Section 400.2-505

Title XXVI TRADE AND COMMERCE

Chapter 400

Effective - 28 Aug 1963   

  400.2-505.  Seller's shipment under reservation. — (1)  Where the seller has identified goods to the contract by or before shipment:

  (a)  his procurement of a negotiable bill of lading to his own order or otherwise reserves in him a security interest in the goods.  His procurement of the bill to the order of a financing agency or of the buyer indicates in addition only the seller's expectation of transferring that interest to the person named.

  (b)  a nonnegotiable bill of lading to himself or his nominee reserves possession of the goods as security but except in a case of conditional delivery (subsection (2) of section 400.2-507) a nonnegotiable bill of lading naming the buyer as consignee reserves no security interest even though the seller retains possession of the bill of lading.

  (2)  When shipment by the seller with reservation of a security interest is in violation of the contract for sale it constitutes an improper contract for transportation within section 400.2-504 but impairs neither the rights given to the buyer by shipment and identification of the goods to the contract nor the seller's powers as a holder of a negotiable document.

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(L. 1963 p. 503 § 2-505)