§ 4-7-502 — Rights acquired by due negotiation

Colorado § 4-7-502

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

Text

(a) Subject to sections 4-7-205 and 4-7-503, 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 article, but 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 indorser will procure the acceptance of the bailee.

(b) Subject to section 4-7-503, 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.

Legislative History

Source: L. 2006: Entire article R&RE, p. 486, � 2, effective September 1. L. 2007: (a)(4) amended, p. 372, � 19, effective August 3.