Legal Question in Business Law in California

Re: Who owns the t-shirts? Maufacturer or Customer?

This is one of those many situations where the language in any contract would govern over the written law, but if the contract is silent on the question, a court would look to the statutes, in this case the California (I suppose) version of the Uniform Commercial Code (UCC). So, the starting point would be to look at the contract of sale, purchase order, or other written documentation first, to see if they give a clue as to when title was to pass from seller to buyer.

Note that in some situations, a court could also look at the parties' prior business dealings with each other, or to industry standards in the custom T-shirt business, to determine the parties' intention as to passage of title.

The UCC says (in California's version, at section 2401(2) that "unless otherwise explicitly agreed, title to the goods passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods........"

In your case, if the shirts were shipped FOB, title would have passed at the point you handed them over to the carrier (UPS, for example) selected and to be paid for by the buyer. If you quoted a delivered-to-silkscreener price and selected the carrier, title passed when the shirts were delivered.

Delivery would be considered complete at the silkscreener, even though it is not the ultimate buyer, because it was the buyer's agent for purposes of taking delivery.

Soooooo - I think the customer owns the shirts.

"But, he has't paid for them!" you ask.....

That's right; the customer owns the shirts and you "own" a claim for payment.

Sometimes sellers of big-ticket items retain a security interest in goods sold. I'm sure that when Caterpillar Tractor Co, loads a couple of brand-new D-9s on a flatcar and consigns them to John Doe Construction in Pumpkin Center, Georgia, they do so with a documented security interest in hand, and have or soon will file a UCC-1.

However, if the customer is solvent, you may be better off with a money claim than getting back shirts that have been customized in a way that makes them unsaleable for you.