KRS 355.7-507: 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 KRS 355.7-508, unless otherwise agreed, the transferor warrants to its

immediate purchaser only in addition to any warranty made in selling or leasing the goods

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.