§ 4-2-505 — 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 the seller or the seller's nominee
reserves possession of the goods as security, but except in a case of conditional
delivery (subsection (2) of section 4-2-507), a nonnegotiable bill of lading naming
the buyer as consignee reserves no security interest even though the seller retains
possession or control 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 4-2-504, 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 of title.

Legislative History

Source: L. 65: p. 1323, � 1. C.R.S. 1963: � 155-2-505. L. 2006: (1)(b) and (2) amended, p. 492, � 11, effective September 1.