Terms Used In Michigan Laws 440.7501

  • Bearer: means a person in control of a negotiable electronic document of title or a person in possession of an instrument, a negotiable tangible document of title, or a certificated security payable to bearer or indorsed in blank. See Michigan Laws 440.1201
  • Delivery: means either of the following:
  (i) With respect to an electronic document of title, a voluntary transfer of control. See Michigan Laws 440.1201
  • Document of title: means a record that in the regular course of business or financing is treated as adequately evidencing that the person in possession or control of the record is entitled to receive, control, hold, and dispose of the record and the goods the record covers and that purports to be issued by or addressed to a bailee and to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass. See Michigan Laws 440.1201
  • Electronic document of title: means a document of title evidenced by a record consisting of information stored in an electronic medium. See Michigan Laws 440.1201
  • Good faith: means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Michigan Laws 440.7102
  • Goods: means all things that are treated as movable for the purposes of a contract for storage or transportation. See Michigan Laws 440.7102
  • Holder: means any of the following:
    •   (i) A person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession. See Michigan Laws 440.1201
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity. See Michigan Laws 440.1201
  • Purchaser: means a person that takes by purchase. See Michigan Laws 440.1201
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
    •   (1) All of 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) All of 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 nonnegotiable document neither makes it negotiable nor adds to the transferee’s rights.
      (4) The naming in a negotiable bill 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.

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