CO Code § 4-7-104 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 7 - Documents of Title|Part 1 - General|§ 4-7-104. Negotiable and Nonnegotiable Document of Title

  Except as otherwise provided in subsection (c) of this section, a document of title is negotiable if by its terms the goods are to be delivered to the bearer or to the order of a named person.    A document of title other than one described in subsection (a) of this section, is nonnegotiable. A bill of lading that states that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against an order in a record signed by the same or another named person.    A document of title is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.     History. Source: L. 2006: Entire article R&RE, p. 471, § 2, effective September 1. L. 2007: (a) amended, p. 366, § 3, effective August 3.    Editor's note:   This section is similar to former § 4-7-104 as it existed prior to 2006.   OFFICIAL COMMENT   Prior Uniform Statutory Provision: Former Section 7-104.   Changes: Subsection (a) is revised to reflect modern style and trade practice. Subsection (b) is revised for style and medium neutrality. Subsection (c) is new.   Purposes:   1. This Article deals with a class of commercial paper representing commodities in storage or transportation. This “commodity paper” is to be distinguished from what might be called “money paper” dealt with in the Article of this Act on Commercial Paper (Article 3) and “investment paper” dealt with in the Article of this Act on Investment Securities (Article 8). The class of “commodity paper” is designated “document of title” following the terminology of the Uniform Sales Act Section 76. Section 1-201. The distinctions between negotiable and nonnegotiable documents in this section makes the most important subclassification employed in the Article, in that the holder of negotiable documents may acquire more rights than its transferor had (See Section 7-502). The former Section 7-104, which provided that a document of title was negotiable if it runs to a named person or assigns if such designation was recognized in overseas trade, has been deleted as not necessary in light of current commercial practice.   A document of title is negotiable only if it satisfies this section. “Deliverable on proper indorsement and surrender of this receipt” will not render a document negotiable. Bailees often include such provisions as a means of insuring return of nonnegotiable receipts for record purposes. Such language may be regarded as insistence by the bailee upon a particular kind of receipt in connection with delivery of the goods. Subsection (a) makes it clear that a document is not negotiable which provides for delivery to order or bearer only if written instructions to that effect are given by a named person. Either tangible or electronic documents of title may be negotiable if the document meets the requirement of this section.   2. Subsection (c) is derived from Section 3-104(d). Prior to issuance of the document of title, an issuer may stamp or otherwise provide by a notation on the document that it is nonnegotiable even if the document would otherwise comply with the requirement of subsection (a). Once issued as a negotiable document of title, the document cannot be changed from a negotiable document to a nonnegotiable document. A document of title that is nonnegotiable cannot be made negotiable by stamping or providing a notation that the document is negotiable. The only way to make a document of title negotiable is to comply with subsection (a). A negotiable document of title may fail to be duly negotiated if the negotiation does not comply with the requirements for “due negotiation” stated in Section 7-501.   Cross Reference:   Section 7-501 and 7-502.   Definitional Cross References:   “Bearer”. Section 1-201.   “Bill of lading”. Section 1-201.   “Delivery”. Section 1-201.   “Document of title”. Section 1-201.   “Person”. Section 1-201.   “Sign”. Section 7-102.   “Warehouse receipt”. Section 1-201.   ANNOTATION   Annotator's note. Since § 4-7-104 is similar to § 4-7-104 as it existed prior to the 2006 repeal and reenactment of this article, a relevant case construing that provision has been included in the annotations to this section.   Drafts to bailee held nonnegotiable documents of title. While a bean company's drafts to a bailee were negotiable instruments, by subsection (1)(a) they were nonnegotiable documents of title since their terms did not require delivery of the beans to “bearer or to the order of a named person”. Midland Bean Co. v. Farmers State Bank, 37 Colo. App. 452, 552 P.2d 317 .