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Michigan Compiled Laws, Chapter 440. Uniform Commercial Code § 440.2505

Current as of January 01, 2025 | Updated by Findlaw Staff

Sec. 2505. (1) Both of the following apply if a seller has identified goods to a contract by or before shipment:

(a) The seller's procurement of a negotiable bill of lading to the seller's own order or otherwise reserves in the seller a security interest in the goods.The seller's 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 the seller or the seller's nominee reserves possession of the goods as security. However, except in a case of conditional delivery under section 2507(2),  1 a nonnegotiable bill of lading naming the buyer as consignee does not reserve a security interest even if the seller retains possession or control of the bill of lading.

(2) If a shipment by a seller with reservation of a security interest is in violation of the contract for sale, it constitutes an improper contract for transportation within section 2504 2 but it does not impair the rights given to the buyer by shipment and identification of the goods to the contract or impair the seller's powers as a holder of a negotiable document of title.

1 M.C.L.A. § 440.2507.
2 M.C.L.A. § 440.2504.
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Cite this article: FindLaw.com - Michigan Compiled Laws, Chapter 440. Uniform Commercial Code § 440.2505 - last updated January 01, 2025 | https://codes.findlaw.com/mi/chapter-440-uniform-commercial-code/mi-comp-laws-440-2505/

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