400.2-401. Passing of title--reservation for security--limited application of this section.
Passing of title--reservation for security--limited application ofthis section.
400.2-401. Each provision of this article with regard to the rights,obligations and remedies of the seller, the buyer, purchasers or otherthird parties applies irrespective of title to the goods except where theprovision refers to such title. Insofar as situations are not covered bythe other provisions of this article and matters concerning title becomematerial the following rules apply:
(1) Title to goods cannot pass under a contract for sale prior totheir identification to the contract (section 400.2-501), and unlessotherwise explicitly agreed the buyer acquires by their identification aspecial property as limited by this chapter. Any retention or reservationby the seller of the title (property) in goods shipped or delivered to thebuyer is limited in effect to a reservation of a security interest.Subject to these provisions and to the provisions of the article on securedtransactions (article 9), title and/or ownership to goods passes from theseller to the buyer in any manner and on any conditions explicitly agreedon by the parties.
(2) Unless otherwise explicitly agreed title passes to the buyer atthe time and place at which the seller completes his or her performancewith reference to the physical delivery of the goods, despite anyreservation of a security interest and even though a document of title isto be delivered at a different time or place; and in particular and despiteany reservation of a security interest by the bill of lading
(a) if the contract requires or authorizes the seller to send thegoods to the buyer but does not require him or her to deliver them atdestination, title passes to the buyer at the time and place of shipment;but
(b) if the contract requires delivery at destination, title passes ontender there.
(3) Unless otherwise explicitly agreed where delivery is to be madewithout moving the goods,
(a) if the seller is to deliver a document of title, title passes atthe time when and the place where he or she delivers such documents; or
(b) if the goods are at the time of contracting already identifiedand no documents are to be delivered, title passes at the time and place ofcontracting.
(4) A rejection or other refusal by the buyer to receive or retainthe goods, whether or not justified, or a justified revocation ofacceptance revests title to the goods in the seller. Such revesting occursby operation of law and is not a "sale".
(L. 1963 p. 503 § 2-401, A.L. 2001 S.B. 288)Effective 7-01-01