Also known as: identify goods to the contract · identified goods to the contract · identifying goods to the contract · identification of goods · goods identification
Written by attorneys · grounded in primary & secondary sources — see below
The act by which a seller designates particular existing goods as those to which a contract for sale refers. Designation typically occurs when the seller marks, segregates, or ships the goods in a manner that ties them to the specific contract.
Select any source to read its text and confirm it supports the definition.
Orion Avionics completed and segregated 300 avionics modules for FalconJet under a long-term supply contract. After FalconJet sent written notice that it would no longer require any modules, Orion halted further production but retained the completed modules. Because the modules had been identified to the contract, Orion could withhold delivery and pursue remedies without tendering the goods into a repudiated agreement.
Karl O. Helm contracted to purchase polystyrene from Cosden Oil. Cosden selected specific quantities from inventory, set them aside, and tagged them for delivery to Helm. When Cosden later repudiated, Helm was unable to cover in the market. Because the goods had been identified to the contract, Helm obtained the right to replevy those particular units rather than pursue only money damages.
Identification occurs when the seller marks, segregates, or otherwise designates existing goods as the ones covered by a particular sales contract. The UCC permits identification at any time and in any manner the parties explicitly agree upon, or by shipment or designation if no agreement exists.
Supporting sources
Once goods are identified to the contract, the seller may withhold delivery of those goods and pursue remedies for breach even though performance is not yet due. Identification also permits the seller to proceed under rules allowing salvage of unfinished goods.
Supporting sources
No. Identification designates the contract goods but does not by itself transfer risk of loss. Risk passes according to the parties' shipping terms or upon delivery unless the contract provides otherwise.
Supporting sources
A seller may recover the price when goods identified to the contract are not reasonably resalable and the buyer fails to pay. Personalized or specially manufactured goods that have no market to others commonly satisfy this requirement.
Supporting sources
If identified goods are totally destroyed without fault before risk passes, the contract is avoided. If the loss is only partial, the buyer may inspect and then either avoid the contract or accept the remaining goods with a price allowance.
Supporting sources