2023 District of Columbia Code › Title 28 - Commercial Instruments and Transactions. [Enacted title] › Subtitle I - Uniform Commercial Code › Article 7 - Documents of Title › Part 1 - General › § 28:7–104. Negotiable and nonnegotiable document of title

§ 28:7–104. Negotiable and nonnegotiable document of title.
(a) 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 bearer or to the order of a named person.
(b) 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.
(c) 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.
(Dec. 30, 1963, 77 Stat. 719, Pub. L. 88-243, § 1; Apr. 27, 2013, D.C. Law 19-299, § 9, 60 DCR 2634.)
Prior Codifications
1981 Ed., § 28:7-104.
1973 Ed., § 28:7-104.
Uniform Commercial Code Comment
Prior Uniform Statutory Provision:
Sections 27 and 76, Uniform Sales Act; Sections 2, 3, 4, 5 and 59, Uniform Warehouse Receipts Act; Sections 2, 3, 4, 5 and 53, Uniform Bills of Lading Act.
Changes:
Consolidated and rewritten.
Purposes of Changes:
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 his transferor had (See Section 7-502).
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 non-negotiable 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. Subsections (1)(a) and (2) make 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.
Cross Reference:
Section 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.
“Overseas”. Section 2-323.
“Person”. Section 1-201.
“Warehouse receipt”. Section 1-201.
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:
Sections 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.