As the “logistics” industry has boomed, many small businesses have tried to expand their businesses from just transportation to warehousing and even fulfillment, without having thought through the ramifications of their newly offered services. Conversely, some warehousing companies have begun to offer transportation services either directly or as “brokers”. These enterprises need to pay close attention to limiting their damages for providing services which they may not have extensive experience providing. The UCC provides helpful provisions which can allow parties to specifically limit damages (to a per pound amount, or other measure). Often clients think of provisions like this, buried in a contract, as “boilerplate” language. However, most “boilerplate” is in contracts for very specific reasons and can prevent some very unpleasant ramifications when a problem occurs. Service providers can substantially reduce their risk by taking advantage of these damage limitation provisions and then manage risks more economically with insurance or reinsurance. The days of a handshake deal are over and operators who do not want to incur the cost of hiring an attorney to draft a good contract are incurring the risk of financial disaster.
