Also known as:identify to the contract · identification to the contract · identifying to the contract
Written by attorneys — see sources below.
Goods that have been designated or earmarked for a particular sales contract by segregation, marking, or other acts fixing them as the contract goods. Identification creates special remedial rights for both buyers and sellers under the UCC even before title passes or risk of loss shifts.
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How its tested
Common Examples
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Seller Unable to Resell Identified Goods
Island Manufacturing contracted to sell 500 custom circuit boards to Interlink Communications. After Interlink repudiated, Island identified the boards to the contract by labeling crates with the buyer's order number and storing them separately. Island attempted to resell the boards at a reasonable price but found no buyers. Island may recover the price under the price action because the boards were identified to the contract and resale proved unavailing.
Seller Holds Identified Goods During Suit
Integrity Partners agreed to sell specialized turbines to Iris Energy. Iris repudiated after the turbines were identified to the contract by serial-number assignment and segregated storage. Integrity sued for the price and retained the turbines in its warehouse. Integrity must continue holding the turbines for Iris until judgment or resale becomes feasible, at which point net proceeds reduce the judgment.
Ines Ibarra ordered 100 custom solar panels from Israel Irving. Irving repudiated before delivery. The panels had already been identified to the contract by model and serial numbers. Ibarra may cover by purchasing substitute panels in the market and recover damages measured against the contract price even though the original panels were identified.
Buyer Elects Damages After Repudiation
Ian Iverson contracted to buy a specific lot of hybrid seed corn from Ingrid Innes. Innes repudiated before delivery. The seed had been identified to the contract by lot number and storage bin assignment. Iverson elected to recover market-price damages rather than pursue the identified seed itself.
Oloffson v. Coomer11 Ill. App.3d 918 (1973)
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.
When does identification occur for goods already in the seller's inventory?
Identification occurs when the seller designates a specific portion of fungible goods to the contract by segregation, marking, or other acts that fix particular goods as the contract goods. Mere intent or paper designation after repudiation is insufficient.
Supporting sources
Does identification alone allow a buyer to obtain specific performance or replevin?
Identification supports a buyer's right to recover the goods or seek specific performance when cover is impracticable or the goods are unique. The buyer must still satisfy the additional statutory requirements for those remedies.
Supporting sources
What happens to identified goods when a buyer repudiates before risk of loss passes?
The seller may treat the risk of loss as resting on the buyer for a commercially reasonable time to the extent of any deficiency in the seller's insurance coverage.
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Can a seller unilaterally identify goods after the buyer has repudiated?
Yes, provided the goods remain in the seller's possession or control at the time the seller learns of the breach. UCC § 2-704(1)(a) expressly authorizes such post-breach identification of conforming goods.
Supporting sources
11 Ill. App. 3d 918 (1973)
…has been paid (a) cover' and have damages under the next section as to all the goods affected whether or not they have been identified to the contract; or (b) recover damages for non-delivery as provided in this Article (Section 2-713). " Plaintiff, therefore, was privileged under Section 2-610 of the Uniform Commercial Code to…
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