3PL Contract Guide

Use this as your contract checklist. Every line should be answered in the agreement or a signed schedule, not in a sales email.

Clause	What you want it to say
Term and renewal	Length, auto-renewal, and how to stop it
Termination notice	Days of notice, and termination for cause (missed SLAs)
Rates and changes	Rate card attached; how much notice before increases; no increases in year one
Minimums	Monthly minimum amount, and how it's billed if you fall short
SLAs	Same-day cutoff, order accuracy, receiving time, with credits when missed
Liability	Cap per unit or replacement cost, not per pound
Inventory accuracy	Shrinkage allowance and how variances are paid
Claims	Deadline to report loss and required evidence
Insurance	Warehouse legal liability limits; certificate naming you
Lien and exit	Which goods the lien covers; release timeline; exit handling fees
Data	You own order, inventory and customer data; export on exit
Recall	Who does what, and at what cost

The default rule comes from the Uniform Commercial Code. UCC 7-204(a) makes a warehouse liable for loss or damage caused by its failure to exercise the care a reasonably careful person would under similar circumstances. UCC 7-204(b) lets the storage agreement limit that liability to a stated amount.

The IWLA's Standard Contract Terms and Conditions for Merchandise Warehouses (revised January 2026) follows the same pattern. The warehouse isn't liable unless it failed to use reasonable care, and liability is "limited to ___ per ___", a blank the parties fill in. The template also says:

• The limit is your exclusive remedy unless you prove the warehouse converted the goods to its own use.
• You can request higher liability in writing before a loss, for an extra monthly charge.
• The warehouse's insurance covers only losses where it's liable; insuring the goods is your responsibility.
• The warehouse isn't liable for lost profits, lost sales or consequential damages.
• For mis-shipments, the warehouse can choose to pay return freight or the damage limit, and it isn't responsible for chargebacks of any kind.

What to negotiate: fill the blank with replacement cost (your landed cost) per unit, not a per-pound figure, and carry your own inventory insurance listing the 3PL's warehouse as a storage location.

The IWLA standard terms require claims to be presented in writing within 60 days of delivery, or of your being notified of the loss, whichever comes first, with the goods identified, the basis for liability and the amount. No lawsuit is allowed unless it's filed within nine months.

If you only reconcile inventory once a year, you can miss the window on a loss that happened in month two. Build a monthly reconciliation (see 3PL inventory discrepancies) and file claims as soon as a variance is confirmed.

The same template requires invoice disputes in writing within 30 days of the invoice date and bars you from offsetting payments without consent. Audit every invoice within that window.

UCC 7-209 gives a warehouse a lien on the goods for storage, handling, labor and related charges, and lets it extend the lien to other goods if the agreement says so. The IWLA template goes further: a general spreading lien on all your goods for all unpaid charges, including charges related to goods no longer in the warehouse. It also reserves the right to require advance payment of accrued and future charges (including future minimums through the end of the term) before you remove goods.

In practice: if you dispute an invoice while leaving, the 3PL can hold your inventory until it's paid. Negotiate for:

• A lien limited to charges on the specific goods, not future minimums.
• A defined release timeline after payment (for example, loaded within a set number of business days).
• Published exit fees (pallet-out, carton pick, admin).

The IWLA terms also let the warehouse require you to remove goods on 30 days' written notice, and move goods to another of its facilities after 14 days' notice. Know both before you sign. More in switching 3PL providers.

Some 3PLs publish their terms. Use them as reference points:

Provider	Published term	Notice
Tondo Fulfillment	Month-to-month	30 days
ShipCalm	Month-to-month	90 days
Thrive 3PL	Month-to-month	Not published
eFulfillment Service	No long-term contracts	Not published
Fulfyld	No long-term contracts	Not published
Simpl Fulfillment	Not published; $750 monthly minimum billed as pay-the-difference	Not published

Some 3PLs also back service with guarantees; Red Stag Fulfillment, for example, advertises financially backed accuracy and shrinkage guarantees. Ask any 3PL whether its SLA carries credits, and put them in the contract.

• Liability capped per pound on a light, high-value product.
• Auto-renewal into another multi-year term with a short opt-out window.
• Rate increases at will, or "rates may be adjusted if volume changes" with no threshold. The IWLA template includes a volume-change clause, so define the threshold.
• No SLA credits: targets with no consequence.
• Lien on future minimums, so you pay the rest of the term to get your goods out.
• No data export clause.
• Concealed shortages excluded without a receiving-count obligation. The IWLA template says concealed shortages aren't the warehouse's responsibility, so require carton-level counts at receiving.
• Physical inventories at your expense only, even when the count proves the 3PL was wrong.

This guide isn't legal advice. Have a lawyer review any agreement before you sign.