Nebraska Uniform Commercial Code 7-404

UCC 7-404


No liability for good faith delivery pursuant to document of title.

A bailee that in good faith has received goods and delivered or otherwise disposed of the goods according to the terms of a document of title or pursuant to this article is not liable for the goods even if:

(1) the person from which the bailee received the goods did not have authority to procure the document or to dispose of the goods; or

(2) the person to which the bailee delivered the goods did not have authority to receive the goods.



  • Prior Uniform Statutory Provision: Former section 7-404.

  • Changes: Changes reflect the definition of good faith in sections 1-201 and 7-102 and for style.

  • Purposes:

  • This section uses the test of good faith, as defined in sections 1-201 and 7-102, to continue the policy of former section 7-404. Good faith now means "honesty in fact and the observance of reasonable commercial standards of fair dealing". The section states explicitly that the common-law rule of "innocent conversion" by unauthorized "intermeddling" with another's property is inapplicable to the operations of commercial carriers and warehousemen that in good faith perform obligations that they have assumed and that generally they are under a legal compulsion to assume. The section applies to delivery to a fraudulent holder of a valid document as well as to delivery to the holder of an invalid document. Of course, in appropriate circumstances, a bailee may use interpleader or other dispute resolution process. See section 7-603.

  • Cross References:

  • Section 7-603.

  • Definitional Cross References:

  • "Bailee". Section 7-102.

  • "Delivery". Section 1-201.

  • "Document of title". Section 1-201.

  • "Good faith". Sections 1-201 and 7-102.

  • "Goods". Section 7-102.

  • "Person". Section 1-201.

  • "Receipt of goods". Section 2-103.

  • "Term". Section 1-201.