Warehouse Receipt

A receipt used in futures markets to guarantee the quantity and quality of a particular commodity being stored within an approved facility.

Investopedia Says:
Rather than delivering the actual commodity, warehouse receipts are used to settle expiring futures contracts. Also referred to as a vault receipt, they are most often used when settling futures contracts that have precious metals as their underlying commodities.

Document giving proof of ownership of goods held in inventory, for example, unfinished goods temporarily stored in a field warehouse by a manufacturer. The receipt is a Title document for its holder and may be either negotiable or nonnegotiable. A negotiable warehouse receipt is deliverable to the bearer or to another party named; a nonnegotiable receipt specifies to whom the stored goods are deliverable. Most warehouse receipts are issued in negotiable form, making them eligible as collateral for Working Capital loans from a bank. See also Asset-Based Lending; Inventory Financing; Uniform Commercial Code.

A written document given by a warehouseman for items received for storage in his or her warehouse, which serves as evidence of title to the stored goods.

A number of warehouse receipts are negotiable instruments, and the law governing such receipts is embodied in Article 7 of the Uniform Commercial Code (UCC).

The general rule is that warehouse receipts need not be in any particular form. They must, however, contain the following information: the location of the warehouse and the place where the goods are stored; the date when the receipt was issued; the consecutive number of the receipts; terms indicating whether the goods are to be delivered to the bearer of the receipt, to a particular individual, or to a particular individual on his or her order; the storage rate or handling charges; a statement describing the goods or the manner in which they are packed; the signature of the warehouseman or his or her agent; the amount of advance payment made, if any; and any other terms that do not impair the warehouseman's duty.

In situations where a warehouse receipt does not contain these provisions, the warehouseman can be held liable in damages to anyone who sustains financial injury because of the omission.