Kentucky Revised Statutes

Ky. Rev. Stat. § 355.2-401 (2026)

Passing of title -- Reservation for security -- Limited application of this

✓ current as of May 2026
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section. Each provision of this article 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 article 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 (KRS 355.2-501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by this chapter. 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 article on secured transactions (Article 9), 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 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 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 document of title, title passes at the time when and the place where he delivers such documents; or

(b) if the goods are at the time of contracting already identified and no documents 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." Effective: July 1, 1960 History: Created 1958 Ky. Acts ch. 77, sec. 2-401, effective July 1, 1960.

Notes of Decisions
Cited in 18 cases, 1963–2005 · leading case: Placer Coal, Inc. v. Rhondale Coal Servs. Co., 684 S.W.2d 25 (Ky. Ct. App. 1984).
Placer Coal, Inc. v. Rhondale Coal Servs. Co., 684 S.W.2d 25 (Ky. Ct. App. 1984). · cites it 10× “KRS 355.2-401(2). Under the terms of the agreements between Rhondale and the appellee coal producers, the coal in question was to be delivered F.”
Dickinson v. Meredith (In Re Wathen's Elevators, Inc.), 37 B.R. 870 (Bankr. W.D. Ky. 1984). · cites it 3× “KRS 355.2-401(2) provides that title passes to the buyer when the seller completes physical delivery, unless the parties explicitly agree otherwise.”
A & a Mech., Inc. v. Thermal Equip. Sales, Inc., 998 S.W.2d 505 (Ky. Ct. App. 1999). “A "sale” consists in the passing of title from the seller to the buyer for a price (KRS 355.2-401). 3 . See in general, David J.”
Meade v. Richardson Fuel, Inc., 166 S.W.3d 55 (Ky. Ct. App. 2005). “KRS 355.2-401(1) provides that “[a]ny 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.”
Spurlin v. Sloan, 368 S.W.2d 314 (Ky. Ct. App. 1963). · cites it 2× “The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer (KRS 355.2-401) is limited in effect .to a reservation of a ‘security interest’.”
Bowling Green Livestock Mkt., Inc. v. Young (In Re Clark), 206 B.R. 439 (Bankr. W.D. Ky. 1996). · cites it 3× “In Kentucky, passage of title is governed by KRS 355.2-401(2), which provides: 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…”
In Re Dippin' Dots Pat. Litig., 249 F. Supp. 2d 1346 (N.D. Ga. 2003). “401; Ky.Rev.Stat. Ann. § 355.2-401; O.C.G.A. § 11-2-401.”
McKenzie v. Oliver, 571 S.W.2d 102 (Ky. Ct. App. 1978). “2d 584 (1967), wherein the court held that title to an automobile had passed from a seller to a buyer, pursuant to KRS 355.2-401, even though payment for the car had not been made.”
Underwood v. Commonwealth, 390 S.W.2d 635 (Ky. Ct. App. 1965). · cites it 2× “KRS 355.2-401, a part of the Uniform Commercial Code, deals with the passage of title of personal property under conditions similar to those at bar.”
Motors Ins. Corp. v. Safeco Ins. Co. of Am., 412 S.W.2d 584 (Ky. Ct. App. 1967). “The circuit court adjudged that the automobile was “still owned” by Scott “despite any oral negotiations.” We think the judgment is clearly erroneous.”
Aventura Sportswear, Ltd. v. Maloney Enter., Inc. (In Re Maloney Enter., Inc.), 37 B.R. 290 (Bankr. E.D. Ky. 1983). “The court has taken note of KRS 355.2-401, which states in pertinent part that “[e]ach provision of this article 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…”
Hamilton Bank of Morristown v. Bank of Com. (In Re Morristown Lincoln-Mercury, Inc.), 25 B.R. 377 (Bankr. E.D. Tenn. 1982). “Ky. Rev.Stat.Ann. § 355.2-401(4) (1972). 9 .”
— Ky. Rev. Stat. § 355.2-401(1) — 1 case
Meade v. Richardson Fuel, Inc., 166 S.W.3d 55 (Ky. Ct. App. 2005). “KRS 355.2-401(1) provides that “[a]ny 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.”
— Ky. Rev. Stat. § 355.2-401(2) — 5 cases
Dickinson v. Meredith (In Re Wathen's Elevators, Inc.), 37 B.R. 870 (Bankr. W.D. Ky. 1984). “KRS 355.2-401(2) provides that title passes to the buyer when the seller completes physical delivery, unless the parties explicitly agree otherwise.”
Bowling Green Livestock Mkt., Inc. v. Young (In Re Clark), 206 B.R. 439 (Bankr. W.D. Ky. 1996). “In Kentucky, passage of title is governed by KRS 355.2-401(2), which provides: 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…”
Lexington Mack, Inc. v. Miller, 555 S.W.2d 249 (Ky. 1977).
Placer Coal, Inc. v. Rhondale Coal Servs. Co., 684 S.W.2d 25 (Ky. Ct. App. 1984). “KRS 355.2-401(2). Under the terms of the agreements between Rhondale and the appellee coal producers, the coal in question was to be delivered F.”
R.O. Hahn, Inc. v. MDG Diagnostics, Inc., 737 S.W.2d 180 (Ky. Ct. App. 1987).
— Ky. Rev. Stat. § 355.2-401(4) — 3 cases
Placer Coal, Inc. v. Rhondale Coal Servs. Co., 684 S.W.2d 25 (Ky. Ct. App. 1984). “KRS 355.2-401(2). Under the terms of the agreements between Rhondale and the appellee coal producers, the coal in question was to be delivered F.”
Hamilton Bank of Morristown v. Bank of Com. (In Re Morristown Lincoln-Mercury, Inc.), 25 B.R. 377 (Bankr. E.D. Tenn. 1982). “Ky. Rev.Stat.Ann. § 355.2-401(4) (1972). 9 .”
Underwood v. Commonwealth, 390 S.W.2d 635 (Ky. Ct. App. 1965). “KRS 355.2-401, a part of the Uniform Commercial Code, deals with the passage of title of personal property under conditions similar to those at bar.”
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