§80107. Warranties and liability

(a) General Rule.-Unless a contrary intention appears, a person negotiating or transferring a bill of lading for value warrants that-

(1) the bill is genuine;

(2) the person has the right to transfer the bill and the title to the goods described in the bill;

(3) the person does not know of a fact that would affect the validity or worth of the bill; and

(4) the goods are merchantable or fit for a particular purpose when merchantability or fitness would have been implied if the agreement of the parties had been to transfer the goods without a bill of lading.

(b) Security for Debt.-A person holding a bill of lading as security for a debt and in good faith demanding or receiving payment of the debt from another person does not warrant by the demand or receipt-

(1) the genuineness of the bill; or

(2) the quantity or quality of the goods described in the bill.

(c) Duplicates.-A common carrier issuing a bill of lading, on the face of which is the word "duplicate" or another word indicating that the bill is not an original bill, is liable the same as a person that represents and warrants that the bill is an accurate copy of an original bill properly issued. The carrier is not otherwise liable under the bill.

(d) Indorser Liability.-Indorsement of a bill of lading does not make the indorser liable for failure of the common carrier or a previous indorser to fulfill its obligations.

( Pub. L. 103–272, §1(e), July 5, 1994, 108 Stat. 1349 .)

In subsection (a), before clause (1), the words "by indorsement or delivery" are omitted as surplus. In clause (4), the words "merchantability or fitness" are substituted for "such warranties", and the words "the goods without a bill of lading" are substituted for "without a bill the goods represented thereby", for clarity.

In subsection (b), before clause (1), the words "person holding" are substituted for "mortgagee or pledgee or other holder" because they are inclusive. The words "from another person" are substituted for "whether from a party to a draft drawn for such debt or from any other person" to eliminate unnecessary words. The words "does not warrant by the demand or receipt" are substituted for "shall not be deemed by so doing to represent or warrant" for clarity.

In subsection (c), the words "A common carrier issuing . . . is liable" are substituted for "plainly shall impose upon the carrier issuing the same the liability" for clarity and to eliminate unnecessary words. The words "The carrier is not otherwise liable under the bill" are substituted for "but no other liability" for clarity.

In subsection (d), the word "respective" is omitted as unnecessary.