Tennessee § 47-7-502 - Rights acquired by due negotiation.

§ 47-7-502. Rights acquired by due negotiation.

Subject to §§ 47-7-205 and 47-7-503, a holder to which a negotiable document of title has been duly negotiated acquires thereby: Title to the document; Title to the goods; All rights accruing under the law of agency or estoppel, including rights to goods delivered to the bailee after the document was issued; and 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, 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. Subject to § 47-7-503, 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: The due negotiation or any prior due negotiation constituted a breach of duty; 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 A previous sale or other transfer of the goods or document has been made to a third person. Acts 2008, ch. 814, § 1. Compiler's Notes. This revised chapter 7 replaces former chapter 7, effective July 1, 2008. Former chapter 7, §§ 47-7-101 — 47-7-106 , 47-7-201 — 47-7-210 , 47-7-301 — 47-7-309 , 47-7-401 — 47-7-404 , 47-7-501 — 47-7-509 , 47-7-601 — 47-7-603 (Acts 1963, ch. 81, § 1 (7-101 — 7-106(1), 7-201 — 7-210, 7-301 — 7-309, 7-401 — 7-404, 7-501 — 7-509, 7-601 — 7-603); 2000, ch. 846, § 15), concerning the Uniform Commercial Code, documents of title, regarding warehouse receipts, bills of lading and other documents of title, was repealed by Acts 2008, ch. 814, § 1, effective July 1, 2008, which enacted this revised chapter 7. Effective Dates. Acts 2008, ch. 814, § 40. July 1, 2008. Cross-References. Bailee, § 47-7-102 . Control of electronic document of title, § 47-7-106 . Document of title to goods defeated in certain cases, § 47-7-503 . Delivery, § 47-1-201 . Delivery order, § 47-7-102 . Document of title, § 47-1-201 . Form of negotiation and requirements of due negotiation, § 47-7-501 . Fungible, § 47-1-201 . Goods, § 47-7-102 . Holder, § 47-1-201 . Issuer, § 47-7-102 . Obligation of bailee to deliver, excuse, § 47-7-403 . Person, § 47-1-201 . Relation of chapter to treaty or statute, § 47-7-103 . Right, § 47-1-201 . Term, § 47-1-201 . Title under warehouse receipt defeated in certain cases, § 47-7-205 . Warehouse receipt, § 47-1-201 .