Before the creation of the Uniform Commercial Code (UCC),
–the right of ownership–was the central concept in sales law, controlling all
issues of rights and remedies of the parties to a sales contract. There were numerous problems with this concept, however. For example, it
was frequently difficult to determine when title actually passed from the seller to the buyer, and therefore it was also difficult to predict
which party a court would decide had title at the time of a loss. Because of such problems, the UCC divorced the question of title as
completely as possible from the question of the rights and obligations of buyers, sellers, and third parties (such as subsequent purchasers,
creditors, or the tax collector).
In some situations, title is still relevant under the UCC, and the UCC has special rules for locating title. These rules will be discussed in the
sections that follow. In most situations, however, the UCC has replaced the concept of title with three other concepts: (1) identification, (2)
risk of loss, and (3) insurable interest.
In lease contracts, of course, the lessor-owner of the goods retains title. Hence, the UCC's provisions relating to passage of title do not apply
to leased goods. Other concepts discussed in this chapter, though, including identification, risk of loss, and insurable interest, relate to lease
contracts as well as to sales contracts.
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