Warehouse Receipts And Bills Of Lading: General Obligations - - CA Commercial Law

Section § 7401

This law says that certain responsibilities on a company that issues documents related to stored goods apply even if there are some issues. It applies if the document doesn't meet specific standards, if the company broke rules, if the company actually owns the goods, or if the document wrongly says it's a warehouse receipt.

The obligations imposed by this division on an issuer apply to a document of title even if:

(1) the document does not comply with the requirements of this division 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.

issuer obligations document of title compliance form requirements issuer violations business conduct goods ownership bailee warehouse receipt non-warehouse issuer goods storage document issuance legal compliance

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7402

This law states that if a company issues a duplicate document for goods that have already been represented by another document from the same company, that duplicate doesn't give any rights to those goods. There are some exceptions, like if it's a part of a set for tangible bills of lading or replacing a lost document. The company can be held responsible for any harm caused if they issue too many documents or don't clearly mark duplicates.

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 7105. The issuer is liable for damages caused by its overissue or failure to identify a duplicate document by a conspicuous notation.

duplicate document goods representation outstanding document issuer liability tangible bills of lading overissue damages conspicuous notation replacement documents fungible goods lost documents stolen documents destroyed documents Section 7105

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7403

This section discusses the responsibilities of a bailee (someone temporarily holding goods for another person) to deliver those goods under certain conditions. If a person is entitled to the goods and follows the correct process, the bailee must deliver them unless specific exceptions apply, such as rightful delivery to someone else, damages not caused by the bailee, or a lawful sale of the goods. The person claiming the goods must pay any liens and surrender any documents showing ownership. The bailee must update these documents to show delivery or be liable to the document's rightful possessor.

(a) A bailee shall deliver the goods to a person entitled under a document of title if the person complies with subdivisions (b) and (c), unless and to the extent that the bailee establishes any of the following:

(1) delivery of the goods to a person whose receipt was rightful as against the claimant;

(2) damage to or delay, loss, or destruction of the goods for which the bailee is not liable;

(3) previous sale or other disposition of the goods in lawful enforcement of a lien or on a warehouse’s lawful termination of storage;

(4) the exercise by a seller of its right to stop delivery pursuant to Section 2705 or by a lessor of its right to stop delivery pursuant to Section 10526;

(5) a diversion, reconsignment, or other disposition pursuant to Section 7303;

(6) release, satisfaction, or any other personal defense against the claimant; or

(7) any other lawful excuse.

(b) 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.

(c) Unless a person claiming the goods is a person against which the document of title does not confer a right under subdivision (a) of Section 7503:

(1) 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

(2) 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.

bailee delivery obligations goods entitled document of title liens rightful receipt damage to goods lawful enforcement stop delivery diversion personal defense lawful excuses surrender documents negotiable document partial delivery

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Section § 7404

This law protects a bailee, who temporarily holds someone else's property, from being held liable if they deliver or dispose of those goods correctly as per a title document or the specific rules, even if the original person did not have the right to give the goods to the bailee or the receiving person wasn't allowed to have them.

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 division 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.

bailee goods document of title good faith liability protection unauthorized authority delivered goods disposed goods procure document valid transfer temporary custody liability exemption authority to receive division rules property transfer

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)