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Separate the sale, the property and the credit protection
This guide uses a selected Pennsylvania rule, not one rule for every U.S. sale. For a cross-border transaction, identify the applicable sales framework as well as the law governing property/security issues. The UN Convention on Contracts for the International Sale of Goods (CISG) can govern some international goods sales, but Article 4 generally does not determine the contract’s effect on ownership of the goods.
A security interest is an interest in property used to secure payment or another obligation. Where Pennsylvania section 2401 governs, paragraph (1) limits a seller’s title reservation in goods shipped or delivered to that kind of interest. The section does not establish that your business has completed any steps needed for effective protection against a particular party.
Give the specialist the complete arrangement
A customs entry, an invoice and a credit-protection document answer different questions. Build a fact file before relying on a title sentence in the quotation.
| Fact to establish | Why management needs it |
|---|---|
| Parties and locations | Exact seller, buyer, asset locations and relevant business locations |
| Goods and delivery | Identified equipment, serials, delivery event and possession |
| Contract language | Sale, payment, title, security and governing-framework provisions |
| Other claims | Known financing, leasing or third-party interests to investigate |
| Protection and enforcement | Advice on required steps, priorities and lawful remedies before delivery |
The unpaid machine may already be in another business’s possession
Fictional example: you deliver an identified machine on agreed credit terms. Your invoice says the machine remains yours until payment. The customer then reports financial difficulty while the machine is on its operating site.
Do not assume the invoice sentence alone determines priority or authorises collection of the machine. Ask the appropriate adviser to assess the actual documents, parties, locations and other claims. This example does not decide who owns or may recover the asset.
Approve supported protection, not just a phrase
Before releasing equipment, ask management what protection has been agreed, which required steps have actually been completed and what remains conditional. If the risk is not supported, reconsider the proposed credit or delivery commitment within the actual agreement.
Use Relationship factsheet for the parties’ rights, payments and delivery roles. Keep security documents, searches and advice in the company’s authorised process; the worksheet is not a filing or an enforceability opinion.
Scope
- Selected Pennsylvania statutory example only. Governing framework, property effects, secured-transactions steps, priority and remedies need actual transaction facts and qualified review; no recovery or priority guarantee.
Next step
Describe the actual sale/payment/property arrangement in Relationship factsheet and obtain a separate scoped security-interest review before delivery on credit.
Sources & review notes
Pennsylvania General Assembly
Passage, dates and research notes
statute · Complete section, especially paragraph (1)
Official section read. A property/security question is not resolved by an importer name or a general sales-law label.
United Nations Treaty Collection
Passage, dates and research notes
treaty · Articles 1–6, including scope, property effects and exclusion
Authentic text read through UNTC after another official host failed. Actual treaty status, reservations, governing law and parties still require checking.
United Nations Treaty Collection
Passage, dates and research notes
treaty-status · Registration 25567 and participant action table
Official depositary record retrieved and scoped status context read. No reader’s nationality, incorporation or choice of law establishes applicability by itself.
Detailed rule records (2)
Section 2401(1) limits a seller’s reservation of title in shipped or delivered goods to a security interest, subject to the relevant secured-transactions provisions.
13 Pa.C.S. §2401: passing of title; reservation for securityCISG Articles 1–6 address scope and exclusion; Article 4 generally leaves the contract’s effect on ownership of the goods outside the Convention. The actual framework must be checked before applying a state-law example.
CISG authentic English text, UNTS 1489 No 25567 CISG registration and participant informationBookmark this guide or mark it as read.
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