N.Y. U.C.C. Law § 2-505 — Seller's Shipment Under Reservation

Section 2--505. Seller's Shipment Under Reservation.

(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 non-negotiable 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

2--507) a non-negotiable 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 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.