Indiana Code

Ind. Code § 26-1-2-401 (2026)

Passing of title; reservation of security; limited application of this section

✓ current as of May 2026
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     Sec. 401. Each provision of IC 26-1-2 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 IC 26-1-2 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 (IC 26-1-2-501), and unless otherwise explicitly agreed, the buyer acquires by their identification a special property as limited by IC 26-1. 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 IC 26-1-9.1 on secured transactions, 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 his 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 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 him 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, where 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 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

(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".

Formerly: Acts 1963, c.317, s.2-401. As amended by P.L.152-1986, SEC.141; P.L.57-2000, SEC.18; P.L.143-2007, SEC.12.

 

Notes of Decisions
Cited in 19 cases, 1973–2020 · leading case: Sam & Mac, Inc. v. Treat, 783 N.E.2d 760 (Ind. Ct. App. 2003).
Sam & Mac, Inc. v. Treat, 783 N.E.2d 760 (Ind. Ct. App. 2003). · cites it 18× “Treat asserted that SMI failed to carry its burden of establishing that any set of cabinets had been identified to the contract of sale and installation between SMI and Gruda Enterprises, and that, as a matter of law, SMI did not have title under Ind.Code § 26-1-2-401, 1.C. §…”
Richardson's RV Inc. v. Indiana Dep't of State Revenue, 80 N.E.3d 293 (Ind. T.C. 2017). · cites it 24× “] ⅜ ⅛ ⅜ ⅜ ⅜ (3) Unless otherwise explicitly agreed, where 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 he delivers [title] documents and if the seller is to…”
O'Donnell v. Am. Employers Ins., 622 N.E.2d 570 (Ind. Ct. App. 1993). · cites it 5× “Indiana Code § 26-1-2-401 applies here and controls: “(1) _ 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.”
Boston v. Chrysler Fin. Servs. Americas LLC (In Re Scott), 427 B.R. 123 (Bankr. S.D. Ind. 2010). · cites it 4× “In particular, the court looked to Indiana Code § 26-1-2-401, which provides that “[u]n-less otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods, despite…”
Madrid v. Bloomington Auto Co., Inc., 782 N.E.2d 386 (Ind. Ct. App. 2003). · cites it 2× “Ind.Code § 26-1-2-401 (Supp.2001) provides that under the sales provisions of the UCC, "[u)nless otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods,…”
Legato Vapors, LLC v. David Cook, 847 F.3d 825 (7th Cir. 2017). “See generally Ind. Code § 26-1-2-401 (2) (under UCC sales provision, title to goods passes at time and place of shipment unless otherwise specified); Quill Corp.”
Marlow v. Conley, 787 N.E.2d 490 (Ind. Ct. App. 2003). · cites it 3× “2000), which is part of the sales provisions of the Uniform Commercial Code ("UCC"), provides that "[uJnless otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the…”
One 1968 Buick, 4 Door v. State, 638 N.E.2d 1313 (Ind. Ct. App. 1994). “…there had been a transfer of ownership two days before...." Trial Court's Amended Order Paragraph 4. 9 . See Ind.Code 26-1-2-401, 402, and 403.”
Miller Pipeline Corp. v. Indiana Dep't of State Revenue, 52 N.E.3d 973 (Ind. T.C. 2016). · cites it 2× “iac/); Ind.Code § 26-1-2-401 (2006)).) (See also Trial Tr.”
Indiana Dep't of State Revenue v. Hoosier Metal Fabricators, Inc., 379 N.E.2d 551 (Ind. Ct. App. 1978). “(a) if the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment; (emphasis added) Evidence in the record discloses that the contract between…”
Thrift, Inc. v. A.D.E., Inc., 454 N.E.2d 878 (Ind. Ct. App. 1983). “The passage of title pursuant to an Article 2 transaction is contained in Ind.Code 26-1-2-401(1). This section in relevant part provides: Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited to a reservation of…”
An-hung Yao v. State, 953 N.E.2d 1236 (Ind. Ct. App. 2011). · cites it 2× “Yao and Lin point out the only connection with Indiana was that Indiana-based Continental investigators contacted them to place an order and then directed Generation Guns to ship the orders to an Indiana address. Citing the Uniform Commercial Code, they argue their control of…”
— Ind. Code § 26-1-2-401(1) — 6 cases
O'Donnell v. Am. Employers Ins., 622 N.E.2d 570 (Ind. Ct. App. 1993). “Indiana Code § 26-1-2-401 applies here and controls: “(1) _ 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.”
Sam & Mac, Inc. v. Treat, 783 N.E.2d 760 (Ind. Ct. App. 2003). “Treat asserted that SMI failed to carry its burden of establishing that any set of cabinets had been identified to the contract of sale and installation between SMI and Gruda Enterprises, and that, as a matter of law, SMI did not have title under Ind.Code § 26-1-2-401, 1.C. §…”
Richardson's RV Inc. v. Indiana Dep't of State Revenue, 80 N.E.3d 293 (Ind. T.C. 2017). “] ⅜ ⅛ ⅜ ⅜ ⅜ (3) Unless otherwise explicitly agreed, where 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 he delivers [title] documents and if the seller is to…”
Thrift, Inc. v. A.D.E., Inc., 454 N.E.2d 878 (Ind. Ct. App. 1983). “The passage of title pursuant to an Article 2 transaction is contained in Ind.Code 26-1-2-401(1). This section in relevant part provides: Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited to a reservation of…”
Kovatch Mobile Equip. Corp. v. Warren Twp., 831 F. Supp. 665 (S.D. Ind. 1993).
— Ind. Code § 26-1-2-401(2) — 6 cases
Sam & Mac, Inc. v. Treat, 783 N.E.2d 760 (Ind. Ct. App. 2003). “Treat asserted that SMI failed to carry its burden of establishing that any set of cabinets had been identified to the contract of sale and installation between SMI and Gruda Enterprises, and that, as a matter of law, SMI did not have title under Ind.Code § 26-1-2-401, 1.C. §…”
Richardson's RV Inc. v. Indiana Dep't of State Revenue, 80 N.E.3d 293 (Ind. T.C. 2017). “] ⅜ ⅛ ⅜ ⅜ ⅜ (3) Unless otherwise explicitly agreed, where 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 he delivers [title] documents and if the seller is to…”
Marlow v. Conley, 787 N.E.2d 490 (Ind. Ct. App. 2003). “2000), which is part of the sales provisions of the Uniform Commercial Code ("UCC"), provides that "[uJnless otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the…”
Indiana Dep't of State Revenue v. Hoosier Metal Fabricators, Inc., 379 N.E.2d 551 (Ind. Ct. App. 1978). “(a) if the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment; (emphasis added) Evidence in the record discloses that the contract between…”
— Ind. Code § 26-1-2-401(2)(b) — 1 case
Sam & Mac, Inc. v. Treat, 783 N.E.2d 760 (Ind. Ct. App. 2003). “Treat asserted that SMI failed to carry its burden of establishing that any set of cabinets had been identified to the contract of sale and installation between SMI and Gruda Enterprises, and that, as a matter of law, SMI did not have title under Ind.Code § 26-1-2-401, 1.C. §…”
— Ind. Code § 26-1-2-401(3) — 1 case
Richardson's RV Inc. v. Indiana Dep't of State Revenue, 80 N.E.3d 293 (Ind. T.C. 2017). “] ⅜ ⅛ ⅜ ⅜ ⅜ (3) Unless otherwise explicitly agreed, where 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 he delivers [title] documents and if the seller is to…”
— Ind. Code § 26-1-2-401(4) — 1 case
1st Source Bank v. Zerteck Inc (N.D. Ind. 2020).
— Ind. Code § 26-1-2-401(8)(b) — 1 case
Sam & Mac, Inc. v. Treat, 783 N.E.2d 760 (Ind. Ct. App. 2003). “Treat asserted that SMI failed to carry its burden of establishing that any set of cabinets had been identified to the contract of sale and installation between SMI and Gruda Enterprises, and that, as a matter of law, SMI did not have title under Ind.Code § 26-1-2-401, 1.C. §…”
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