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identification takes place when the animals are conceived; identification takes place when the crops are planted. Goods that are part of a larger mass are identified when the goods are marked, shipped, or somehow designated by the seller or lessor as the particular goods to pass under the contract. WHEN TITLE PASSES Contract between seller and buyer usually determines when title passesWithout an explicit agreement to the contrary, title passes to the buyer at the time and the place the seller performsby delivering the goods [UCC 2–401(2)]. Shipment and Destination Contracts In a shipment contract, the seller is required or authorized to ship goods by carrier. Under a shipment contract, theseller is required only to deliver the goods into the hands of a carrier, and title passes to the buyer at the time and place of shipment [UCC 2–401(2)(a)]. Generally, all contracts are assumed to be shipment contracts if nothing to the contrary is stated in the contract. In a destination contract, the seller is required to deliver the goods to a particular destination. Title passes to the buyer when the goods are tendered at that destination [UCC 2–401(2)(b)]. Delivery without Movement of the Goods In that situation, the passage of title depends on whether the seller must deliver a document of title, such as a bill of lading or a warehouse receipt, to the buyer. With document of title (bill of lading): title passes when and where document delivered.Without document: title passes when sales contract is made, if goods have been identified, or when identification occurs if they have not been identified.Sales or Leases by Nonowners
Void Title: If the seller is a thief, the seller’s title is void—legally, no title exists. Thus, the buyer acquires no title, and the real owner can reclaim the goods from the buyer. True owner gets goods back.Voidable Title: A seller has a voidable title to goods obtained by fraud, paid for with a check that was later dishonored, purchased from a minor, or purchased on credit when the seller was insolvent. Good Faith Purchaser keeps goods.( A good faith purchaser is one who buys without knowledge of circumstancesthat would make an ordinary person inquire about the validity of the seller’s title to the goods.) Voidable Title and Leases: good faith lessee retains possession.Entrustment Rule. Entrusting goods to a merchant who deals in goods of that kind gives the merchant the power to transfer all rights to a buyer in the ordinary course of business [UCC 2–403(2)]. RISK OF LOSS Delivery with Movementof the Goods—Carrier Cases Shipment Contracts: The risk of loss in a shipment contract passes to the buyer or lessee when the goods are delivered to the carrier [UCC 2–509(1)(a), 2A–219(2)(a)]. Destination Contracts: ROL passes to Buyer when goods tendered at contractually specified destination. [UCC 2–509(1)(b), 2A–219(2)(b)]. F.O.B. (free on board)—The seller pays the expenses and carries the risk of loss to the F.O.B. place named [UCC 2–