ROBERT L. EHRLICH, JR., Governor                              Ch. 95

(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.

Subtitle 5. Warehouse Receipts and Bills of Lading: Negotiation and Transfer.
7-501.

(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.

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