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Wang Globalnet v. Port Newark Refrigerated Warehouse

A-0722-09T1 (N.J. Super. App. Div. 2010) (Unpublished)

WAREHOUSES; UCC — Under the Uniform Commercial Code, parties may include, within the warehouse receipt or tariff, reasonable provisions as to the time and manner of presenting claims and for instituting actions based on the bailment, and a nine month cutoff for the filing of law suits will be considered reasonable.

Pursuant to a bailment contract, a customer delivered approximately 2,368 cartons of whole squid to a warehouse for storage. The warehouse receipt indicated all contract terms. One term said that any storer had to bring a lawsuit against the warehouse within nine months after learning, or in the exercise of reasonable care when it should have learned, of any loss or destruction or damage to the goods while in the care of the warehouse. On the day it picked up its squid, the customer faxed the warehouse a notice that the squids were melted while in storage and had to be destroyed because of a risk to human health. The customer claimed damages in the fax. However, it sued the warehouse, alleging breach of contract and warranty, ten months after this notice.

The warehouse filed a motion for summary judgment, relying on the nine-month limitation for filing suit. The customer argued the limitation was unconscionable. The lower court granted the motion, determining the provision was not unconscionable, and that the terms and conditions on the warehouse receipt were legible. The customer appealed.

The Appellate Division affirmed, holding that the matter was governed by the Uniform Commercial Code, applicable to the liability of warehousemen, which provides that “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.” The Court concluded the customer had failed to demonstrate that there was anything commercially unreasonable with respect to a nine-month limitation period, and affirmed the lower court’s finding that the nine-month provision was not unconscionable.

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