§ 25-7-501. Form of negotiation and requirements of due negotiation. - North Carolina Statutes

PART 5.

WAREHOUSE RECEIPTS AND BILLS OFLADING: NEGOTIATION AND TRANSFER.

§ 25‑7‑501.  Formof negotiation and requirements of due negotiation.

(a)        The following rulesapply to a negotiable tangible document of title:

(1)        If the document'soriginal terms run to the order of a named person, the document is negotiatedby the named person's indorsement and delivery. After the named person'sindorsement in blank or to bearer, any person may negotiate the document bydelivery alone.

(2)        If the document'soriginal terms run to bearer, it is negotiated by delivery alone.

(3)        If the document'soriginal terms run to the order of a named person and it is delivered to thenamed person, the effect is the same as if the document had been negotiated.

(4)        Negotiation of thedocument after it has been indorsed to a named person requires indorsement bythe named person and delivery.

(5)        A document is dulynegotiated if it is negotiated in the manner stated in this subsection to aholder that purchases it in good faith, without notice of any defense againstor claim to it on the part of any person, and for value, unless it isestablished that the negotiation is not in the regular course of business orfinancing or involves receiving the document in settlement or payment of a monetaryobligation.

(b)        The following rulesapply to a negotiable electronic document of title:

(1)        If the document'soriginal terms run to the order of a named person or to bearer, the document isnegotiated by delivery of the document to another person. Indorsement by thenamed person is not required to negotiate the document.

(2)        If the document'soriginal terms run to the order of a named person and the named person hascontrol of the document, the effect is the same as if the document had beennegotiated.

(3)        A document is dulynegotiated if it is negotiated in the manner stated in this subsection to aholder that purchases it in good faith, without notice of any defense againstor claim to it on the part of any person, and for value, unless it is establishedthat the negotiation is not in the regular course of business or financing orinvolves taking delivery of the document in settlement or payment of a monetaryobligation.

(c)        Indorsement of anonnegotiable document of title neither makes it negotiable nor adds to thetransferee's rights.

(d)        The naming in anegotiable bill of lading of a person to be notified of the arrival of thegoods does not limit the negotiability of the bill or constitute notice to apurchaser of the bill of any interest of that person in the goods. (1917, c. 37, ss. 37 to 40,47; 1919, c. 65, ss. 3, 7, 27 to 30, 37; C.S., ss. 285, 289, 309 to 312, 319,4077 to 4080, 4087; 1931, c. 358, ss. 2, 3; 1965, c. 700, s. 1; 2006‑112,s. 25.)