Sales and Leases | 51
Goods must both exist and be identified before any interest in the goods can pass. In this vein, the term future goods describes goods that (1) do not yet exist and (2) are not yet identified. If any transaction purports to be a present, immediate sale of future goods or any interest in them, the transaction is nothing more than a contract to sell. Once the goods come into being and are identified, then (and only then) can any title or interest in them pass from the seller to the buyer. One consequence of this rule is that the goods need not exist, and the seller need not have title to them, at the time of contracting. It suffices if the goods exist, and the seller has title to them, when they are delivered to the buyer. [U.C.C. § 2-105(2) (1951); 2 Anderson U.C.C. § 2-105:9 (3d. ed.), Westlaw (database updated Dec. 2020).] Example : A printer contracted with a publisher to print two million newspaper inserts at a price of $40,000. At the time of contracting, the inserts were future goods. The inserts did not exist at that time, and hence they were not identified to the contract. Thus, when the parties entered the contract here, no interest in or title to the inserts could pass. There was, however, a perfectly valid contract for the sale of goods governed by Article 2. [ See The Press, Inc. v. Fins & Feathers Publishing Co. , 361 N.W.2d 171 (Minn. Ct. App. 1985).] 8. Lot Article 2 defines a lot as “a parcel or a single article which is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.” [U.C.C. § 2-105(5) (1951).] In other words, a lot consists of the goods that are the subject of either (1) the sale at large or (2) one distinct delivery within the larger sale. Delivery of a lot thus may or may not wholly satisfy the seller’s obligations. [2 Anderson U.C.C. § 2-105:13 (3d. ed.), Westlaw (database updated Dec. 2020).] 9. Commercial Unit Initially, the terms lot and commercial unit seem conceptually similar, and in some ways, they are. But Article 2 assigns a separate definition to each term, so it is crucial not to conflate or confuse the two. In that vein, a commercial unit is “such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use.” [U.C.C. § 2-105(6) (1951).] Put another way, a commercial unit is one item or a group of items that, within the relevant commercial practices, is treated as a single item or unit. Dividing the item or group, then, would impair its commercial value, its character, or its usefulness. Examples of commercial units might include one article, such as an assembled machine, or a quantity of items, such as a bale or carload. [U.C.C. § 2- 105(6) (1951); 2 Anderson U.C.C. § 2-105:14 (3d. ed.), Westlaw (database updated Dec. 2020).]
a. Price and Commercial Units
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