GA Code § 11-7-204 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 7 - Warehouse Receipts, Bills of Lading, and Other Documents of Title|Part 2 - Warehouse Receipts: Special Provisions|§ 11-7-204. Duty of Care; Contractual Limitation of Warehouse's Liability

  A warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard to the goods that a reasonably careful person would exercise under similar circumstances. Unless otherwise agreed, the warehouse is not liable for damages that could not have been avoided by the exercise of that care.   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 beyond which the warehouse is not liable. Such a limitation is not effective with respect to the warehouse's liability for conversion to its own use. On request of the bailor in a record at the time of signing the storage agreement or within a reasonable time after receipt of the warehouse receipt, the warehouse's liability may be increased on part or all of the goods covered by the storage agreement or the warehouse receipt. In this event, increased rates may be charged based on an increased valuation of the goods.   Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the bailment may be included in the warehouse receipt or storage agreement.    (Code 1933, § 109A-7 - 204, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2010, p. 481, § 1-1/HB 451.)    The 2010 amendment,  effective May 27, 2010, rewrote this Code section. See the Editor's notes for applicability.   Cross references.   - Care required of depositaries for hire, § 44-12-92.   Editor's notes.   - Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010.   Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.   JUDICIAL DECISIONS   Editor's notes.   - In light of the similarity of the provisions, decisions under Ga. L. 1937-38, p. 390, § 23, subsequently codified as former Code 1933, § 111-423, are included in the annotations for this section.   Lost profits.    - In appropriate cases, O.C.G.A. § 11-7-204(1) should be construed to cover lost profits as consequential damages. Georgia Ports Auth. v. Servac Int'l, 202 Ga. App. 777, 415 S.E.2d 516 (1992).    Warehouseman is not insurer against loss of goods by theft  and will not be liable for loss of this character in absence of negligence or other fault. Citizens Bank & Trust Co. v. SLT Whse. Co., 368 F. Supp. 1042 (M.D. Ga. 1974), aff'd, 515 F.2d 1382 (5th Cir. 1975).   Duty of ordinary care.   - Warehouseman owes duty of ordinary care in protecting goods from theft or other wrongful taking. Citizens Bank & Trust Co. v. SLT Whse. Co., 368 F. Supp. 1042 (M.D. Ga. 1974), aff'd, 515 F.2d 1382 (5th Cir. 1975).    Defendant storage company is bound to exercise ordinary care to protect plaintiff's property, and failure to deliver goods on demand establishes prima facie case for plaintiff, which defendant can overcome only by establishing exercise of ordinary care to prevent loss or destruction. Harper Whse., Inc. v. Henry Chanin Corp., 102 Ga. App. 489, 116 S.E.2d 641 (1960);(decided under former Code 1933, § 111-423).    Defendant storage company is bound to exercise ordinary care to protect plaintiff's property, and failure to deliver goods on demand establishes prima facie case for plaintiff. Washburn Storage Co. v. Mobley, 94 Ga. App. 113, 94 S.E.2d 37 (1956)(decided under former Code 1933, § 111-423).    Warehouseman does not guarantee title  to particular goods received by and receipted for by him. Citizens Bank & Trust Co. v. SLT Whse. Co., 368 F. Supp. 1042 (M.D. Ga. 1974), aff'd, 515 F.2d 1382 (5th Cir. 1975).   Where warehouseman without knowledge that depositor lacked title.   - There is one situation in which it is entirely clear that a warehouseman is not liable to holders of receipts, and this is when goods deposited in warehouse turn out not to have been owned by borrower-depositor and circumstances are such that warehouseman is not chargeable with knowledge of depositor's lack of title. Citizens Bank & Trust Co. v. SLT Whse. Co., 368 F. Supp. 1042 (M.D. Ga. 1974), aff'd, 515 F.2d 1382 (5th Cir. 1975).   Liability tied to base rate valid.    - Agreement provision which limited warehouse's liability to 100 times base or monthly storage rate was valid under O.C.G.A. § 11-7-204(2) where base or monthly storage rate was calculated on a per item basis. Sun Valley, Inc. v. Southland Bonded Whse. Inc., 171 Ga. App. 233, 319 S.E.2d 91 (1984).   Debtor not a fiduciary.    - Where a farmer did not require that the proceeds of the debtor's sales of the farmer's seeds be kept in a separate account, and the debtor paid the debtor's company's operating expenses with the proceeds of the sale of the farmer's seeds, the debtor was not a fiduciary under 11 U.S.C. § 523(a)(4) and the debt was discharged in the debtor's bankruptcy; neither O.C.G.A. § 11-9-315(a)(1) nor O.C.G.A. § 11-7-204(1) imposed any fiduciary duties on the debtor. Bennett v. Wright (In re Wright), 282 Bankr. 510 (Bankr. M.D. Ga. 2002).   Customer's assent to limitations on warehouse receipt a jury question.    - In a dispute over a storage facility's storage of a customer's seed, in which the facility sought to bind the customer to limitations printed on the reverse of the facility's warehouse receipts, the trial court erred by concluding that evidence that the facility routinely mailed warehouse receipts to the facility's customers was sufficient to bind the customer as a matter of law; because the customer denied receiving the receipts, the customer's assent was a question for the jury. Turfgrass Group v. Ga. Cold Storage Co., 346 Ga. App. 659, 816 S.E.2d 716 (2018).    Cited in A.A.A. Parking, Inc. v. Bigger, 113 Ga. App. 578, 149 S.E.2d 255 (1966).   RESEARCH REFERENCES   C.J.S.   - 93 C.J.S., Warehousemen and Safe Depositaries, § 56 et seq.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 7-204.   ALR.    - Liability of warehouseman for damage to or destruction of property by fire, 16 A.L.R. 280.    Provision in warehouseman's receipt limiting liability as applicable where warehouseman converts property, 99 A.L.R. 266.    Duty of warehouseman to take up and cancel negotiable receipt upon delivering goods as delegable or nondelegable, 139 A.L.R. 1488.    Validity and applicability of stipulation in warehouseman's receipt fixing valuation of property as basis of responsibility, 142 A.L.R. 776.    Necessity of bringing to bailor's attention provision in warehouse receipt limiting liability of warehouseman, 160 A.L.R. 1112.   Damages recoverable from warehouseman for negligence causing injury to, or destruction of, goods of a perishable nature, 32 A.L.R.2d 910.   Liability of warehouseman for injury to stored goods as result of failure to maintain proper temperatures, 92 A.L.R.2d 1298.   Presumption and burden of proof where subject of bailment is destroyed or damaged by windstorm or other meteorological phenomena, 43 A.L.R.3d 607.   Liability of warehouseman or other bailee for loss of goods stored at other than agreed-upon place, 76 A.L.R.4th 883.