Also known as: identify the goods to the contract · identified to the contract · goods identification · identification of goods
Written by attorneys — see sources below.
The designation by which particular existing goods become the subject matter of a sales contract. Identification occurs when the parties agree on specific goods or an undivided share of an identified bulk of fungible goods. Once identification takes place the buyer acquires a special property interest that supports certain remedies even before delivery.
Indigo Textiles contracted to sell 10,000 yards of fabric to Israel Irving. The parties identified the exact bolts by lot number at the warehouse. Irving refused delivery and Indigo could not resell the fabric at a reasonable price after reasonable efforts. Indigo sued Irving for the contract price.
Icarus Aviation sold specialized avionics equipment to Idris Ives. After Ives repudiated, Icarus identified the units to the contract and retained possession. Icarus sued for the price and continued to hold the equipment rather than reselling it before judgment.
Interlink Communications agreed to buy custom circuit boards from Innovate Pharmaceuticals. The boards were identified by serial numbers in the contract. When Innovate failed to deliver, Interlink purchased substitute boards from another supplier and sought damages for the difference in price.
Isaac Irving contracted to buy a future harvest of wheat from India Inoue. Inoue repudiated before any wheat existed. Isaac waited a commercially reasonable time before covering rather than immediately purchasing substitute grain on the market.
Richard Oloffson, doing business as Rich's Ag Service, entered into an agreement with Clarence Coomer on April 16, 1970, under which Coomer would sell and deliver 40,000 bushels of corn to Oloffson in October and December 1970. Oloffson described the deal as two separate contracts of 20,000 bushels each, priced at $1.12 3/4 per bushel for delivery by October 30 and $1.12 1/4 per bushel for delivery by December 15. Coomer confirmed the total quantity but stated he would deliver as much as possible by October 30 with the remainder by December 15. On June 3, 1970, Coomer notified Oloffson that he would not plant corn that season because of excessive wetness and instructed Oloffson to secure the corn from another source if Oloffson had commitments to third parties. The market price for corn for future delivery stood at $1.16 per bushel on that date. When Oloffson contacted Coomer again in September 1970 regarding the corn, Coomer repeated that delivery would not occur. Oloffson mailed confirmations of the April agreement to Coomer and had his attorney demand performance, but Coomer did not respond to either communication. Following the passage of both October 30 and December 15 without any deliveries, Oloffson obtained replacement corn by purchasing 20,000 bushels at $1.35 per bushel and 20,000 bushels at $1.49 per bushel. Oloffson brought suit against Coomer in the circuit court of Bureau County. After a trial without a jury, the court entered judgment for Oloffson in the amount of $1,500 plus costs. Oloffson appealed the judgment to the Illinois Appellate Court for the Third District.
Identification occurs when the parties designate particular existing goods or an undivided share of an identified bulk of fungible goods as the subject matter of the contract. The designation may be made by serial number, location, quantity from a specified source, or other means that sufficiently particularizes the goods.
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No. For fungible goods stored in an identified bulk, an undivided share may be identified without physical separation or bagging. The contract need only specify the quantity and the particular bulk from which the goods will come.
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Identification gives the buyer a special property interest that supports recovery of the goods themselves through replevin or specific performance when cover is unavailable. It also enables a seller to recover the price of identified goods that cannot be resold at a reasonable price.
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Yes. When goods have been identified to the contract and the seller fails to deliver or repudiates, the buyer may recover those specific goods in appropriate circumstances rather than being limited to damages or cover.
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Goods that are not yet existing or not yet identified remain future goods. A purported present sale of future goods operates only as a contract to sell. No property interest passes until the goods come into existence and are identified to the contract.
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