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Warehousing Agreement
I need a warehousing agreement for a third-party logistics provider to store and manage inventory for a period of 12 months, with provisions for monthly inventory audits, liability coverage for damaged goods, and a 30-day termination notice period.
What is a Warehousing Agreement?
A Warehousing Agreement lets businesses safely store their goods in someone else's facility while clearly defining who's responsible for what. Under Malaysian law, these contracts spell out essential details like storage fees, handling procedures, and insurance requirements between warehouse operators and their clients.
The agreement protects both parties by setting rules for inventory tracking, damage liability, and security measures. It must comply with Malaysia's Warehouse Keeper's Act and local storage regulations, especially for specialized items like dangerous goods or temperature-controlled products. Most Malaysian businesses use these agreements when outsourcing their storage needs to third-party logistics providers.
When should you use a Warehousing Agreement?
Use a Warehousing Agreement when your business needs to store goods in a third-party facility for any period longer than a month. This is especially important for Malaysian companies dealing with high-value inventory, temperature-sensitive items, or products requiring special handling like electronics, textiles, or perishable goods.
The agreement becomes essential when scaling operations beyond in-house storage capacity, entering new markets, or managing seasonal inventory fluctuations. Malaysian law requires formal documentation for commercial storage arrangements, particularly when dealing with customs-controlled goods, dangerous materials, or when multiple parties share warehouse space.
What are the different types of Warehousing Agreement?
- Simple Warehouse Storage Agreement: Basic storage-only contract for straightforward warehouse space rental without additional services
- Service Level Agreement For Warehousing And Distribution: Focuses on performance metrics, delivery standards, and service quality benchmarks
- Warehousing And Distribution Agreement: Comprehensive contract covering both storage and logistics services, including inventory management
- Warehouse Distribution Agreement: Emphasizes distribution operations with detailed shipping terms and delivery schedules
Who should typically use a Warehousing Agreement?
- Warehouse Operators: Professional storage facilities and logistics companies that provide space and services under Malaysian storage regulations
- Manufacturing Companies: Businesses needing external storage for raw materials, finished products, or seasonal inventory overflow
- Import-Export Firms: Companies requiring bonded warehouse facilities for international trade goods under customs supervision
- Legal Departments: In-house counsel or external lawyers who draft and review Warehousing Agreements to ensure compliance
- Logistics Managers: Oversee daily operations, inventory tracking, and coordination between warehouse staff and client companies
How do you write a Warehousing Agreement?
- Storage Details: List exact space requirements, location, duration, and any special handling needs like temperature control
- Service Scope: Define required services beyond storage (loading, packaging, inventory management)
- Insurance Coverage: Gather proof of warehouse insurance and determine additional coverage needs for stored goods
- Operational Hours: Confirm access times, loading schedules, and holiday arrangements
- Compliance Requirements: Check Malaysian storage regulations for your specific goods type
- Payment Terms: Establish storage rates, additional service fees, and payment schedules
- Emergency Procedures: Document protocols for accidents, natural disasters, or security breaches
What should be included in a Warehousing Agreement?
- Party Details: Full legal names, registration numbers, and authorized representatives of warehouse operator and client
- Service Scope: Detailed description of storage space, handling services, and operational procedures
- Term and Renewal: Clear start date, duration, and conditions for extension or termination
- Payment Terms: Storage rates, additional charges, payment schedule, and late payment consequences
- Liability Clauses: Insurance requirements, damage responsibility, and indemnification provisions
- Operating Hours: Access times, delivery schedules, and holiday arrangements
- Dispute Resolution: Malaysian jurisdiction clause and agreed method for resolving conflicts
What's the difference between a Warehousing Agreement and an Agency Agreement?
A Warehousing Agreement differs significantly from an Agency Agreement, though both are common in Malaysian business operations. While a Warehousing Agreement focuses specifically on storage services and facility management, an Agency Agreement establishes a broader representative relationship between parties.
- Scope of Services: Warehousing Agreements cover physical storage, handling, and inventory management, while Agency Agreements authorize one party to act on behalf of another in various business matters
- Legal Authority: Agency Agreements grant power to make binding decisions or contracts, but Warehousing Agreements limit authority to storage-related operations
- Liability Structure: Warehouse operators are liable primarily for goods' safety and handling, whereas agents carry broader fiduciary responsibilities
- Duration and Termination: Warehousing Agreements typically align with specific storage needs and space availability, while Agency Agreements often have more flexible terms based on business relationships
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