(a) Subject to sections 4-7-205 and 4-7503, 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 goodsdelivered to the bailee after the document was issued; and
The direct obligation of the issuer to hold or deliver the goods according to the termsof 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:
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 orcontrol 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 thirdperson.
Source: L. 2006: Entire article R&RE, p. 486, § 2, effective September 1. L. 2007: (a)(4) amended, p. 372, § 19, effective August 3.
Editor's note: This section is similar to former § 4-7-502 as it existed prior to 2006.