Also known as: identifications to the contract · contract identification
Written by attorneys · grounded in primary & secondary sources — see below
A designation of particular existing goods as the subject matter of a contract for their sale. The designation renders the goods identified rather than future goods and enables the buyer to acquire a special property interest in them.
Prairie Grain Co. contracted to buy 20,000 bushels of wheat from Hartley Farm. Hartley harvested the wheat and unloaded it into bins labeled with Prairie Grain's name and contract number. When Hartley repudiated, Prairie Grain asserted rights in the wheat stored in those bins.
Bridge Clean contracted with MonitorCorp for portable air-quality units custom-calibrated for specific project sites. MonitorCorp assigned serial numbers to the units and stored them in bins labeled for Bridge Clean. After MonitorCorp repudiated, Bridge Clean sought recovery of those exact units.
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Goods become identified when they are designated as the particular goods that will satisfy the contract. For fungible goods in an identified bulk, an undivided share may be identified without physical segregation of the buyer's exact portion.
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Once goods are identified, a buyer may recover the goods themselves or obtain specific performance in a proper case when the seller repudiates or fails to deliver. The buyer may also assert a security interest in identified goods in its possession and resell them to recover payments and expenses.
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No. For fungible goods stored in an identified bulk, the buyer's stated quantity creates an undivided interest in the bulk without the need for the seller to scoop out or isolate the exact units sold.
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No. Title cannot pass under a contract for sale prior to identification of the goods to the contract.
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