§ 7—101. Short title
This article may be cited as Uniform Commercial Code-Documents of Title. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—102. Definitions and index of definitions
(a) In this article, unless the context otherwise requires:
(1) “Bailee” means a person that by a warehouse receipt, bill of lading, or other document
of title acknowledges possession of goods 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 to which or to whose order the
bill promises delivery.
(4) “Consignor” means a person named in a bill of lading as the person from which the
goods have been received for shipment.
(5) “Delivery order” means a record that contains an order to deliver goods directed to
a warehouse, carrier, or other person that in the ordinary course of business issues
warehouse receipts or bills of lading.
(6) “Goods” means all things that are treated as movable for the purposes of a contract
for storage or transportation.
(7) “Issuer” means a bailee that issues a document of title, or, in the case of an unaccepted
delivery order, the person that orders the possessor of goods to deliver. The term
includes a person for which an agent or employee purports to act in issuing a document
if the agent or employee has real or apparent authority to issue documents, even if
the issuer did not receive any goods, the goods were misdescribed, or in any other
respect the agent or employee violated the issuer’s instructions.
(8) “Person entitled under the document” means the holder, in the case of a negotiable
document of title, or the person to which delivery of the goods is to be made by the
terms of, or pursuant to instructions in a record under, a nonnegotiable document
of title.
(9) [Reserved.]
(10) “Shipper” means a person that enters into a contract of transportation with a carrier.
(11) “Warehouse” means a person engaged in the business of storing goods for hire.
(b) Definitions in other articles applying to this article and the sections in which they
appear are:
(1) “Contract for sale,” section 2—106.
(2) “Lessee in the ordinary course of business,” section 2A—103.
(3) “Receipt” of goods, section 2—103.
(c) In addition, Article 1 of this title contains general definitions and principles of
construction and interpretation applicable throughout this article. (Added 2015, No. 51, § B.3, eff. June 3, 2015; amended 2025, No. 17, § 7, eff. July 1, 2025.)
§ 7—103. Relation of article to treaty or statute
(a) This article is subject to any treaty or statute of the United States or regulatory
statute of this State to the extent the treaty, statute, or regulatory statute is
applicable.
(b) This article does not modify or repeal any law prescribing the form or content of
a document of title or the services or facilities to be afforded by a bailee, or otherwise
regulating a bailee’s business in respects not specifically treated in this article.
However, violation of such a law does not affect the status of a document of title
that otherwise is within the definition of a document of title.
(c) This article modifies, limits, and supersedes the federal Electronic Signatures in
Global and National Commerce Act (15 U.S.C. § 7001, et. seq.) but does not modify, limit, or supersede Section 101(c) of that act (15 U.S.C. § 7001(c)) or authorize electronic delivery 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 the Uniform Electronic Transactions Act
(9 V.S.A. chapter 20) and this article, this article governs. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—104. Negotiable and nonnegotiable document of title
(a) Except as otherwise provided in subsection (c) of this section, a document of title
is negotiable if by its terms the goods are to be delivered to bearer or to the order
of a named person.
(b) A document of title other than one described in subsection (a) of this section is
nonnegotiable. A bill of lading that states that the goods are consigned to a named
person is not made negotiable by a provision that the goods are to be delivered only
against an order in a record signed 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 it is nonnegotiable. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—105. Reissuance in alternative medium
(a) Upon request of a person entitled under an electronic document of title, the issuer
of the electronic document may issue a tangible document of title as a substitute
for the electronic document if:
(1) the person entitled under the electronic document surrenders control of the document
to the issuer; and
(2) the tangible document when issued contains a statement that it is issued in substitution
for the electronic document.
(b) Upon issuance of a tangible document of title in substitution for an electronic document
of title in accordance with subsection (a) of this section:
(1) the electronic document ceases to have any effect or validity; and
(2) the person that procured issuance of the tangible document warrants to all subsequent
persons entitled under the tangible document that the warrantor was a person entitled
under the electronic document when the warrantor surrendered control of the electronic
document to the issuer.
(c) Upon request of a person entitled under a tangible document of title, the issuer of
the tangible document may issue an electronic document of title as a substitute for
the tangible document if:
(1) the person entitled under the tangible document surrenders possession of the document
to the issuer; and
(2) the electronic document when issued contains a statement that it is issued in substitution
for the tangible document.
(d) Upon issuance of an electronic document of title in substitution for a tangible document
of title in accordance with subsection (c) of this section:
(1) the tangible document ceases to have any effect or validity; and
(2) the person that procured issuance of the electronic document warrants to all subsequent
persons entitled under the electronic document that the warrantor was a person entitled
under the tangible document when the warrantor surrendered possession of the tangible
document to the issuer. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—106. Control of electronic document of title
(a) A person has control of an electronic document of title if a system employed for evidencing
the transfer of interests in the electronic document reliably establishes that person
as the person to which the electronic document was issued or transferred.
(b) A system satisfies subsection (a) of this section, and a person has control of an
electronic document of title, if the document is created, stored, and transferred
in a manner that:
(1) a single authoritative copy of the document exists which is unique, identifiable,
and, except as otherwise provided in subdivisions (4), (5), and (6) of this subsection,
unalterable;
(2) the authoritative copy identifies the person asserting control as:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document has been transferred, the person
to which the document was most recently transferred;
(3) the authoritative copy is communicated to and maintained by the person asserting control
or its designated custodian;
(4) copies or amendments that add or change an identified transferee of the authoritative
copy can be made only with the consent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copy is readily identifiable
as a copy that is not the authoritative copy; and
(6) any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.
(c) A system satisfies subsection (a) of this section, and a person has control of an
electronic document of title, if an authoritative electronic copy of the document,
a record attached to or logically associated with the electronic copy, or a system
in which the electronic copy is recorded:
(1) enables the person readily to identify each electronic copy as either an authoritative
copy or a nonauthoritative copy;
(2) enables the person readily to identify itself in any way, including by name, identifying
number, cryptographic key, office, or account number, as the person to which each
authoritative electronic copy was issued or transferred; and
(3) gives the person exclusive power, subject to subsection (d) of this section, to:
(A) prevent others from adding or changing the person to which each authoritative electronic
copy has been issued or transferred; and
(B) transfer control of each authoritative electronic copy.
(d) Subject to subsection (e) of this section, a power is exclusive under subdivisions
(c)(3)(A) and (c)(3)(B) of this section even if:
(1) the authoritative electronic copy, a record attached to or logically associated with
the authoritative electronic copy, or a system in which the authoritative electronic
copy is recorded limits the use of the document of title or has a protocol that is
programmed to cause a change, including a transfer or loss of control; or
(2) the power is shared with another person.
(e) A power of a person is not shared with another person under subdivision (d)(2) of
this section and the person’s power is not exclusive if:
(1) the person can exercise the power only if the power also is exercised by the other
person; and
(2) the other person:
(A) can exercise the power without exercise of the power by the person; and
(B) is the transferor to the person of an interest in the document of title.
(f) If a person has the powers specified in subdivisions (c)(3)(A) and (c)(3)(B) of this
section, the powers are presumed to be exclusive.
(g) A person has control of an electronic document of title if another person, other
than the transferor to the person of an interest in the document:
(1) has control of the document and acknowledges that it has control on behalf of the
person; or
(2) obtains control of the document after having acknowledged that it will obtain control
of the document on behalf of the person.
(h) A person that has control under this section is not required to acknowledge that
it has control on behalf of another person.
(i) If a person acknowledges that it has or will obtain control on behalf of another
person, unless the person otherwise agrees or law other than this article or Article
9 of this title otherwise provides, the person does not owe any duty to the other
person and is not required to confirm the acknowledgment to any other person. (Added 2015, No. 51, § B.3, eff. June 3, 2015; amended 2025, No. 17, § 7, eff. July 1, 2025.)
§ 7—201. Person that may issue a warehouse receipt; storage under bond
(a) A warehouse receipt may be issued by any warehouse.
(b) If goods, including distilled spirits and agricultural commodities, are stored under
a statute requiring a bond against withdrawal or a license for the issuance of receipts
in the nature of warehouse receipts, a receipt issued for the goods is deemed to be
a warehouse receipt even if issued by a person that is the owner of the goods and
is not a warehouse. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—202. Form of warehouse receipt; effect of omission
(a) A warehouse receipt need not be in any particular form.
(b) Unless a warehouse receipt provides for each of the following, the warehouse is liable
for damages caused to a person injured by its omission:
(1) a statement of the location of the warehouse facility where the 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 its order;
(5) the rate of storage and handling charges, unless goods are stored under a field warehousing
arrangement, in which case a statement 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, a statement of the fact of that ownership; and
(9) a statement of the amount of advances made and of liabilities incurred for which the
warehouse claims a lien or security interest, unless the precise amount of advances
made or liabilities incurred, at the time of the issue of the receipt, is unknown
to the warehouse or to its agent that issued the receipt, in which case a statement
of the fact that advances have been made or liabilities incurred and the purpose of
the advances or liabilities is sufficient.
(c) A warehouse may insert in its receipt any terms that are not contrary to this title
and do not impair its obligation of delivery under section 7—403 of this title or its duty of care under section 7—204 of this title. Any contrary provision is ineffective. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—203. Liability for nonreceipt or misdescription
A party to or purchaser for value in good faith of a document of title, other than
a bill of lading, that relies upon the description of the goods in the document may
recover from the issuer damages caused by the nonreceipt or misdescription of the
goods, except to the extent that:
(1) the document conspicuously indicates that the issuer does not know whether all or
part of the goods in fact were received or conform to the description, such as a 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, 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 nonreceipt or misdescription. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—204. Duty of care; contractual limitation of warehouse’s liability
(a) A warehouse is liable for damages for loss of or injury to the goods caused by its
failure to exercise care with regard to the goods that a reasonably careful person
would exercise under similar circumstances. Unless otherwise agreed, the warehouse
is not liable for damages that could not have been avoided by the exercise of that
care.
(b) Damages may be limited by a term in the warehouse receipt or storage agreement limiting
the amount of liability in case of loss or damage beyond which the warehouse is not
liable. Such a limitation is not effective with respect to the warehouse’s liability
for conversion to its own use. On request of the bailor in a record at the time of
signing the storage agreement or within a reasonable time after receipt of the warehouse
receipt, the warehouse’s liability may be increased on part or all of the goods covered
by the storage agreement or the warehouse receipt. In this event, increased rates
may be charged based on an increased valuation of the goods.
(c) Reasonable provisions as to the time and manner of presenting claims and commencing
actions based on the bailment may be included in the warehouse receipt or storage
agreement. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—205. Title under warehouse receipt defeated in certain cases
A buyer in ordinary course of business of fungible goods sold and delivered by a warehouse
that is also in the business of buying and selling such goods takes the goods free
of any claim under a warehouse receipt even if the receipt is negotiable and has been
duly negotiated. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—206. Termination of storage at warehouse’s option
(a) A warehouse, by giving notice to the person on whose account the goods are held and
any other person known to claim an interest in the goods, may require payment of any
charges and removal of the goods from the warehouse at the termination of the period
of storage fixed by the document of title or, if a period is not fixed, within a stated
period not less than 30 days after the warehouse gives notice. If the goods are not
removed before the date specified in the notice, the warehouse may sell them pursuant
to section 7—210 of this title.
(b) If a warehouse in good faith believes that goods are about to deteriorate or decline
in value to less than the amount of its lien within the time provided in subsection
(a) of this section and section 7—210 of this title, the warehouse may specify in the notice given under subsection (a) of this section
any reasonable shorter time for removal of the goods and, if the goods are not removed,
may sell them at public sale held not less than one week after a single advertisement
or posting.
(c) If, as a result of a quality or condition of the goods of which the warehouse did
not have notice at the time of deposit, the goods are a hazard to other property,
the warehouse facilities, or other persons, the warehouse may sell the goods at public
or private sale without advertisement or posting on reasonable notification to all
persons known to claim an interest in the goods. If the warehouse, after a reasonable
effort, is unable to sell the goods, it may dispose of them in any lawful manner and
does not incur liability by reason of that disposition.
(d) A warehouse shall deliver the goods to any person entitled to them under this article
upon due demand made at any time before sale or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any sale or disposition under
this section but shall hold the balance for delivery on the demand of any person to
which the warehouse would have been bound to deliver the goods. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—207. Goods shall be kept separate; fungible goods
(a) Unless the warehouse receipt provides otherwise, a warehouse shall keep separate the
goods covered by each receipt so as 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 goods are owned in common
by the persons entitled thereto and the warehouse is severally liable to each owner
for that owner’s share. If, because of overissue, a mass of fungible goods is insufficient
to meet all the receipts the warehouse has issued against it, the persons entitled
include all holders to which overissued receipts have been duly negotiated. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—208. Altered warehouse receipts
If a blank in a negotiable tangible warehouse receipt has been filled in without authority,
a good-faith purchaser for value and without notice of the lack of authority may treat
the insertion as authorized. Any other unauthorized alteration leaves any tangible
or electronic warehouse receipt enforceable against the issuer according to its original
tenor. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—209. Lien of warehouse
(a) A warehouse has a lien against the bailor on the goods covered by a warehouse receipt
or storage agreement or on the proceeds thereof in its possession for charges for
storage or transportation, including demurrage and terminal charges, insurance, labor,
or other charges, present or future, in relation to the goods, and for expenses necessary
for preservation of the goods or reasonably incurred in their sale pursuant to law.
If the person on whose account the goods are held is liable for similar charges or
expenses in relation to other goods whenever deposited and it is stated in the warehouse
receipt or storage agreement that a lien is claimed for charges and expenses in relation
to other goods, the warehouse also has a lien against the goods covered by the warehouse
receipt or storage agreement or on the proceeds thereof in its possession for those
charges and expenses, whether or not the other goods have been delivered by the warehouse.
However, as against a person to which a negotiable warehouse receipt is duly negotiated,
a warehouse’s lien is limited to charges in an amount or at a rate specified in the
warehouse receipt or, if no charges are so specified, to a reasonable charge for storage
of the specific goods covered by the receipt subsequent to the date of the receipt.
(b) A warehouse may also reserve a security interest against the bailor for the maximum
amount specified on the receipt for charges other than those specified in subsection
(a) of this section, such as for money advanced and interest. The security interest
is governed by Article 9 of this title.
(c) A warehouse’s lien for charges and expenses under subsection (a) of this section or
a security interest under subsection (b) of this section is also effective against
any person that so entrusted the bailor with possession of the goods that a pledge
of them by the bailor to a good-faith purchaser for value would have been valid. However,
the lien or security interest is not effective against a person that before issuance
of a document of title had a legal interest or a perfected security interest in the
goods and that did not:
(1) deliver or entrust the goods or any document of title covering 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 7—403 of this title; or
(C) power of disposition under section 2—403, subsection 2A—304(2) or 2A—305(2), section
9—320, or subsection 9—321(c) of this title, or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of any document.
(d) A warehouse’s lien on household goods for charges and expenses in relation to the
goods under subsection (a) of this section is also effective against all persons if
the depositor was the legal possessor of the goods at the time of deposit. In this
subsection, “household goods” means furniture, furnishings, or personal effects used
by the depositor in a dwelling.
(e) A warehouse loses its lien on any goods that it voluntarily delivers or unjustifiably
refuses to deliver. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—210. Enforcement of warehouse’s lien
(a) Except as otherwise provided in subsection (b) of this section, a warehouse’s lien
may be enforced by public or private sale of the goods, in bulk or in packages, at
any time or place and on any terms that are commercially reasonable, after notifying
all persons known to claim an interest in the goods. The notification shall include
a statement of the amount due, the nature of the proposed sale, and the time and place
of any public sale. The fact that a better price could have been obtained by a sale
at a different time or in a method different from that selected by the warehouse is
not of itself sufficient to establish that the sale was not made in a commercially
reasonable manner. The warehouse sells in a commercially reasonable manner if the
warehouse sells the goods in the usual manner in any recognized market therefore,
sells at the price current in that market at the time of the sale, or otherwise sells
in conformity with commercially reasonable practices among dealers in the type of
goods sold. A sale of more goods than apparently necessary to be offered to ensure
satisfaction of the obligation is not commercially reasonable, except in cases covered
by the preceding sentence.
(b) A warehouse may enforce its lien on goods, other than goods stored by a merchant in
the course of its business, only if the following requirements are satisfied:
(1) All persons known to claim an interest in the goods shall be notified.
(2) The notification shall include an itemized statement of the claim, a description of
the goods subject to the lien, a demand for payment within a specified time not less
than 10 days after receipt of the notification, and a conspicuous statement that unless
the claim is paid within that time the goods will be advertised for sale and sold
by auction at a specified time and place.
(3) The sale shall conform to the terms of the notification.
(4) The sale shall be held at the nearest suitable place to where the goods are held or
stored.
(5) After the expiration of the time given in the notification, an advertisement of the
sale shall be published once a week for two weeks consecutively in a newspaper of
general circulation where the sale is to be held. The advertisement shall include
a description of the goods, the name of the person on whose account the goods are
being held, and the time and place of the sale. The sale shall take place at least
15 days after the first publication. If there is no newspaper of general circulation
where the sale is to be held, the advertisement shall be posted at least 10 days before
the sale in not fewer than six conspicuous places in the neighborhood of the proposed
sale.
(c) Before any sale pursuant to this section, any person claiming a right in the goods
may pay the amount necessary to satisfy the lien and the reasonable expenses incurred
in complying with this section. In that event, the goods may not be sold but shall
be retained by the warehouse subject to the terms of the receipt and this article.
(d) A warehouse may buy at any public sale held pursuant to this section.
(e) A purchaser in good faith of goods sold to enforce a warehouse’s lien takes the goods
free of any rights of persons against which the lien was valid, despite the warehouse’s
noncompliance with this section.
(f) A warehouse may satisfy its lien from the proceeds of any sale pursuant to this section
but shall hold the balance, if any, for delivery on demand to any person to which
the warehouse would have been bound to deliver the goods.
(g) The rights provided by this section are in addition to all other rights allowed by
law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of its business, the lien
may be enforced in accordance with subsection (a) or (b) of this section.
(i) A warehouse is liable for damages caused by failure to comply with the requirements
for sale under this section and, in case of willful violation, is liable for conversion. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—301. Liability for nonreceipt or misdescription; “said to contain”; “shipper’s weight,
load, and count”; improper handling
(a) A consignee of a nonnegotiable bill of lading which has given value in good faith,
or a holder to which a negotiable bill has been duly negotiated, relying upon the
description of the goods in the bill or upon the date shown in the bill, may recover
from the issuer damages caused by the misdating of the bill or the nonreceipt or misdescription
of the goods, except to the extent that the bill indicates that the issuer does not
know whether any part or all of the goods in fact were received or conform to the
description, such as in a 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 to contain,” “shipper’s weight,
load, and count,” or words of similar import, 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 in packages and ascertain
the kind and quantity if shipped in bulk; and
(2) words such as “shipper’s weight, load, and count,” or words of similar import indicating
that the description was made by the shipper are ineffective except as to goods concealed
in packages.
(c) If bulk goods are loaded by a shipper that makes available to the issuer of a bill
of lading adequate facilities for weighing those goods, the issuer shall ascertain
the kind and quantity within a reasonable time after receiving the shipper’s request
in a record to do so. In that case, “shipper’s weight” or words of similar import
are ineffective.
(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 import, may indicate that the goods were loaded
by the shipper, and, if that statement is true, the issuer is not liable for damages
caused by the improper loading. However, omission of such words does not imply liability
for damages caused by improper loading.
(e) A shipper guarantees to an issuer the accuracy at the time of shipment of the description,
marks, labels, number, kind, quantity, condition, and weight, as furnished by the
shipper, and the shipper shall indemnify the issuer against damage caused by inaccuracies
in those particulars. This right of indemnity does not limit the issuer’s responsibility
or liability under the contract of carriage to any person other than the shipper. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—302. Through bills of lading and similar documents of title
(a) The issuer of a through bill of lading, or other document of title embodying an undertaking
to be performed in part by a person acting as its agent or by a performing carrier,
is liable to any person entitled to recover on the bill or other document for any
breach by the other person or the performing carrier of its obligation under the bill
or other document. However, to the extent that the bill or other document covers an
undertaking to be performed overseas or in territory not contiguous to the continental
United States or an undertaking including matters other than transportation, this
liability for breach by the other person or the performing carrier may be varied by
agreement of the parties.
(b) If goods covered by a through bill of lading or other document of title embodying
an undertaking to be performed in part by a person other than the issuer are received
by that person, the person is subject, with respect to its own performance while the
goods are in its possession, to the obligation of the issuer. The person’s obligation
is discharged by delivery of the goods to another person pursuant to the bill or other
document and does not include liability for breach by any other person or by the issuer.
(c) The issuer of a through bill of lading or other document of title described in subsection
(a) of this section is entitled to recover from the performing carrier, or other person
in possession of the goods when the breach of the obligation under the bill or other
document occurred:
(1) the amount it may be required to pay to any person entitled to recover on the bill
or other document for the breach, as may be evidenced by any receipt, judgment, or
transcript of judgment; and
(2) the amount of any expense reasonably incurred by the issuer in defending any action
commenced by any person entitled to recover on the bill or other document for the
breach. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—303. Diversion; reconsignment; change of instructions
(a) Unless the bill of lading otherwise provides, a carrier may deliver the goods to a
person or destination other than that stated in the bill or may otherwise dispose
of the goods, without liability for misdelivery, on instructions from:
(1) the holder of a negotiable bill;
(2) the consignor on a nonnegotiable bill, even if the consignee has given contrary instructions;
(3) the consignee on a nonnegotiable bill in the absence of contrary instructions from
the consignor, if the goods have arrived at the billed destination or if the consignee
is in possession of the tangible bill or in control of the electronic bill; or
(4) the consignee on a nonnegotiable bill, if the consignee is entitled as against the
consignor to dispose of the goods.
(b) Unless instructions described in subsection (a) of this section are included in a
negotiable bill of lading, a person to which the bill is duly negotiated may hold
the bailee according to the original terms. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—304. Tangible bills of lading in a set
(a) Except as customary in international transportation, a tangible bill of lading may
not be issued in a set of parts. The issuer is 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 be valid only if the goods have not been
delivered against any other part, the whole of the parts constitutes one bill.
(c) If a tangible negotiable bill of lading is lawfully issued in a set of parts and different
parts are negotiated to different persons, the title of the holder to which the first
due negotiation is made prevails as to both the document of title and the goods even
if any later holder may have received the goods from the carrier in good faith and
discharged the carrier’s obligation by surrendering its part.
(d) A person that negotiates or transfers a single part of a tangible bill of lading issued
in a set is liable to holders of that part as if it were the whole set.
(e) The bailee shall deliver in accordance with part 4 of this article against the first
presented part of a tangible bill of lading lawfully issued in a set. Delivery in
this manner discharges the bailee’s obligation on the whole bill. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—305. Destination bills
(a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier,
at the request of the consignor, may procure the bill to be issued at destination
or at any other place designated in the request.
(b) Upon request of any person entitled as against a carrier to control the goods while
in transit and on surrender of possession or control of any outstanding bill of lading
or other receipt covering the goods, the issuer, subject to section 7-105 of this title, may procure a substitute bill to be issued at any place designated in the request. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—306. Altered bills of lading
An unauthorized alteration or filling in of a blank in a bill of lading leaves the
bill enforceable according to its original tenor. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—307. Lien of carrier
(a) A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof
in its possession for charges after the date of the carrier’s receipt of the goods
for storage or transportation, including demurrage and terminal charges, and for expenses
necessary for preservation of the goods incident to their transportation 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 applicable tariffs or, if no charges are stated, a reasonable charge.
(b) A lien for charges and expenses under subsection (a) of this section on goods that
the carrier was required by law to receive for transportation is effective against
the consignor or any person entitled to the goods unless the carrier had notice that
the consignor lacked authority to subject the goods to those charges and expenses.
Any other lien under subsection (a) of this section is effective against the consignor
and any person that permitted the bailor to have control or possession of the goods
unless the carrier had notice that the bailor lacked authority.
(c) A carrier loses its lien on any goods that it voluntarily delivers or unjustifiably
refuses to deliver. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—308. Enforcement of carrier’s lien
(a) A carrier’s lien on goods may be enforced by public or private sale of the goods,
in bulk or in packages, at any time or place and on any terms that are commercially
reasonable, after notifying all persons known to claim an interest in the goods. The
notification shall include a statement of the amount due, the nature of the proposed
sale, and the time and place of any public sale. The fact that a better price could
have been obtained by a sale at a different time or in a method different from that
selected by the carrier is not of itself sufficient to establish that the sale was
not made in a commercially reasonable manner. The carrier sells goods in a commercially
reasonable manner if the carrier sells the goods in the usual manner in any recognized
market therefor, sells at the price current in that market at the time of the sale,
or otherwise sells in conformity with commercially reasonable practices among dealers
in the type of goods sold. A sale of more goods than apparently necessary to be offered
to ensure satisfaction of the obligation is not commercially reasonable, except in
cases covered by the preceding sentence.
(b) Before any sale pursuant to this section, any person claiming a right in the goods
may pay the amount necessary to satisfy the lien and the reasonable expenses incurred
in complying with this section. In that event, the goods may not be sold but shall
be retained by the carrier, subject to the terms of the bill of lading and this article.
(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’s lien takes the goods
free of any rights of persons against which the lien was valid, despite the carrier’s
noncompliance with this section.
(e) A carrier may satisfy its lien from the proceeds of any sale pursuant to this section
but shall hold the balance, if any, for delivery on demand to any person to which
the carrier would have been bound to deliver the goods.
(f) The rights provided by this section are in addition to all other rights allowed by
law to a creditor against a debtor.
(g) A carrier’s lien may be enforced pursuant to either subsection (a) of this section
or the procedure set forth in subsection 7—210(b) of this title.
(h) A carrier is liable for damages caused by failure to comply with the requirements
for sale under this section and, in case of willful violation, is liable for conversion. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—309. Duty of care; contractual limitation of carrier’s liability
(a) A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall
exercise the degree of care in relation to the goods which a reasonably careful person
would exercise under similar circumstances. This subsection does not affect any statute,
regulation, or rule of law that imposes liability upon a common carrier for damages
not caused by its negligence.
(b) Damages may be limited by a term in the bill of lading or in a transportation agreement
that the carrier’s liability may not exceed a value stated in the bill or transportation
agreement if the carrier’s rates are dependent upon value and the consignor is afforded
an opportunity to declare a higher value and the consignor is advised of the opportunity.
However, such a limitation is not effective with respect to the carrier’s liability
for conversion to its own use.
(c) Reasonable provisions as to the time and manner of presenting claims and commencing
actions based on the shipment may be included in a bill of lading or a transportation
agreement. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—401. Irregularities in issue of receipt or bill or conduct of issuer
The obligations imposed by this article on an issuer apply to a document of title
even if:
(1) the document does not comply with the requirements of this article or of any other
statute, rule, or regulation regarding its issuance, form, or content;
(2) the issuer violated laws regulating the conduct of its business;
(3) the goods covered by the document were owned by the bailee when the document was issued;
or
(4) the person issuing the document is not a warehouse but the document purports to be
a warehouse receipt. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—402. Duplicate document of title; overissue
A duplicate or any other document of title purporting to cover goods already represented
by an outstanding document of the same issuer does not confer any right in the goods,
except as provided in the case of tangible bills of lading in a set of parts, overissue
of documents for fungible goods, substitutes for lost, stolen, or destroyed documents,
or substitute documents issued pursuant to section 7—105 of this title. The issuer is liable for damages caused by its overissue or failure to identify
a duplicate document by a conspicuous notation. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—403. Obligation of bailee to deliver; excuse
(a) A bailee shall deliver the goods to a person entitled under a document of title if
the person complies with subsections (b) and (c) of this section, unless and to the
extent that the bailee establishes any of the following:
(1) delivery of the goods to a person whose receipt was rightful as against the claimant;
(2) damage to or delay, loss, or destruction of the goods for which 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 of storage;
(4) the exercise by a seller of its right to stop delivery pursuant to section 2—705 of this title or by a lessor of its right to stop delivery pursuant to section 2A—526 of this title;
(5) a diversion, reconsignment, or other disposition pursuant to section 7—303 of this title;
(6) release, satisfaction, or any other personal defense against the claimant; or
(7) any other lawful excuse.
(b) A person claiming goods covered by a document of title shall satisfy the bailee’s
lien if the bailee so requests or if the bailee is prohibited by law from delivering
the goods until the charges are paid.
(c) Unless a person claiming the goods is a person against which the document of title
does not confer a right under subsection 7—503(a) of this title:
(1) the person claiming under a document shall surrender possession or control of any
outstanding negotiable document covering the goods for cancellation or indication
of partial deliveries; and
(2) the bailee shall cancel the document or conspicuously indicate in the document the
partial delivery or the bailee is liable to any person to which the document is duly
negotiated. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—404. No liability for good-faith delivery pursuant to document of title
A bailee that in good faith has received goods and delivered or otherwise disposed
of the goods according to the terms of a document of title or pursuant to this article
is not liable for the goods even if:
(1) the person from which the bailee received the goods did not have authority to procure
the document or to dispose of the goods; or
(2) the person to which the bailee delivered the goods did not have authority to receive
the goods. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 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. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—502. Rights acquired by due negotiation
(a) Subject to sections 7—205 and 7—503 of this title, a holder to which a negotiable document of title has been duly negotiated 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 the document 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 any defense or claim by the issuer except those arising
under the terms of the document or under this article, but in the case of a delivery
order, the bailee’s obligation accrues only upon the bailee’s acceptance of the delivery
order and the obligation acquired by the holder is that the issuer and any indorser
will procure the acceptance of the bailee.
(b) Subject to section 7—503 of this title, title and rights acquired by due negotiation are not defeated by any stoppage of
the goods represented by the document of title or by surrender of the goods by the
bailee and are not impaired even if:
(1) the due negotiation or any prior due negotiation constituted a breach of duty;
(2) any person has been deprived of possession of a negotiable tangible document or control
of a negotiable electronic document by misrepresentation, fraud, accident, mistake,
duress, loss, theft, or conversion; or
(3) a previous sale or other transfer of the goods or document has been made to a third
person. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—503. Document of title to goods defeated in certain cases
(a) A document of title confers no right in goods against a person that before issuance
of the document had a legal interest or a perfected security interest in the goods
and that did not:
(1) deliver or entrust the goods or any document of title covering 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 7—403 of this title; or
(C) power of disposition under section 2—403, subdivisions 2A—304(2) or 2A—305(2), section
9—320, or subsection 9—321(c) of this title or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of any document.
(b) Title to goods based upon an unaccepted delivery order is subject to the rights of
any person to which a negotiable warehouse receipt or bill of lading covering the
goods has been duly negotiated. That title may be defeated under section 7—504 of this title to the same 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 freight forwarder is subject
to the rights of any person to which a bill issued by the freight forwarder is duly
negotiated. However, delivery by the carrier in accordance with part 4 of this article
pursuant to its own bill of lading discharges the carrier’s obligation to deliver. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—504. Rights acquired in absence of due negotiation; effect of diversion; stoppage of delivery
(a) A transferee of a document of title, whether negotiable or nonnegotiable, to which
the document has been delivered but not duly negotiated, acquires the title and rights
that its transferor 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 rights of the transferee may be defeated:
(1) by those creditors of the transferor which could treat the transfer as void under
section 2—402 or 2A—308 of this title;
(2) by a buyer from the transferor in ordinary course of business if the bailee has delivered
the goods to the buyer or received notification of the buyer’s rights;
(3) by a lessee from the transferor in ordinary course of business if the bailee has delivered
the goods to the lessee or received notification of the lessee’s rights; or
(4) as against the bailee, by good-faith dealings of the bailee with the transferor.
(c) A diversion or other change of shipping instructions by the consignor in a nonnegotiable
bill of lading which causes the bailee not to deliver the goods to the consignee defeats
the consignee’s title to the goods if the goods have been delivered to a buyer in
ordinary course of business or a lessee in ordinary course of business and, in any
event, defeats the consignee’s rights against the bailee.
(d) Delivery of the goods pursuant to a nonnegotiable document of title may be stopped
by a seller under section 2-705 of this title or a lessor under section 2A—526 of this title, subject to the requirements of due notification in those sections. A bailee that
honors the seller’s or lessor’s instructions is entitled to be indemnified by the
seller or lessor against any resulting loss or expense. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—505. Indorser not guarantor for other parties
The indorsement of a tangible document of title issued by a bailee does not make the
indorser liable for any default by the bailee or previous indorsers. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—506. Delivery without indorsement: right to compel indorsement
The transferee of a negotiable tangible document of title has a specifically enforceable
right to have its transferor supply any necessary indorsement, but the transfer becomes
a negotiation only as of the time the indorsement is supplied. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—507. Warranties on negotiation or delivery of document of title
If a person negotiates or delivers a document of title for value, otherwise than as
a mere intermediary under section 7—508 of this title, unless otherwise agreed, the transferor, in addition to any warranty made in selling
or leasing the goods, warrants to its immediate purchaser only that:
(1) the document is genuine;
(2) the transferor does not have knowledge of any fact that would impair the document’s
validity or worth; and
(3) the negotiation or delivery is rightful and fully effective with respect to the title
to the document and the goods it represents. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—508. Warranties of collecting bank as to documents of title
A collecting bank or other intermediary known to be entrusted with documents of title
on behalf of another or with collection of a draft or other claim against delivery
of documents warrants by the delivery of the documents only its own good faith and
authority even if the collecting bank or other intermediary has purchased or made
advances against the claim or draft to be collected. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—509. Adequate compliance with commercial contract
Whether a document of title is adequate to fulfill the obligations of a contract for
sale, a contract for lease, or the conditions of a letter of credit is determined
by Article 2, 2A, or 5 of this title. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—601. Lost, stolen, or destroyed documents of title
(a) If a document of title is lost, stolen, or destroyed, a court may order delivery of
the goods or issuance of a substitute document and the bailee may without liability
to any person comply with the order. If the document was negotiable, a court may not
order delivery of the goods or issuance of a substitute document without the claimant’s
posting security unless it finds that any person that may suffer loss as a result
of nonsurrender of possession or control of the document is adequately protected against
the loss. If the document was nonnegotiable, the court may require security. The court
may also order payment of the bailee’s reasonable costs and attorney’s fees in any
action under this subsection.
(b) A bailee that, without a court order, delivers goods to a person claiming under a
missing negotiable document of title is liable to any person injured thereby. If the
delivery is not in good faith, the bailee is liable for conversion. Delivery in good
faith is not conversion if the claimant posts security with the bailee in an amount
at least double the value of the goods at the time of posting to indemnify any person
injured by the delivery which files a notice of claim within one year after the delivery. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—602. Judicial process against goods covered by negotiable document of title
Unless a document of title was originally issued upon delivery of the goods by a person
that did not have power to dispose of them, a lien does not attach by virtue of any
judicial process to goods in the possession of a bailee for which a negotiable document
of title is outstanding unless possession or control of the document is first surrendered
to the bailee or the document’s negotiation is enjoined. The bailee may not be compelled
to deliver the goods pursuant to process until possession or control of the document
is surrendered to the bailee or to the court. A purchaser of the document for value
without notice of the process or injunction takes free of the lien imposed by judicial
process. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)
§ 7—603. Conflicting claims; interpleader
If more than one person claims title to or possession of the goods, the bailee is
excused from delivery until the bailee has a reasonable time to ascertain the validity
of the adverse claims or to commence an action for interpleader. The bailee may assert
an interpleader either in defending an action for nondelivery of the goods or by original
action. (Added 2015, No. 51, § B.3, eff. June 3, 2015.)