# Title 41 — Uniform Commercial Code

## Chapter 41-07 — Documents of Title

### § 41-07-01. (7-101) Short title.

This chapter may be cited as Uniform Commercial Code - Documents of Title.
### § 41-07-02. (7-102) Definitions and index of definitions.

1. In this chapter, unless the context otherwise requires:
a. "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.
b. "Carrier" means a person that issues a bill of lading.
c. "Consignee" means a person named in a bill of lading to which or to whose order
the bill promises delivery.
d. "Consignor" means a person named in a bill of lading as the person from which
the goods have been received for shipment.
e. "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.
f. "Good faith" means honesty in fact and the observance of reasonable commercial
standards of fair dealing.
g. "Goods" means all things that are treated as movable for the purposes of a
contract for storage or transportation.
h. "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.
i. "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
non-negotiable document of title.
j. "Shipper" means a person that enters into a contract of transportation with a
carrier.
k. "Warehouse" means a person engaged in the business of storing goods for hire.
2. Definitions in other sections applying to this chapter and the sections in which they
appear are:
a. "Contract for sale". Section 41-02-06.
b. "Lessee in ordinary course". Section 41-02.1-03.
c. "Receipt" of goods. Section 41-02-03.
3. In addition, chapter 41-01 contains general definitions and principles of construction
and interpretation applicable throughout this chapter.
### § 41-07-03. (7-103) Relation of chapter to treaty or statute.

1. 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 is applicable.
2. 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 chapter.
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.
3. This chapter modifies, limits, and supersedes the federal Electronic Signatures in
Global and National Commerce Act [Pub. L. 106-229; 114 Stat. 464; 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)].
4. To the extent there is a conflict between chapter 9-16 and this chapter, this chapter
governs.
### § 41-07-04. (7-104) Negotiable and non-negotiable document of title.

1. Except as otherwise provided in subsection 3, 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.
2. A document of title other than one described in subsection 1 is non-negotiable. 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.
3. A document of title is non-negotiable if, at the time it is issued, the document has a
conspicuous legend, however expressed, that it is non-negotiable.
### § 41-07-05. (7-105) Reissuance in alternative medium.

1. 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:
a. The person entitled under the electronic document surrenders control of the
document to the issuer; and
b. The tangible document when issued contains a statement that it is issued in
substitution for the electronic document.
2. Upon issuance of a tangible document of title in substitution for an electronic
document of title in accordance with subsection 1:
a. The electronic document ceases to have any effect or validity; and
b. 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.
3. 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:
a. The person entitled under the tangible document surrenders possession of the
document to the issuer; and
b. The electronic document when issued contains a statement that it is issued in
substitution for the tangible document.
4. Upon issuance of an electronic document of title in substitution for a tangible
document of title in accordance with subsection 3:
a. The tangible document ceases to have any effect or validity; and
b. 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.
### § 41-07-06. (7-106) Control of electronic document of title.

1. 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.
2. A system satisfies subsection 1, and a person has control of an electronic document of
title, if the document is created, stored, and transferred in a manner that:
a. A single authoritative copy of the document exists which is unique, identifiable,
and, except as otherwise provided in subdivisions d, e, and f, unalterable;
b. The authoritative copy identifies the person asserting control as:

(1) The person to which the document was issued; or
(2) If the authoritative copy indicates that the document has been transferred,
the person to which the document was most recently transferred;
c. The authoritative copy is communicated to and maintained by the person
asserting control or its designated custodian;
d. Copies or amendments that add or change an identified transferee of the
authoritative copy can be made only with the consent of the person asserting
control;
e. 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
f. Any amendment of the authoritative copy is readily identifiable as authorized or
unauthorized.
3. A system satisfies subsection 1, and a person has control of an electronic document of
title, if an authoritative electronic copy of the document, a record attached to or
logically associated with the electronic copy, or a system in which the electronic copy
is recorded:
a. Enables the person readily to identify each electronic copy as either an
authoritative copy or a nonauthoritative copy;
b. Enables the person readily to identify itself in any way, including by name,
identifying number, cryptographic key, office, or account number, as the person to
which each authoritative electronic copy was issued or transferred; and
c. Gives the person exclusive power, subject to subsection 4, to:
(1) Prevent others from adding or changing the person to which each
authoritative electronic copy has been issued or transferred; and
(2) Transfer control of each authoritative electronic copy.
4. Subject to subsection 5, a power is exclusive under subdivision c of subsection 3,
even if:
a. The authoritative electronic copy, a record attached to or logically associated with
the authoritative electronic copy, or a system in which the authoritative electronic
copy is recorded limits the use of the document of title or has a protocol that is
programmed to cause a change, including a transfer or loss of control; or
b. The power is shared with another person.
5. A power of a person is not shared with another person under subdivision b of
subsection 4 and the person's power is not exclusive if:
a. The person can exercise the power only if the power also is exercised by the
other person; and
b. The other person:
(1) Can exercise the power without exercise of the power by the person; or
(2) Is the transferor to the person of an interest in the document of title.
6. If a person has the powers specified in subdivision c of subsection 3, the powers are
presumed to be exclusive.
7. A person has control of an electronic document of title if another person, other than the
transferor to the person of an interest in the document:
a. Has control of the document and acknowledges that it has control on behalf of the
person; or
b. Obtains control of the document after having acknowledged that it will obtain
control of the document on behalf of the person.
8. A person that has control under this section is not required to acknowledge that it has
control on behalf of another person.
9. If a person acknowledges that it has or will obtain control on behalf of another person,
unless the person otherwise agrees or law other than this chapter or chapter 41-09
otherwise provides, the person does not owe any duty to the other person and is not
required to confirm the acknowledgment to any other person.
### § 41-07-07. (7-201) Person that may issue a warehouse receipt - Storage under bond.

1. A warehouse receipt may be issued by any warehouse.

2. 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 deemed to be a
warehouse receipt even if issued by a person that is the owner of the goods and is not
a warehouse.
### § 41-07-08. (7-202) Form of warehouse receipt - Effect of omission.

1. A warehouse receipt need not be in any particular form.
2. Unless a warehouse receipt provides for each of the following, the warehouse is liable
for damages caused to a person injured by its omission:
a. A statement of the location of the warehouse facility where the goods are stored;
b. The date of issue of the receipt;
c. The unique identification code of the receipt;
d. A statement whether the goods received will be delivered to the bearer, to a
named person, or to a named person or its order;
e. 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
non-negotiable receipt;
f. A description of the goods or the packages containing them;
g. The signature of the warehouse or its agent;
h. If the receipt is issued for goods that the warehouse owns, either solely, jointly, or
in common with others, a statement of the fact of that ownership; and
i. 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.
3. A warehouse may insert in its receipt any terms that are not contrary to this title and do
not impair its obligation of delivery under section 41-07-28 or its duty of care under
section 41-07-10. Any contrary provision is ineffective.
### § 41-07-09. (7-203) Liability for nonreceipt or misdescription.

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
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.
### § 41-07-10. (7-204) Duty of care - Contractual limitation of warehouse's liability.

1. 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.
2. 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.
3. 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.
4. This section does not modify or repeal chapter 4.1-58.
### § 41-07-11. (7-205) Title under warehouse receipt defeated in certain cases.

A buyer in 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.
### § 41-07-12. (7-206) Termination of storage at warehouse's option.

1. 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 days after the warehouse gives notice. If the goods are not
removed before the date specified in the notice, the warehouse may sell them
pursuant to section 41-07-16.
2. 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 1 and
section 41-07-16, the warehouse may specify in the notice given under subsection 1
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 week after a single
advertisement or posting.
3. 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, it may dispose of them in any lawful manner and does not
incur liability by reason of that disposition.
4. 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.
5. 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.
### § 41-07-13. (7-207) Goods must be kept separate - Fungible goods.

1. Unless the warehouse receipt provides otherwise, 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.
2. 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.
### § 41-07-14. (7-208) Altered warehouse receipts.

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.

### § 41-07-15. (7-209) Lien of warehouse.

1. 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 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 those 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.
2. 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 1,
such as for money advanced and interest. The security interest is governed by chapter
41-09.
3. A warehouse's lien for charges and expenses under subsection 1 or a security interest
under subsection 2 is also effective against any person that so 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:
a. Deliver or entrust the goods or any document of title covering the goods to the
bailor or the bailor's nominee with:
(1) Actual or apparent authority to ship, store, or sell;
(2) Power to obtain delivery under section 41-07-28; or
(3) Power of disposition under section 41-02-48, subsection 2 of section
41-02.1-34, subsection 2 of section 41-02.1-35, section 41-09-40,
subsection 3 of section 41-09-41, or other statute or rule of law; or
b. Acquiesce in the procurement by the bailor or its nominee of any document.
4. A warehouse's lien on household goods for charges and expenses in relation to the
goods under subsection 1 is also effective against all persons if the depositor was the
legal possessor of the goods at the time of deposit. In this subsection, "household
goods" means furniture, furnishings, or personal effects used by the depositor in a
dwelling.
5. A warehouse loses its lien on any goods that it voluntarily delivers or unjustifiably
refuses to deliver.
### § 41-07-16. (7-210) Enforcement of warehouse's lien.

1. Except as otherwise provided in subsection 2, 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 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.
2. A warehouse may enforce its lien on goods, other than goods stored by a merchant in
the course of its business, only if the following requirements are satisfied:
a. All persons known to claim an interest in the goods must be notified.
b. 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 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.
c. The sale must conform to the terms of the notification.
d. The sale must be held at the nearest suitable place to where the goods are held
or stored.
e. After the expiration of the time given in the notification, an advertisement of the
sale must be published once a week for two 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 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 days before the sale in not fewer than six conspicuous places
in the neighborhood of the proposed sale.
3. 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.
4. A warehouse may buy at any public sale held pursuant to this section.
5. 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.
6. 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.
7. The rights provided by this section are in addition to all other rights allowed by law to a
creditor against a debtor.
8. 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 1 or 2.
9. 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.
### § 41-07-17. (7-301) Liability for nonreceipt or misdescription - Said to contain -

Shipper's weight, load, and count - Improper handling.
1. A consignee of a non-negotiable bill of lading which 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.
2. If goods are loaded by the issuer of a bill of lading:
a. The issuer shall count the packages of goods if shipped in packages and
ascertain the kind and quantity if shipped in bulk; and

b. 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.
3. If bulk goods are loaded by a shipper that makes available to the issuer of a bill of
lading adequate facilities for weighing those 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.
4. 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, may indicate that the goods were loaded by the
shipper, and, if that 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.
5. 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.
### § 41-07-18. (7-302) Through bills of lading and similar documents of title.

1. 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.
2. 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.
3. The issuer of a through bill of lading or other document of title described in
subsection 1 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:
a. 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
b. 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.
### § 41-07-19. (7-303) Diversion - Reconsignment - Change of instructions.

1. 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:
a. The holder of a negotiable bill;
b. The consignor on a non-negotiable bill, even if the consignee has given contrary
instructions;

c. The consignee on a non-negotiable 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
d. The consignee on a non-negotiable bill, if the consignee is entitled as against the
consignor to dispose of the goods.
2. Unless instructions described in subsection 1 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.
### § 41-07-20. (7-304) Tangible bills of lading in a set.

1. 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.
2. 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 bill.
3. 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.
4. 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.
5. The bailee shall deliver in accordance with part 4 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.
### § 41-07-21. (7-305) Destination bills.

1. Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at
the request of the consignor, may procure the bill to be issued at destination or at any
other place designated in the request.
2. 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 41-07-05, may procure
a substitute bill to be issued at any place designated in the request.
### § 41-07-22. (7-306) Altered bills of lading.

An unauthorized alteration or filling in of a blank in a bill of lading leaves the bill enforceable
according to its original tenor.
### § 41-07-23. (7-307) Lien of carrier.

1. A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof
in its possession 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.
2. A lien for charges and expenses under subsection 1 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 1 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.

3. A carrier loses its lien on any goods that it voluntarily delivers or unjustifiably refuses to
deliver.
### § 41-07-24. (7-308) Enforcement of carrier's lien.

1. 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.
2. 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 of lading and this chapter.
3. A carrier may buy at any public sale pursuant to this section.
4. 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.
5. 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.
6. The rights provided by this section are in addition to all other rights allowed by law to a
creditor against a debtor.
7. A carrier's lien may be enforced pursuant to either subsection 1 or the procedure set
forth under subsection 2 of section 41-07-16.
8. 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.
### § 41-07-25. (7-309) Duty of care - Contractual limitation of carrier's liability.

1. A carrier that issues a bill of lading, whether negotiable or non-negotiable, 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
statute, regulation, or rule of law that imposes liability upon a common carrier for
damages not caused by its negligence.
2. 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.
3. 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.
### § 41-07-26. (7-401) Irregularities in issue of receipt or bill or conduct of issuer.

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.
### § 41-07-27. (7-402) Duplicate document of title - Overissue.

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 pursuant to section 41-07-05. The issuer is liable for damages caused by its overissue or
failure to identify a duplicate document by a conspicuous notation.
### § 41-07-28. (7-403) Obligation of bailee to deliver - Excuse.

1. A bailee shall deliver the goods to a person entitled under a document of title if the
person complies with subsections 2 and 3 unless and to the extent that the bailee
establishes any of the following:
a. Delivery of the goods to a person whose receipt was rightful as against the
claimant;
b. Damage to or delay, loss, or destruction of the goods for which the bailee is not
liable;
c. Previous sale or other disposition of the goods in lawful enforcement of a lien or
on a warehouse's lawful termination of storage;
d. The exercise by a seller of its right to stop delivery pursuant to section 41-02-84
or by a lessor of its right to stop delivery pursuant to section 41-02.1-74;
e. A diversion, reconsignment, or other disposition pursuant to section 41-07-19;
f. Release, satisfaction, or any other personal defense against the claimant; or
g. Any other lawful excuse.
2. 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.
3. Unless a person claiming the goods is a person against which the document of title
does not confer a right under subsection 1 of section 41-07-32:
a. The person claiming under a document shall surrender possession or control of
any outstanding negotiable document covering the goods for cancellation or
indication of partial deliveries; and
b. 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.
### § 41-07-29. (7-404) No liability for good-faith delivery pursuant to document of title.

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.
### § 41-07-30. (7-501) Form of negotiation and requirements of due negotiation.

1. The following rules apply to a negotiable tangible document of title:

a. 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.
b. If the document's original terms run to bearer, it is negotiated by delivery alone.
c. 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.
d. Negotiation of the document after it has been indorsed to a named person
requires indorsement by the named person and delivery.
e. 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
monetary obligation.
2. The following rules apply to a negotiable electronic document of title:
a. 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.
b. 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.
c. 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.
3. Indorsement of a non-negotiable document of title neither makes it negotiable nor
adds to the transferee's rights.
4. 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.
### § 41-07-31. (7-502) Rights acquired by due negotiation.

1. Subject to sections 41-07-11 and 41-07-32, a holder to which a negotiable document
of title has been duly negotiated acquires thereby:
a. Title to the document;
b. Title to the goods;
c. All rights accruing under the law of agency or estoppel, including rights to goods
delivered to the bailee after the document was issued; and
d. 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.
2. Subject to section 41-07-32, 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:
a. The due negotiation or any prior due negotiation constituted a breach of duty;
b. 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

c. A previous sale or other transfer of the goods or document has been made to a
third person.
### § 41-07-32. (7-503) Document of title to goods defeated in certain cases.

1. 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:
a. Deliver or entrust the goods or any document of title covering the goods to the
bailor or the bailor's nominee with:
(1) Actual or apparent authority to ship, store, or sell;
(2) Power to obtain delivery under section 41-07-28; or
(3) Power of disposition under section 41-02-48, subsection 2 of section
41-02.1-34, subsection 2 of section 41-02.1-35, section 41-09-40,
subsection 3 of section 41-09-41, or other statute or rule of law; or
b. Acquiesce in the procurement by the bailor or its nominee of any document.
2. 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 41-07-34 to the
same extent as the rights of the issuer or a transferee from the issuer.
3. 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 part 4 pursuant to its own bill of
lading discharges the carrier's obligation to deliver.
### § 41-07-33. (7-504) Rights acquired in absence of due negotiation - Effect of diversion -

Stoppage of delivery.
1. A transferee of a document of title, whether negotiable or non-negotiable, to which the
document has been delivered but not duly negotiated, acquires the title and rights that
its transferor had or had actual authority to convey.
2. In the case of a transfer of a non-negotiable document of title, until but not after the
bailee receives notice of the transfer, the rights of the transferee may be defeated:
a. By those creditors of the transferor which could treat the transfer as void under
section 41-02-47 or 41-02.1-38;
b. 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;
c. 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
d. As against the bailee, by good-faith dealings of the bailee with the transferor.
3. A diversion or other change of shipping instructions by the consignor in a
non-negotiable 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.
4. Delivery of the goods pursuant to a non-negotiable document of title may be stopped
by a seller under section 41-02-84 or a lessor under section 41-02.1-74, subject to the
requirements of due notification in those sections. A bailee that honors the seller's or
lessor's instructions is entitled to be indemnified by the seller or lessor against any
resulting loss or expense.
### § 41-07-34. (7-505) Indorser not guarantor for other parties.

The indorsement of a tangible document of title issued by a bailee does not make the
indorser liable for any default by the bailee or previous indorsers.

### § 41-07-35. (7-506) Delivery without indorsement - Right to compel indorsement.

The transferee of a negotiable tangible document of title has a specifically enforceable right
to have its transferor supply any necessary indorsement, but the transfer becomes a negotiation
only as of the time the indorsement is supplied.
### § 41-07-36. (7-507) Warranties on negotiation or delivery of document of title.

If a person negotiates or delivers a document of title for value, otherwise than as a mere
intermediary under section 41-07-37, 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 does not have 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.
### § 41-07-37. (7-508) Warranties of collecting bank as to documents of title.

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 the 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.
### § 41-07-38. (7-509) Adequate compliance with commercial contract.

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 chapter 41-02, 41-02.1,
or 41-05.
### § 41-07-39. (7-601) Lost, stolen, or destroyed documents of title.

1. 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 non-negotiable, the court may require security. The court
may also order payment of the bailee's reasonable costs and attorney's fees in any
action under this subsection.
2. 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 which files a notice of claim within one year after the delivery.
### § 41-07-40. (7-602) Judicial process against goods covered by negotiable document of

title.
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
to 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.

### § 41-07-41. (7-603) Conflicting claims - Interpleader.

If more than one person claims title to or possession of the goods, the bailee is excused
from delivery until the bailee has a reasonable time to ascertain the validity of the adverse
claims or to commence an action for interpleader. The bailee may assert an interpleader either
in defending an action for nondelivery of the goods or by original action.
