A party to or purchaser for value in good faith of a document of title, other than a bill of lading, that relies upon the description of the goods in the document may recover from the issuer damages caused by the nonreceipt or misdescription of the goods, except to the extent that:

1. (1) The document conspicuously indicates that the issuer does not know whether all or part of the goods in fact were received or conform to the description, such as a case in which the description is in terms of marks or labels or kind, quantity, or condition, or the receipt or description is qualified by “contents, condition, and quality unknown”, “said to contain”, or words of similar import, if the indication is true; or
2. (2) The party or purchaser otherwise has notice of the nonreceipt or misdescription.

Uniform Commercial Code Comment

“Value”. Section 1-204.

“Receipt of goods”. Section 2-103.

“Purchaser”. Section 1-201.

“Party”. Section 1-201.

“Notice”. Section 1-202.

“Issuer”. Section 7-102.

“Good Faith”. Section 1-201 [7-102].

“Goods”. Section 7-102.

“Document of title”. Section 1-201.

Definitional Cross References: “Conspicuous”. Section 1-201.

Cross Reference:Section 7-301.

Purpose: This section is a simplified restatement of existing law as to the method by which a bailee may avoid responsibility for the accuracy of descriptions which are made by or in reliance upon information furnished by the depositor. The issuer is liable on documents issued by an agent, contrary to instructions of its principal, without receiving goods. No disclaimer of the latter liability is permitted.

Changes: Changes to this section are for style only.

Prior Uniform Statutory Provision: Former Section 7-203.

“Value”. Section 1-201.

“Receipt of goods”. Section 2-103.

“Purchaser”. Section 1-201.

“Party”. Section 1-201.

“Notice”. Section 1-201.

“Issuer”. Section 7-102.

“Goods”. Section 7-102.

“Document of title”. Section 1-201.

“Document”. Section 7-102.

Definitional Cross References: “Conspicuous”. Section 1-201.

Cross References:Sections 7-301 and 7-203.

Purposes of Changes and New Matter: This section is a simplified restatement of existing law as to the method by which a bailee may avoid responsibility for the accuracy of descriptions which are made by or in reliance upon information furnished by the depositor. The issuer is liable on documents issued by an agent, contrary to instructions of his principal, without receiving goods. No disclaimer of the latter liability is permitted.

Changes: New section confined to problem of non-receipt and misdescription.

Prior Uniform Statutory Provision: Section 20, Uniform Warehouse Receipts Act.

History

Dec. 30, 1963, 77 Stat. 720, Pub. L. 88-243, § 1

Apr. 27, 2013, D.C. Law 19-299, § 9, 60 DCR 2634

Prior Codifications

1973 Ed., § 28:7-203.

1981 Ed., § 28:7-203.