(1) Where the seller has identified goods to the contract by or before shipment:

Attorney's Note

Under the Alabama Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
Violationup to 30 daysup to $200
For details, see Ala. Code § 13A-5-7
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Terms Used In Alabama Code 7-2-505

  • Buyer: means a person who buys or contracts to buy goods. See Alabama Code 7-2-103
  • Contract: A legal written agreement that becomes binding when signed.
  • Contract for sale: includes both a present sale of goods and a contract to sell goods at a future time. See Alabama Code 7-2-106
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • Seller: means a person who sells or contracts to sell goods. See Alabama Code 7-2-103
(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.
(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 Section 7-2-507) 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.
(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 Section 7-2-504, 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.
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