State Codes and Statutes

Statutes > Utah > Title-70a > Chapter-07a > 70a-7a-501

70A-7a-501. Form of negotiation and requirements of due negotiation.
(1) The following rules apply to a negotiable tangible document of title:
(a) If the document's original terms run to the order of a named person, the document isnegotiated by the named person's indorsement and delivery. After the named person'sindorsement in blank or to bearer, any person may negotiate the document by delivery alone.
(b) If the document's original terms run to bearer, it is negotiated by delivery alone.
(c) If the document's original terms run to the order of a named person and it is deliveredto the named person, the effect is the same as if the document had been negotiated.
(d) Negotiation of the document after it has been indorsed to a named person requiresindorsement by the named person and delivery.
(e) A document is duly negotiated if it is negotiated in the manner stated in thisSubsection (1) to a holder that purchases it in good faith, without notice of any defense against orclaim to it on the part of any person, and for value, unless it is established that the negotiation isnot in the regular course of business or financing or involves receiving the document insettlement or payment of a monetary obligation.
(2) The following rules apply to a negotiable electronic document of title:
(a) If the document's original terms run to the order of a named person or to bearer, thedocument is negotiated by delivery of the document to another person. Indorsement by thenamed person is not required to negotiate the document.
(b) If the document's original terms run to the order of a named person and the namedperson has control of the document, the effect is the same as if the document had beennegotiated.
(c) A document is duly negotiated if it is negotiated in the manner stated in thissubsection to a holder that purchases it in good faith, without notice of any defense against orclaim to it on the part of any person, and for value, unless it is established that the negotiation isnot in the regular course of business or financing or involves taking delivery of the document insettlement or payment of a monetary obligation.
(3) Indorsement of a nonnegotiable document of title neither makes it negotiable noradds to the transferee's rights.
(4) The naming in a negotiable bill of lading of a person to be notified of the arrival ofthe goods does not limit the negotiability of the bill or constitute notice to a purchaser of the billof any interest of that person in the goods.

Enacted by Chapter 42, 2006 General Session