(7-502) Rights acquired by due negotiation
N.D. Cent. Code § 41-07-31
in effect41-07-31. (7-502) Rights acquired by due negotiation
1. Subject to sections 41-07-11 and 41-07-32, a holder to which a negotiable document
of title has been duly negotiated acquires thereby:
a. Title to the document;
b. Title to the goods;
c. All rights accruing under the law of agency or estoppel, including rights to goods
delivered to the bailee after the document was issued; and
d. The direct obligation of the issuer to hold or deliver the goods according to the
terms of the document free of any defense or claim by the issuer except those
arising under the terms of the document or under this chapter, 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.
2. Subject to section 41-07-32, 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:
a. The due negotiation or any prior due negotiation constituted a breach of duty;
b. Any person has been deprived of possession of a negotiable tangible document
or control of a negotiable electronic document by misrepresentation, fraud,
accident, mistake, duress, loss, theft, or conversion; or
c. A previous sale or other transfer of the goods or document has been made to a
third person.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c07.pdf#nameddest=41-07-31Fetched: 10/16/2026