Sales and Leases - A Problem-based Approach, 2016a

efers” is “identification.” Identification gives the buyer “a special property interest and
an insurable interest” in the goods, but not the full bundle of rights that goes with full
ownership of the goods.
10.1.2. When Does Identification Occur? UCC § 2-501(1)(a)-(c) provides the framework for
determining when identification occurs. These sections apply only in the absence of an
agreement otherwise.
10.1.2.1. The first rule: look at the agreement of the parties to determine if it specifies
when identification of the goods occurs. For example, if an artist has made 50 numbered
prints of a particular piece of art, the contract may specify a particular methodology for
determining which of the 50 prints will be delivered to the buyer. Also remember that
usage of trade, course of dealing and course of performance may establish some of the
terms of the agreement. For example, if it is customary in the trade to provide the lowest
available numbered print, then identification of the print is established by usage of trade.
10.1.2.2. Absent a contractual provision otherwise, § 2-501(1)(a) states that in the context
of a contract for the sale of goods already existing and identified, identification occurs
when the contract is made.
10.1.2.2.1. At the Charlie Russell Art Auction, when a buyer walks into an artist’s
room and points out a particular painting and offers to purchase it for $150, and
the artist accepts that offer, the identification of the goods occurs when the artist
accepts the offer. At that point in time, the buyer acquires certain rights in the
painting, even if the buyer does not take possession of the painting immediately.
10.1.2.2.2. A buyer walks into a drugstore, picks out a can of hairspray, and takes
it to the check-out stand. When the check-out person accepts the buyer’s money,
the contract is formed and identification of the goods occurs at the cash register.
10.1.2.3. What about the situation where I see a canoe dangling from the ceiling in the
store, and I tell the salesman I want to buy a canoe of that model? When is the particular
canoe that is the subject of the contract identified? Is it when the stocker pulls out one of
the several canoes of that model in storage? Is it when the stocker loads it on top of my
car? Is it when I pay the purchase price at the cash register?
10.1.2.3.1. Note that § 2-501(1)(b) refers to identification “when goods are
shipped, marked or otherwise designated by the seller.” However, § 2-501(1)(b)
only applies to future goods, and thus it is not applicable to this situation, where
goods are in existence (see § 2-105(2) for the definition of “future goods”).
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