Published — January 23, 2021
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: WHAT CONSTITUTES A TRUST RECEIPT TRANSACTION?
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A trust receipt need not be in any particular form.
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But every such receipt must substantially contain a description of the goods, documents or instruments subject of the trust receipt, the total invoice value of the goods and the amount of the draft to be paid by the entrustee and an undertaking or a commitment of the entrustee.
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The trust receipt may contain other terms and conditions agreed upon by the parties.
Is there a particular form for a trust receipt to be accepted?
The law says:
A trust receipt need not be in any particular form, but every such receipt must substantially contain the following:
- a description of the goods, documents or instruments subject of the trust receipt;
- the total invoice value of the goods and the amount of the draft to be paid by the entrustee;
- an undertaking or a commitment of the entrustee (a) to hold in trust for the entruster the goods, documents or instruments therein described; (b) to dispose of them in the manner provided for in the trust receipt; and (c) to turn over the proceeds of the sale of the goods, documents or instruments to the entruster to the extent of the amount owing to the entruster or as appears in the trust receipt or to return the goods, documents or instruments in the event of their non-sale within the period specified therein.
The trust receipt may contain other terms and conditions agreed upon by the parties in addition to those hereinabove enumerated provided that such terms and conditions shall not be contrary to the provisions of Presidential Decree No. 115 or “Trust Receipts Law”, any existing laws, public policy or morals, public order or good customs.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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