PSA to wine geeks

WINE TALK
1

Would you ever sign an Indemnity Agreement like the following, as a requirement to continue storing physically fragile collectibles at a warehouse company? This company may have asked all other customers to sign also. If so, most other customers might not read carefully, and blithely sign without realizing potential consequences.

“The Client henceforth indemnifies the Company, including all its officers, employees, affiliates, sub-contractors, agents, and vendors, in case it may incur, pay, or encounter any and all losses, claims, charges, obligations, damages, judgments, or expenses whatsoever, which may arise directly or indirectly whenever the Company provides services to the Client, except for deliberate fraud or gross negligence by the Company. These would be termed “Indemnity Liabilities”. Moreover, AFTER the Client or Company ever terminates their service relationship, the Client REMAINS subject to any and all Indemnification Liabilities FOR NO LESS THAN FOUR ADDITIONAL YEARS; such that the Client agrees to pay fully within thirty days upon the sole determination of the Company. In case of any dispute whatsoever, Client agrees to waive seeking any court remedy, whereby the sole remedy to the Client is binding, confidential private arbitration through a third-party arbitrator which the Company selects.”

I posed a plausible scenario to the warehouse company: Suppose that I request a pick-up of collectibles for storage, but its truck driver hits a pedestrian while en route and never even reaches my apartment. It never picks up or stores those incremental items.
This Indemnification Agreement would seem to leave me fully and solely responsible to both the company and the pedestrian (plus any other third parties), for all related medical, disability, funeral, truck repair, and legal expenses or settlements----both current and future.

In response, the warehouse company verbally dismissed that scenario, saying only informally that its commercial insurance policy would “handle” them. My question was how, because I am not an express party to that policy, with no standing to expect coverage. The company would not elaborate further, especially in writing. Guess what I did with my collectibles stored there.

Moral of the story: Read carefully before signing any agreement, and also consider not signing at all.

2

Which warehouse asked you to do this? Was this an addendum?

3

An addendum via friendly e-mail.

4

One of the smartest legal beagles I know was stunned at its open-ended, one-sided nature.

1 Like
5

Company has facilities in Noo Yawk and other areas.

So, I edited the OP title.

Beware.

6

I can’t imagine signing such an agreement. At first glance, it appears you (the customer paying a ton of money to use their service: storage of your wine) are agreeing to essentially let them completely off the hook for ordinary negligence that causes any loss for which you otherwise would seek to have them/their insurance (if they maintain insurance) reimburse you. Although, I do think that specific language is less than clear. It’s clearly intended to be the broader indemnity against liability, rather than narrower indemnity against loss - but who cares, as either seems a terrible deal for the customer.

Then that four-year clause and the arbitrator-selected-by-the-company stuff. Gawd.

Even wilder is that there’s no reference to any necessary qualifications or professional association the company-selected arbitrator needs to have or to which the arbitrator must belong.

All that said, I defend people charged with federal crimes, so my reading of this proposed contract and all the “civil” litigation ramifications or exposures may be off a bit . . . . :grinning:

2 Likes
7

I am sure that other customers have casually signed, and they are stuck.

8

For a consumer-facing services contract like wine storage at a facility, this honestly doesn’t shock me that much. If I were drafting this, I’d write the same thing. I wouldn’t bother to carve out gross negligence or fraud, nor would I bother with a term limit on the liability. And then I’d fit it all onto a single page, no margins, 6 point type.

They’re not intended to be negotiated, or honestly read and understood. Good on you for bothering.

3 Likes
9

Competitors enable negotiation, via exit to another place, especially before signing anything like that.

1 Like
10

Damn! Glad I’ve got an old 100-year-old coal room in which to store my small collection of wine. :grinning:

So, Marc, what’s the selling point with using one, or another, of these storage facilities, given what, to me at least, appears to be their statement “We love your wine, as if it was our own, but, hey, if something happens to it . . . well, we’re sorry.”???

I don’t get it.

1 Like
11

Worse than that. Separate of a collectibles loss, the customer takes major tail risk, per my truck scenario.

12

Yeah, I just don’t get it. Not here in the U.S. of A.

I live in “fly-over” country, where a warehouse pops up somewhere just outside of town every five minutes or so. Perhaps it’s different in the larger metropolitan areas in the U.S., but my guess is that if this sort of contract language is form/standard, there’s one hell of a lucrative business opportunity awaiting some enterprising person who knows a thing or two about storage of high-value goods, needing tender loving care.

But, again, I’m just a relatively poor criminal defense attorney hooked on fermented juice in a bottle.

1 Like
13

Sure, in theory. But you have to assume that just about no one is reading the thing, and most people who do still won’t bother to deal with the hassle of finding a different service provider.

Unless you’re a large corporate customer storing pallets of wine, they’re not negotiating that thing, or even blinking when someone challenges it.

It’s like a click-thru terms of service for software.

I’m not dismissing your frustration. You should be pissed and you should for sure reject it.

1 Like
14

Because they can get away with it, just like every other service provider does in a standard consumer contract. Every one of those contracts is one-sided because there’s no incentive to make it “fair”.

There are exceptions to that, like when the internet goes nuts over Insta hiding some egregious term in an updated Terms of Service, and they’re shamed into retracting it, but that’s definitely not the norm.

Capitalism!

2 Likes
15

I don’t doubt you - not even for a second.

So, if the norm in high-volume wine producing regions, where there’s a significant volume of winery “off-sight” storage, isn’t there a real opening/opportunity for a cold-storage warehouse operation that contracts to remain liable for any loss due to the provider’s negligence, insuring against that loss, etc.

Or do think this sort of contract language is pervasive in all U.S. industries where there’s 3rd-party warehouse storage of others’/producers’ valuable goods? Again, I am totally ignoratant about any/all of this business/industry.

16

This is not legal advice, just my opinion, but as ridiculous as that provision is, it’s not going to end up hurting you or any other customer.

No court is going to make a wine storage customer liable to defend the storage place because the delivery truck hit someone or any of those other hypotheticals.

I understand you objecting, but I also don’t think you need to be worried about it.

4 Likes
17

Likely true, but nobody wants to get into that ordeal.

3 Likes
18

The court-remedy waiver and binding-arbitration requirement may prevent a customer from obtaining a court opinion of non-enforceable contract.

19

I can’t say for certain, but I’d bet this one-sidedness is very much the standard for consumer-facing. Commercial contracts are likely less so, and also more likely to be negotiated.

The gap of risk is covered by insurance, in theory.

1 Like
20

Wine storage for individuals is more like self-storage, not commercial warehousing.

1 Like