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Copyright 2017, Matthew Bender & Company, Inc., a member of the LexisNexis Group.



Passage of Title


Matthew Bender Editorial Staff

Chapter Summary


This chapter of Commercial Law and Practice Guide (Matthew Bender) reviews the significance of the concept of title under the U.C.C. and the rules governing the passage of title in a sales transaction.

The chapter examines the diminished significance of title under the U.C.C. and the remaining utility of the concept to determine when a sale has occurred. The chapter also covers the identification of existing goods, which occurs when the contract is made if the goods are identified to the contract at that time. Next, it discusses the right of the parties to a sales contract to agree on when title to goods will pass. Then, it addresses the passing of title in the absence of agreement, which occurs when and where the seller completes its performance with respect to the physical delivery of the goods.

The chapter also discusses the general rule on the passage of title, which is that a purchaser receives all title of the transferor or all title the transferor had the power to transfer. It next examines the shelter principle, under which a transferor who has received an improved position may convey that improvement to the transferee. Then, the chapter covers when a transferor can convey better title that the transferor actually has.

In addition, the chapter analyzes the good faith purchase doctrine, under which a purchase for value must be in good faith. Further, it addresses transactions that involve the conveyance of voidable title and examines the rights of sellers, buyers, and good faith purchasers to undelivered goods. The chapter concludes with a discussion of the entrustment rule, which provides that when goods are entrusted to a merchant who deals in goods of the kind, the merchant has the power to transfer all rights of the entruster to a buyer in ordinary course of business.

Commercial Law and Practice Guide (Matthew Bender) provides article-by-article analysis of the Uniform Commercial Code, as well as strategies for applying the Code in specific transactions. It contains a unique combination of in-depth substantive analysis and practical guidance for handling commercial transactions, including sales transactions, leasing transactions, negotiable instrument transactions, letters of credit, and secured transactions.


UCC,Uniform Commercial Code,passage of title,title,sale,sales contract,contract,identification,shelter,principle,good faith,purchase,voidable,entrustment,undelivered goods,merchant,buyer,ordinary course of business


For a step-by-step analysis of Article 2, which includes a discussion of passing good title, see Chapter 2.

For treatment of documents of title in the context of a risk of loss discussion, see Chapter 6.

For analysis of documents of title, see Chapter 25.


For complete guidance regarding the mechanics of completing U.C.C.-related forms and the substantive law connected with those forms, which explains sales, leases, negotiable instruments, bank deposits and collections, funds transfers, letters of credit, bulk transfers, documents of title, investment securities, secured transactions, and consumer law, see Federal Business & Commercial Litigation LexisNexis Forms (Matthew Bender).

For expert analysis of specific remedies; examination of litigation costs, economic factors, and other relevant practical considerations for both plaintiffs' and defendants' attorneys; and coverage of specific situations in which the business entity has been damaged, including remedies for breach of contract for the sale or lease of goods, see Commercial Damages: A Guide to Remedies in Business Litigation (Matthew Bender).

For complete, up-to-date litigation forms adapted from actual cases for the preparation and trial of a commercial lawsuit that reflect the most recent terminology, concepts, causes of action, and defenses mandated by the U.C.C., and that provide full explanations, alternative procedures, and helpful commentary, see Modern U.C.C. Litigation Forms (Matthew Bender).
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