Legal Definitions - due negotiation

Definition: Due negotiation refers to the transfer of a negotiable document of title from one party to another, where the transferee takes it free of certain claims enforceable against the transferor.

For example, if a seller transfers a negotiable document of title to a buyer, the buyer takes it free of any claims that may be made against the seller. This is known as the good-faith-purchase exception to the doctrine of derivative title.

Due negotiation is an important concept in business and commerce, as it allows for the smooth transfer of ownership of goods and services. It ensures that the transferee is protected from any claims that may be made against the transferor, and that the transfer is made in good faith and without notice of conflicting title claims or defenses.