Ch 8: Documents of Title

Question 1

Which Article # of the UCC governs documents of title?

Answer 1

Article 7 of the UCC

Question 2

Which two types of documents is the UCC Article 7 concerned with?

Answer 2

• warehouse receipts
  
  • represent goods stored in a warehouse
• bills of lading
  
  • represent goods that ar ebeing transported by a carrier

Question 3

What is the duty of the common carrier?

Question 4

What is a holder of a duly negotiated document of title?

Answer 4

A person who:

• gives present value
• takes in good faith without notice of defenses or adverse claims
• takes the document in the regular course of business or financing
• must obtain it in the regular course of business or financing

Such a person is like a holder in due course of commercial paper - subject to few defenses.

Question 5

How are documents of title negotiated?

Answer 5

Like commercial paper, the procedure for negotiating a document of title depends on whether the document is a bearer or order document:

• a bearer document is negotiated by delivery alone
• an order document requires delivery plus a valid signature

Question 6

What are the three transfer warranties made by a transferor of a document of title?

Answer 6

• the document is genuine
• the transferor has no knowledge of any fact that would impair the document’s validity or value
• the negotiation or transfer is rightful and effective