Question

General Mills contracted with Max Grains Corp., to begin supplying them with wheat and other grains for their products. The contract was signed in December 2016 and the first delivery is expected for September 2019. At what time will General Mills acquire an interest in the goods that Max Grains will supply?

Group of answer choices

At the time they are harvested

At the time they entered the contract on December 2016

At the time the goods are shipped or are designated by the seller (Max Grains)

When General Mills select the goods

Answer 1

Answer: When General Mills select the goods

Explanation:

The buyer acquires an insurable interest in the goods upon identification of the goods to the contract. Contracted date, harvesting time and shipping time do not provide an interest in the goods supplied. Hence when General Mills selects the goods, they will acquire an interest in the goods that Max Grains will supply.