Tennessee § 47-2-401 - Passing of title — Reservation for security — Limited application of this section.

§ 47-2-401. Passing of title — Reservation for security — Limited application of this section.

Each provision of this chapter with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where the provision refers to such title. Insofar as situations are not covered by the other provisions of this chapter and matters concerning title become material the following rules apply: Title to goods cannot pass under a contract for sale prior to their identification to the contract (§ 47-2-501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by chapters 1-9 of this title. Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest. Subject to these provisions and to the provisions of the chapter on Secured Transactions (chapter 9 of this title), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed to by the parties. Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; and in particular and despite any reservation of a security interest by the bill of lading: If the contract requires or authorizes the seller to send the goods to the buyer but does not require the seller to deliver them at destination, title passes to the buyer at the time and place of shipment; but If the contract requires delivery at destination, title passes on tender there. Unless otherwise explicitly agreed where delivery is to be made without moving the goods: If the seller is to deliver a tangible document of title, title passes at the time when and the place where he delivers such documents and if the seller is to deliver an electronic document of title, title passes when the seller delivers the document; or If the goods are at the time of contracting already identified and no documents of title are to be delivered, title passes at the time and place of contracting. A rejection or other refusal 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 the seller. Such revesting occurs by operation of law and is not a “sale.” Acts 1963, ch. 81, § 1 (2-401); Acts 2008, ch. 814, § 7. Amendments. The 2008 amendment, in (3), rewrote (A) which read: “(a) if the seller is to deliver a document of title, title passes at the time when and the place where the seller delivers such documents; or”, and substituted “documents of title” for “documents” in (B). Effective Dates. Acts 2008, ch. 814, § 40. July 1, 2008. Prior Tennessee Law: §§ 47-1219, 47-1220. Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Automobiles, § 31; 6 Tenn. Juris., Commercial Law, §§ 2, 17, 98. Law Reviews. Creation, Perfection, and Enforcement of Security Interest Under the “Tennessee” Commercial Code (John A. Walker, Jr.), 48 Tenn. L. Rev. 819. Cited: Pidgeon-Thomas Iron Co. v. Garner, 495 S.W.2d 826, 1973 Tenn. LEXIS 496 (Tenn. 1973); United States Fidelity & Guaranty Co. v. Thompson & Green Machinery Co., 568 S.W.2d 821, 1978 Tenn. LEXIS 613 (Tenn. 1978); In re Nixon Machinery Co., 6 B.R. 847, 1980 Bankr. LEXIS 4194 (Bankr. E.D. Tenn. 1980); In re Tom Woods Used Cars, Inc., 24 B.R. 529, 1982 Bankr. LEXIS 2925 (Bankr. E.D. Tenn. 1982); Porter Brown Limestone Co. v. Olson, 648 S.W.2d 242, 1982 Tenn. LEXIS 374 (Tenn. 1982); Four Seasons Gardening & Landscaping, Inc. v. Crouch, 688 S.W.2d 439, 1984 Tenn. App. LEXIS 3449 (Tenn. Ct. App. 1984); In re Production Steel, Inc., 54 B.R. 417, 1985 Bankr. LEXIS 5094 (Bankr. M.D. Tenn. 1985); In re Phillips, 77 B.R. 648, 1987 Bankr. LEXIS 1539 (Bankr. E.D. Tenn. 1987); Jack Daniel Distillery v. Jackson, 740 S.W.2d 413, 1987 Tenn. LEXIS 1014 (Tenn. 1987); Thomas Nelson, Inc. v. United States, 694 F. Supp. 428, 1988 U.S. Dist. LEXIS 15334 (M.D. Tenn. 1988); Volunteer Val-Pak v. Celauro, 767 S.W.2d 635, 1989 Tenn. LEXIS 124 (Tenn. 1989); Reprise Capital Corp. v. Rogers Group, Inc., 802 S.W.2d 608, 1990 Tenn. App. LEXIS 402 (Tenn. Ct. App. 1990); Illinois C. G. Railroad v. State, 805 S.W.2d 746, 1991 Tenn. LEXIS 80 (Tenn. 1991); Oakland Gin Co. v. Marlow (In re Julien Co.), 44 F.3d 426, 1995 FED App. 29P, 1995 U.S. App. LEXIS 1348 (6th Cir. Tenn. 1995).