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This entry was published on 2014-12-26
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Document of Title to Goods Defeated in Certain Cases
Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 7, PART 5
Section 7--503. Document of Title to Goods Defeated in Certain Cases.

(a) A document of title confers no right in goods against a person
that before issuance of the document had a legal interest or a perfected
security interest in the goods and that did not:

(1) deliver or entrust the goods or any document of title covering the
goods to the bailor or the bailor's nominee with:

(A) actual or apparent authority to ship, store, or sell;

(B) power to obtain delivery under Section 7--403; or

(C) power of disposition under Section 2--403, 2-A--304(2),
2-A--305(2), 9--320, or 9--321(c) or other statute or rule of law; or

(2) acquiesce in the procurement by the bailor or its nominee of any

(b) Title to goods based upon an unaccepted delivery order is subject
to the rights of any person to which a negotiable warehouse receipt or
bill of lading covering the goods has been duly negotiated. That title
may be defeated under Section 7--504 to the same extent as the rights of
the issuer or a transferee from the issuer.

(c) Title to goods based upon a bill of lading issued to a freight
forwarder is subject to the rights of any person to which a bill issued
by the freight forwarder is duly negotiated. However, delivery by the
carrier in accordance with Part 4 of this article pursuant to its own
bill of lading discharges the carrier's obligation to deliver.