CHAPTER 7. DOCUMENTS OF TITLE
IC 26-1-7
Chapter 7. Documents of Title
IC 26-1-7-101
Short title
Sec. 101. This chapter may be cited as Uniform Commercial Code. Documents of Title.
(Formerly: Acts 1963, c.317, s.7-101.) As amended by P.L.152-1986,SEC.244; P.L.143-2007, SEC.24.
IC 26-1-7-102
Definitions and index of definitions
Sec. 102. (a) In this chapter unless the context otherwise requires:
(1) "Bailee" means a person that by a warehouse receipt, bill oflading, or other document of title acknowledges possession ofgoods and contracts to deliver them.
(2) "Carrier" means a person that issues a bill of lading.
(3) "Consignee" means a person named in a bill of lading towhich or to whose order the bill promises delivery.
(4) "Consignor" means a person named in a bill of lading as theperson from which the goods have been received for shipment.
(5) "Delivery order" means a record that contains an order todeliver goods directed to a warehouse, carrier, or other personthat in the ordinary course of business issues warehousereceipts or bills of lading.
(6) "Good faith" means honesty in fact and the observance ofreasonable commercial standards of fair dealing.
(7) "Goods" means all things that are treated as movable for thepurposes of a contract for storage or transportation.
(8) "Issuer" means a bailee that issues a document of title or, inthe case of an unaccepted delivery order, the person that ordersthe possessor of goods to deliver. The term includes a personfor which an agent or employee purports to act in issuing adocument if the agent or employee has real or apparentauthority to issue documents, even if the issuer did not receiveany goods, the goods were misdescribed, or in any other respectthe agent or employee violated the issuer's instructions.
(9) "Person entitled under the document" means the holder, inthe case of a negotiable document of title, or the person towhich delivery of the goods is to be made by the terms of, orpursuant to instructions in a record under, a nonnegotiabledocument of title.
(10) "Record" means information that is inscribed on a tangiblemedium or that is stored in an electronic or other medium andis retrievable in perceivable form.
(11) "Shipper" means a person that enters into a contract oftransportation with a carrier.
(12) "Sign" means, with present intent to authenticate or adopta record:
(A) to execute or adopt a tangible symbol; or (B) to attach to or logically associate with the record anelectronic sound, symbol, or process.
(13) "Warehouse" means a person engaged in the business ofstoring goods for hire.
(b) Other definitions applying to this chapter and the sections inwhich they appear are:
"Duly negotiate". IC 26-1-7-501.
"Contract for sale". IC 26-1-2-106.
"Lessee in the ordinary course of business". IC 26-1-2.1-103(o).
"Receipt" of goods. IC 26-1-2-103.
(c) In addition, IC 26-1-1 contains general definitions andprinciples of construction and interpretation applicable throughoutthis chapter.
(Formerly: Acts 1963, c.317, s.7-102.) As amended by P.L.152-1986,SEC.245; P.L.143-2007, SEC.25.
IC 26-1-7-103
Relation of chapter to other laws
Sec. 103. (a) This chapter is subject to any treaty or statute of theUnited States or regulatory statute of this state to the extent thetreaty, statute, or regulatory statute applies.
(b) This chapter does not modify or repeal any law prescribing theform or content of a document of title or the services or facilities tobe afforded by a bailee, or otherwise regulating a bailee's business inrespects not specifically treated in this article. However, violation ofsuch a law does not affect the status of a document of title thatotherwise is within the definition of a document of title.
(c) This chapter modifies, limits, and supersedes the federalElectronic Signatures in Global and National Commerce Act (15U.S.C. 7001 et seq.) but does not modify, limit, or supersede Section101(c) of that act (15 U.S.C. 7001(c)) or authorize electronicdelivery of any of the notices described in section 103(b) of that act(15 U.S.C. 7003(b)).
(d) To the extent there is a conflict between IC 26-2-8 and thischapter, this chapter governs.
(Formerly: Acts 1963, c.317, s.7-103.) As amended by P.L.152-1986,SEC.246; P.L.143-2007, SEC.26.
IC 26-1-7-104
Negotiable and nonnegotiable warehouse receipt, bill of lading, andother document of title
Sec. 104. (a) Except as otherwise provided in subsection (c), adocument of title is negotiable if by its terms the goods are to bedelivered to bearer or to the order of a named person.
(b) A document of title other than one described in subsection (a)is nonnegotiable. A bill of lading that states that the goods areconsigned to a named person is not made negotiable by a provisionthat the goods are to be delivered only against an order in a recordsigned by the same or another named person.
(c) A document of title is nonnegotiable if, at the time it is issued,
the document has a conspicuous legend, however expressed, that itis nonnegotiable.
(Formerly: Acts 1963, c.317, s.7-104.) As amended by P.L.143-2007,SEC.27.
IC 26-1-7-105
Tangible substitute for electronic document of title
Sec. 105. (a) Upon request of a person entitled under an electronicdocument of title, the issuer of the electronic document may issue atangible document of title as a substitute for the electronic documentif:
(1) the person entitled under the electronic document surrenderscontrol of the document to the issuer; and
(2) the tangible document when issued contains a statement thatit is issued in substitution for the electronic document.
(b) Upon issuance of a tangible document of title in substitutionfor an electronic document of title in accordance with subsection (a):
(1) the electronic document ceases to have any effect orvalidity; and
(2) the person that procured issuance of the tangible documentwarrants to all subsequent persons entitled under the tangibledocument that the warrantor was a person entitled under theelectronic document when the warrantor surrendered control ofthe electronic document to the issuer.
(c) Upon request of a person entitled under a tangible documentof title, the issuer of the tangible document may issue an electronicdocument of title as a substitute for the tangible document if:
(1) the person entitled under the tangible document surrenderspossession of the document to the issuer; and
(2) the electronic document when issued contains a statementthat it is issued in substitution for the tangible document.
(d) Upon issuance of an electronic document of title insubstitution for a tangible document of title in accordance withsubsection (c):
(1) the tangible document ceases to have any effect or validity;and
(2) the person that procured issuance of the electronic documentwarrants to all subsequent persons entitled under the electronicdocument that the warrantor was a person entitled under thetangible document when the warrantor surrendered possessionof the tangible document to the issuer.
(Formerly: Acts 1963, c.317, s.7-105.) As amended by P.L.152-1986,SEC.247; P.L.143-2007, SEC.28.
IC 26-1-7-106
Control of electronic document of title
Sec. 106. (a) A person has control of an electronic document oftitle if a system employed for evidencing the transfer of interests inthe electronic document reliably establishes that person as the personto which the electronic document was issued or transferred. (b) A system satisfies subsection (a), and a person is deemed tohave control of an electronic document of title, if the document iscreated, stored, and assigned in such a manner that:
(1) a single authoritative copy of the document exists that isunique, identifiable, and, except as otherwise provided insubdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting controlas:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document hasbeen transferred, the person to which the document was mostrecently transferred;
(3) the authoritative copy is communicated to and maintainedby the person asserting control or its designated custodian;
(4) copies or amendments that add or change an identifiedassignee of the authoritative copy can be made only with theconsent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copyis readily identifiable as a copy that is not the authoritativecopy; and
(6) any amendment of the authoritative copy is readilyidentifiable as authorized or unauthorized.
As added by P.L.143-2007, SEC.29.
IC 26-1-7-201
Who may issue a warehouse receipt; storage under governmentbond
Sec. 201. (a) A warehouse receipt may be issued by anywarehouse.
(b) If goods, including distilled spirits and agriculturalcommodities, are stored under a statute requiring a bond againstwithdrawal or a license for the issuance of receipts in the nature ofwarehouse receipts, a receipt issued for the goods is considered to bea warehouse receipt even if issued by a person that is the owner ofthe goods and is not a warehouse.
(Formerly: Acts 1963, c.317, s.7-201.) As amended by P.L.143-2007,SEC.30.
IC 26-1-7-202
Form of warehouse receipt; essential terms; optional terms
Sec. 202. (a) A warehouse receipt need not be in any particularform.
(b) Unless a warehouse receipt provides for each of the following,the warehouse is liable for damages caused to a person injured by itsomission:
(1) a statement of the location of the warehouse facility wherethe goods are stored;
(2) the date of issue of the receipt;
(3) the unique identification code of the receipt;
(4) a statement whether the goods received will be delivered to
the bearer, to a named person, or to a named person or theperson's order;
(5) the rate of storage and handling charges, unless goods arestored under a field warehousing arrangement, in which case astatement of that fact is sufficient on a nonnegotiable receipt;
(6) a description of the goods or the packages containing them;
(7) the signature of the warehouse or its agent;
(8) if the receipt is issued for goods that the warehouse owns,either solely, jointly, or in common with others, the fact of thatownership; and
(9) a statement of the amount of advances made and ofliabilities incurred for which the warehouse claims a lien orsecurity interest unless the precise amount of advances made orliabilities incurred at the time of the issue of the receipt isunknown to the warehouse or to its agent that issued the receipt,in which case a statement of the fact that advances have beenmade or liabilities incurred and the purpose of the advances orliabilities is sufficient.
(c) A warehouse may insert in its receipt any terms that are notcontrary to the provisions of IC 26-1 and do not impair its obligationof delivery under section 403 of this chapter or its duty of care undersection 204 of this chapter. Any contrary provisions are ineffective.
(Formerly: Acts 1963, c.317, s.7-202.) As amended by P.L.152-1986,SEC.248; P.L.143-2007, SEC.31.
IC 26-1-7-203
Liability for nonreceipt or misdescription
Sec. 203. A party to or purchaser for value in good faith of adocument of title, other than a bill of lading, that relies upon thedescription of the goods in the document may recover from the issuerdamages caused by the nonreceipt or misdescription of the goods,except to the extent that:
(1) the document conspicuously indicates that the issuer doesnot know whether all or any part of the goods in fact werereceived or conform to the description, such as a case in whichthe description is in terms of marks or labels or kind, quantity,or condition, or the receipt or description is qualified by"contents, condition, and quality unknown", "said to contain",or words of similar import, if the indication is true; or
(2) the party or purchaser otherwise has notice of the nonreceiptor misdescription.
(Formerly: Acts 1963, c.317, s.7-203.) As amended by P.L.143-2007,SEC.32.
IC 26-1-7-204
Duty of care; contractual limitation of warehouse's liability
Sec. 204. (a) A warehouse is liable for damages for loss of orinjury to the goods caused by its failure to exercise care with regardto the goods that a reasonably careful person would exercise undersimilar circumstances. Unless otherwise agreed, the warehouse is not
liable for damages that could not have been avoided by the exerciseof that care.
(b) Damages may be limited by a term in the warehouse receipt orstorage agreement limiting the amount of liability in case of loss ordamage beyond which the warehouse is not liable. Such a limitationis not effective with respect to the warehouse's liability forconversion to its own use. On request of the bailor in a record at thetime of signing the storage agreement or within a reasonable timeafter receipt of the warehouse receipt, the warehouse's liability maybe increased on part or all of the goods covered by the storageagreement or the warehouse receipt. In this event, increased ratesmay be charged based on an increased valuation of the goods.
(c) Reasonable provisions as to the time and manner of presentingclaims and commencing actions based on the bailment may beincluded in the warehouse receipt or storage agreement.
(Formerly: Acts 1963, c.317, s.7-204.) As amended by P.L.143-2007,SEC.33.
IC 26-1-7-205
Title under warehouse receipt defeated in certain cases
Sec. 205. A buyer in the ordinary course of business of fungiblegoods sold and delivered by a warehouse that is also in the businessof buying and selling such goods takes the goods free of any claimunder a warehouse receipt even if the receipt is negotiable and hasbeen duly negotiated.
(Formerly: Acts 1963, c.317, s.7-205.) As amended by P.L.143-2007,SEC.34.
IC 26-1-7-206
Termination of storage at warehouse's option
Sec. 206. (a) A warehouse, by giving notice to the person onwhose account the goods are held and any other person known toclaim an interest in the goods, may require payment of any chargesand removal of the goods from the warehouse at the termination ofthe period of storage fixed by the document of title, or, if a period isnot fixed, within a stated period not less than thirty (30) days afterthe warehouse gives notice. If the goods are not removed before thedate specified in the notice, the warehouse may sell them undersection 210 of this chapter on enforcement of a warehouse's lien.
(b) If a warehouse in good faith believes that goods are about todeteriorate or decline in value to less than the amount of its lienwithin the time provided in subsection (a) and section 210 of thischapter, the warehouse may specify in the notice given undersubsection (a) any reasonable shorter time for removal of the goodsand, if the goods are not removed, may sell them at public sale heldnot less than one (1) week after a single advertisement or posting.
(c) If, as a result of a quality or condition of the goods of whichthe warehouse did not have notice at the time of deposit, the goodsare a hazard to other property, the warehouse facilities, or otherpersons, the warehouse may sell the goods at public or private sale
without advertisement or posting on reasonable notification to allpersons known to claim an interest in the goods. If the warehouse,after a reasonable effort, is unable to sell the goods, the warehousemay dispose of them in any lawful manner and does not incurliability by reason of the disposition.
(d) A warehouse shall deliver the goods to any person entitled tothem under this chapter upon due demand made at any time beforesale or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any saleor disposition under this section but shall hold the balance fordelivery on the demand of any person to which the warehouse wouldhave been bound to deliver the goods.
(Formerly: Acts 1963, c.317, s.7-206.) As amended by P.L.152-1986,SEC.249; P.L.143-2007, SEC.35.
IC 26-1-7-207
Goods must be kept separate; fungible goods
Sec. 207. (a) Unless the warehouse receipt otherwise provides, awarehouse shall keep separate the goods covered by each receipt soas to permit at all times identification and delivery of those goods.However, different lots of fungible goods may be commingled.
(b) If different lots of fungible goods are commingled, the goodsare owned in common by the persons entitled thereto and thewarehouse is severally liable to each owner for that owner's share. Ifbecause of overissue, a mass of fungible goods is insufficient to meetall the receipts the warehouse has issued against it, the personsentitled include all holders to which overissued receipts have beenduly negotiated.
(Formerly: Acts 1963, c.317, s.7-207.) As amended by P.L.143-2007,SEC.36.
IC 26-1-7-208
Altered warehouse receipts
Sec. 208. If a blank in a negotiable tangible warehouse receipt hasbeen filled in without authority, a good faith purchaser for value andwithout notice of the lack of authority may treat the insertion asauthorized. Any other unauthorized alteration leaves any tangible orelectronic warehouse receipt enforceable against the issuer accordingto its original tenor.
(Formerly: Acts 1963, c.317, s.7-208.) As amended by P.L.143-2007,SEC.37.
IC 26-1-7-209
Warehouse lien
Sec. 209. (a) A warehouse has a lien against the bailor on thegoods covered by a warehouse receipt or storage agreement or on theproceeds thereof in its possession for charges for storage ortransportation, including demurrage and terminal charges, insurance,labor, or other charges, present or future, in relation to the goods, andfor expenses necessary for preservation of the goods or reasonably
incurred in their sale pursuant to law. If the person on whose accountthe goods are held is liable for similar charges or expenses in relationto other goods whenever deposited and it is stated in the warehouse'sreceipt or storage agreement that a lien is claimed for charges andexpenses in relation to other goods, the warehouse also has a lienagainst the goods covered by the warehouse receipt or storageagreement or on the proceeds thereof in its possession for the chargesand expenses, whether or not the other goods have been delivered bythe warehouse. However, as against a person to which a negotiablewarehouse receipt is duly negotiated, a warehouse's lien is limited tocharges in an amount or at a rate specified in the warehouse receiptor, if no charges are so specified, to a reasonable charge for storageof the specific goods covered by the receipt subsequent to the date ofthe receipt.
(b) A warehouse may also reserve a security interest against thebailor for the maximum amount specified on the receipt for chargesother than those specified in subsection (a), such as for moneyadvanced and interest. The security interest is governed byIC 26-1-9.1 on secured transactions.
(c) A warehouse's lien for charges and expenses under subsection(a) or a security interest under subsection (b) is also effective againstany person that entrusted the bailor with possession of the goods thata pledge of them by the bailor to a good faith purchaser for valuewould have been valid. However, the lien or security interest is noteffective against a person that before issuance of a document of titlehad a legal interest or a perfected security interest in the goods andthat did not:
(1) deliver or entrust the goods or any document of titlecovering the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under section 403 of thischapter; or
(C) power of disposition under IC 26-1-2-403,IC 26-1-2.1-304(2), IC 26-1-2.1-305(2), IC 26-1-9.1-320, orIC 26-1-9.1-321 or any other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee ofany document.
(d) For purposes of this subsection, "household goods" meansfurniture, furnishings, or personal effects used by the depositor in adwelling. A warehouse's lien on household goods for charges andexpenses in relation to the goods under subsection (a) is alsoeffective against all persons if the depositor was the legal possessorof the goods at the time of deposit.
(e) A warehouse loses its lien on any goods that the warehousevoluntarily delivers or unjustifiably refuses to deliver.
(Formerly: Acts 1963, c.317, s.7-209.) As amended by P.L.152-1986,SEC.250; P.L.57-2000, SEC.36; P.L.143-2007, SEC.38.
IC 26-1-7-210
Enforcement of warehouse's lien Sec. 210. (a) Except as otherwise provided in subsection (b), awarehouse's lien may be enforced by public or private sale of thegoods, in bulk or in packages, at any time or place and on any termsthat are commercially reasonable, after notifying all persons knownto claim an interest in the goods. The notification must include astatement of the amount due, the nature of the proposed sale, and thetime and place of any public sale. The fact that a better price couldhave been obtained by a sale at a different time or in a methoddifferent from that selected by the warehouse is not of itselfsufficient to establish that the sale was not made in a commerciallyreasonable manner. The warehouse sells in a commerciallyreasonable manner if the warehouse sells the goods in the usualmanner in any recognized market therefor, sells at the price currentin that market at the time of the warehouse's sale, or otherwise sellsin conformity with commercially reasonable practices among dealersin the type of goods sold. A sale of more goods than apparentlynecessary to be offered to ensure satisfaction of the obligation is notcommercially reasonable except in cases covered by the precedingsentence.
(b) A warehouse may enforce its lien on goods other than goodsstored by a merchant in the course of its business if the followingrequirements are satisfied:
(1) All persons known to claim an interest in the goods must benotified.
(2) The notification must include an itemized statement of theclaim, a description of the goods subject to the lien, a demandfor payment within a specified time not less than ten (10) daysafter receipt of the notification, and a conspicuous statementthat unless the claim is paid within that time the goods will beadvertised for sale and sold by auction at a specified time andplace.
(3) The sale must conform to the terms of the notification.
(4) The sale must be held at the nearest suitable place to wherethe goods are held or stored.
(5) After the expiration of the time given in the notification, anadvertisement of the sale must be published once a week fortwo (2) weeks consecutively in a newspaper of generalcirculation where the sale is to be held. The advertisement mustinclude a description of the goods, the name of the person onwhose account the goods are being held, and the time and placeof the sale. The sale must take place at least fifteen (15) daysafter the first publication. If there is no newspaper of generalcirculation where the sale is to be held, the advertisement mustbe posted at least ten (10) days before the sale in not fewer thansix (6) conspicuous places in the neighborhood of the proposedsale.
(c) Before any sale pursuant to this section, any person claiminga right in the goods may pay the amount necessary to satisfy the lienand the reasonable expenses incurred in complying with this section.In that event, the goods may not be sold but must be retained by the
warehouse subject to the terms of the receipt and this chapter.
(d) A warehouse may buy at any public sale held pursuant to thissection.
(e) A purchaser in good faith of goods sold to enforce awarehouse's lien takes the goods free of any rights of persons againstwhich the lien was valid, despite the warehouse's noncompliancewith this section.
(f) A warehouse may satisfy its lien from the proceeds of any salepursuant to this section but shall hold the balance, if any, for deliveryon demand to any person to which the warehouse would have beenbound to deliver the goods.
(g) The rights provided by this section are in addition to all otherrights allowed by law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of itsbusiness, the lien may be enforced in accordance with subsection (a)or (b).
(i) A warehouse is liable for damages caused by failure to complywith the requirements for sale under this section and, in case ofwillful violation, is liable for conversion.
(Formerly: Acts 1963, c.317, s.7-210.) As amended by P.L.152-1986,SEC.251; P.L.143-2007, SEC.39.
IC 26-1-7-301
Liability for nonreceipt or misdescription; "said to contain";"shipper's load and count"; improper handling
Sec. 301. (a) A consignee of a nonnegotiable bill of lading thathas given value in good faith, or a holder to which a negotiable billhas been duly negotiated, relying upon the description of the goodsin the bill or upon the date shown in the bill, may recover from theissuer damages caused by the misdating of the bill or the nonreceiptor misdescription of the goods, except to the extent that the billindicates that the issuer does not know whether any part or all of thegoods in fact were received or conform to the description, such as ina case in which the description is in terms of marks or labels or kind,quantity, or condition or the receipt or description is qualified by"contents or condition of contents of packages unknown", "said tocontain", "shipper's weight, load, and count" or words of similarimport, if that indication is true.
(b) If goods are loaded by the issuer of a bill of lading:
(1) the issuer shall count the packages of goods if shipped inpackages and ascertain the kind and quantity if shipped in bulk;and
(2) words such as "shipper's weight, load, and count" or wordsof similar import indicating that the description was made bythe shipper are ineffective except as to goods concealed inpackages.
(c) If bulk goods are loaded by a shipper that makes available tothe issuer of a bill of lading adequate facilities for weighing thegoods, the issuer shall ascertain the kind and quantity within areasonable time after receiving the shipper's request in a record to do
so. In that case, "shipper's weight" or words of similar import areineffective.
(d) The issuer of a bill of lading, by including in the bill the words"shipper's weight, load, and count" or words of similar importindicate that the goods were loaded by the shipper, and if thestatement is true, the issuer is not liable for damages caused by theimproper loading. However, omission of such words does not implyliability for damages caused by improper loading.
(e) A shipper guarantees to an issuer the accuracy at the time ofshipment of the description, marks, labels, number, kind, quantity,condition, and weight, as furnished by the shipper, and the shippershall indemnify the issuer against damage caused by inaccuracies inthose particulars. This right of indemnity does not limit the issuer'sresponsibility or liability under the contract of carriage to any personother than the shipper.
(Formerly: Acts 1963, c.317, s.7-301.) As amended by P.L.143-2007,SEC.40.
IC 26-1-7-302
Through bills of lading and similar documents
Sec. 302. (a) The issuer of a through bill of lading or otherdocument of title embodying an undertaking to be performed in partby a person acting as its agent or by a performing carrier is liable toany person entitled to recover on the bill or other document for anybreach by the other person or the performing carrier of its obligationunder the bill or other document. However, to the extent that the billor other document covers an undertaking to be performed overseasor in territory not contiguous to the continental United States or anundertaking including matters other than transportation, this liabilityfor breach by the other person or the performing carrier may bevaried by agreement of the parties.
(b) If goods covered by a through bill of lading or other documentof title embodying an undertaking to be performed in part by aperson other than the issuer are received by that person, the personis subject, with respect to its own performance while the goods arein its possession, to the obligation of the issuer. The person'sobligation is discharged by delivery of the goods to another personpursuant to the bill or other document and does not include liabilityfor breach by any other person or by the issuer.
(c) The issuer of a through bill of lading or other document of titledescribed in subsection (b) is entitled to recover from the performingcarrier or other person in possession of the goods when the breach ofthe obligation under the bill or other document occurred:
(1) the amount it may be required to pay to any person entitledto recover on the bill or other document for the breach, as maybe evidenced by any receipt, judgment, or transcript ofjudgment; and
(2) the amount of any expense reasonably incurred by the issuerin defending any action commenced by any person entitled torecover on the bill or other document for the breach.(Formerly: Acts 1963, c.317, s.7-302.) As amended by P.L.143-2007,SEC.41.
IC 26-1-7-303
Diversion; reconsignment; change of instructions
Sec. 303. (a) Unless the bill of lading otherwise provides, a carriermay deliver the goods to a person or destination other than that statedin the bill or may otherwise dispose of the goods, without liability formisdelivery, on instructions from:
(1) the holder of a negotiable bill;
(2) the consignor on a nonnegotiable bill even if the consigneehas given contrary instructions;
(3) the consignee on a nonnegotiable bill in the absence ofcontrary instructions from the consignor, if the goods havearrived at the billed destination or if the consignee is inpossession of the tangible bill or in control of the electronic bill;or
(4) the consignee on a nonnegotiable bill if the consignee isentitled as against the consignor to dispose of the goods.
(b) Unless instructions described in subsection (a) are included ina negotiable bill of lading, a person to which the bill is dulynegotiated may hold the bailee according to the original terms.
(Formerly: Acts 1963, c.317, s.7-303.) As amended by P.L.143-2007,SEC.42.
IC 26-1-7-304
Bills of lading in a set
Sec. 304. (a) Except as customary in international transportation,a tangible bill of lading may not be issued in a set of parts. The issueris liable for damages caused by violation of this subsection.
(b) If a tangible bill of lading is lawfully issued in a set of parts,each of which contains an identification code and is expressed to bevalid only if the goods have not been delivered against any otherpart, the whole of the parts constitutes one (1) bill.
(c) If a tangible negotiable bill of lading is lawfully issued in a setof parts and different parts are negotiated to different persons, thetitle of the holder to which the first due negotiation is made prevailsas to both the document of title and the goods even if any later holdermay have received the goods from the carrier in good faith anddischarged the carrier's obligation by surrendering its part.
(d) A person that negotiates or transfers a single part of a tangiblebill of lading issued in a set is liable to holders of that part as if itwere the whole set.
(e) The bailee shall deliver in accordance with sections 401through 404 of this chapter against the first presented part of atangible bill of lading lawfully issued in a set. Delivery in thismanner discharges the bailee's obligation on the whole bill.
(Formerly: Acts 1963, c.317, s.7-304.) As amended by P.L.152-1986,SEC.252; P.L.143-2007, SEC.43.
IC 26-1-7-305
Destination bills
Sec. 305. (a) Instead of issuing a bill of lading to the consignor atthe place of shipment, a carrier may at the request of the consignorprocure the bill to be issued at a destination or at any other placedesignated in the request.
(b) Upon request of any person entitled as against a carrier tocontrol the goods while in transit and on surrender of possession orcontrol of any outstanding bill of lading or other receipt covering thegoods, the issuer, subject to section 105 of this chapter, may procurea substitute bill to be issued at any place designated in the request.
(Formerly: Acts 1963, c.317, s.7-305.) As amended by P.L.143-2007,SEC.44.
IC 26-1-7-306
Altered bills of lading
Sec. 306. An unauthorized alteration or filling in of a blank in abill of lading leaves the bill enforceable according to its originaltenor.
(Formerly: Acts 1963, c.317, s.7-306.)
IC 26-1-7-307
Lien of carrier
Sec. 307. (a) A carrier has a lien on the goods covered by a bill oflading or on the proceeds from the goods for charges after the dateof the carrier's receipt of the goods for storage or transportation,including demurrage and terminal charges, and for expensesnecessary for preservation of the goods incident to theirtransportation or reasonably incurred in their sale pursuant to law.However, against a purchaser for value of a negotiable bill of lading,a carrier's lien is limited to charges stated in the bill or the applicabletariffs or, if no charges are stated, a reasonable charge.
(b) A lien for charges and expenses under subsection (a) on goodsthat the carrier was required by law to receive for transportation iseffective against the consignor or any person entitled to the goodsunless the carrier had notice that the consignor lacked authority tosubject the goods to those charges and expenses. Any other lienunder subsection (a) is effective against the consignor and any personthat permitted the bailor to have control or possession of the goodsunless the carrier had notice that the bailor lacked authority.
(c) A carrier loses its lien on any goods that it voluntarily deliversor unjustifiably refuses to deliver.
(Formerly: Acts 1963, c.317, s.7-307.) As amended by P.L.143-2007,SEC.45.
IC 26-1-7-308
Enforcement of carrier's lien
Sec. 308. (a) A carrier's lien on goods may be enforced by publicor private sale of the goods, in bulk or in packages, at any time orplace, and on any terms that are commercially reasonable, after
notifying all persons known to claim an interest in the goods. Thenotification must include a statement of the amount due, the natureof the proposed sale, and the time and place of any public sale. Thefact that a better price could have been obtained by a sale at adifferent time or in a method different from that selected by thecarrier is not of itself sufficient to establish that the sale was notmade in a commercially reasonable manner. The carrier sells goodsin a commercially reasonable manner if the carrier sells the goods inthe usual manner in any recognized market therefor, sells at the pricecurrent in that market at the time of the sale, or otherwise sells inconformity with commercially reasonable practices among dealers inthe type of goods sold. A sale of more goods than apparentlynecessary to be offered to ensure satisfaction of the obligation is notcommercially reasonable, except in cases covered by the precedingsentence.
(b) Before any sale pursuant to this section, any person claiminga right in the goods may pay the amount necessary to satisfy the lienand the reasonable expenses incurred in complying with this section.In that event, the goods may not be sold but must be retained by thecarrier, subject to the terms of the bill and this chapter.
(c) A carrier may buy at any public sale pursuant to this section.
(d) A purchaser in good faith of goods sold to enforce a carrier'slien takes the goods free of any rights of persons against which thelien was valid, despite the carrier's noncompliance with this section.
(e) A carrier may satisfy its lien from the proceeds of any salepursuant to this section but shall hold the balance, if any, for deliveryon demand to any person to which the carrier would have been boundto deliver the goods.
(f) The rights provided by this section are in addition to all otherrights allowed by law to a creditor against a debtor.
(g) A carrier's lien may be enforced pursuant to either subsection(a) or the procedure set forth in section 210(b) of this chapter.
(h) A carrier is liable for damages caused by failure to complywith the requirements for sale under this section and, in case ofwillful violation, is liable for conversion.
(Formerly: Acts 1963, c.317, s.7-308.) As amended by P.L.152-1986,SEC.253; P.L.143-2007, SEC.46.
IC 26-1-7-309
Duty of care; contractual limitation of carrier's liability
Sec. 309. (a) A carrier that issues a bill of lading, whethernegotiable or nonnegotiable, shall exercise the degree of care inrelation to the goods which a reasonably careful person wouldexercise under similar circumstances. This subsection does not affectany law, regulation, or rule of law that imposes liability upon acommon carrier for damages not caused by its negligence.
(b) Damages may be limited by a term in the bill of lading or ina transportation agreement that the carrier's liability may not exceeda value stated in the bill or transportation agreement if the carrier'srates are dependent upon value and the consignor is afforded an
opportunity to declare a higher value and the consignor is advised ofthe opportunity. However, such a limitation is not effective withrespect to the carrier's liability for conversion to its own use.
(c) Reasonable provisions as to the time and manner of presentingclaims and commencing actions based on the shipment may beincluded in a bill of lading or a transportation agreement.
(Formerly: Acts 1963, c.317, s.7-309.) As amended by P.L.143-2007,SEC.47.
IC 26-1-7-401
Irregularities in issue of receipt or bill or conduct of issuer
Sec. 401. The obligations imposed by this chapter on an issuerapply to a document of title even if:
(1) the document does not comply with the requirements of thischapter or of any other statute, rule, or regulation regarding itsissuance, form, or content;
(2) the issuer violated laws regulating the conduct of itsbusiness;
(3) the goods covered by the document were owned by thebailee when the document was issued; or
(4) the person issuing the document is not a warehouse but thedocument purports to be a warehouse receipt.
(Formerly: Acts 1963, c.317, s.7-401.) As amended by P.L.152-1986,SEC.254; P.L.143-2007, SEC.48.
IC 26-1-7-402
Duplicate receipt or bill; overissue
Sec. 402. A duplicate or any other document of title purporting tocover goods already represented by an outstanding document of thesame issuer does not confer any right in the goods, except asprovided in the case of tangible bills of lading in a set of parts,overissue of documents for fungible goods, substitutes for lost, stolenor destroyed documents, or substitute documents issued undersection 105 of this chapter. The issuer is liable for damages causedby its overissue or failure to identify a duplicate document by aconspicuous notation.
(Formerly: Acts 1963, c.317, s.7-402.) As amended by P.L.143-2007,SEC.49.
IC 26-1-7-403
Obligation of warehouse or carrier to deliver; excuse
Sec. 403. (a) A bailee shall deliver the goods to a person entitledunder a document of title if the person complies with subsections (b)and (c), unless and to the extent that the bailee establishes any of thefollowing:
(1) Delivery of the goods to a person whose receipt was rightfulas against the claimant.
(2) Damage to or delay, loss, or destruction of the goods forwhich the bailee is not liable.
(3) Previous sale or other disposition of the goods in lawful
enforcement of a lien or on a warehouse's lawful termination ofstorage.
(4) The exercise by a seller of its right to stop delivery pursuantto the provisions of IC 26-1-2-705 or by a lessor of its right tostop delivery under IC 26-1-2.1-526.
(5) A diversion, reconsignment, or other disposition pursuant tosection 303 of this chapter.
(6) Release, satisfaction, or any other personal defense againstthe claimant.
(7) Any other lawful excuse.
(b) A person claiming goods covered by a document of title shallsatisfy the bailee's lien if the bailee so requests or if the bailee isprohibited by law from delivering the goods until the charges arepaid.
(c) Unless a person claiming the goods is a person against whichthe document of title does not confer a right under section 503(a) ofthis chapter:
(1) the person claiming the goods under a document shallsurrender possession or control of any outstanding negotiabledocument covering the goods for cancellation or indication ofpartial deliveries; and
(2) the bailee shall cancel the document or conspicuouslyindicate in the document the partial delivery or the bailee isliable to any person to which the document is duly negotiated.
(Formerly: Acts 1963, c.317, s.7-403; Acts 1973, P.L.265, SEC.1.)As amended by P.L.152-1986, SEC.255; P.L.143-2007, SEC.50.
IC 26-1-7-404
No liability for good faith delivery upon receipt or bill
Sec. 404. A bailee that in good faith has received goods anddelivered or otherwise disposed of the goods according to the termsof a document of title or pursuant to this chapter is not liable for thegoods even if:
(1) the person from which the bailee received the goods did nothave authority to procure the document or to dispose of thegoods; or
(2) the person to which the bailee delivered the goods did nothave authority to receive the goods.
(Formerly: Acts 1963, c.317, s.7-404.) As amended by P.L.152-1986,SEC.256; P.L.143-2007, SEC.51.
IC 26-1-7-501
Form of negotiation and requirements of "due negotiation"
Sec. 501. (a) The following rules apply to a negotiable tangibledocument of title:
(1) If the document's original terms run to the order of a namedperson, the document is negotiated by the named person'sendorsement and delivery. After the named person'sendorsement in blank or to bearer, any person may negotiate thedocument by delivery alone. (2) If the negotiable document's original terms run to bearer, itis negotiated by delivery alone.
(3) If the document's original terms run to the order of a namedperson and it is delivered to the named person, the effect is thesame as if the document had been negotiated.
(4) Negotiation of the document after it has been endorsed to anamed person requires endorsement and delivery.
(5) A negotiable document of title is "duly negotiated" when itis negotiated in the manner stated in this section to a holder whopurchases it in good faith without notice of any defense againstor claim to it on the part of any person and for value, unless itis established that the negotiation is not in the regular course ofbusiness or financing or involves receiving the document insettlement or payment of a money obligation.
(b) The following rules apply to a negotiable electronic documentof title:
(1) If the document's original terms run to the order of a namedperson or to bearer, the document is negotiated by delivery ofthe document to another person. Endorsement by the namedperson is not required to negotiate the document.
(2) If the document's original terms run to the order of a namedperson and the named person has control of the document, theeffect is the same as if the document had been negotiated.
(3) A document is duly negotiated if it is negotiated in themanner stated in this subsection to a holder that purchases it ingood faith, without notice of any defense against or claim to iton the part of any person, and for value, unless it is establishedthat the negotiation is not in the regular course of business orfinancing or involves taking delivery of the document insettlement or payment of a monetary obligation.
(c) Endorsement of a nonnegotiable document of title neithermakes it negotiable nor adds to the transferee's rights.
(d) The naming in a negotiable bill of lading of a person to benotified of the arrival of the goods does not limit the negotiability ofthe bill or constitute notice to a purchaser of the bill of any interestof that person in the goods.
(Formerly: Acts 1963, c.317, s.7-501.) As amended by P.L.143-2007,SEC.52.
IC 26-1-7-502
Rights acquired by due negotiation
Sec. 502. (a) Subject to sections 205 and 503 of this chapter, aholder to which a negotiable document of title has been dulynegotiated acquires thereby:
(1) title to the document;
(2) title to the goods;
(3) all rights accruing under the law of agency or estoppel,including rights to goods delivered to the bailee after thedocument was issued; and
(4) the direct obligation of the issuer to hold or deliver the
goods according to the terms of the document free of anydefense or claim by the issuer except those arising under theterms of the document or under this chapter. In the case of adelivery order, the bailee's obligation accrues only upon thebailee's acceptance of the delivery order, and the obligationacquired by the holder is that the issuer and any endorser willprocure the acceptance of the bailee.
(b) Subject to section 503 of this chapter, title and rights acquiredby due negotiation are not defeated by any stoppage of the goodsrepresented by the document of title or by surrender of the goods bythe bailee and are not impaired even if:
(1) the due negotiation or any prior due negotiation constituteda breach of duty;
(2) any person has been deprived of possession of a negotiabletangible document or control of a negotiable electronicdocument by misrepresentation, fraud, accident, mistake,duress, loss, theft, or conversion; or
(3) a previous sale or other transfer of the goods or documenthas been made to a third person.
(Formerly: Acts 1963, c.317, s.7-502.) As amended by P.L.152-1986,SEC.257; P.L.143-2007, SEC.53.
IC 26-1-7-503
Form of negotiation and requirements of "due negotiation"
Sec. 503. (a) A document of title confers no right in goods againsta person that before issuance of the document had a legal interest ora perfected security interest in the goods and that did not:
(1) deliver or entrust the goods or any document of titlecovering the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under section 403 of thischapter; or
(C) power of disposition under IC 26-1-2-403,IC 26-1-9.1-320, or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee ofany document.
(b) Title to goods based upon an unaccepted delivery order issubject to the rights of any person to which a negotiable warehousereceipt or bill of lading covering the goods has been duly negotiated.That title may be defeated under section 504 of this chapter to thesame extent as the rights of the issuer or a transferee from the issuer.
(c) Title to goods based upon a bill of lading issued to a freightforwarder is subject to the rights of any person to which a bill issuedby the freight forwarder is duly negotiated. However, delivery by thecarrier in accordance with sections 401 through 404 of this chapterpursuant to its own bill of lading discharges the carrier's obligationto deliver.
(Formerly: Acts 1963, c.317, s.7-503.) As amended by P.L.152-1986,SEC.258; P.L.57-2000, SEC.37; P.L.143-2007, SEC.54.
IC 26-1-7-504
Rights acquired in the absence of due negotiation; effect ofdiversion; seller's stoppage of delivery
Sec. 504. (a) A transferee of a document of title, whethernegotiable or nonnegotiable, to which the document has beendelivered but not duly negotiated, acquires the title and rights that thetransferor had or had actual authority to convey.
(b) In the case of a transfer of a nonnegotiable document of title,until but not after the bailee receives notice of the transfer, the rightsof the transferee may be defeated:
(1) by those creditors of the transferor that could treat thetransfer as void under IC 26-1-2-402 or IC 26-1-2.1-308;
(2) by a buyer from the transferor in ordinary course of businessif the bailee has delivered the goods to the buyer or receivednotification of the buyer's rights;
(3) by a lessee from the transferor in ordinary course ofbusiness if the bailee has delivered the goods to the lessee orreceived notification of the lessee's rights; or
(4) as against the bailee by good faith dealings of the baileewith the transferor.
(c) A diversion or other change of shipping instructions by theconsignor in a nonnegotiable bill of lading which causes the baileenot to deliver the goods to the consignee defeats the consignee's titleto the goods if the goods have been delivered to a buyer in ordinarycourse of business or a lessee in ordinary course of business, and, inany event, defeats the consignee's rights against the bailee.
(d) Delivery of the goods pursuant to a nonnegotiable documentof title may be stopped by a seller under IC 26-1-2-705 or a lessorunder IC 26-1-2.1-526 and subject to the requirements of duenotification provided in those sections. A bailee that honors theseller's or lessor's instructions is entitled to be indemnified by theseller or the lessor against any resulting loss or expense.
(Formerly: Acts 1963, c.317, s.7-504.) As amended by P.L.152-1986,SEC.259; P.L.143-2007, SEC.55.
IC 26-1-7-505
Endorser not a guarantor for other parties
Sec. 505. The endorsement of a tangible document of title issuedby a bailee does not make the endorser liable for any default by thebailee or previous endorsers.
(Formerly: Acts 1963, c.317, s.7-505.) As amended by P.L.143-2007,SEC.56.
IC 26-1-7-506
Delivery without endorsement; right to compel endorsement
Sec. 506. The transferee of a negotiable tangible document of titlehas a specifically enforceable right to have the transferor supply anynecessary endorsement but the transfer becomes a negotiation onlyas of the time the endorsement is supplied.
(Formerly: Acts 1963, c.317, s.7-506.) As amended by P.L.143-2007,
SEC.57.
IC 26-1-7-507
Warranties on negotiation or transfer of receipt or bill
Sec. 507. If a person negotiates or delivers a document of title forvalue, otherwise than as a mere intermediary under section 508 ofthis chapter, unless otherwise agreed, the transferor, in addition toany warranty made in selling or leasing the goods, warrants to itsimmediate purchaser only that:
(1) the document is genuine;
(2) the transferor has no knowledge of any fact that wouldimpair the document's validity or worth; and
(3) the negotiation or delivery is rightful and fully effectivewith respect to the title to the document and the goods itrepresents.
(Formerly: Acts 1963, c.317, s.7-507.) As amended by P.L.152-1986,SEC.260; P.L.143-2007, SEC.58.
IC 26-1-7-508
Warranties of collecting bank as to documents
Sec. 508. A collecting bank or other intermediary known to beentrusted with documents of title on behalf of another or withcollection of a draft or other claim against delivery of documentswarrants by delivery of the documents only its own good faith andauthority even if the collecting bank or other intermediary haspurchased or made advances against the claim or draft to becollected.
(Formerly: Acts 1963, c.317, s.7-508.) As amended by P.L.143-2007,SEC.59.
IC 26-1-7-509
Receipt or bill; when adequate to comply with commercial contract
Sec. 509. Whether a document of title is adequate to fulfill theobligations of a contract for sale, a contract for lease, or theconditions of a letter of credit is determined by IC 26-1-2,IC 26-1-2.1, or IC 26-1-5.1.
(Formerly: Acts 1963, c.317, s.7-509.) As amended by P.L.152-1986,SEC.261; P.L.183-1996, SEC.5; P.L.143-2007, SEC.60.
IC 26-1-7-601
Lost and missing documents
Sec. 601. (a) If a document of title is lost, stolen, or destroyed, acourt may order delivery of the goods or issuance of a substitutedocument and the bailee may without liability to any person complywith the order. If the document was negotiable, a court may not orderdelivery of the goods or issuance of a substitute document withoutthe claimant's posting security unless it finds that any person thatmay suffer loss as a result of nonsurrender of possession or controlof the document is adequately protected against the loss. If thedocument was nonnegotiable, the court may require security. The
court may also order payment of the bailee's reasonable costs andattorney's fees in an action under this subsection.
(b) A bailee that, without a court order, delivers goods to a personclaiming under a missing negotiable document of title is liable to anyperson injured thereby. If the delivery is not in good faith, the baileeis liable for conversion. Delivery in good faith is not conversion ifthe claimant posts security with the bailee in an amount at leastdouble the value of the goods at the time of posting to indemnify anyperson injured by the delivery that files a notice of claim within one(1) year after the delivery.
(Formerly: Acts 1963, c.317, s.7-601.) As amended by P.L.143-2007,SEC.61.
IC 26-1-7-602
Attachment of goods covered by a negotiable document
Sec. 602. Unless a document of title was originally issued upondelivery of the goods by a person that did not have power to disposeof them, a lien does not attach by virtue of any judicial process togoods in the possession of a bailee for which a negotiable documentof title is outstanding unless possession or control of the documentis first surrendered to the bailee or the document's negotiation isenjoined. The bailee may not be compelled to deliver the goodspursuant to process until possession or control of the document issurrendered to the bailee or the court. A purchaser of the documentfor value without notice of the process or injunction takes free of thelien imposed by judicial process.
(Formerly: Acts 1963, c.317, s.7-602.) As amended by P.L.143-2007,SEC.62.
IC 26-1-7-603
Conflicting claims; interpleader
Sec. 603. If more than one (1) person claims title to or possessionof the goods, the bailee is excused from deli