Also known as: goods severing from realty · severed from realty · severed goods · UCC §2-107
Written by attorneys · grounded in primary & secondary sources — see below
Identified things attached to realty that qualify as goods under Article 2 of the UCC when severed from the land by the seller. Severance by the buyer instead leaves the transaction outside Article 2 and subject to common-law rules.
Greta Goldstein owns wooded acreage and contracts to sell a specified stand of mature oak to Gareth Glover for $45,000. The contract requires Greta to fell the trees, cut them into logs, and deliver the logs to Gareth's mill within thirty days. Because Greta will perform the severance, the logs are goods under the UCC once identified to the contract.
Genesis Pharmaceuticals purchases natural gas from a producer that extracts the gas from its own wells and delivers it by pipeline. When the producer later files for bankruptcy, the court treats the delivered gas as goods because the producer severed it from the realty before identification and sale.
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Article 2 applies only if the seller is the party who will sever the minerals, oil, or gas from the land. If the buyer must perform the severance, common-law rules control instead.
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Yes. UCC section 2-105 expressly incorporates the rules of section 2-107, making identified things attached to realty into goods once they are severed by the seller.
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The UCC supplies a widely accepted, uniform definition of goods that predates section 503(b)(9) and fits commercial transactions between corporations, so courts use it as the principal analog for determining priority claims.
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