N.Y. Uniform Commercial Code Law § 7-501: Form of Negotiation and Requirements of Due Negotiation

Section 7--501. Form of Negotiation and Requirements of Due Negotiation.

(a) The following rules apply to a negotiable tangible document of

title:

(1) 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.

(2) If the document's original terms run to bearer, it is negotiated

by delivery alone.

(3) 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.

(4) Negotiation of the document after it has been indorsed to a named

person requires indorsement by the named person and delivery.

(5) 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.

(b) The following rules apply to a negotiable electronic document of

title:

(1) 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.

(2) 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.

(3) 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.

(c) Indorsement of a nonnegotiable document of title neither makes it

negotiable nor adds to the transferee's rights.

(d) 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.