41-02-53. (2-505) Seller's shipment under reservation.
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1. If the seller has identified goods to the contract by or before shipment:
a. The seller's procurement of a negotiable bill of lading to the seller's own order or
otherwise reserves in the seller a security interest in the goods. The seller's
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 non-negotiable bill of lading to the seller or the seller's nominee reserves
possession of the goods as security but except in a case of conditional delivery
(subsection 2 of section 41-02-55) a non-negotiable 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 section
41-02-52 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.
41-02-54. (2-506) Rights of financing agency. 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.
41-02-55. (2-507) Effect of seller's tender - Delivery on condition. 1. Tender of delivery is a condition to the buyer's duty to accept the goods and, unless
otherwise agreed, to the buyer's duty to pay for them. Tender entitles the seller to
acceptance of the goods and to payment according to the contract. 2. If payment is due and demanded on the delivery to the buyer of goods or documents
of title, the buyer's right as against the seller to retain or dispose of them is conditional
upon the buyer making the payment due.
41-02-56. (2-508) Cure by seller of improper tender or delivery - Replacement. 1. If 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 the
seller's intention to cure and may then within the contract time make a conforming
delivery. 2. If 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 the
seller seasonably notifies the buyer, have a further reasonable time to substitute a
conforming tender.
41-02-57. (2-509) Risk of loss in the absence of breach. 1. If the contract requires or authorizes the seller to ship the goods by carrier:
a. If it does not require the seller 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 41-02-53).
b. If it does require the seller 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. If the goods are held by a bailee to be delivered without being moved, the risk of loss
passes to the buyer:
a. On the buyer's receipt of possession or control of a negotiable document of title
covering the goods;
b. On acknowledgment by the bailee of the buyer's right to possession of the goods;
or
c. After the buyer's receipt of possession or control of a non-negotiable document of
title or other direction to deliver in a record, as provided in subdivision b of
subsection 4 of section 41-02-51.
3. In any case not within subsection 1 or 2, the risk of loss passes to the buyer on the
buyer's 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 chapter on sale on approval (section 41-02-44) and on effect of
breach on risk of loss (section 41-02-58).
41-02-58. (2-510) Effect of breach on risk of loss. 1. If 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. If the buyer rightfully revokes acceptance, the buyer may to the extent of any
deficiency in the buyer's effective insurance coverage treat the risk of loss as having
rested on the seller from the beginning. 3. If 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 the buyer,
the seller may to the extent of any deficiency in the seller's effective insurance
coverage treat the risk of loss as resting on the buyer for a commercially reasonable
time.
41-02-59. (2-511) Tender of payment by buyer - Payment by check. 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 title on the effect of an instrument on an obligation
(section 41-03-36), payment by check is conditional and is defeated as between the
parties by dishonor of the check on due presentment.
41-02-60. (2-512) Payment by buyer before inspection. 1. If 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 title (section 41-05-09). 2. Payment pursuant to subsection 1 does not constitute an acceptance of goods or
impair the buyer's right to inspect or any of the buyer's remedies.
41-02-61. (2-513) Buyer's right to inspection of goods. 1. Unless otherwise agreed and subject to subsection 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 chapter on C.I.F.
contracts (subsection 3 of section 41-02-38), 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.