                                 CODE OF VIRGINIA

SELLER&#8217;S SHIPMENT UNDER RESERVATION (§ 8.2-505)

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&#8217;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 &#xA7; 8.2-507) 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 [ &#xA7; 8.2-504 ] but impairs
neither the rights given to the buyer by shipment and identification of the
goods to the contract nor the seller&#8217;s powers as a holder of a negotiable
document of title.

HISTORY: 1964, c. 219; 2004, c. 200.