(2-401) Passing of title - Reservation for security - Limited application of section
N.D. Cent. Code § 41-02-46
in effect41-02-46. (2-401) Passing of title - Reservation for security - Limited application of
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 when 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:
1. Title to goods cannot pass under a contract for sale prior to their identification to the
contract (section 41-02-49) and, unless otherwise explicitly agreed, the buyer acquires
by their identification a special property as limited by 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
41-09), title to goods passes from the seller to the buyer in any manner and on any
conditions explicitly agreed on by the parties.
2. Unless otherwise explicitly agreed, title passes to the buyer at the time and place at
which the seller completes the seller's 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:
a. 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
b. If the contract requires delivery at destination, title passes on tender there.
3. Unless otherwise explicitly agreed, if delivery is to be made without moving the goods:
a. If the seller is to deliver a tangible document of title, title passes at the time when
and the place where the seller delivers such documents and, if the seller is to
deliver an electronic document of title, title passes when the seller delivers the
document; or
b. 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.
4. 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".
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c02.pdf#nameddest=41-02-46Fetched: 10/16/2026