Sales and Leases | 36
in goods to which Article 2 applies), but only if the seller (or one acting on the seller’s behalf) is the one to do the severing. Similarly, a contract for the sale of a structure or its materials to be removed from realty is one for the sale of goods. Here again, though, the seller must do the severing. In either case, if the buyer does the severing, then the contract is considered a contract affecting land, not one for the sale of goods. Hence, Article 2 would not apply. [U.C.C. § 2-107(1), cmt. 1 (1951).] Note : Before the minerals, structure, or the structure’s materials are actually severed from the realty, the relevant contract is effective only as a contract of sale—even if it purports to be a present sale. It is not effective as a conveyance of any interest in the goods unless it would be effective as a conveyance under relevant real property law. The upshot here is that, before severance, the goods are treated as real property, not personal property, for all purposes outside the UCC. [See U.C.C. § 2- 107(1) (1951); 2 Anderson U.C.C. § 2-107:8 (3d. ed.), Westlaw (database updated Dec. 2020).] Example : A buyer and seller contracted for the seller to provide a specified quantity of coal from a designated coal mine. At the time, the coal had not yet been mined. Per the contract, the seller was to extract the coal from the mine. To that end, the contract specified that the seller would enter a separate agreement with the mine’s operator. Per that separate agreement, the operator would mine the coal on the seller’s behalf for delivery to the buyer. Here, the contract is one for the sale of goods. True, when the buyer and seller entered their contract, the coal was not movable because it remained in the earth, unmined. However, per that contract, the seller, via the operator, was to extract the coal and deliver it to the buyer. [ Adapted from Son v. Coal Equity, Inc. , 293 B.R. 392 (W.D. Ky 2003), aff’d in part, rev’d in part on other grounds by 122 Fed.Appx. 797 (6th Cir. 2004).] 2) Growing Crops and Other Things Attached to Land and Timber to Be Cut Contracts for the sale of goods include contracts for the sale of growing crops and timber to be cut. In addition, contracts for the sale of goods encompass things other than crops or timber to be cut that are attached to realty, provided that the other things (1) do not consist of minerals and similar substances, oil, gas, or structures and their materials and (2) can be removed without material harm to the land. Here, it does not matter whether the buyer or the seller is the one to do the severing. In either case, the contract is one for the sale of goods. And here, the contract of sale may make a present conveyance of the goods, even if they have not yet been severed from the realty, provided the parties identify what is to be sold. [U.C.C. § 2-
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