(a) The following rules apply to a negotiable tangible document of title:
         (1) If the document’s original terms run to the order
    
of a named person, the document is negotiated by the named person’s indorsement and delivery. After the named person’s indorsement in blank or to bearer, any person may negotiate the document by delivery alone.
        (2) If the document’s original terms run to bearer,
    
it is negotiated by delivery alone.
        (3) If the document’s original terms run to the order
    
of a named person and it is delivered to the named person, the effect is the same as if the document had been negotiated.
        (4) Negotiation of the document after it has been
    
indorsed to a named person requires indorsement by the named person and delivery.
        (5) A document is duly negotiated if it is negotiated
    
in the manner stated in this subsection to a holder that purchases it in good faith, without notice of any defense against or claim to it on the part of any person, and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves receiving the document in settlement or payment of a monetary obligation.
    (b) The following rules apply to a negotiable electronic document of title:
lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Illinois Compiled Statutes 810 ILCS 5/7-501

  • Good faith: means honesty in fact and the
    
observance of reasonable commercial standards of fair dealing. See Illinois Compiled Statutes 810 ILCS 5/7-102
  • Goods: means all things that are treated as
    •     
    movable for the purposes of a contract for storage or transportation. See Illinois Compiled Statutes 810 ILCS 5/7-102
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.

    •          (1) If the document’s original terms run to the order
        
    of a named person or to bearer, the document is negotiated by delivery of the document to another person. Indorsement by the named person is not required to negotiate the document.
            (2) If the document’s original terms run to the order
        
    of a named person and the named person has control of the document, the effect is the same as if the document had been negotiated.
            (3) A document is duly negotiated if it is negotiated
        
    in the manner stated in this subsection to a holder that purchases it in good faith, without notice of any defense against or claim to it on the part of any person, and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves taking delivery of the document in settlement or payment of a monetary obligation.
        (c) Indorsement of a nonnegotiable document of title neither makes it negotiable nor adds to the transferee’s rights.
         (d) The naming in a negotiable bill of lading of a person to be notified of the arrival of the goods does not limit the negotiability of the bill or constitute notice to a purchaser of the bill of any interest of that person in the goods.
      Previous section
    Next section  
     Part 5 Contents

    LawServer is used by

    New York Times, IRS, USDA, UCLA, DOT