Identifying goods to contract

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  • #3204599

    On September 10, Bell Corp. entered into a contract to purchase 50 lamps from Glow Manufacturing. Bell prepaid 40% of the purchase price. Glow became insolvent on September 19 before segregating, in its inventory, the lamps to be delivered to Bell. Bell will not be able to recover the lamps because:

    The answer to this was because the goods are not identified to the contract. Are the goods not identified to the contract because Glow did not segregate the inventory of lamps that were to be delivered to Bell before it became insolvent?

    Trying to identify what in the question indicates that the goods were not identified to the contract.

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  • #3204665
    Ibrahim S

    Exactly correct. As you've said, the entity's lack of segregation of the goods implies that they have not been specifically identified and set aside for the buyer. Thus, the buyer would not have the power to recover the goods, but could sue for damages or, if the seller files for bankruptcy, attempt to recover the amount from the bankruptcy estate.

    AUD - 92 (September 2020)

    BEC - 97 (January 2020)

    FAR - 97 (December 2019)

    REG - 97 (December 2020)


    Thank you!

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