70A-2-501 - Insurable interest in goods -- Manner of identification of goods.
70A-2-501. Insurable interest in goods -- Manner of identification of goods.
(1) The buyer obtains a special property and an insurable interest in goods byidentification of existing goods as goods to which the contract refers even though the goods soidentified are nonconforming and he has an option to return or reject them. Such identificationcan be made at any time and in any manner explicitly agreed to by the parties. In the absence ofexplicit agreement identification occurs
(a) when the contract is made if it is for the sale of goods already existing and identified;
(b) if the contract is for the sale of future goods other than those described in paragraph(c), when goods are shipped, marked or otherwise designated by the seller as goods to which thecontract refers;
(c) when the crops are planted or otherwise become growing crops or the young areconceived if the contract is for the sale of unborn young to be born within 12 months aftercontracting or for the sale of crops to be harvested within 12 months or the next normal harvestseason after contracting whichever is longer.
(2) The seller retains an insurable interest in goods so long as title to or any securityinterest in the goods remains in him and where the identification is by the seller alone he mayuntil default or insolvency or notification to the buyer that the identification is final substituteother goods for those identified.
(3) Nothing in this section impairs any insurable interest recognized under any otherstatute or rule of law.
Enacted by Chapter 154, 1965 General Session