Negotiable and nonnegotiable documents

(1) Except as otherwise provided in subsection 3, a document is negotiable: (a) if by its terms the goods are to be delivered to bearer or to the order of a named person; or (b) where recognized in overseas trade, if it runs to a named person or assigns. (2) A document other than one described in subsection 1 is nonnegotiable. A bill of lading in which it is stated that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against an order in a record signed by the same or another named person. (3) A document is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable. Code 1950, §§ 61-7, 61-8; 1964, c. 219; 2004, c. 200 .