<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-2-505 - Seller's shipment under reservation. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2073229Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073229SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073229CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2073229Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073229DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2073229Normal-000001 { margin-top: 0; margin-bottom: 0; margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-right: 0; } p.s2073229Normal-000002 { margin-top: 0; margin-bottom: 0; text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073229000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2073229SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073229SCL-000004 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2073229Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2-505"><span class="s2073229SENU">57A-2-505</span></a><span xml:space="preserve" class="s2073229SENU">. </span><span class="s2073229CL">Seller's shipment under reservation.</span></p><p dir="ltr" class="s2073229Normal-000000"><span class="s2073229DefaultParagraphFont">(1) Where the seller has identified goods to the contract by or before shipment:</span></p><p dir="ltr" class="s2073229Normal-000001"><span class="s2073229DefaultParagraphFont">(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.</span></p><p dir="ltr" class="s2073229Normal-000001"><span xml:space="preserve" class="s2073229DefaultParagraphFont">(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 § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2-507"><span class="s2073229DefaultParagraphFont">57A-2-507</span></a><span class="s2073229DefaultParagraphFont">) 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.</span></p><p dir="ltr" class="s2073229Normal-000002"><span xml:space="preserve" class="s2073229DefaultParagraphFont">(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 § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2-504"><span class="s2073229DefaultParagraphFont">57A-2-504</span></a><span xml:space="preserve" class="s2073229DefaultParagraphFont"> 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.</span></p><p dir="ltr" class="s2073229Normal"><span xml:space="preserve" class="s2073229000003"> </span></p><p dir="ltr" class="s2073229Normal"><span class="s2073229SCL">Source:</span><span xml:space="preserve" class="s2073229SCL-000004"> SL 1966, ch 150, § 2-505; SDCL §§ 57-6-12 to 57-6-14; SL 2009, ch 254, § 812.</span></p></div></body></html>