State Codes and Statutes

Statutes > California > Com > 2501-2515

COMMERCIAL CODE
SECTION 2501-2515



2501.  (1) The buyer obtains a special property and an insurable
interest in goods by identification of existing goods as goods to
which the contract refers even though the goods so identified are
nonconforming and he has an option to return or reject them. Such
identification can be made at any time and in any manner explicitly
agreed to by the parties. In the absence of explicit agreement
identification occurs
   (a) When the contract is made if it is for the sale of goods
already existing and identified;
   (b) If the contract is for the sale of future goods other than
those described in paragraph (c), when goods are shipped, marked or
otherwise designated by the seller as goods to which the contract
refers;
   (c) If the contract is for the sale of unborn young or future
crops, when the crops are planted or otherwise become growing crops
or the young are conceived.
   (2) The seller retains an insurable interest in goods so long as
title to or any security interest in the goods remains in him and
where the identification is by the seller alone he may until default
or insolvency or notification to the buyer that the identification is
final substitute other goods for those identified.
   (3) Nothing in this section impairs any insurable interest
recognized under any other statute or rule of law.



2502.  (1) Subject to subdivisions (2) and (3), and even though the
goods have not been shipped, a buyer who has paid a part or all of
the price of goods in which he or she has a special property under
the provisions of the immediately preceding section may on making and
keeping good a tender of any unpaid portion of their price recover
them from the seller if either:
   (a) In the case of goods bought for personal, family, or household
purposes, the seller repudiates or fails to deliver as required by
the contract.
   (b) In all cases, the seller becomes insolvent within 10 days
after receipt of the first installment on their price.
   (2) The buyer's right to recover the goods under paragraph (a) of
subdivision (1) vests upon acquisition of a special property, even if
the seller had not then repudiated or failed to deliver.
   (3) If the identification creating his or her special property has
been made by the buyer, he or she acquires the right to recover the
goods only if they conform to the contract for sale.



2503.  (1) Tender of delivery requires that the seller put and hold
conforming goods at the buyer's disposition and give the buyer any
notification reasonably necessary to enable him to take delivery. The
manner, time and place for tender are determined by the agreement
and this division, and in particular
   (a) Tender must be at a reasonable hour, and if it is of goods
they must be kept available for the period reasonably necessary to
enable the buyer to take possession; but
   (b) Unless otherwise agreed, the buyer must furnish facilities
reasonably suited to the receipt of the goods.
   (2) Where the case is within the next section respecting shipment
tender requires that the seller comply with its provisions.
   (3) Where the seller is required to deliver at a particular
destination tender requires that he comply with subdivision (1) and
also in any appropriate case tender documents as described in
subdivisions (4) and (5) of this section.
   (4) Where goods are in the possession of a bailee and are to be
delivered without being moved
   (a) Tender requires that the seller either tender a negotiable
document of title covering such goods or procure acknowledgment by
the bailee of the buyer's right to possession of the goods; but
   (b) Tender to the buyer of a nonnegotiable document of title or of
a record directing the bailee to deliver is sufficient tender unless
the buyer seasonably objects, and except as otherwise provided in
Division 9 (commencing with Section 9101), receipt by the bailee of
notification of the buyer's rights fixes those rights as against the
bailee and all third persons; but risk of loss of the goods and of
any failure by the bailee to honor the nonnegotiable document of
title or to obey the direction remains on the seller until the buyer
has had a reasonable time to present the document or direction, and a
refusal by the bailee to honor the document or to obey the direction
defeats the tender.
   (5) Where the contract requires the seller to deliver documents
   (a) He must tender all such documents in correct form, except as
provided in this division with respect to bills of lading in a set
(subdivision (2) of Section 2323); and
   (b) Tender through customary banking channels is sufficient and
dishonor of a draft accompanying or associated with the documents
constitutes nonacceptance or rejection.



2504.  Where the seller is required or authorized to send the goods
to the buyer and the contract does not require him to deliver them at
a particular destination, then unless otherwise agreed he must
    (a) Put the goods in the possession of such a carrier and make
such a contract for their transportation as may be reasonable having
regard to the nature of the goods and other circumstances of the
case; and
    (b) Obtain and promptly deliver or tender in due form any
document necessary to enable the buyer to obtain possession of the
goods or otherwise required by the agreement or by usage of trade;
and
    (c) Promptly notify the buyer of the shipment.

Failure to notify the buyer under paragraph (c) or to make a proper
contract under paragraph (a) is a ground for rejection only if
material delay or loss ensues.



2505.  (1) Where the seller has identified goods to the contract by
or before shipment:
   (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 (subdivision (2) of Section 2507) 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 the preceding section 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.



2506.  (1) A financing agency by paying or purchasing for value a
draft which relates to a shipment of goods acquires to the extent of
the payment or purchase and in addition to its own rights under the
draft and any document of title securing it any rights of the shipper
in the goods including the right to stop delivery and the shipper's
right to have the draft honored by the buyer.
   (2) The right to reimbursement of a financing agency which has in
good faith honored or purchased the draft under commitment to or
authority from the buyer is not impaired by subsequent discovery of
defects with reference to any relevant document which was apparently
regular.



2507.  (1) Tender of delivery is a condition to the buyer's duty to
accept the goods and, unless otherwise agreed, to his duty to pay for
them. Tender entitles the seller to acceptance of the goods and to
payment according to the contract.
   (2) Where payment is due and demanded on the delivery to the buyer
of goods or documents of title, his right as against the seller to
retain or dispose of them is conditional upon his making the payment
due.


2508.  (1) Where any tender or delivery by the seller is rejected
because nonconforming and the time for performance has not yet
expired, the seller may seasonably notify the buyer of his intention
to cure and may then within the contract time make a conforming
delivery.
   (2) Where the buyer rejects a nonconforming tender which the
seller had reasonable grounds to believe would be acceptable with or
without money allowance the seller may if he seasonally notifies the
buyer have a further reasonable time to substitute a conforming
tender.


2509.  (1) Where the contract requires or authorizes the seller to
ship the goods by carrier
   (a) If it does not require him to deliver them at a particular
destination, the risk of loss passes to the buyer when the goods are
duly delivered to the carrier even though the shipment is under
reservation (Section 2505); but
   (b) If it does require him to deliver them at a particular
destination and the goods are there duly tendered while in the
possession of the carrier, the risk of loss passes to the buyer when
the goods are there duly so tendered as to enable the buyer to take
delivery.
   (2) Where the goods are held by a bailee to be delivered without
being moved, the risk of loss passes to the buyer
   (a) On his receipt of possession or control of a negotiable
document of title covering the goods; or
   (b) On acknowledgment by the bailee of the buyer's right to
possession of the goods; or
   (c) After his receipt of possession or control of a nonnegotiable
document of title or other direction to deliver in a record, as
provided in subdivision (4)(b) of Section 2503.
   (3) In any case not within subdivision (1) or (2), the risk of
loss passes to the buyer on his receipt of the goods if the seller is
a merchant; otherwise the risk passes to the buyer on tender of
delivery.
   (4) The provisions of this section are subject to contrary
agreement of the parties and to the provisions of this division on
sale on approval (Section 2327) and on effect of breach on risk of
loss (Section 2510).


2510.  (1) Where a tender or delivery of goods so fails to conform
to the contract as to give a right of rejection the risk of their
loss remains on the seller until cure or acceptance.
   (2) Where the buyer rightfully revokes acceptance he may to the
extent of any deficiency in his effective insurance coverage treat
the risk of loss as having rested on the seller from the beginning.
   (3) Where the buyer as to conforming goods already identified to
the contract for sale repudiates or is otherwise in breach before
risk of their loss has passed to him, the seller may to the extent of
any deficiency in his effective insurance coverage treat the risk of
loss as resting on the buyer for a commercially reasonable time.




2511.  (1) Unless otherwise agreed, tender of payment is a condition
to the seller's duty to tender and complete any delivery.
   (2) Tender of payment is sufficient when made by any means or in
any manner current in the ordinary course of business unless the
seller demands payment in legal tender and gives any extension of
time reasonably necessary to procure it.
   (3) Subject to the provisions of this code on the effect of an
instrument on an obligation (Section 3310), payment by check is
conditional and is defeated as between the parties by dishonor of the
check on due presentment.



2512.  (1) Where the contract requires payment before inspection
nonconformity of the goods does not excuse the buyer from so making
payment unless (a) the nonconformity appears without inspection or
(b) despite tender of the required documents the circumstances would
justify injunction against honor under this code (subdivision (b) of
Section 5109).
   (2) Payment pursuant to subdivision (1) does not constitute an
acceptance of goods or impair the buyer's right to inspect or any of
his remedies.



2513.  (1) Unless otherwise agreed and subject to subdivision (3),
where goods are tendered or delivered or identified to the contract
for sale, the buyer has a right before payment or acceptance to
inspect them at any reasonable place and time and in any reasonable
manner. When the seller is required or authorized to send the goods
to the buyer, the inspection may be after their arrival.
   (2) Expenses of inspection must be borne by the buyer but may be
recovered from the seller if the goods do not conform and are
rejected.
   (3) Unless otherwise agreed and subject to the provisions of this
division on C.I.F. contracts (subdivision (3) of Section 2321), the
buyer is not entitled to inspect the goods before payment of the
price when the contract provides
   (a) For delivery "C.O.D." or on other like terms; or
   (b) For payment against documents of title, except where such
payment is due only after the goods are to become available for
inspection.
   (4) A place or method of inspection fixed by the parties is
presumed to be exclusive but unless otherwise expressly agreed it
does not postpone identification or shift the place for delivery or
for passing the risk of loss. If compliance becomes impossible,
inspection shall be as provided in this section unless the place or
method fixed was clearly intended as an indispensable condition
failure of which avoids the contract.



2514.  Unless otherwise agreed documents against which a draft is
drawn are to be delivered to the drawee on acceptance of the draft if
it is payable more than three days after presentment; otherwise,
only on payment.


2515.  In furtherance of the adjustment of any claim or dispute
   (a) Either party on reasonable notification to the other and for
the purpose of ascertaining the facts and preserving evidence has the
right to inspect, test and sample the goods including such of them
as may be in the possession or control of the other; and
   (b) The parties may agree to a third party inspection or survey to
determine the conformity or condition of the goods and may agree
that the findings shall be binding upon them in any subsequent
litigation or adjustment.

State Codes and Statutes

Statutes > California > Com > 2501-2515

COMMERCIAL CODE
SECTION 2501-2515



2501.  (1) The buyer obtains a special property and an insurable
interest in goods by identification of existing goods as goods to
which the contract refers even though the goods so identified are
nonconforming and he has an option to return or reject them. Such
identification can be made at any time and in any manner explicitly
agreed to by the parties. In the absence of explicit agreement
identification occurs
   (a) When the contract is made if it is for the sale of goods
already existing and identified;
   (b) If the contract is for the sale of future goods other than
those described in paragraph (c), when goods are shipped, marked or
otherwise designated by the seller as goods to which the contract
refers;
   (c) If the contract is for the sale of unborn young or future
crops, when the crops are planted or otherwise become growing crops
or the young are conceived.
   (2) The seller retains an insurable interest in goods so long as
title to or any security interest in the goods remains in him and
where the identification is by the seller alone he may until default
or insolvency or notification to the buyer that the identification is
final substitute other goods for those identified.
   (3) Nothing in this section impairs any insurable interest
recognized under any other statute or rule of law.



2502.  (1) Subject to subdivisions (2) and (3), and even though the
goods have not been shipped, a buyer who has paid a part or all of
the price of goods in which he or she has a special property under
the provisions of the immediately preceding section may on making and
keeping good a tender of any unpaid portion of their price recover
them from the seller if either:
   (a) In the case of goods bought for personal, family, or household
purposes, the seller repudiates or fails to deliver as required by
the contract.
   (b) In all cases, the seller becomes insolvent within 10 days
after receipt of the first installment on their price.
   (2) The buyer's right to recover the goods under paragraph (a) of
subdivision (1) vests upon acquisition of a special property, even if
the seller had not then repudiated or failed to deliver.
   (3) If the identification creating his or her special property has
been made by the buyer, he or she acquires the right to recover the
goods only if they conform to the contract for sale.



2503.  (1) Tender of delivery requires that the seller put and hold
conforming goods at the buyer's disposition and give the buyer any
notification reasonably necessary to enable him to take delivery. The
manner, time and place for tender are determined by the agreement
and this division, and in particular
   (a) Tender must be at a reasonable hour, and if it is of goods
they must be kept available for the period reasonably necessary to
enable the buyer to take possession; but
   (b) Unless otherwise agreed, the buyer must furnish facilities
reasonably suited to the receipt of the goods.
   (2) Where the case is within the next section respecting shipment
tender requires that the seller comply with its provisions.
   (3) Where the seller is required to deliver at a particular
destination tender requires that he comply with subdivision (1) and
also in any appropriate case tender documents as described in
subdivisions (4) and (5) of this section.
   (4) Where goods are in the possession of a bailee and are to be
delivered without being moved
   (a) Tender requires that the seller either tender a negotiable
document of title covering such goods or procure acknowledgment by
the bailee of the buyer's right to possession of the goods; but
   (b) Tender to the buyer of a nonnegotiable document of title or of
a record directing the bailee to deliver is sufficient tender unless
the buyer seasonably objects, and except as otherwise provided in
Division 9 (commencing with Section 9101), receipt by the bailee of
notification of the buyer's rights fixes those rights as against the
bailee and all third persons; but risk of loss of the goods and of
any failure by the bailee to honor the nonnegotiable document of
title or to obey the direction remains on the seller until the buyer
has had a reasonable time to present the document or direction, and a
refusal by the bailee to honor the document or to obey the direction
defeats the tender.
   (5) Where the contract requires the seller to deliver documents
   (a) He must tender all such documents in correct form, except as
provided in this division with respect to bills of lading in a set
(subdivision (2) of Section 2323); and
   (b) Tender through customary banking channels is sufficient and
dishonor of a draft accompanying or associated with the documents
constitutes nonacceptance or rejection.



2504.  Where the seller is required or authorized to send the goods
to the buyer and the contract does not require him to deliver them at
a particular destination, then unless otherwise agreed he must
    (a) Put the goods in the possession of such a carrier and make
such a contract for their transportation as may be reasonable having
regard to the nature of the goods and other circumstances of the
case; and
    (b) Obtain and promptly deliver or tender in due form any
document necessary to enable the buyer to obtain possession of the
goods or otherwise required by the agreement or by usage of trade;
and
    (c) Promptly notify the buyer of the shipment.

Failure to notify the buyer under paragraph (c) or to make a proper
contract under paragraph (a) is a ground for rejection only if
material delay or loss ensues.



2505.  (1) Where the seller has identified goods to the contract by
or before shipment:
   (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 (subdivision (2) of Section 2507) 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 the preceding section 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.



2506.  (1) A financing agency by paying or purchasing for value a
draft which relates to a shipment of goods acquires to the extent of
the payment or purchase and in addition to its own rights under the
draft and any document of title securing it any rights of the shipper
in the goods including the right to stop delivery and the shipper's
right to have the draft honored by the buyer.
   (2) The right to reimbursement of a financing agency which has in
good faith honored or purchased the draft under commitment to or
authority from the buyer is not impaired by subsequent discovery of
defects with reference to any relevant document which was apparently
regular.



2507.  (1) Tender of delivery is a condition to the buyer's duty to
accept the goods and, unless otherwise agreed, to his duty to pay for
them. Tender entitles the seller to acceptance of the goods and to
payment according to the contract.
   (2) Where payment is due and demanded on the delivery to the buyer
of goods or documents of title, his right as against the seller to
retain or dispose of them is conditional upon his making the payment
due.


2508.  (1) Where any tender or delivery by the seller is rejected
because nonconforming and the time for performance has not yet
expired, the seller may seasonably notify the buyer of his intention
to cure and may then within the contract time make a conforming
delivery.
   (2) Where the buyer rejects a nonconforming tender which the
seller had reasonable grounds to believe would be acceptable with or
without money allowance the seller may if he seasonally notifies the
buyer have a further reasonable time to substitute a conforming
tender.


2509.  (1) Where the contract requires or authorizes the seller to
ship the goods by carrier
   (a) If it does not require him to deliver them at a particular
destination, the risk of loss passes to the buyer when the goods are
duly delivered to the carrier even though the shipment is under
reservation (Section 2505); but
   (b) If it does require him to deliver them at a particular
destination and the goods are there duly tendered while in the
possession of the carrier, the risk of loss passes to the buyer when
the goods are there duly so tendered as to enable the buyer to take
delivery.
   (2) Where the goods are held by a bailee to be delivered without
being moved, the risk of loss passes to the buyer
   (a) On his receipt of possession or control of a negotiable
document of title covering the goods; or
   (b) On acknowledgment by the bailee of the buyer's right to
possession of the goods; or
   (c) After his receipt of possession or control of a nonnegotiable
document of title or other direction to deliver in a record, as
provided in subdivision (4)(b) of Section 2503.
   (3) In any case not within subdivision (1) or (2), the risk of
loss passes to the buyer on his receipt of the goods if the seller is
a merchant; otherwise the risk passes to the buyer on tender of
delivery.
   (4) The provisions of this section are subject to contrary
agreement of the parties and to the provisions of this division on
sale on approval (Section 2327) and on effect of breach on risk of
loss (Section 2510).


2510.  (1) Where a tender or delivery of goods so fails to conform
to the contract as to give a right of rejection the risk of their
loss remains on the seller until cure or acceptance.
   (2) Where the buyer rightfully revokes acceptance he may to the
extent of any deficiency in his effective insurance coverage treat
the risk of loss as having rested on the seller from the beginning.
   (3) Where the buyer as to conforming goods already identified to
the contract for sale repudiates or is otherwise in breach before
risk of their loss has passed to him, the seller may to the extent of
any deficiency in his effective insurance coverage treat the risk of
loss as resting on the buyer for a commercially reasonable time.




2511.  (1) Unless otherwise agreed, tender of payment is a condition
to the seller's duty to tender and complete any delivery.
   (2) Tender of payment is sufficient when made by any means or in
any manner current in the ordinary course of business unless the
seller demands payment in legal tender and gives any extension of
time reasonably necessary to procure it.
   (3) Subject to the provisions of this code on the effect of an
instrument on an obligation (Section 3310), payment by check is
conditional and is defeated as between the parties by dishonor of the
check on due presentment.



2512.  (1) Where the contract requires payment before inspection
nonconformity of the goods does not excuse the buyer from so making
payment unless (a) the nonconformity appears without inspection or
(b) despite tender of the required documents the circumstances would
justify injunction against honor under this code (subdivision (b) of
Section 5109).
   (2) Payment pursuant to subdivision (1) does not constitute an
acceptance of goods or impair the buyer's right to inspect or any of
his remedies.



2513.  (1) Unless otherwise agreed and subject to subdivision (3),
where goods are tendered or delivered or identified to the contract
for sale, the buyer has a right before payment or acceptance to
inspect them at any reasonable place and time and in any reasonable
manner. When the seller is required or authorized to send the goods
to the buyer, the inspection may be after their arrival.
   (2) Expenses of inspection must be borne by the buyer but may be
recovered from the seller if the goods do not conform and are
rejected.
   (3) Unless otherwise agreed and subject to the provisions of this
division on C.I.F. contracts (subdivision (3) of Section 2321), the
buyer is not entitled to inspect the goods before payment of the
price when the contract provides
   (a) For delivery "C.O.D." or on other like terms; or
   (b) For payment against documents of title, except where such
payment is due only after the goods are to become available for
inspection.
   (4) A place or method of inspection fixed by the parties is
presumed to be exclusive but unless otherwise expressly agreed it
does not postpone identification or shift the place for delivery or
for passing the risk of loss. If compliance becomes impossible,
inspection shall be as provided in this section unless the place or
method fixed was clearly intended as an indispensable condition
failure of which avoids the contract.



2514.  Unless otherwise agreed documents against which a draft is
drawn are to be delivered to the drawee on acceptance of the draft if
it is payable more than three days after presentment; otherwise,
only on payment.


2515.  In furtherance of the adjustment of any claim or dispute
   (a) Either party on reasonable notification to the other and for
the purpose of ascertaining the facts and preserving evidence has the
right to inspect, test and sample the goods including such of them
as may be in the possession or control of the other; and
   (b) The parties may agree to a third party inspection or survey to
determine the conformity or condition of the goods and may agree
that the findings shall be binding upon them in any subsequent
litigation or adjustment.


State Codes and Statutes

State Codes and Statutes

Statutes > California > Com > 2501-2515

COMMERCIAL CODE
SECTION 2501-2515



2501.  (1) The buyer obtains a special property and an insurable
interest in goods by identification of existing goods as goods to
which the contract refers even though the goods so identified are
nonconforming and he has an option to return or reject them. Such
identification can be made at any time and in any manner explicitly
agreed to by the parties. In the absence of explicit agreement
identification occurs
   (a) When the contract is made if it is for the sale of goods
already existing and identified;
   (b) If the contract is for the sale of future goods other than
those described in paragraph (c), when goods are shipped, marked or
otherwise designated by the seller as goods to which the contract
refers;
   (c) If the contract is for the sale of unborn young or future
crops, when the crops are planted or otherwise become growing crops
or the young are conceived.
   (2) The seller retains an insurable interest in goods so long as
title to or any security interest in the goods remains in him and
where the identification is by the seller alone he may until default
or insolvency or notification to the buyer that the identification is
final substitute other goods for those identified.
   (3) Nothing in this section impairs any insurable interest
recognized under any other statute or rule of law.



2502.  (1) Subject to subdivisions (2) and (3), and even though the
goods have not been shipped, a buyer who has paid a part or all of
the price of goods in which he or she has a special property under
the provisions of the immediately preceding section may on making and
keeping good a tender of any unpaid portion of their price recover
them from the seller if either:
   (a) In the case of goods bought for personal, family, or household
purposes, the seller repudiates or fails to deliver as required by
the contract.
   (b) In all cases, the seller becomes insolvent within 10 days
after receipt of the first installment on their price.
   (2) The buyer's right to recover the goods under paragraph (a) of
subdivision (1) vests upon acquisition of a special property, even if
the seller had not then repudiated or failed to deliver.
   (3) If the identification creating his or her special property has
been made by the buyer, he or she acquires the right to recover the
goods only if they conform to the contract for sale.



2503.  (1) Tender of delivery requires that the seller put and hold
conforming goods at the buyer's disposition and give the buyer any
notification reasonably necessary to enable him to take delivery. The
manner, time and place for tender are determined by the agreement
and this division, and in particular
   (a) Tender must be at a reasonable hour, and if it is of goods
they must be kept available for the period reasonably necessary to
enable the buyer to take possession; but
   (b) Unless otherwise agreed, the buyer must furnish facilities
reasonably suited to the receipt of the goods.
   (2) Where the case is within the next section respecting shipment
tender requires that the seller comply with its provisions.
   (3) Where the seller is required to deliver at a particular
destination tender requires that he comply with subdivision (1) and
also in any appropriate case tender documents as described in
subdivisions (4) and (5) of this section.
   (4) Where goods are in the possession of a bailee and are to be
delivered without being moved
   (a) Tender requires that the seller either tender a negotiable
document of title covering such goods or procure acknowledgment by
the bailee of the buyer's right to possession of the goods; but
   (b) Tender to the buyer of a nonnegotiable document of title or of
a record directing the bailee to deliver is sufficient tender unless
the buyer seasonably objects, and except as otherwise provided in
Division 9 (commencing with Section 9101), receipt by the bailee of
notification of the buyer's rights fixes those rights as against the
bailee and all third persons; but risk of loss of the goods and of
any failure by the bailee to honor the nonnegotiable document of
title or to obey the direction remains on the seller until the buyer
has had a reasonable time to present the document or direction, and a
refusal by the bailee to honor the document or to obey the direction
defeats the tender.
   (5) Where the contract requires the seller to deliver documents
   (a) He must tender all such documents in correct form, except as
provided in this division with respect to bills of lading in a set
(subdivision (2) of Section 2323); and
   (b) Tender through customary banking channels is sufficient and
dishonor of a draft accompanying or associated with the documents
constitutes nonacceptance or rejection.



2504.  Where the seller is required or authorized to send the goods
to the buyer and the contract does not require him to deliver them at
a particular destination, then unless otherwise agreed he must
    (a) Put the goods in the possession of such a carrier and make
such a contract for their transportation as may be reasonable having
regard to the nature of the goods and other circumstances of the
case; and
    (b) Obtain and promptly deliver or tender in due form any
document necessary to enable the buyer to obtain possession of the
goods or otherwise required by the agreement or by usage of trade;
and
    (c) Promptly notify the buyer of the shipment.

Failure to notify the buyer under paragraph (c) or to make a proper
contract under paragraph (a) is a ground for rejection only if
material delay or loss ensues.



2505.  (1) Where the seller has identified goods to the contract by
or before shipment:
   (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 (subdivision (2) of Section 2507) 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 the preceding section 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.



2506.  (1) A financing agency by paying or purchasing for value a
draft which relates to a shipment of goods acquires to the extent of
the payment or purchase and in addition to its own rights under the
draft and any document of title securing it any rights of the shipper
in the goods including the right to stop delivery and the shipper's
right to have the draft honored by the buyer.
   (2) The right to reimbursement of a financing agency which has in
good faith honored or purchased the draft under commitment to or
authority from the buyer is not impaired by subsequent discovery of
defects with reference to any relevant document which was apparently
regular.



2507.  (1) Tender of delivery is a condition to the buyer's duty to
accept the goods and, unless otherwise agreed, to his duty to pay for
them. Tender entitles the seller to acceptance of the goods and to
payment according to the contract.
   (2) Where payment is due and demanded on the delivery to the buyer
of goods or documents of title, his right as against the seller to
retain or dispose of them is conditional upon his making the payment
due.


2508.  (1) Where any tender or delivery by the seller is rejected
because nonconforming and the time for performance has not yet
expired, the seller may seasonably notify the buyer of his intention
to cure and may then within the contract time make a conforming
delivery.
   (2) Where the buyer rejects a nonconforming tender which the
seller had reasonable grounds to believe would be acceptable with or
without money allowance the seller may if he seasonally notifies the
buyer have a further reasonable time to substitute a conforming
tender.


2509.  (1) Where the contract requires or authorizes the seller to
ship the goods by carrier
   (a) If it does not require him to deliver them at a particular
destination, the risk of loss passes to the buyer when the goods are
duly delivered to the carrier even though the shipment is under
reservation (Section 2505); but
   (b) If it does require him to deliver them at a particular
destination and the goods are there duly tendered while in the
possession of the carrier, the risk of loss passes to the buyer when
the goods are there duly so tendered as to enable the buyer to take
delivery.
   (2) Where the goods are held by a bailee to be delivered without
being moved, the risk of loss passes to the buyer
   (a) On his receipt of possession or control of a negotiable
document of title covering the goods; or
   (b) On acknowledgment by the bailee of the buyer's right to
possession of the goods; or
   (c) After his receipt of possession or control of a nonnegotiable
document of title or other direction to deliver in a record, as
provided in subdivision (4)(b) of Section 2503.
   (3) In any case not within subdivision (1) or (2), the risk of
loss passes to the buyer on his receipt of the goods if the seller is
a merchant; otherwise the risk passes to the buyer on tender of
delivery.
   (4) The provisions of this section are subject to contrary
agreement of the parties and to the provisions of this division on
sale on approval (Section 2327) and on effect of breach on risk of
loss (Section 2510).


2510.  (1) Where a tender or delivery of goods so fails to conform
to the contract as to give a right of rejection the risk of their
loss remains on the seller until cure or acceptance.
   (2) Where the buyer rightfully revokes acceptance he may to the
extent of any deficiency in his effective insurance coverage treat
the risk of loss as having rested on the seller from the beginning.
   (3) Where the buyer as to conforming goods already identified to
the contract for sale repudiates or is otherwise in breach before
risk of their loss has passed to him, the seller may to the extent of
any deficiency in his effective insurance coverage treat the risk of
loss as resting on the buyer for a commercially reasonable time.




2511.  (1) Unless otherwise agreed, tender of payment is a condition
to the seller's duty to tender and complete any delivery.
   (2) Tender of payment is sufficient when made by any means or in
any manner current in the ordinary course of business unless the
seller demands payment in legal tender and gives any extension of
time reasonably necessary to procure it.
   (3) Subject to the provisions of this code on the effect of an
instrument on an obligation (Section 3310), payment by check is
conditional and is defeated as between the parties by dishonor of the
check on due presentment.



2512.  (1) Where the contract requires payment before inspection
nonconformity of the goods does not excuse the buyer from so making
payment unless (a) the nonconformity appears without inspection or
(b) despite tender of the required documents the circumstances would
justify injunction against honor under this code (subdivision (b) of
Section 5109).
   (2) Payment pursuant to subdivision (1) does not constitute an
acceptance of goods or impair the buyer's right to inspect or any of
his remedies.



2513.  (1) Unless otherwise agreed and subject to subdivision (3),
where goods are tendered or delivered or identified to the contract
for sale, the buyer has a right before payment or acceptance to
inspect them at any reasonable place and time and in any reasonable
manner. When the seller is required or authorized to send the goods
to the buyer, the inspection may be after their arrival.
   (2) Expenses of inspection must be borne by the buyer but may be
recovered from the seller if the goods do not conform and are
rejected.
   (3) Unless otherwise agreed and subject to the provisions of this
division on C.I.F. contracts (subdivision (3) of Section 2321), the
buyer is not entitled to inspect the goods before payment of the
price when the contract provides
   (a) For delivery "C.O.D." or on other like terms; or
   (b) For payment against documents of title, except where such
payment is due only after the goods are to become available for
inspection.
   (4) A place or method of inspection fixed by the parties is
presumed to be exclusive but unless otherwise expressly agreed it
does not postpone identification or shift the place for delivery or
for passing the risk of loss. If compliance becomes impossible,
inspection shall be as provided in this section unless the place or
method fixed was clearly intended as an indispensable condition
failure of which avoids the contract.



2514.  Unless otherwise agreed documents against which a draft is
drawn are to be delivered to the drawee on acceptance of the draft if
it is payable more than three days after presentment; otherwise,
only on payment.


2515.  In furtherance of the adjustment of any claim or dispute
   (a) Either party on reasonable notification to the other and for
the purpose of ascertaining the facts and preserving evidence has the
right to inspect, test and sample the goods including such of them
as may be in the possession or control of the other; and
   (b) The parties may agree to a third party inspection or survey to
determine the conformity or condition of the goods and may agree
that the findings shall be binding upon them in any subsequent
litigation or adjustment.