Documents of Title

Question 1

Article 7 UCC

Answer 1

Deals w. 2 types of documents of title:

1. Warehouse receipts
2. Bills of lading

Question 2

Warehouse receipts & bills of lading provide convenient ways to

Answer 2

transfer title to goods that are stored or being transported.

Question 3

The person that holds a document of title has the right

Answer 3

to have the goods represented by the document delivered to him or her by the issuer of the document

Question 4

The issuer of a document of title is

Answer 4

The Bailee (could be UPS or a warehouse)

Question 5

The person to who the goods belong is

Answer 5

The Bailor

Question 6

Question is if it’s “Negotiable”

Answer 6

Look for magic words “Deliver to Order” or “Deliver to Bearer”

Question 7

If it has those magic words “Deliver to Order or Bearer”

Answer 7

you are a holder of a duly negotiated document of title (Similar to a holder in due course).

Question 8

To be a holder of a duly negotiated document of title one must:

Answer 8

(Just like an HDC)

1. Give present value for the document of title
2. take the document of title in good faith
3. be without any notice of an adverse claim or defense, and
4. the purchaser must obtain it in the regular course of business or financing.

Question 9

A Bearer document of title is negotiated

Answer 9

By Delivery ALONE

Question 10

An Order document requires both

Answer 10

Delivery
AND
a Valid Signature of the person named on the document.

Question 11

Effects of NEGOTIATION

Answer 11

A holder to whom a document of title has been duly negotiated acquires title to BOTH the Document AND the Goods.

The holder also acquires the right to have the goods delivered to him free of any defenses not on the face of the document.

Question 12

Transfer Warranties made by person transferring a document of title warranties:

Answer 12

1. The document is genuine
2. He has no knowledge of any fact that wd impair the doc’s validity or value; AND
3. the negotiation is rightful and effective.

Question 13

NonNegotiable (No Magic Words “Order or Bearer”

Answer 13

Can only deliver the goods to the person named on the document (the “Consignee”).

Question 14

Essential Terms of a Warehouse Receipt

Answer 14

Who - is to receive the goods
What - a description of the goods
When -the date the receipt was issued
Where - the goods are being stored
How Much - the fees & storage rates must be stated
Signed - by the warehouser or agent must be included

Question 15

A warehouseman has a duty to use

Answer 15

reasonable care with respect to goods stored.

Question 16

A common carrier’s duty of care is

Answer 16

higher standard. Treated as an insurer, however, can limit its common-law liability by inserting in the bill of lading a provision limiting liability to a certain $ amt. and offer insurance for purchase for more.

Question 17

With a bill of lading - the consignee is

Answer 17

The person who is supposed to be receiving the goods

Question 18

With a bill of lading - the consignor is

Answer 18

The person from whom the carrier received the goods