Chapter IX Bailment

If a merchant receives goods under bailment within the scope of its business, the merchant must store the bailed goods with the due care of a prudent manager even if it does not receive remuneration.

①If a person in the business of conducting transactions at a hotel, food and beverage establishment, bathhouse, or other such establishment at which it is intended for customers to gather (hereinafter referred to as an "establishment's proprietor" in this Section) receives goods under bailment from a customer, the establishment's proprietor is not entitled to be released from the liability to compensate the customer for loss or damage arising as a result of loss or damage to the bailed goods unless it proves that the loss or damage is due to force majeure.

②An establishment's proprietor is liable to compensate for loss or damage if the goods that the customer has carried into an establishment are lost or damaged due to the proprietor's failure to exercise due care, even if these are goods that a customer has not bailed to it.

③An establishment's proprietor may not be released from the liability referred to in the preceding two paragraphs even if it indicates that it does not assume liability for goods that customers carry into the establishment.

An establishment's proprietor is not liable to compensate for loss or damage to cash, negotiable instruments, or other valuables, unless a customer notifies the establishment's proprietor of the type and value of the items while making the bailment.

①A claim involving the liability of an establishment's proprietor as referred to in the preceding two Articles is extinguished by prescription if the customer does not exercise it during the one-year period after the establishment's proprietor returns the bailed goods or the customer leaves with the goods that they carried into the establishment (or, in the event of a total loss of goods, after the customer leaves the establishment).

②The provisions of the preceding paragraph do not apply if an establishment's proprietor has knowledge of the loss or damage to the goods prescribed in that paragraph.

The term "warehouse operator" as used in this Section means a person engaged in the business of storing goods at a warehouse facility on behalf of another person.

A warehouse operator must issue a warehouse receipt for bailed goods at the request of the bailor.

A warehouse receipt must contain the following information as well as its number, and bear the signature or the name and seal of a warehouse operator:

If a warehouse operator issues a warehouse receipt to a bailor, the warehouse operator must enter the following information in its books:

①The holder of a warehouse receipt may request a warehouse operator to divide the bailed goods and issue new warehouse receipts for each of the portions of the goods. In this case, the holder must return the initial warehouse receipt to the warehouse operator.

②The costs for dividing bailed goods and issuing warehouse receipts under the provisions of the preceding paragraph are borne by the holder of the warehouse receipt.

A warehouse operator may not assert the falsity of the information entered in a warehouse receipt against a holder in good faith.

If a warehouse receipt has been prepared, its holder must use it to dispose of the bailed goods.

Even if a warehouse receipt is issued to a named person, it may be negotiated or pledged by means of indorsement; provided, however, that this does not apply if the receipt indicates that its indorsement is prohibited.

If a warehouse receipt is delivered to a person who is entitled to use it to collect bailed goods, its delivery has the same effect as the delivery of the bailed goods as it concerns the acquisition of rights that are exercised in connection with the bailed goods.

If the holder of a warehouse receipt loses that warehouse receipt, they may provide reasonable security and request a reissuance. In this case, the warehouse operator must make an entry of this in its books.

At any time during a warehouse operator's business hours, the bailor or the holder of a warehouse receipt may ask to inspect bailed goods or to be provided with samples of them, and may take the necessary measures to preserve them.

A warehouse operator is not entitled to be released from the liability for damages for the loss of or damage to bailed goods, unless it proves that it did not neglect to exercise due care in storing the goods.

A warehouse operator may not request payment of storage fees, money advanced, and other such costs associated with the bailed goods (referred to as "storage fees and other monies" in Article 616, paragraph (1)) until at least the time at which the bailed goods leave the warehouse facility; provided, however, that if some of the bailed goods leave the warehouse facility, the warehouse operator may request payment in proportion to the goods that have left it.

If the parties do not specify a storage period, the warehouse operator may not return the bailed goods until after six months have passed since the day on which the bailed goods were placed in the warehouse facility; provided, however, that this does not apply if there are compelling reasons.

If a warehouse receipt has been prepared, a person may not demand the return of the bailed goods other than in exchange for the receipt.

If a warehouse receipt is pledged, the bailor, with the pledgee's consent, may demand the return of part of the bailed goods even before the claim secured by the pledge becomes due. In this case, the warehouse operator must enter the type, quality, and quantity of the returned part of the bailed goods on the warehouse receipt, and make an entry of this in its books.

The provisions of Article 524, paragraphs (1) and (2) apply mutatis mutandis if the bailor or the holder of a warehouse receipt refuses to receive or is unable to receive the bailed goods.

①A warehouse operator ceases to be liable for damage or partial loss of bailed goods if the bailor or the holder of a warehouse receipt receives the bailed goods without raising any objection and pays the storage fees and other monies; provided, however, that this does not apply if the bailed goods contain any damage or partial loss that cannot be immediately discovered and the bailor or the holder of the warehouse receipt issues notice of this to the warehouse operator within two weeks from the date of delivery.

②The provisions of the preceding paragraph do not apply if the warehouse operator has knowledge of any damage or partial loss of the bailed goods.

①A claim involving the liability of a warehouse operator arising from loss or damage to bailed goods is extinguished by prescription if it is not exercised within one year after the date of the removal of the bailed goods from the warehouse facility.

②In the event of a total loss of bailed goods, the period referred to in the preceding paragraph is counted from the day on which the warehouse operator issued notice of the loss to the holder of the warehouse receipt (or to the bailor if no warehouse receipt is prepared or the holder of the warehouse receipt is unknown).

③The provisions of the preceding two paragraphs do not apply if the warehouse operator has knowledge of the loss or damage to the bailed goods.