§ 25-2-401. Passing of title; reservation for security; limited application of this section.
PART 4.
TITLE, CREDITORS AND GOOD FAITHPURCHASERS.
§ 25‑2‑401. Passing of title; reservation for security; limited application of thissection.
Each provision of this articlewith regard to the rights, obligations and remedies of the seller, the buyer, purchasersor other third parties applies irrespective of title to the goods except wherethe provision refers to such title. Insofar as situations are not covered bythe other provisions of this article and matters concerning title becomematerial the following rules apply:
(1) Title to goodscannot pass under a contract for sale prior to their identification to thecontract (G.S. 25‑2‑501), and unless otherwise explicitly agreedthe buyer acquires by their identification a special property as limited by thischapter. Any retention or reservation by the seller of the title (property) ingoods shipped or delivered to the buyer is limited in effect to a reservationof a security interest. Subject to these provisions and to the provisions ofthe article on secured transactions (article 9), title to goods passes from theseller to the buyer in any manner and on any conditions explicitly agreed on bythe parties.
(2) Unless otherwiseexplicitly agreed title passes to the buyer at the time and place at which theseller completes his performance with reference to the physical delivery of thegoods, despite any reservation of a security interest and even though adocument of title is to be delivered at a different time or place; and inparticular and despite any reservation of a security interest by the bill oflading
(a) if the contractrequires or authorizes the seller to send the goods to the buyer but does notrequire him to deliver them at destination, title passes to the buyer at thetime and place of shipment; but
(b) if the contractrequires delivery at destination, title passes on tender there.
(3) Unless otherwiseexplicitly agreed where delivery is to be made without moving the goods,
(a) if the seller is todeliver a tangible document of title, title passes at the time when and theplace where he delivers such documents and if the seller is to deliver anelectronic document of title, title passes when the seller delivers thedocument; or
(b) if the goods are atthe time of contracting already identified and no documents of title are to bedelivered, title passes at the time and place of contracting.
(4) A rejection or otherrefusal 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 theseller. Such revesting occurs by operation of law and is not a"sale." (1965,c. 700, s. 1; 2006‑112, s. 31.)