§ 2-505 — Seller's Shipment Under Reservation

Section 2--505. Seller's Shipment Under Reservation.\n (1) Where the seller has identified goods to the contract by or before\nshipment:\n (a) his procurement of a negotiable bill of lading to his own\n order or otherwise reserves in him a security interest in the\n goods. His procurement of the bill to the order of a\n financing agency or of the buyer indicates in addition only\n the seller's expectation of transferring that interest to the\n person named.\n (b) a non-negotiable bill of lading to himself or his nominee\n reserves possession of the goods as security but except in a\n case of conditional delivery (subsection (2) of Section\n 2--507) a non-negotiable bill of lading naming the buyer as\n consignee reserves no security interest even though the\n seller retains possession or control of the bill of lading.\n (2) When shipment by the seller with reservation of a security\ninterest is in violation of the contract for sale it constitutes an\nimproper contract for transportation within the preceding section but\nimpairs neither the rights given to the buyer by shipment and\nidentification of the goods to the contract nor the seller's powers as a\nholder of a negotiable document of title.\n