PART 5. 
WAREHOUSE RECEIPTS AND BILLS OF LADING:



NEGOTIATION
AND TRANSFER



 



§490:7-501  Form of negotiation and
requirements of due negotiation.  (a)  The following rules apply to a
negotiable tangible document of title:



(1)  If the document's original terms run to the order
of a named person, the document is negotiated by the named person's indorsement
and delivery.  After the named person's indorsement in blank or to bearer, any
person may negotiate the document by delivery alone.



(2)  If the document's original terms run to bearer,
it is negotiated by delivery alone.



(3)  If the document's original terms run to the order
of a named person and it is delivered to the named person, the effect is the
same as if the document had been negotiated.



(4)  Negotiation of the document after it has been
indorsed to a named person requires indorsement by the named person and
delivery.



(5)  A document is duly negotiated if it is negotiated
in the manner stated in this subsection to a holder that purchases it in good
faith, without notice of any defense against or claim to it on the part of any
person, and for value, unless it is established that the negotiation is not in
the regular course of business or financing or involves receiving the document
in settlement or payment of a monetary obligation.



(b)  The following rules apply to a negotiable
electronic document of title:



(1)  If the document's original terms run to the order
of a named person or to bearer, the document is negotiated by delivery of the
document to another person.  Indorsement by the named person is not required to
negotiate the document.



(2)  If the document's original terms run to the order
of a named person and the named person has control of the document, the effect
is the same as if the document had been negotiated.



(3)  A document is duly negotiated if it is negotiated
in the manner stated in this subsection to a holder that purchases it in good
faith, without notice of any defense against or claim to it on the part of any
person, and for value, unless it is established that the negotiation is not in
the regular course of business or financing or involves taking delivery of the
document in settlement or payment of a monetary obligation.



(c)  Indorsement of a nonnegotiable document of
title neither makes it negotiable nor adds to the transferee's rights.



(d)  The naming in a negotiable bill of lading
of a person to be notified of the arrival of the goods does not limit the
negotiability of the bill or constitute notice to a purchaser of the bill of any
interest of that person in the goods. [L 2004, c 163, pt of §1]