Field warehousing allows businesses to obtain funds by using their inventory as collateral. Instead of physically giving their inventory to a lender, businesses entrust it to a third party, such as a warehouse, who ensures its safety. While the business retains the ability to use the inventory, the third party maintains control over it. This arrangement enables businesses to secure financing for their inventory without the need for physical transfer to the lender.
Field warehousing is a method of financing inventory by pledging it to a third-party warehouser when it cannot be delivered to a creditor or third party. The borrower sets aside a portion of the inventory and places it under the nominal control of the lender or third party, giving them a possessory interest. For instance, a wholesaler with a large inventory of goods that needs financing but cannot deliver them to the lender or creditor can use field warehousing. They pledge their inventory to a third-party warehouser who keeps the goods on their premises, allowing the wholesaler to access them as needed while the lender has a possessory interest in the goods. This enables the wholesaler to finance their inventory without having to deliver it to the lender or creditor.
Field warehousing refers to the practice of storing goods or commodities in a designated area or field, typically owned or leased by a third-party company, for a specified period of time.
Field warehousing offers several advantages, including cost savings on storage facilities, flexibility in storing large quantities of goods, and easy accessibility for transportation and distribution purposes.
Field warehousing is subject to various laws and regulations, including those related to storage, transportation, and handling of goods. These may vary depending on the jurisdiction and the nature of the goods being stored.
The responsibility for the security of goods stored in field warehouses typically lies with the owner or operator of the warehouse. They are expected to take reasonable measures to ensure the safety and protection of the stored goods.
The type of goods that can be stored in a field warehouse may vary depending on local regulations and any specific restrictions imposed by the warehouse operator. It is important to check with the warehouse operator regarding their policies and any limitations on the types of goods they accept.
In case of damage or theft of goods stored in a field warehouse, it is important to review the terms and conditions of the storage agreement or contract. Typically, the warehouse operator may have liability limitations or insurance coverage in place to address such situations.
The accessibility of goods stored in a field warehouse may depend on the terms of the storage agreement. Some warehouses may have specific operating hours or require prior notice for access, while others may offer 24/7 access. It is important to clarify these details with the warehouse operator.
The ability to terminate a field warehousing agreement before the agreed-upon period may depend on the terms and conditions outlined in the contract. Some agreements may have provisions for early termination, while others may require adherence to the agreed-upon storage period.
Failure to pay storage fees for goods stored in a field warehouse may result in various consequences, such as the imposition of late fees, denial of access to the goods, or even the potential for the warehouse operator to exercise a lien on the goods to recover unpaid fees.
Insurance requirements for goods stored in a field warehouse may vary depending on the jurisdiction and the nature of the goods. It is advisable to consult with an insurance professional to determine the appropriate coverage needed for your specific situation.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/field-warehousing/
- Modern Language Association (MLA):Field Warehousing. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/field-warehousing/.
- Chicago Manual of Style (CMS):Field Warehousing. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/field-warehousing/ (accessed: May 09 2024).
- American Psychological Association (APA):Field Warehousing. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/field-warehousing/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts