§ 4-7-501 — Form of negotiation and requirements of due negotiation

Colorado § 4-7-501

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Documents of Title

Text

(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 indorsement and delivery. After the
named person's indorsement in blank or to bearer, any person may negotiate the
document by delivery alone.

(2) If the 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 indorsed to a named
person requires indorsement by the named person and delivery.

(5) A document is duly negotiated if it is negotiated in the manner stated in
this subsection (a) 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 receiving the document in settlement or payment of a monetary
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.
Indorsement 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 (b) 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) Indorsement 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.

Legislative History

Source: L. 2006: Entire article R&RE, p. 485, � 2, effective September 1. L. 2007: (a)(4) amended, p. 371, � 18, effective August 3.