China Warehousing and Logistics Disputes: Bailment, Warehouse Receipts and Cargo Loss Claims

Three contracts that look alike but are not

Most cargo disputes in China are mis-filed before anyone argues about the facts, because the parties name the wrong contract. Chinese law draws three separate lines around goods in someone else's hands: a warehousing contract (仓储合同), a bailment contract (保管合同), and a contract of carriage (运输合同). They sit in different chapters of the Civil Code and answer different questions. The warehousing and bailment rules govern goods stored; the carriage rules govern goods moved. Confusing the three changes who is liable, what standard applies, and what document the claimant needs — which is why the first step in any claim is identifying which relationship actually existed.

Warehousing contracts: formed by agreement, proved by the receipt

Under the Civil Code (effective 1 January 2021), a warehousing contract is defined in Article 904, and Article 905 says it is formed when the warehouseman and the depositor reach agreement — it is a consensual contract that does not wait for the goods to be delivered. That is the first trap, because a bailment contract forms differently: it is concluded on delivery of the goods, not on agreement. The warehouseman's obligation then crystallises in the warehouse receipt: Article 908 requires the warehouseman to issue a warehouse receipt or entry note, Article 909 lists what it must record and requires a signature or seal, and Article 910 makes the receipt the document for retrieving the goods and allows it to be transferred by endorsement with the warehouseman's signature or seal. In practice that means the receipt is both the evidence and the key: the party holding a properly endorsed receipt is the party entitled to the goods, and a warehouse that releases the goods to the wrong holder has a problem.

Who pays for damaged or missing goods

Liability for stored goods is in Article 917: the warehouseman is liable where the goods are damaged or lost through failure to keep them properly, but is excused where the loss is caused by the natural characteristics of the goods, packaging that did not meet the agreement, or deterioration beyond the storage period. Article 918 then pulls in the bailment rules for anything the warehousing chapter does not cover. Two of those borrowed rules matter most. Article 892 requires the custodian to keep the goods properly; Article 897 sets the fault standard — a gratuitous custodian is liable only for intent or gross negligence, while a paid custodian (and a warehouseman, who is paid) answers for ordinary fault. The practical effect is that a claimant against a commercial warehouse does not need to prove gross negligence — a failure to keep the goods properly, measured against the contract and ordinary practice, is enough.

When the goods were moving, not stored

Where the loss happened in transit, the claim moves to the carriage rules. Article 832 makes the carrier liable for damage or loss of goods during carriage, with a short list of defences: force majeure, the natural characteristics of the goods or reasonable wastage, and fault of the consignor or consignee. Article 836 gives the carrier a lien over the goods for unpaid freight, storage charges and other sums. The lien is bounded by the general rules in Articles 447 to 449 — it generally must arise from the same legal relationship as the debt, with an important exception for lien between enterprises, and it cannot override a statutory or contractual exclusion. For ocean carriage the governing document is the bill of lading, defined in Article 71 of the Maritime Code as proof of the contract of carriage by sea, a receipt for the goods, and the document against which the carrier delivers — three functions the warehouse receipt does not share, which is why a warehouse receipt and a bill of lading are never interchangeable.

The conventions a foreign party should not assume

Cross-border logistics brings its own conventions, and two assumptions are common and wrong. China is a party to the Montreal Convention of 1999 (in force for China since 31 July 2005), so international air cargo claims run on that framework rather than on the Civil Code's general carriage rules. China is not a party to the CMR Convention on international road carriage, so a CMR-style claim does not apply as a matter of treaty — the parties may only choose to apply it by agreement. A claim drafted on the assumption that a familiar international convention applies can be drafted into the wrong legal system before it starts.

Practical points before the goods are lost

• Name the contract first. Warehousing (formed by agreement), bailment (formed on delivery) and carriage (goods in transit) carry different liability standards — identify which relationship exists before demanding anything.
• Treat the warehouse receipt as the key. It is the retrieval document and the transfer instrument under Article 910; keep it, and check the endorsement chain before releasing or collecting goods.
• Match the fault standard to the arrangement. A gratuitous custodian answers only for intent or gross negligence; a paid warehouse or carrier answers for ordinary fault.
• Check the convention for cross-border legs. Air claims run on the Montreal Convention; road claims do not run on CMR unless agreed — confirm which regime applies before framing the claim.

How Tianni Law Firm Can Help

Tianni Law Firm (江苏天倪律师事务所), based in Nanjing, Jiangsu, advises warehouses, carriers, traders and their insurers on Chinese logistics disputes — identifying the correct contract, enforcing warehouse receipts and bills of lading, pursuing cargo loss claims under the Civil Code and the maritime and air regimes, and defending the statutory defences in Articles 917 and 832. This article is general information, not legal advice; the Civil Code, the Maritime Code and the applicable conventions are applied case by case, so confirm the current official texts and the facts of the specific loss before acting.