KRS 355.2-505: Seller's shipment under reservation.

(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 f inancing 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

(subsection (2) of KRS 355.2 -507) 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

KRS 355.2-504 but impairs neither the rights given to the buyer by shipment and

identification of the go ods to the contract nor the seller's powers as a holder of a

negotiable document.