Georgia § 11-7-501 - Form of negotiation and requirements of due negotiation.

§ 11-7-501. Form of negotiation and requirements of due negotiation.

The following rules apply to a negotiable tangible document of title: 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; If the document's original terms run to bearer, it is negotiated by delivery alone; 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; Negotiation of the document after it has been indorsed to a named person requires indorsement by the named person and delivery; and 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 receiving the document in settlement or payment of a money obligation. The following rules apply to a negotiable electronic document of title: 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; 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; and 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. Indorsement of a nonnegotiable document of title neither makes it negotiable nor adds to the transferee's rights. 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. (Code 1933, § 109A-7 - 501, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1963, p. 188, § 18; Ga. L. 2010, p. 481, § 1-1/HB 451.) The 2010 amendment, effective May 27, 2010, deleted the quotation marks around "due negotiation" in the catchline; redesignated former subsections (1) through (4) as subsection (a); rewrote present subsection (a); added subsection (b); redesignated former subsections (5) and (6) as present subsections (c) and (d), respectively; in present subsection (c), inserted "of title" in the middle; and, in present subsection (d), inserted "of lading", substituted "or" for "nor", substituted "of the bill" for "thereof", and substituted "that person" for "such person" near the end. See the Editor's notes for applicability. Editor's notes. - Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010. Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.