Documents of Title

Question 1

Documents of title

Answer 1

provide a convenient and safe way to transfer title to goods stored and transported. The party holding the document has the right to have the goods represented by the document delivered to him.

Question 2

Documents of title

Answer 2

Warehouse receipts cover goods stored in a warehouse and bills of lading represent goods transported by common carriers

Question 3

Negotiation

Answer 3

Documents of title are negotiable if goods are to be delivered to bearer or to the order of a specified party.

a. Holders of duly negotiated documents of title are similar to HDCs of commercial paper in that they are subject to very few defenses.
b. To be a holder of a duly negotiated document of title one must give value, in good faith, without notice of adverse claims or defenses and obtain it in the regular course of business or financing.

Question 4

Negotiation

Answer 4

Negotiation of bearer documents of title requires delivery alone. Negotiation of order documents require delivery plus a proper signature.

Question 5

Negotiation

Answer 5

The holder of a duly negotiated document of title acquires title to both the document and the goods represented by the document.

Question 6

Negotiation - Transfer Warranties—

Answer 6

One transferring a document of title warrants that the document is genuine, he has no knowledge of facts that would impair validity or value, and negotiation or transfer is rightful and effective.

Question 7

Negotiation

Answer 7

With bearer documents, the issuer is required to deliver goods only to the party possessing the bearer document or one designated by him. With order documents, the goods must be delivered only to the order of that party or to one holding a document properly endorsed by that party. With nonnegotiable documents the goods must be delivered to the person named in the document (the consignee).