Also known as: goods identified to a contract · identification of goods to the contract · identified goods · contract identification
Written by attorneys · grounded in primary & secondary sources — see below
Goods that a seller has designated as the particular items to which a sales contract refers. Designation occurs when the seller marks, sets aside, or begins production of the items for the buyer. Identification creates a special property interest in the buyer and enables specific remedies such as recovery of the price or replevin.
Gino Giordano contracted to sell custom-printed banners to Grandview Holdings. Giordano designated the banners by serial number and stored them in a labeled warehouse bin for the buyer. Grandview Holdings refused delivery and payment. After attempting to resell the banners to other customers without success, Giordano sued for the contract price.
Weisz Graphics manufactured specialty signage for Peck Industries under a release schedule. Weisz identified certain finished signs by tagging them for Peck and holding them in inventory. Peck never requested release and later refused to pay. Weisz retained the identified signs while pursuing recovery of their price.
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Identification occurs when the seller designates existing goods as the ones to which the contract refers or when the seller begins production of goods to be manufactured for the buyer. Once identification takes place, the buyer acquires a special property interest even before delivery or payment.
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A seller may recover the price of goods identified to the contract when resale after reasonable effort is not possible or would be unavailing. Identification therefore supplies the factual predicate that allows the seller to obtain the price rather than merely damages for nonacceptance.
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A buyer may replevy goods identified to the contract when cover is unavailable after reasonable effort or when the circumstances indicate that cover would be unavailing. Identification therefore gives the buyer an immediate possessory remedy in appropriate cases.
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No. Goods not yet in existence when the contract is made become identified when the seller designates them or begins the first production step. Future goods therefore can be identified to the contract once the seller takes the requisite action.
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