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Texas Business & Commerce Code - Section 2.501. Insurable Interest In Goods; Manner Of Identification Of Goods

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 2.501. Insurable Interest In Goods; Manner Of Identification Of Goods

§ 2.501. INSURABLE 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 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
		(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 Subdivision (3), 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 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.
	(b)  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.
	(c)  Nothing in this section impairs any insurable interest 
recognized under any other statute or rule of law.

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.           

Last modified: August 10, 2007