UCC allows title to pass when buyer question - need clarity on agreement terms

Yes that sounds right! I was getting tangled up in the identification requirements. So if parties agree, title can pass upon possession even before delivery is complete?

Exactly, but remember the goods still need to be identified to the contract. The parties can't just agree to pass title on non-existent or unidentified goods.

This is why I always double-check these details with Certana.ai's document verification tool. You can upload your sales contract and UCC-1 to make sure the title transfer timing aligns with your security interest attachment. Saved me from a mess last month when the timing was off.

That's smart. Getting the timing wrong between title passage and security interest perfection can create gaps in coverage.

Good point about verifying the documents align. I'll need to make sure our UCC-1 filing reflects the actual agreement terms.

Right, title passage under Article 2 is about ownership transfer, while Article 9 attachment is about when your security interest becomes enforceable. They can happen at different times.

Ok that makes sense. So you could have title pass but security interest not attach yet, or vice versa?

Ugh FOB terms always trip me up. Why can't everything just be simple pickup at seller's location?

Because commercial transactions are never simple! But FOB destination vs FOB shipping point makes a huge difference for risk of loss and title passage timing.

This is exactly why I use document checking tools now. Upload the sales agreement and it flags inconsistencies between FOB terms and title passage clauses. Certana.ai caught one for me where we had conflicting terms that would have caused problems.

Yes identification is key. You can't pass title to unidentified goods even if parties agree.

What if goods are identified but don't conform to contract? Does that affect title passage?

Good question. Buyer might have right to reject non-conforming goods, which would affect whether title actually passes even if possession occurs.

Good point. So file the UCC-1 first, then let title pass according to the agreement terms?

Exactly. Better safe than sorry with lien priority issues.

Article 2 for the title passage question, but Article 9 is relevant for the security interest timing.

Got it. Yeah Article 2-401 lets parties agree when title passes, subject to identification requirements.

True, inspection possession vs acceptance possession can be different. The agreement should be specific about which type of possession triggers title passage.

This is getting complicated. Maybe just stick with standard delivery terms unless there's a specific business reason to customize?

Sometimes clients have specific needs. But yeah, custom arrangements require more careful drafting.

Good reminder about state variations. Most states follow the uniform version but there can be differences.

When in doubt, I just upload the relevant documents to Certana.ai to check for consistency issues between the various agreements and filings. Catches things I might miss.

Glad you got it sorted out. These UCC provisions can be tricky even for experienced practitioners.

Good luck with the transaction. Just remember to coordinate the title passage timing with your UCC-1 filing timeline.

Will do. And I'll definitely look into those document verification tools that were mentioned. Sounds like they could save me from similar confusion in the future.

Welcome to UCC practice! Great question. I usually include specific language about title passage timing in the sales agreement, especially for equipment financing deals like what Savannah was working on. The UCC defaults can work, but being explicit prevents disputes later. For example, I'll include something like "Title shall pass to Buyer upon Buyer's acceptance of the goods at [location]" rather than just relying on the possession rule. It's better to be clear upfront than to have arguments later about what constitutes "obtaining possession." The key is making sure your title passage clause, delivery terms, and security interest documentation all align with each other.