U.C.C. § 2-107 — Goods to Be Severed From Realty: Recording

Editorial note. Section 2-107 supplanted a doctrinally fragmented body of common-law rules that classified contracts for the sale of things attached to realty variously as sales of goods or as conveyances of land, depending on the identity of the severing party and the nature of the subject matter.

Editorial note. Under § 2-107(1), a contract for the sale of minerals or a structure to be severed from realty by the seller is a contract for the sale of goods within Article 2. Under § 2-107(2), a contract for the sale of growing crops or of timber to be cut is a sale of goods regardless of who severs. Under § 2-107(3), the parties may by identification effect a present sale before severance, and the affected transaction is subject to the third-party rights provided by the law of real property.

Editorial note. The section applies to any transaction in which the subject matter is presently attached to or forms part of the realty and severance is contemplated.

Editorial note. Section 2-107 coordinates Article 2 with Article 9 (which governs security interests in goods, including goods to be severed) and with the state law of fixtures reflected in § 9-334.

Editorial note. Section 2-107 is the primary Article 2 mechanism for classifying transactions at the border between personalty and realty. Whether the writing requirement of § 2-201 or the Statute of Frauds for interests in land supplies the writing rule depends on the § 2-107 classification.

Editorial note. Courts apply § 2-107 to disputes over timber contracts, mineral leases, standing crops, and the sale of removable structures. The classification determines the applicable warranty, remedy, and Statute-of-Frauds regime.

Editorial note. See U.C.C. § 2-105 ('goods' defined); § 2-201 (Statute of Frauds for sales of goods); § 9-102(a)(41) (fixture definition); § 9-334 (fixture priority); Statute of Frauds, 29 Car. 2, c. 3 (1677).

Editorial note. A conveyancer or commercial practitioner must apply § 2-107 to determine whether the transaction is subject to Article 2, to real-property recording law, or to both.