the current shortage of storage room for oil that might be $1 per day per barrel. If you din’t Pay what you owe you might be forced into bankruptcy.