Meaning
Entities that hold and manage assets on behalf of another party without being a primary party to the main commercial contract. Such non-signatory custodians often include third party logistics providers and independent warehouses that store components for a smart device manufacturer. Their role is governed by separate storage agreements that define their responsibilities for the safekeeping of the property.
The involvement of these parties is limited to the physical handling and protection of the assets, rather than the execution of the main trade.
Storage Duty
Care and protection of the inventory are the central obligations of the warehouse operator. This includes maintaining environmental controls to prevent moisture damage to sensitive radio modules. When non-signatory custodians are used, the owner must ensure that the bailment terms are clearly communicated to the facility manager.
Insurance coverage is typically required to protect against loss or damage while the items are in the custodian’s possession.
Asset Tracking
Documentation of the arrival and departure of goods is necessary for maintaining an accurate audit trail. Providing regular inventory reports allows the owner to monitor stock levels and plan production schedules. Because non-signatory custodians do not have a direct stake in the sales contract, they provide a neutral environment for the inspection of goods before final delivery.
Access Right
Permission for the owner to enter the facility for audits or inspections is a standard requirement.
