The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 9A V.S.A. § 7-504)
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§ 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.)