CHAPTER 7. DOCUMENTS OF TITLE
IC 26-1-7
Chapter 7. Documents of Title
IC 26-1-7-101
Short title
Sec. 101. This chapter may be cited as Uniform Commercial Code
. Documents of Title.
(Formerly: Acts 1963, c.317, s.7-101.) As amended by P.L.152-1986,
SEC.244; P.L.143-2007, SEC.24.
IC 26-1-7-102
Definitions and index of definitions
Sec. 102. (a) In this chapter unless the context otherwise requires:
(1) "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.
(2) "Carrier" means a person that issues a bill of lading.
(3) "Consignee" means a person named in a bill of lading to
which or to whose order the bill promises delivery.
(4) "Consignor" means a person named in a bill of lading as the
person from which the goods have been received for shipment.
(5) "Delivery order" means a record that contains an order to
deliver goods directed to a warehouse, carrier, or other person
that in the ordinary course of business issues warehouse
receipts or bills of lading.
(6) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(7) "Goods" means all things that are treated as movable for the
purposes of a contract for storage or transportation.
(8) "Issuer" means a bailee that issues a document of title or, in
the case of an unaccepted delivery order, the person that orders
the possessor of goods to deliver. The term includes a person
for which an agent or employee purports to act in issuing a
document if the agent or employee has real or apparent
authority to issue documents, even if the issuer did not receive
any goods, the goods were misdescribed, or in any other respect
the agent or employee violated the issuer's instructions.
(9) "Person entitled under the document" means the holder, in
the case of a negotiable document of title, or the person to
which delivery of the goods is to be made by the terms of, or
pursuant to instructions in a record under, a nonnegotiable
document of title.
(10) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.
(11) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(12) "Sign" means, with present intent to authenticate or adopt
a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic sound, symbol, or process.
(13) "Warehouse" means a person engaged in the business of
storing goods for hire.
(b) Other definitions applying to this chapter and the sections in
which they appear are:
"Duly negotiate". IC 26-1-7-501.
"Contract for sale". IC 26-1-2-106.
"Lessee in the ordinary course of business". IC 26-1-2.1-103(o).
"Receipt" of goods. IC 26-1-2-103.
(c) In addition, IC 26-1-1 contains general definitions and
principles of construction and interpretation applicable throughout
this chapter.
(Formerly: Acts 1963, c.317, s.7-102.) As amended by P.L.152-1986,
SEC.245; P.L.143-2007, SEC.25.
IC 26-1-7-103
Relation of chapter to other laws
Sec. 103. (a) This chapter is subject to any treaty or statute of the
United States or regulatory statute of this state to the extent the
treaty, statute, or regulatory statute applies.
(b) This chapter does not modify or repeal any law prescribing the
form or content of a document of title or the services or facilities to
be afforded by a bailee, or otherwise regulating a bailee's business in
respects not specifically treated in this article. However, violation of
such a law does not affect the status of a document of title that
otherwise is within the definition of a document of title.
(c) This chapter modifies, limits, and supersedes the federal
Electronic Signatures in Global and National Commerce Act (15
U.S.C. 7001 et seq.) but does not modify, limit, or supersede Section
101(c) of that act (15 U.S.C. 7001(c)) or authorize electronic
delivery of any of the notices described in section 103(b) of that act
(15 U.S.C. 7003(b)).
(d) To the extent there is a conflict between IC 26-2-8 and this
chapter, this chapter governs.
(Formerly: Acts 1963, c.317, s.7-103.) As amended by P.L.152-1986,
SEC.246; P.L.143-2007, SEC.26.
IC 26-1-7-104
Negotiable and nonnegotiable warehouse receipt, bill of lading, and
other document of title
Sec. 104. (a) Except as otherwise provided in subsection (c), 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)
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.
(Formerly: Acts 1963, c.317, s.7-104.) As amended by P.L.143-2007,
SEC.27.
IC 26-1-7-105
Tangible substitute for electronic document of title
Sec. 105. (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:
(1) the person entitled under the electronic document surrenders
control of the document to the issuer; and
(2) the tangible document when issued contains a statement that
it is issued in substitution for the electronic document.
(b) Upon issuance of a tangible document of title in substitution
for an electronic document of title in accordance with subsection (a):
(1) the electronic document ceases to have any effect or
validity; and
(2) the person that procured issuance of the tangible document
warrants to all subsequent persons entitled under the tangible
document that the warrantor was a person entitled under the
electronic document when the warrantor surrendered control of
the electronic document to the issuer.
(c) Upon request of a person entitled under a tangible document
of title, the issuer of the tangible document may issue an electronic
document of title as a substitute for the tangible document if:
(1) the person entitled under the tangible document surrenders
possession of the document to the issuer; and
(2) the electronic document when issued contains a statement
that it is issued in substitution for the tangible document.
(d) Upon issuance of an electronic document of title in
substitution for a tangible document of title in accordance with
subsection (c):
(1) the tangible document ceases to have any effect or validity;
and
(2) the person that procured issuance of the electronic document
warrants to all subsequent persons entitled under the electronic
document that the warrantor was a person entitled under the
tangible document when the warrantor surrendered possession
of the tangible document to the issuer.
(Formerly: Acts 1963, c.317, s.7-105.) As amended by P.L.152-1986,
SEC.247; P.L.143-2007, SEC.28.
IC 26-1-7-106
Control of electronic document of title
Sec. 106. (a) A person has control of an electronic document of
title if a system employed for evidencing the transfer of interests in
the electronic document reliably establishes that person as the person
to which the electronic document was issued or transferred.
(b) A system satisfies subsection (a), and a person is deemed to
have control of an electronic document of title, if the document is
created, stored, and assigned in such a manner that:
(1) a single authoritative copy of the document exists that is
unique, identifiable, and, except as otherwise provided in
subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting control
as:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document has
been transferred, the person to which the document was most
recently transferred;
(3) the authoritative copy is communicated to and maintained
by the person asserting control or its designated custodian;
(4) copies or amendments that add or change an identified
assignee of the authoritative copy can be made only with the
consent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
(6) any amendment of the authoritative copy is readily
identifiable as authorized or unauthorized.
As added by P.L.143-2007, SEC.29.
IC 26-1-7-201
Who may issue a warehouse receipt; storage under government
bond
Sec. 201. (a) A warehouse receipt may be issued by any
warehouse.
(b) If goods, including distilled spirits and agricultural
commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of
warehouse receipts, a receipt issued for the goods is considered to be
a warehouse receipt even if issued by a person that is the owner of
the goods and is not a warehouse.
(Formerly: Acts 1963, c.317, s.7-201.) As amended by P.L.143-2007,
SEC.30.
IC 26-1-7-202
Form of warehouse receipt; essential terms; optional terms
Sec. 202. (a) A warehouse receipt need not be in any particular
form.
(b) Unless a warehouse receipt provides for each of the following,
the warehouse is liable for damages caused to a person injured by its
omission:
(1) a statement of the location of the warehouse facility where
the goods are stored;
(2) the date of issue of the receipt;
(3) the unique identification code of the receipt;
(4) a statement whether the goods received will be delivered to
the bearer, to a named person, or to a named person or the
person's order;
(5) the rate of storage and handling charges, unless goods are
stored under a field warehousing arrangement, in which case a
statement of that fact is sufficient on a nonnegotiable receipt;
(6) a description of the goods or the packages containing them;
(7) the signature of the warehouse or its agent;
(8) if the receipt is issued for goods that the warehouse owns,
either solely, jointly, or in common with others, the fact of that
ownership; and
(9) a statement of the amount of advances made and of
liabilities incurred for which the warehouse claims a lien or
security interest unless the precise amount of advances made or
liabilities incurred at the time of the issue of the receipt is
unknown to the warehouse or to its agent that issued the receipt,
in which case a statement of the fact that advances have been
made or liabilities incurred and the purpose of the advances or
liabilities is sufficient.
(c) A warehouse may insert in its receipt any terms that are not
contrary to the provisions of IC 26-1 and do not impair its obligation
of delivery under section 403 of this chapter or its duty of care under
section 204 of this chapter. Any contrary provisions are ineffective.
(Formerly: Acts 1963, c.317, s.7-202.) As amended by P.L.152-1986,
SEC.248; P.L.143-2007, SEC.31.
IC 26-1-7-203
Liability for nonreceipt or misdescription
Sec. 203. A party to or purchaser for value in good faith of a
document of title, other than a bill of lading, that relies upon the
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 any part of the goods in fact were
received or conform to the description, such as a case in which
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 words of similar import, if the indication is true; or
(2) the party or purchaser otherwise has notice of the nonreceipt
or misdescription.
(Formerly: Acts 1963, c.317, s.7-203.) As amended by P.L.143-2007,
SEC.32.
IC 26-1-7-204
Duty of care; contractual limitation of warehouse's liability
Sec. 204. (a) A warehouse is liable for damages for loss of or
injury to the goods caused by its failure to exercise care with regard
to the goods that a reasonably careful person would exercise under
similar circumstances. Unless otherwise agreed, the warehouse is not
liable for damages that could not have been avoided by the exercise
of that care.
(b) Damages may be limited by a term in the warehouse receipt or
storage agreement limiting the amount of liability in case of loss or
damage beyond which the warehouse is not liable. Such a limitation
is not effective with respect to the warehouse's liability for
conversion to its own use. On request of the bailor in a record at the
time of signing the storage agreement or within a reasonable time
after receipt of the warehouse receipt, the warehouse's liability may
be increased on part or all of the goods covered by the storage
agreement or the warehouse receipt. In this event, increased rates
may be charged based on an increased valuation of the goods.
(c) Reasonable provisions as to the time and manner of presenting
claims and commencing actions based on the bailment may be
included in the warehouse receipt or storage agreement.
(Formerly: Acts 1963, c.317, s.7-204.) As amended by P.L.143-2007,
SEC.33.
IC 26-1-7-205
Title under warehouse receipt defeated in certain cases
Sec. 205. A buyer in the ordinary course of business of fungible
goods sold and delivered by a warehouse that is also in the business
of buying and selling such goods takes the goods free of any claim
under a warehouse receipt even if the receipt is negotiable and has
been duly negotiated.
(Formerly: Acts 1963, c.317, s.7-205.) As amended by P.L.143-2007,
SEC.34.
IC 26-1-7-206
Termination of storage at warehouse's option
Sec. 206. (a) A warehouse, by giving notice to the person on
whose account the goods are held and any other person known to
claim an interest in the goods, may require payment of any charges
and removal of the goods from the warehouse at the termination of
the period of storage fixed by the document of title, or, if a period is
not fixed, within a stated period not less than thirty (30) days after
the warehouse gives notice. If the goods are not removed before the
date specified in the notice, the warehouse may sell them under
section 210 of this chapter on enforcement of a warehouse's lien.
(b) If a warehouse in good faith believes that goods are about to
deteriorate or decline in value to less than the amount of its lien
within the time provided in subsection (a) and section 210 of this
chapter, the warehouse may specify in the notice given under
subsection (a) any reasonable shorter time for removal of the goods
and, if the goods are not removed, may sell them at public sale held
not less than one (1) week after a single advertisement or posting.
(c) If, as a result of a quality or condition of the goods of which
the warehouse did not have notice at the time of deposit, the goods
are a hazard to other property, the warehouse facilities, or other
persons, the warehouse may sell the goods at public or private sale
without advertisement or posting on reasonable notification to all
persons known to claim an interest in the goods. If the warehouse,
after a reasonable effort, is unable to sell the goods, the warehouse
may dispose of them in any lawful manner and does not incur
liability by reason of the disposition.
(d) A warehouse shall deliver the goods to any person entitled to
them under this chapter upon due demand made at any time before
sale or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any sale
or disposition under this section but shall hold the balance for
delivery on the demand of any person to which the warehouse would
have been bound to deliver the goods.
(Formerly: Acts 1963, c.317, s.7-206.) As amended by P.L.152-1986,
SEC.249; P.L.143-2007, SEC.35.
IC 26-1-7-207
Goods must be kept separate; fungible goods
Sec. 207. (a) Unless the warehouse receipt otherwise provides, a
warehouse shall keep separate the goods covered by each receipt so
as to permit at all times identification and delivery of those goods.
However, different lots of fungible goods may be commingled.
(b) If different lots of fungible goods are commingled, the goods
are owned in common by the persons entitled thereto and the
warehouse is severally liable to each owner for that owner's share. If
because of overissue, a mass of fungible goods is insufficient to meet
all the receipts the warehouse has issued against it, the persons
entitled include all holders to which overissued receipts have been
duly negotiated.
(Formerly: Acts 1963, c.317, s.7-207.) As amended by P.L.143-2007,
SEC.36.
IC 26-1-7-208
Altered warehouse receipts
Sec. 208. If a blank in a negotiable tangible warehouse receipt has
been filled in without authority, a good faith purchaser for value and
without notice of the lack of authority may treat the insertion as
authorized. Any other unauthorized alteration leaves any tangible or
electronic warehouse receipt enforceable against the issuer according
to its original tenor.
(Formerly: Acts 1963, c.317, s.7-208.) As amended by P.L.143-2007,
SEC.37.
IC 26-1-7-209
Warehouse lien
Sec. 209. (a) A warehouse has a lien against the bailor on the
goods covered by a warehouse receipt or storage agreement or on the
proceeds thereof in its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods, and
for expenses necessary for preservation of the goods or reasonably
incurred in their sale pursuant to law. If the person on whose account
the goods are held is liable for similar charges or expenses in relation
to other goods whenever deposited and it is stated in the warehouse's
receipt or storage agreement that a lien is claimed for charges and
expenses in relation to other goods, the warehouse also has a lien
against the goods covered by the warehouse receipt or storage
agreement or on the proceeds thereof in its possession for the charges
and expenses, whether or not the other goods have been delivered by
the warehouse. However, as against a person to which a negotiable
warehouse receipt is duly negotiated, a warehouse's lien is limited to
charges in an amount or at a rate specified in the warehouse receipt
or, if no charges are so specified, to a reasonable charge for storage
of the specific goods covered by the receipt subsequent to the date of
the receipt.
(b) A warehouse may also reserve a security interest against the
bailor for the maximum amount specified on the receipt for charges
other than those specified in subsection (a), such as for money
advanced and interest. The security interest is governed by
IC 26-1-9.1 on secured transactions.
(c) A warehouse's lien for charges and expenses under subsection
(a) or a security interest under subsection (b) is also effective against
any person that entrusted the bailor with possession of the goods that
a pledge of them by the bailor to a good faith purchaser for value
would have been valid. However, the lien or security interest is not
effective against a person that before issuance of a document of title
had a legal interest or a perfected security interest in the goods and
that did not:
(1) deliver or entrust the goods or any document of title
covering the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under section 403 of this
chapter; or
(C) power of disposition under IC 26-1-2-403,
IC 26-1-2.1-304(2), IC 26-1-2.1-305(2), IC 26-1-9.1-320, or
IC 26-1-9.1-321 or any other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of
any document.
(d) For purposes of this subsection, "household goods" means
furniture, furnishings, or personal effects used by the depositor in a
dwelling. A warehouse's lien on household goods for charges and
expenses in relation to the goods under subsection (a) is also
effective against all persons if the depositor was the legal possessor
of the goods at the time of deposit.
(e) A warehouse loses its lien on any goods that the warehouse
voluntarily delivers or unjustifiably refuses to deliver.
(Formerly: Acts 1963, c.317, s.7-209.) As amended by P.L.152-1986,
SEC.250; P.L.57-2000, SEC.36; P.L.143-2007, SEC.38.
IC 26-1-7-210
Enforcement of warehouse's lien
Sec. 210. (a) Except as otherwise provided in subsection (b), a
warehouse's lien may be enforced by public or private sale of the
goods, in bulk or in packages, at any time or place and on any terms
that are commercially reasonable, after notifying all persons known
to claim an interest in the goods. The notification must include a
statement of the amount due, the nature of the proposed sale, and the
time and place of any public sale. The fact that a better price could
have been obtained by a sale at a different time or in a method
different from that selected by the warehouse is not of itself
sufficient to establish that the sale was not made in a commercially
reasonable manner. The warehouse sells in a commercially
reasonable manner if the warehouse sells the goods in the usual
manner in any recognized market therefor, sells at the price current
in that market at the time of the warehouse's sale, or otherwise sells
in conformity with commercially reasonable practices among dealers
in the type of goods sold. A sale of more goods than apparently
necessary to be offered to ensure satisfaction of the obligation is not
commercially reasonable except in cases covered by the preceding
sentence.
(b) A warehouse may enforce its lien on goods other than goods
stored by a merchant in the course of its business if the following
requirements are satisfied:
(1) All persons known to claim an interest in the goods must be
notified.
(2) The notification must include an itemized statement of the
claim, a description of the goods subject to the lien, a demand
for payment within a specified time not less than ten (10) days
after receipt of the notification, and a conspicuous statement
that unless the claim is paid within that time the goods will be
advertised for sale and sold by auction at a specified time and
place.
(3) The sale must conform to the terms of the notification.
(4) The sale must be held at the nearest suitable place to where
the goods are held or stored.
(5) After the expiration of the time given in the notification, an
advertisement of the sale must be published once a week for
two (2) weeks consecutively in a newspaper of general
circulation where the sale is to be held. The advertisement must
include a description of the goods, the name of the person on
whose account the goods are being held, and the time and place
of the sale. The sale must take place at least fifteen (15) days
after the first publication. If there is no newspaper of general
circulation where the sale is to be held, the advertisement must
be posted at least ten (10) days before the sale in not fewer than
six (6) conspicuous places in the neighborhood of the proposed
sale.
(c) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred in complying with this section.
In that event, the goods may not be sold but must be retained by the
warehouse subject to the terms of the receipt and this chapter.
(d) A warehouse may buy at any public sale held pursuant to this
section.
(e) A purchaser in good faith of goods sold to enforce a
warehouse's lien takes the goods free of any rights of persons against
which the lien was valid, despite the warehouse's noncompliance
with this section.
(f) A warehouse may satisfy its lien from the proceeds of any sale
pursuant to this section but shall hold the balance, if any, for delivery
on demand to any person to which the warehouse would have been
bound to deliver the goods.
(g) The rights provided by this section are in addition to all other
rights allowed by law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of its
business, the lien may be enforced in accordance with subsection (a)
or (b).
(i) A warehouse is liable for damages caused by failure to comply
with the requirements for sale under this section and, in case of
willful violation, is liable for conversion.
(Formerly: Acts 1963, c.317, s.7-210.) As amended by P.L.152-1986,
SEC.251; P.L.143-2007, SEC.39.
IC 26-1-7-301
Liability for nonreceipt or misdescription; "said to contain";
"shipper's load and count"; improper handling
Sec. 301. (a) A consignee of a nonnegotiable bill of lading that
has given value in good faith, or a holder to which a negotiable bill
has been duly negotiated, relying upon the description of the goods
in the bill or upon the date shown in the bill, may recover from the
issuer damages caused by the misdating of the bill or the nonreceipt
or misdescription of the goods, except to the extent that the bill
indicates that the issuer does not know whether any part or all of the
goods in fact were received or conform to the description, such as in
a case in which the description is in terms of marks or labels or kind,
quantity, or condition or the receipt or description is qualified by
"contents or condition of contents of packages unknown", "said to
contain", "shipper's weight, load, and count" or words of similar
import, if that indication is true.
(b) If goods are loaded by the issuer of a bill of lading:
(1) the issuer shall count the packages of goods if shipped in
packages and ascertain the kind and quantity if shipped in bulk;
and
(2) words such as "shipper's weight, load, and count" or words
of similar import indicating that the description was made by
the shipper are ineffective except as to goods concealed in
packages.
(c) If bulk goods are loaded by a shipper that makes available to
the issuer of a bill of lading adequate facilities for weighing the
goods, the issuer shall ascertain the kind and quantity within a
reasonable time after receiving the shipper's request in a record to do
so. In that case, "shipper's weight" or words of similar import are
ineffective.
(d) The issuer of a bill of lading, by including in the bill the words
"shipper's weight, load, and count" or words of similar import
indicate that the goods were loaded by the shipper, and if the
statement is true, the issuer is not liable for damages caused by the
improper loading. However, omission of such words does not imply
liability for damages caused by improper loading.
(e) A shipper guarantees to an issuer the accuracy at the time of
shipment of the description, marks, labels, number, kind, quantity,
condition, and weight, as furnished by the shipper, and the shipper
shall indemnify the issuer against damage caused by inaccuracies in
those particulars. This right of indemnity does not limit the issuer's
responsibility or liability under the contract of carriage to any person
other than the shipper.
(Formerly: Acts 1963, c.317, s.7-301.) As amended by P.L.143-2007,
SEC.40.
IC 26-1-7-302
Through bills of lading and similar documents
Sec. 302. (a) The issuer of a through bill of lading or other
document of title embodying an undertaking to be performed in part
by a person acting as its agent or by a performing carrier is liable to
any person entitled to recover on the bill or other document for any
breach by the other person or the performing carrier of its obligation
under the bill or other document. However, to the extent that the bill
or other document covers an undertaking to be performed overseas
or in territory not contiguous to the continental United States or an
undertaking including matters other than transportation, this liability
for breach by the other person or the performing carrier may be
varied by agreement of the parties.
(b) If goods covered by a through bill of lading or other document
of title embodying an undertaking to be performed in part by a
person other than the issuer are received by that person, the person
is subject, with respect to its own performance while the goods are
in its possession, to the obligation of the issuer. The person's
obligation is discharged by delivery of the goods to another person
pursuant to the bill or other document and does not include liability
for breach by any other person or by the issuer.
(c) The issuer of a through bill of lading or other document of title
described in subsection (b) is entitled to recover from the performing
carrier or other person in possession of the goods when the breach of
the obligation under the bill or other document occurred:
(1) the amount it may be required to pay to any person entitled
to recover on the bill or other document for the breach, as may
be evidenced by any receipt, judgment, or transcript of
judgment; and
(2) the amount of any expense reasonably incurred by the issuer
in defending any action commenced by any person entitled to
recover on the bill or other document for the breach.
(Formerly: Acts 1963, c.317, s.7-302.) As amended by P.L.143-2007,
SEC.41.
IC 26-1-7-303
Diversion; reconsignment; change of instructions
Sec. 303. (a) Unless the bill of lading otherwise provides, a carrier
may deliver the goods to a person or destination other than that stated
in the bill or may otherwise dispose of the goods, without liability for
misdelivery, on instructions from:
(1) the holder of a negotiable bill;
(2) the consignor on a nonnegotiable bill even if the consignee
has given contrary instructions;
(3) the consignee on a nonnegotiable bill in the absence of
contrary instructions from the consignor, if the goods have
arrived at the billed destination or if the consignee is in
possession of the tangible bill or in control of the electronic bill;
or
(4) the consignee on a nonnegotiable bill if the consignee is
entitled as against the consignor to dispose of the goods.
(b) Unless instructions described in subsection (a) are included in
a negotiable bill of lading, a person to which the bill is duly
negotiated may hold the bailee according to the original terms.
(Formerly: Acts 1963, c.317, s.7-303.) As amended by P.L.143-2007,
SEC.42.
IC 26-1-7-304
Bills of lading in a set
Sec. 304. (a) Except as customary in international transportation,
a tangible bill of lading may not be issued in a set of parts. The issuer
is liable for damages caused by violation of this subsection.
(b) If a tangible bill of lading is lawfully issued in a set of parts,
each of which contains an identification code and is expressed to be
valid only if the goods have not been delivered against any other
part, the whole of the parts constitutes one (1) bill.
(c) If a tangible negotiable bill of lading is lawfully issued in a set
of parts and different parts are negotiated to different persons, the
title of the holder to which the first due negotiation is made prevails
as to both the document of title and the goods even if any later holder
may have received the goods from the carrier in good faith and
discharged the carrier's obligation by surrendering its part.
(d) A person that negotiates or transfers a single part of a tangible
bill of lading issued in a set is liable to holders of that part as if it
were the whole set.
(e) The bailee shall deliver in accordance with sections 401
through 404 of this chapter against the first presented part of a
tangible bill of lading lawfully issued in a set. Delivery in this
manner discharges the bailee's obligation on the whole bill.
(Formerly: Acts 1963, c.317, s.7-304.) As amended by P.L.152-1986,
SEC.252; P.L.143-2007, SEC.43.
IC 26-1-7-305
Destination bills
Sec. 305. (a) Instead of issuing a bill of lading to the consignor at
the place of shipment, a carrier may at the request of the consignor
procure the bill to be issued at a destination or at any other place
designated in the request.
(b) Upon request of any person entitled as against a 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 105 of this chapter, may procure
a substitute bill to be issued at any place designated in the request.
(Formerly: Acts 1963, c.317, s.7-305.) As amended by P.L.143-2007,
SEC.44.
IC 26-1-7-306
Altered bills of lading
Sec. 306. An unauthorized alteration or filling in of a blank in a
bill of lading leaves the bill enforceable according to its original
tenor.
(Formerly: Acts 1963, c.317, s.7-306.)
IC 26-1-7-307
Lien of carrier
Sec. 307. (a) A carrier has a lien on the goods covered by a bill of
lading or on the proceeds from the goods for charges after the date
of the carrier's receipt of the goods for storage or transportation,
including demurrage and terminal charges, and for expenses
necessary for preservation of the goods incident to their
transportation or reasonably incurred in their sale pursuant to law.
However, against a purchaser for value of a negotiable bill of lading,
a carrier's lien is limited to charges stated in the bill or the applicable
tariffs or, if no charges are stated, a reasonable charge.
(b) A lien for charges and expenses under subsection (a) on goods
that the carrier was required by law to receive for transportation is
effective against the consignor or any person entitled to the goods
unless the carrier had notice that the consignor lacked authority to
subject the goods to those charges and expenses. Any other lien
under subsection (a) is effective against the consignor and any person
that permitted the bailor to have control or possession of the goods
unless the carrier had notice that the bailor lacked authority.
(c) A carrier loses its lien on any goods that it voluntarily delivers
or unjustifiably refuses to deliver.
(Formerly: Acts 1963, c.317, s.7-307.) As amended by P.L.143-2007,
SEC.45.
IC 26-1-7-308
Enforcement of carrier's lien
Sec. 308. (a) A carrier's lien on goods may be enforced by public
or private sale of the goods, in bulk or in packages, at any time or
place, and on any terms that are commercially reasonable, after
notifying all persons known to claim an interest in the goods. The
notification must include a statement of the amount due, the nature
of the proposed sale, and the time and place of any public sale. The
fact that a better price could have been obtained by a sale at a
different time or in a method different from that selected by the
carrier is not of itself sufficient to establish that the sale was not
made in a commercially reasonable manner. The carrier sells goods
in a commercially reasonable manner if the carrier sells the goods in
the usual manner in any recognized market therefor, sells at the price
current in that market at the time of the sale, or otherwise sells in
conformity with commercially reasonable practices among dealers in
the type of goods sold. A sale of more goods than apparently
necessary to be offered to ensure satisfaction of the obligation is not
commercially reasonable, except in cases covered by the preceding
sentence.
(b) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred in complying with this section.
In that event, the goods may not be sold but must be retained by the
carrier, subject to the terms of the bill and this chapter.
(c) A carrier may buy at any public sale pursuant to this section.
(d) A purchaser in good faith of goods sold to enforce a carrier's
lien takes the goods free of any rights of persons against which the
lien was valid, despite the carrier's noncompliance with this section.
(e) A carrier may satisfy its lien from the proceeds of any sale
pursuant to this section but shall hold the balance, if any, for delivery
on demand to any person to which the carrier would have been bound
to deliver the goods.
(f) The rights provided by this section are in addition to all other
rights allowed by law to a creditor against a debtor.
(g) A carrier's lien may be enforced pursuant to either subsection
(a) or the procedure set forth in section 210(b) of this chapter.
(h) A carrier is liable for damages caused by failure to comply
with the requirements for sale under this section and, in case of
willful violation, is liable for conversion.
(Formerly: Acts 1963, c.317, s.7-308.) As amended by P.L.152-1986,
SEC.253; P.L.143-2007, SEC.46.
IC 26-1-7-309
Duty of care; contractual limitation of carrier's liability
Sec. 309. (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 law, 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 the bill of lading or in
a transportation agreement that the carrier's liability may not exceed
a value stated in the bill or transportation agreement if the carrier's
rates are dependent upon value and the consignor is afforded an
opportunity to declare a higher value and the consignor is advised of
the opportunity. However, such a limitation is not 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.
(Formerly: Acts 1963, c.317, s.7-309.) As amended by P.L.143-2007,
SEC.47.
IC 26-1-7-401
Irregularities in issue of receipt or bill or conduct of issuer
Sec. 401. 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.
(Formerly: Acts 1963, c.317, s.7-401.) As amended by P.L.152-1986,
SEC.254; P.L.143-2007, SEC.48.
IC 26-1-7-402
Duplicate receipt or bill; overissue
Sec. 402. A duplicate or any other document of title purporting to
cover goods already represented by an outstanding document of the
same issuer does not confer any right in the goods, except as
provided in the case of tangible bills of lading in a set of parts,
overissue of documents for fungible goods, substitutes for lost, stolen
or destroyed documents, or substitute documents issued under
section 105 of this chapter. The issuer is liable for damages caused
by its overissue or failure to identify a duplicate document by a
conspicuous notation.
(Formerly: Acts 1963, c.317, s.7-402.) As amended by P.L.143-2007,
SEC.49.
IC 26-1-7-403
Obligation of warehouse or carrier to deliver; excuse
Sec. 403. (a) A bailee shall deliver the goods to a person entitled
under a document of title if the person complies with subsections (b)
and (c), unless and to the extent that the bailee establishes any of the
following:
(1) Delivery of the goods to a person whose receipt was rightful
as against the claimant.
(2) Damage to or delay, loss, or destruction of the goods for
which the bailee is not liable.
(3) Previous sale or other disposition of the goods in lawful
enforcement of a lien or on a warehouse's lawful termination of
storage.
(4) The exercise by a seller of its right to stop delivery pursuant
to the provisions of IC 26-1-2-705 or by a lessor of its right to
stop delivery under IC 26-1-2.1-526.
(5) A diversion, reconsignment, or other disposition pursuant to
section 303 of this chapter.
(6) Release, satisfaction, or any other personal defense against
the claimant.
(7) Any other lawful excuse.
(b) A person claiming goods covered by a document of title shall
satisfy the bailee's lien if the bailee so requests or if the bailee is
prohibited by law from delivering the goods until the charges are
paid.
(c) Unless a person claiming the goods is a person against which
the document of title does not confer a right under section 503(a) of
this chapter:
(1) the person claiming the goods under a document shall
surrender possession or control of any outstanding negotiable
document covering the goods for cancellation or indication of
partial deliveries; and
(2) the bailee shall cancel the document or conspicuously
indicate in the document the partial delivery or the bailee is
liable to any person to which the document is duly negotiated.
(Formerly: Acts 1963, c.317, s.7-403; Acts 1973, P.L.265, SEC.1.)
As amended by P.L.152-1986, SEC.255; P.L.143-2007, SEC.50.
IC 26-1-7-404
No liability for good faith delivery upon receipt or bill
Sec. 404. A bailee that in good faith has received goods and
delivered or otherwise disposed of the goods according to the terms
of a document of title or pursuant to this chapter is not liable for the
goods even if:
(1) the person from which the bailee received the goods did not
have authority to procure the document or to dispose of the
goods; or
(2) the person to which the bailee delivered the goods did not
have authority to receive the goods.
(Formerly: Acts 1963, c.317, s.7-404.) As amended by P.L.152-1986,
SEC.256; P.L.143-2007, SEC.51.
IC 26-1-7-501
Form of negotiation and requirements of "due negotiation"
Sec. 501. (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
endorsement and delivery. After the named person's
endorsement in blank or to bearer, any person may negotiate the
document by delivery alone.
(2) If the negotiable 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 endorsed to a
named person requires endorsement and delivery.
(5) A negotiable document of title is "duly negotiated" when it
is negotiated in the manner stated in this section to a holder who
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 money obligation.
(b) The following rules apply to a negotiable electronic document
of title:
(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. Endorsement 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) Endorsement 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.
(Formerly: Acts 1963, c.317, s.7-501.) As amended by P.L.143-2007,
SEC.52.
IC 26-1-7-502
Rights acquired by due negotiation
Sec. 502. (a) Subject to sections 205 and 503 of this chapter, a
holder to which a negotiable document of title has been duly
negotiated acquires thereby:
(1) title to the document;
(2) title to the goods;
(3) all rights accruing under the law of agency or estoppel,
including rights to goods delivered to the bailee after the
document was issued; and
(4) the direct obligation of the issuer to hold or deliver the
goods according to the terms of the document free of any
defense or claim by the issuer except those arising under the
terms of the document or under this chapter. In the case of a
delivery order, the bailee's obligation accrues only upon the
bailee's acceptance of the delivery order, and the obligation
acquired by the holder is that the issuer and any endorser will
procure the acceptance of the bailee.
(b) Subject to section 503 of this chapter, title and rights acquired
by due negotiation are not defeated by any stoppage of the goods
represented by the document of title or by surrender of the goods by
the bailee and are not impaired even if:
(1) the due negotiation or any prior due negotiation constituted
a breach of duty;
(2) any person has been deprived of possession of a negotiable
tangible document or control of a negotiable electronic
document by misrepresentation, fraud, accident, mistake,
duress, loss, theft, or conversion; or
(3) a previous sale or other transfer of the goods or document
has been made to a third person.
(Formerly: Acts 1963, c.317, s.7-502.) As amended by P.L.152-1986,
SEC.257; P.L.143-2007, SEC.53.
IC 26-1-7-503
Form of negotiation and requirements of "due negotiation"
Sec. 503. (a) A document of title confers no right in goods against
a person that before issuance of the document had a legal interest or
a perfected security interest in the goods and that did not:
(1) deliver or entrust the goods or any document of title
covering the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under section 403 of this
chapter; or
(C) power of disposition under IC 26-1-2-403,
IC 26-1-9.1-320, or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of
any document.
(b) Title to goods based upon an unaccepted delivery order is
subject to the rights of any person to which a negotiable warehouse
receipt or bill of lading covering the goods has been duly negotiated.
That title may be defeated under section 504 of this chapter to the
same extent as the rights of the issuer or a transferee from the issuer.
(c) Title to goods based upon a bill of lading issued to a freight
forwarder is subject to the rights of any person to which a bill issued
by the freight forwarder is duly negotiated. However, delivery by the
carrier in accordance with sections 401 through 404 of this chapter
pursuant to its own bill of lading discharges the carrier's obligation
to deliver.
(Formerly: Acts 1963, c.317, s.7-503.) As amended by P.L.152-1986,
SEC.258; P.L.57-2000, SEC.37; P.L.143-2007, SEC.54.
IC 26-1-7-504
Rights acquired in the absence of due negotiation; effect of
diversion; seller's stoppage of delivery
Sec. 504. (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 the
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:
(1) by those creditors of the transferor that could treat the
transfer as void under IC 26-1-2-402 or IC 26-1-2.1-308;
(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 IC 26-1-2-705 or a lessor
under IC 26-1-2.1-526 and subject to the requirements of due
notification provided in those sections. A bailee that honors the
seller's or lessor's instructions is entitled to be indemnified by the
seller or the lessor against any resulting loss or expense.
(Formerly: Acts 1963, c.317, s.7-504.) As amended by P.L.152-1986,
SEC.259; P.L.143-2007, SEC.55.
IC 26-1-7-505
Endorser not a guarantor for other parties
Sec. 505. The endorsement of a tangible document of title issued
by a bailee does not make the endorser liable for any default by the
bailee or previous endorsers.
(Formerly: Acts 1963, c.317, s.7-505.) As amended by P.L.143-2007,
SEC.56.
IC 26-1-7-506
Delivery without endorsement; right to compel endorsement
Sec. 506. The transferee of a negotiable tangible document of title
has a specifically enforceable right to have the transferor supply any
necessary endorsement but the transfer becomes a negotiation only
as of the time the endorsement is supplied.
(Formerly: Acts 1963, c.317, s.7-506.) As amended by P.L.143-2007,
SEC.57.
IC 26-1-7-507
Warranties on negotiation or transfer of receipt or bill
Sec. 507. If a person negotiates or delivers a document of title for
value, otherwise than as a mere intermediary under section 508 of
this chapter, unless otherwise agreed, the transferor, in addition to
any warranty made in selling or leasing the goods, warrants to its
immediate purchaser only that:
(1) the document is genuine;
(2) the transferor has no knowledge of any fact that would
impair the document's validity or worth; and
(3) the negotiation or delivery is rightful and fully effective
with respect to the title to the document and the goods it
represents.
(Formerly: Acts 1963, c.317, s.7-507.) As amended by P.L.152-1986,
SEC.260; P.L.143-2007, SEC.58.
IC 26-1-7-508
Warranties of collecting bank as to documents
Sec. 508. A collecting bank or other intermediary known to be
entrusted with documents of title on behalf of another or with
collection of a draft or other claim against delivery of documents
warrants by delivery of the documents only its own good faith and
authority even if the collecting bank or other intermediary has
purchased or made advances against the claim or draft to be
collected.
(Formerly: Acts 1963, c.317, s.7-508.) As amended by P.L.143-2007,
SEC.59.
IC 26-1-7-509
Receipt or bill; when adequate to comply with commercial contract
Sec. 509. Whether a document of title is adequate to fulfill the
obligations of a contract for sale, a contract for lease, or the
conditions of a letter of credit is determined by IC 26-1-2,
IC 26-1-2.1, or IC 26-1-5.1.
(Formerly: Acts 1963, c.317, s.7-509.) As amended by P.L.152-1986,
SEC.261; P.L.183-1996, SEC.5; P.L.143-2007, SEC.60.
IC 26-1-7-601
Lost and missing documents
Sec. 601. (a) If a document of title is lost, stolen, or destroyed, a
court may order delivery of the goods or issuance of a substitute
document and the bailee may without liability to any person comply
with the order. If the document was negotiable, a court may not order
delivery of the goods or issuance of a substitute document without
the claimant's posting security unless it finds that any person that
may suffer loss as a result of nonsurrender of possession or control
of the document is adequately protected against the loss. If the
document was nonnegotiable, the court may require security. The
court may also order payment of the bailee's reasonable costs and
attorney's fees in an action under this subsection.
(b) A bailee that, without a court order, delivers goods to a person
claiming under a missing negotiable document of title is liable to any
person injured thereby. If the delivery is not in good faith, the bailee
is liable for conversion. Delivery in good faith is not conversion if
the claimant posts security with the bailee in an amount at least
double the value of the goods at the time of posting to indemnify any
person injured by the delivery that files a notice of claim within one
(1) year after the delivery.
(Formerly: Acts 1963, c.317, s.7-601.) As amended by P.L.143-2007,
SEC.61.
IC 26-1-7-602
Attachment of goods covered by a negotiable document
Sec. 602. Unless a document of title was originally issued upon
delivery of the goods by a person that did not have power to dispose
of them, a lien does not attach by virtue of any judicial process to
goods in the possession of a bailee for which a negotiable document
of title is outstanding unless possession or control of the document
is first surrendered to the bailee or the document's negotiation is
enjoined. The bailee may not be compelled to deliver the goods
pursuant to process until possession or control of the document is
surrendered to the bailee or the court. A purchaser of the document
for value without notice of the process or injunction takes free of the
lien imposed by judicial process.
(Formerly: Acts 1963, c.317, s.7-602.) As amended by P.L.143-2007,
SEC.62.
IC 26-1-7-603
Conflicting claims; interpleader
Sec. 603. If more than one (1) person claims title to or possession
of the goods, the bailee is excused from deli