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HomeCommercial CodeDiv. 7Ch. 4§ 7404 Bailee Good Faith Protection

§ 7404 Bailee Good Faith Protection

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 7404 Bailee Good Faith Protection

Key Takeaways

  • •If someone gives you stuff to hold or move, and you follow the instructions on the paperwork or the rules, you won't get in trouble for it.
  • •Even if the person who gave you the stuff didn't really own it, you're still safe if you did what the paperwork said.
  • •Same if the person you gave the stuff to wasn't supposed to get it—you're still okay if you followed the rules.

Example

You work at a storage place. A guy drops off a TV and gives you a paper saying to give it to his friend next week. You do that.

Later, you find out the TV was stolen and the friend wasn’t supposed to get it. But because you followed the paper and the rules, you won’t get in trouble.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 7404 Bailee Good Faith Protection

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 division 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. (Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

Last verified: January 23, 2026

Key Terms

baileegood faithdocument of titlenot liable

Related Statutes

  • § 7401 Issuer Obligations Despite Defects
  • § 7403 Bailee Delivery To Title Holder
  • § 3403 Unauthorized Signature Effectiveness
  • § 3404 Impostor-Induced Instrument Endorsement
  • § 3406 Negligence In Instrument Forgery

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 7404.
View Official Source