Final answer:
An order document of title becomes negotiable by delivery when it is directed to a specific person or is endorsed to them and physically delivered. It effectively transfers title and rights associated with the goods documented once the transfer is authorized or ratified.
Step-by-step explanation:
An order document of title becomes negotiable by delivery when the document states that the goods are to be delivered to the order of a named person, or if it is indorsed to a specific person. The document must be delivered to that person or their designee in order for the goods to be legally binding and transferred. Negotiable documents of title are used in business transactions to ensure the orderly transfer and delivery of goods and in securing financing by using the documents as collateral. In order for the negotiation to be effective, the transfer must be authorized or ratified by the person entitled to enforce the document or by their operation of law. Once the document is successfully negotiated, the holder acquires the title to the document and the goods it covers, as well as all rights that accrue under the document, including any rights to the goods.