§ 34.1-2-505 — Seller's shipment under reservation

(a) Where the seller has identified goods to the contract
by or before shipment:
(i) 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;
(ii) 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 (section 34.1-2-507(b)) 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.
(b) 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 the
preceding section 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.