§ 2—401. Passing of title; reservation for security; limited application of this section
Each provision of this article with regard to the rights, obligations, and remedies
of the seller, the buyer, purchasers, or other third parties applies irrespective
of title to the goods except where the provision refers to such title. Insofar as
situations are not covered by the other provisions of this article and matters concerning
title become material the following rules apply:
(1) Title to goods cannot pass under a contract for sale prior to their identification to the contract (§ 2—501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by this title. Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest. Subject to these provisions and to the provisions of the article on Secured Transactions (article 9), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.
(2) Unless otherwise explicitly agreed title passes to the buyer at the time and place
at which the seller completes his or her performance with reference to the physical
delivery of the goods, despite any reservation of a security interest and even though
a document of title is to be delivered at a different time or place; and in particular
and despite any reservation of a security interest by the bill of lading:
(a) if the contract requires or authorizes the seller to send the goods to the buyer but
does not require him or her to deliver them at destination, title passes to the buyer
at the time and place of shipment; but
(b) if the contract requires delivery at destination, title passes on tender there.
(3) Unless otherwise explicitly agreed where delivery is to be made without moving the
goods:
(a) if the seller is to deliver a tangible document of title, title passes at the time
when and the place where he or she delivers such documents and if the seller is to
deliver an electronic document of title, title passes when the seller delivers the
document; or
(b) if the goods are at the time of contracting already identified and no documents of
title are to be delivered, title passes at the time and place of contracting.
(4) A rejection or other refusal by the buyer to receive or retain the goods, whether
or not justified, or a justified revocation of acceptance revests title to the goods
in the seller. Such revesting occurs by operation of law and is not a “sale.” (Amended 2015, No. 51, § B.5, eff. June 3, 2015.)