(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 36-2-507) 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 the preceding section (Section 36-2-504) 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.
HISTORY: 1962 Code Section 10.2-505; 1966 (54) 2716; 2014 Act No. 213 (S.343), Section 11, eff October 1, 2014. "Bill of lading" Section 1-201. "Buyer" Section 2-103. "Consignee" Section 7-102. "Contract" Section 1-201. "Contract for sale" Section 2-106. "Delivery" Section 1-201. "Financing agency" Section 2-104. "Goods" Section 2-105. "Holder" Section 1-201. "Person" Section 1-201. "Security interest" Section 1-201. "Seller" Section 2-103.