ch20

West's Business Law with Online Research Guide, 9th Edition

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IDENTIFICATION OF GOODS Before any interest in specific goods can pass from seller to buyer or from lessor to lessee, two conditions must be met: (1) the goods must be in existence , and (2) they must be identified as the specific goods designated in the contract. Existing Goods: If the contract calls for the sale or lease of goods that already exist in their final form, then identification occurs at the time the contract is made . Future Goods: If the contract calls for the sale or lease of goods that have yet to be completed or modified in accordance with the contract, identification occurs when the goods are shipped, marked, or otherwise designated by the seller or lessor for delivery to the buyer or lessee. Fungible Goods: Goods that are alike by physical nature, by agreement, or by trade usage ( e.g. , grains of wheat, barrels of like-grade oil). Identification of these goods occurs when the goods are shipped, marked, or otherwise designated by the seller or lessor for delivery to the buyer or lessee. Ch. 20: Title, Risk, and Insurable Interest - No. 1 West’s Business Law (9th ed.)
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Identification is significant because it permits the buyer or lessee to insure the goods and to recover from third parties who damage the goods (in transit or otherwise). Ch. 20: Title, Risk, and Insurable Interest - No. 2 West’s Business Law (9th ed.)
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PASSAGE OF TITLE The UCC provides that, unless a contrary agreement is explicitly made, title passes to the buyer at the time the goods are physically delivered to the buyer . Shipment Contract: A contract that (1) requires the seller to ship the goods to the buyer via carrier and (2) relieves the seller of liability for the goods once they have been delivered to the carrier. Title passes to the buyer at the time and place of shipment by the carrier. Destination Contract: A contract that (1) requires the seller to ship the goods via carrier, (2) to a particular destination, and (3) relieves the seller of liability for the goods once they have been delivered to the designated destination. Title passes to the buyer at the time when the goods are made available at the designated destination. Non-Delivery Contract:
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ch20 - IDENTIFICATION OF GOODS Before any interest in...

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