12A:7-501 - Form of negotiation and requirements ofĀ "due negotiation"
12A:7-501.Ā Form of negotiation and requirements ofĀ "due negotiation"
(1) A negotiable document of title running to the order of a named person isĀ negotiated by his indorsement and delivery.Ā After his indorsement in blank orĀ to bearer any person can negotiate it by delivery alone.
(2)(a) A negotiable document of title is also negotiated by delivery aloneĀ when by its original terms it runs to bearer;
(b) when a document running to the order of a named person is delivered to him the effect is the same as if the document had been negotiated.
(3) Negotiation of a negotiable document of title after it has been indorsedĀ to a specified person requires indorsement by the special indorsee as well asĀ delivery.
(4) A negotiable document of title isĀ "duly negotiated"Ā when it is negotiated in the manner stated in this section to a holder who purchases it inĀ good faith without notice of any defense against or claim to it on the part ofĀ any person and for value, unless it is established that the negotiation is notĀ in the regular course of business or financing or involves receiving theĀ document in settlement or payment of a money obligation.
(5) Indorsement of a non-negotiable document neither makes it negotiable norĀ adds to the transferee's rights.
(6) The naming in a negotiable bill of a person to be notified of the arrival of the goods does not limit the negotiability of the bill nor constitute notice to a purchaser thereof of any interest of such person in the goods.
L.1961, c. 120, s. 7-501.
Ā
(1) A negotiable document of title running to the order of a named person isĀ negotiated by his indorsement and delivery.Ā After his indorsement in blank orĀ to bearer any person can negotiate it by delivery alone.
(2)(a) A negotiable document of title is also negotiated by delivery aloneĀ when by its original terms it runs to bearer;
(b) when a document running to the order of a named person is delivered to him the effect is the same as if the document had been negotiated.
(3) Negotiation of a negotiable document of title after it has been indorsedĀ to a specified person requires indorsement by the special indorsee as well asĀ delivery.
(4) A negotiable document of title isĀ "duly negotiated"Ā when it is negotiated in the manner stated in this section to a holder who purchases it inĀ good faith without notice of any defense against or claim to it on the part ofĀ any person and for value, unless it is established that the negotiation is notĀ in the regular course of business or financing or involves receiving theĀ document in settlement or payment of a money obligation.
(5) Indorsement of a non-negotiable document neither makes it negotiable norĀ adds to the transferee's rights.
(6) The naming in a negotiable bill of a person to be notified of the arrival of the goods does not limit the negotiability of the bill nor constitute notice to a purchaser thereof of any interest of such person in the goods.
L.1961, c. 120, s. 7-501.
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