12.03.010 Buyer's Interest in Goods; Manner of Identification of Goods

(a) 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 (3), when goods are shipped, marked, or otherwise designated by the seller as goods to which the contract refers;

(3) When crops are planted or otherwise become growing crops or the young are conceived if the contract is for the sale of unborn young or crops to be harvested. In a contract for sale of unborn young, birth must occur or be expected to occur within twelve (12) months of the date of contracting. In a cc tract for sale of crops to be harvested, harvesting must occur within twelve (12) months of the date of contracting or at the time of the next normal harvest season after contracting, whichever time period is longer.

(b) The seller retains an insurable interest in goods so long as title to or any security interest in the goods remains in him. Where the identification is to be made by the seller alone, he may, until he defaults or until he notifies the buyer that the identification is final, substitute other goods for those identified.