Dear Dan - I think you're on the right track.  ROL remains on the seller if the buyer has the right to reject the goods or actually, rightfully rejects them; i.e. the seller hasn't completed all obligations until the buyer has accepted the goods.  There is no need for the seller to retain title in these cases.   Nim

-----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk [mailto:[log in to unmask]] On Behalf Of Daniel Warner
Sent: Friday, November 15, 2013 1:01 PM
To: [log in to unmask]
Subject: UCC Art. 2 question

Hi Colleagues:

The Art. 2 default positions for when title passes and when risk of loss (ROL) passes are as follows:


  *   Title passes when seller has completed delivery obligations under the contract.

  *   ROL passes when seller has completed all obligations under the contract (ie, a conforming delivery, not just a delivery).

My question: why the difference in the rules?  Why don't title and ROL pass together?

One idea: given the rule governing title, a buyer could get title to non-conforming goods.  Maybe that would be of some use to buyer if seller goes bankrupt: at least the buyer has something, although non-conforming, that can't be taken by the bankruptcy trustee.  But that doesn't seem very reasonable, really.

I remember in law school our elderly (seemed to me then) UCC prof comparing UCC to the pre-UCC law regarding the sale of goods, and he kind of derided the pre-UCC law by chanting "Title, title, who's got the title?" (as if it were "Button, button, whose got the button?"--a nursery game of sorts).  Why did he do that?

Again, my question: Why don't title and ROL pass together under UCC Art. 2?

Thank you,

Dan Warner

Prof. Daniel M. Warner
Dept. of Accounting (Business Legal Studies) MS 9071, Parks Hall 401 Western Washington University
516 High St.
Bellingham, WA 98225
360 650-3390