Insurable Interest in Goods; Manner of Identification of Goods

1. Law
2. Georgia Code
3. Commercial Code
4. Sales
5. Performance
6. 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:

1. When the contract is made if it is for the sale of goods already existing and identified;
2. If the contract is for the sale of future goods other than those described in paragraph (c) of this subsection, when goods are shipped, marked, or otherwise designated by the seller as goods to which the contract refers;
3. 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 12 months after contracting or for the sale of crops to be harvested within 12 months or the next normal harvest season after contracting whichever is longer.

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.

Nothing in this Code section impairs any insurable interest recognized under any other statute or rule of law.

(Code 1933, § 109A-2 - 501, enacted by Ga. L. 1962, p. 156, § 1.)

Law reviews.

- For article discussing the resolution of conflicting claims to goods between an unsecured seller of goods and a creditor of a buyer claiming under an after-acquired property clause, see 28 Mercer L. Rev. 625 (1977). For article, "Impracticability As Risk Allocation: The Effect of Changed Circumstances upon Contract Obligations for the Sale of Goods," see 22 Ga. L. Rev. 503 (1988).

JUDICIAL DECISIONS

Cited in First Nat'l Bank & Trust Co. v. Smithloff, 119 Ga. App. 284, 167 S.E.2d 190 (1969); Promech Corp. v. Brodhead-Garrett Co., 131 Ga. App. 314, 205 S.E.2d 511 (1974); International Harvester Credit Corp. v. Associates Fin. Servs. Co., 133 Ga. App. 488, 211 S.E.2d 430 (1974); Trust Co. v. Thompson, 133 Ga. App. 866, 212 S.E.2d 498 (1975); Redfern Meats, Inc. v. Hertz Corp., 134 Ga. App. 381, 215 S.E.2d 10 (1975); Western Publishing Co. v. International Horizons, Inc., 21 Bankr. 414 (N.D. Ga. 1982).

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 962.

6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:378.

C.J.S.

- 44 C.J.S., Insurance, §§ 218-221.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 2-501.

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