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 by
identification of existing goods as goods to which the contract refers even though the goods so
identified are nonconforming and he has an option to return or reject them. Such identification can
be made at any time and in any manner explicitly agreed to by the parties. In the absence of
explicit 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 the
contract refers;
(c) when the crops are planted or otherwise become growing crops or the young are
conceived if the contract is for the sale of unborn young to be born within twelve months after
contracting or for the sale of crops to be harvested within twelve months or the next normal
harvest season after contracting whichever is longer.
(2) The seller retains an insurable interest in goods so long as title to or any security
interest in the goods remains in him and where the identification is by the seller alone he may
until default or insolvency or notification to the buyer that the identification is final substitute
other goods for those identified.
(3) Nothing in this section impairs any insurable interest recognized under any other
statute or rule of law.
Enacted by Chapter 154, 1965 General Session
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Last revised: Thursday, May 28, 2009