Legal Definitions - future goods

In legal terms, goods generally refer to all things that are movable at the time they are identified for sale, excluding money, investment securities, and legal claims. Future goods are a specific category of goods that are not yet in existence or have not yet been identified as the specific items for a contract at the time the contract for their sale is made.

Essentially, for goods to be considered "future goods," they must be manufactured, grown, or acquired by the seller after the sales agreement has been established. Ownership (or "title") of these goods cannot legally transfer to the buyer until they come into existence and are specifically identified as the items intended for the contract.

Here are some examples to illustrate this concept:

• Custom Manufacturing: Imagine a restaurant chain contracts with a kitchen equipment manufacturer to design and build 50 specialized, high-efficiency ovens for their new locations. At the time the contract is signed, these ovens do not physically exist; they must be manufactured according to the restaurant's specifications over the next several months. These unbuilt ovens are considered future goods because their creation and identification as the specific items for the contract will occur after the agreement is made. Ownership will only pass once the ovens are built and designated for the restaurant.

• Agricultural Products: Consider a brewery that enters into an agreement with a hops farm in early spring to purchase the entire yield of a particular variety of hops from a specific field that will be harvested in late summer. When the contract is formed, the hops plants are still growing and have not yet produced the harvestable cones. The future harvest of hops is classified as future goods because they are not yet in existence in their final, marketable form and have not been identified as the specific quantity to be delivered. The brewery will take ownership only after the hops are harvested and prepared for shipment.

• Commissioned Art or Craft: A client commissions a sculptor to create a unique bronze statue for their garden. The sculptor agrees to the design and price, but the bronze has not yet been cast, nor has the intricate work begun. The uncreated statue is a future good because it does not exist at the moment the contract is formed. The sculptor must first acquire the materials and then create the specific piece of art. Ownership will transfer to the client only once the statue is completed and identified as the commissioned work.