with entitlement orders or directions originated by the secured party; and (5) a secured party having control of a letter-of-credit right under Section 369107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party; and (6) a secured party having control of an electronic document shall: (A) give control of the electronic document to the debtor or its designated custodian; (B) if the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic document is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and (C) take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.” SECTION 38. Section 36-9-301(3) of the 1976 Code is amended to read: “(3) Except as otherwise provided in item (4), while tangible negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs: (A) perfection of a security interest in the goods by filing a fixture filing; (B) perfection of a security interest in timber to be cut; and (C) the effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.” SECTION 39. Section 36-9-310(b) of the 1976 Code is amended to read: “(b) The filing of a financing statement is not necessary to perfect a security interest: (1) that is perfected under Section 369308(d), (e), (f), or (g); (2) that is perfected under Section 369309 when it attaches; (3) in property subject to a statute, regulation, or treaty described in Section 369311(a);
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 3104(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 7501. Cross Reference: Sections 7501 and 7502. Definitional Cross References: ‘Bearer’. Section 1201. ‘Bill of lading’. Section 1201. ‘Delivery’. Section 1201. ‘Document of title’. Section 1201. ‘Person’. Section 1201. ‘Sign’. Section 7102 ‘Warehouse receipt’. Section 1201. Section 367105. (a) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if:
description of the goods in the document may recover from the issuer damages caused by the nonreceipt or misdescription of the goods, except to the extent that: (1) the document conspicuously indicates that the issuer does not know whether all or part of the goods in fact were received or conform to the description, as where the description is in terms of marks or labels or kind, quantity, or condition, or the receipt or description is qualified by ‘contents, condition and quality unknown’, ‘said to contain’ or the like, if the indication is true; or (2) the party or purchaser has notice of the nonreceipt or misdescription. OFFICIAL COMMENT Prior Uniform Statutory Provision: Former Section 7203. Changes: Changes to this section are for style only. Purpose: This section is a simplified restatement of existing law as to the method by which a bailee may avoid responsibility for the accuracy of descriptions which are made by or in reliance upon information furnished by the depositor. The issuer is liable on documents issued by an agent, contrary to instructions of its principal, without receiving goods. No disclaimer of the latter liability is permitted. Cross Reference: Section 7301. Definitional Cross References: ‘Conspicuous’. Section 1201. ‘Document of title’. Section 1201. ‘Goods’. Section 7102. ‘Good Faith’. Section 1201. [7102] ‘Issuer’. Section 7102. ‘Notice’. Section 1202. ‘Party’. Section 1201. ‘Purchaser’. Section 1201. ‘Receipt of goods’. Section 2103. ‘Value’. Section 1204.
fact caused the loss. Subsection (d) permits the carrier to bar, by disclosure of shipper’s loading, liability to a good faith purchaser. There is no implication that decisions such as Modern Tool Corp. v. Pennsylvania R. Co., 100 F.Supp. 595 (D.N.J.1951), are disapproved. 3. This section is a restatement of existing law as to the method by which a bailee may avoid responsibility for the accuracy of descriptions which are made by or in reliance upon information furnished by the depositor or shipper. The wording in this section – ‘contents or condition of contents of packages unknown’ or ‘shipper’s weight, load and count’ – to indicate that the shipper loaded the goods or that the carrier does not know the description, condition, or contents of the loaded packages continues to be appropriate as commonly understood in the transportation industry. The reasons for this wording are as important in 2002 as when the prior section initially was approved. The issuer is liable on documents issued by an agent, contrary to instructions of his principal, without receiving goods. No disclaimer of this liability is permitted since it is not a matter either of the care of the goods or their description. 4. The shipper’s erroneous report to the carrier concerning the goods may cause damage to the carrier. Subsection (e) therefore provides appropriate indemnity. 5. The word ‘freight’ in the former Section 7301 has been changed to ‘goods’ to conform to international and domestic land transport usage in which ‘freight’ means the price paid for carriage of the goods and not the goods themselves. Hence, changing the word ‘freight’ to the word ‘goods’ is a clarifying change that fits both international and domestic practice. Cross References: Sections 7203, 7309 and 7501. Definitional Cross References: ‘Bill of lading’. Section 1201. ‘Consignee’. Section 7102. ‘Document of Title’. Section 1201. ‘Duly negotiate’. Section 7501. ‘Good faith’. Section 1201. [7102]. ‘Goods’. Section 7102. ‘Holder’. Section 1201.
2. Electronic bills of lading in domestic or international trade will not be issued in a set given the requirements of control necessary to deliver the bill to another person. An electronic bill of lading will be a single, authoritative copy. Section 7106. Hence, this section differentiates between electronic bills of lading and tangible bills of lading. This section does not prohibit electronic data messages about goods in transit because these electronic data messages are not the issued bill of lading. Electronic data messages contain information for the carrier’s management and handling of the cargo but this information for the carrier’s use is not the issued bill of lading. Cross Reference: Section 7103, 7303 and 7106. Definitional Cross References: ‘Bailee’. Section 7102. ‘Bill of lading’. Section 1201. ‘Delivery’. Section 1201. ‘Document of title’. Section 1201. ‘Duly negotiate’. Section 7501. ‘Good faith’. Section 1201. [7102]. ‘Goods’. Section 7102. ‘Holder’. Section 1201. ‘Issuer’. Section 7102. ‘Person’. Section 1201. ‘Receipt of goods’. Section 2103. Section 367305. (a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at the request of the consignor, may procure the bill to be issued at destination or at any other place designated in the request. (b) Upon request of anyone entitled as against the carrier to control the goods while in transit and on surrender of possession or control of any outstanding bill of lading or other receipt covering the goods, the issuer, subject to Section 367105, may procure a substitute bill to be issued at any place designated in the request. OFFICIAL COMMENT Prior Uniform Statutory Provision: Former Section 7305. Changes: To accommodate electronic bills of lading and for style.
Definitional Cross References: ‘Bill of lading’. Section 1201. ‘Carrier’. Section 7102. ‘Creditor’. Section 1201. ‘Delivery’. Section 1201. ‘Good faith’. Section 1201. [7102] ‘Goods’. Section 7102. ‘Notification’. Section 1202. ‘Notifies’. Section 1202. ‘Person’. Section 1201. ‘Purchaser’. Section 1201. ‘Rights’. Section 1201. ‘Term’. Section 1201. Section 367309. (a) A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall exercise the degree of care in relation to the goods which a reasonably careful person would exercise under similar circumstances. This subsection does not affect any statute, regulation, or rule of law that imposes liability upon a common carrier for damages not caused by its negligence. (b) Damages may be limited by a term in a bill of lading or in a transportation agreement that the carrier’s liability may not exceed a value stated in the bill if the carrier’s rates are dependent upon value and the consignor is afforded an opportunity to declare a higher value and the cosignor is advised of the opportunity. However, such a limitation is effective with respect to the carrier’s liability for conversion to its own use. (c) Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the shipment may be included in a bill of lading or a transportation agreement. OFFICIAL COMMENT Prior Uniform Statutory Provision: Former Section 7309. Changes: References to tariffs eliminated because of deregulation, adding reference to transportation agreements, and for style. Purposes:
4. As used in this section, damages may include damages arising from delay in delivery. Delivery dates and times are often specified in the parties’ contract. See Section 7403. Cross Reference: Sections 1302, 7103, 7204, 7403. Definitional Cross References: ‘Action’. Section 1201. ‘Bill of lading’. Section 1201. ‘Carrier’. Section 7102. ‘Consignor’. Section 7102. ‘Document of Title’. Section 1102. ‘Goods’. Section 7102. ‘Value’. Section 1204. PART 4 Warehouse Receipts and Bill of Lading: General Obligations Section 367401. The obligations imposed by this chapter on an issuer apply to a document of title even if: (1) the document does not comply with the requirements of this chapter or of any other statute, rule, or regulation regarding its issuance, form, or content; (2) the issuer violated laws regulating the conduct of its business; (3) the goods covered by the document were owned by the bailee when the document was issued; or (4) the person issuing the document is not a warehouse but the document purports to be a warehouse receipt. OFFICIAL COMMENT Prior Uniform Statutory Provision: Former Section 7401. Changes: Changes for style only. Purposes: The bailee’s liability on its document despite nonreceipt or misdescription of the goods is affirmed in Sections 7203 and 7301.