(a) A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that its transferor had or had actual authority to convey.
     (b) In the case of a transfer of a nonnegotiable document of title, until but not after the bailee receives notice of the transfer, the rights of the transferee may be defeated:
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 5/7-504

  • Bailee: means a person that by a warehouse
    
receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them. See Illinois Compiled Statutes 810 ILCS 5/7-102
  • Consignee: means a person named in a bill of
    •     
    lading to which or to whose order the bill promises delivery. See Illinois Compiled Statutes 810 ILCS 5/7-102
  • Consignor: means a person named in a bill of
    •     
    lading as the person from which the goods have been received for shipment. 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

             (1) by those creditors of the transferor which could
        
    treat the transfer as void under Section 2-402 or 2A-308;
            (2) by a buyer from the transferor in ordinary course
        
    of business if the bailee has delivered the goods to the buyer or received notification of the buyer’s rights;
            (3) by a lessee from the transferor in ordinary
        
    course of business if the bailee has delivered the goods to the lessee or received notification of the lessee’s rights; or
            (4) as against the bailee, by good-faith dealings of
        
    the bailee with the transferor.
        (c) A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver the goods to the consignee defeats the consignee’s title to the goods if the goods have been delivered to a buyer in ordinary course of business or a lessee in ordinary course of business and, in any event, defeats the consignee’s rights against the bailee.
         (d) Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under Section 2-705 or a lessor under Section 2A-526, subject to the requirements of due notification in those Sections. A bailee that honors the seller’s or lessor’s instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense.
      Previous section
    Next section  
     Part 5 Contents

    LawServer is used by

    New York Times, IRS, USDA, UCLA, DOT