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This entry was published on 2014-09-22
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SECTION 2-501
Insurable Interest in Goods; Manner of Identification of Goods
Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 2, PART 5
Section 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 non-conforming 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.