Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 20

Delivery without Movement of the Goods. Aleris International, Inc., rented a John Deere 644J loader from Holt Equipment Co. Four months later, the parties signed a sales contract for the loader, which was still in Aleris's possession. This agreement provided that "despite physical delivery of the equipment, title shall remain in the seller" until Aleris paid the full price or the parties signed an installment contract, a loan agreement, or a lease for it. The next month, Aleris filed for bankruptcy in a federal court. Holt filed a claim with the court to repossess the loader. Holt asserted that under UCC 2-401, it was the owner. Holt cited the sales contract provision that referred to the seller's retention of title and to the fact that Aleris had not fully paid for the loader. Which provision of UCC 2-401 applies in this case? What are its rules? Under these rules, who is entitled to the loader, and why? [ In re Aleris International , Ltd., __ Bankr. __ (D.Del. 2011)]