TITLE 6A
Uniform Commercial Code
CHAPTER 6A-1
General Provisions
PART 6A-1-201
General Definitions and Principles of Interpretation
SECTION 6A-1-201
§ 6A-1-201 General definitions.
(a) Unless the context otherwise requires, words or phrases defined in this
section, or in the additional definitions contained in other chapters of title
6A that apply to particular chapters or parts thereof, have the meanings stated.
(b) Subject to definitions contained in other chapters of
title 6A that apply to particular chapters or parts thereof:
(1) "Action", in the sense of a judicial proceeding, includes
recoupment, counterclaim, set-off, suit in equity, and any other proceeding in
which rights are determined.
(2) "Aggrieved party" means a party entitled to pursue a
remedy.
(3) "Agreement", as distinguished from "contract", means the
bargain of the parties in fact, as found in their language or inferred from
other circumstances, including course of performance, course of dealing, or
usage of trade as provided in § 6A-1-303.
(4) "Bank" means a person engaged in the business of banking
and includes a savings bank, savings and loan association, credit union, and
trust company.
(5) "Bearer" means a person in possession of a negotiable
instrument, document of title, or certificated security that is payable to
bearer or indorsed in blank.
(6) "Bill of lading" means a document evidencing the receipt
of goods for shipment issued by a person engaged in the business of
transporting or forwarding goods.
(7) "Branch" includes a separately incorporated foreign
branch of a bank.
(8) "Burden of establishing" a fact means the burden of
persuading the trier of fact that the existence of the fact is more probable
than its nonexistence.
(9) "Buyer in ordinary course of business" means a person
that buys goods in good faith, without knowledge that the sale violates the
rights of another person in the goods, and in the ordinary course from a
person, other than a pawnbroker, in the business of selling goods of that kind.
A person buys goods in the ordinary course if the sale to the person comports
with the usual or customary practices in the kind of business in which the
seller is engaged or with the seller's own usual or customary practices. A
person that sells oil, gas, or other minerals at the wellhead or minehead is a
person in the business of selling goods of that kind. A buyer in ordinary
course of business may buy for cash, by exchange of other property, or on
secured or unsecured credit, and may acquire goods or documents of title under
a preexisting contract for sale. Only a buyer that takes possession of the
goods or has a right to recover the goods from the seller under Chapter 2 may
be a buyer in ordinary course of business. "Buyer in ordinary course of
business" does not include a person that acquires goods in a transfer in bulk
or as security for or in total or partial satisfaction of a money debt.
(10) "Conspicuous", with reference to a term, means so
written, displayed, or presented that a reasonable person against which it is
to operate ought to have noticed it. Whether a term is "conspicuous" or not is
a decision for the court. Conspicuous terms include the following:
(A) A heading in capitals equal to or greater in size than
the surrounding text, or in contrasting type, font, or color to the surrounding
text of the same or lesser size; and
(B) Language in the body of a record or display in larger
type than the surrounding text, or in contrasting type, font, or color to the
surrounding text of the same size, or set off from surrounding text of the same
size by symbols or other marks that call attention to the language.
(11) "Consumer" means an individual who enters into a
transaction primarily for personal, family, or household purposes.
(12) "Contract", as distinguished from "agreement", means the
total legal obligation that results from the parties' agreement as determined
by title 6A as supplemented by any other applicable laws.
(13) "Creditor" includes a general creditor, a secured
creditor, a lien creditor, and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in
equity, and an executor or administrator of an insolvent debtor's or assignor's
estate.
(14) "Defendant" includes a person in the position of
defendant in a counterclaim, cross-claim, or third-party claim.
(15) "Delivery", with respect to an instrument, document of
title, or chattel paper, means voluntary transfer of possession.
(16) "Document of title" includes bill of lading, dock
warrant, dock receipt, warehouse receipt or order for the delivery of goods,
and also any other document which in the regular course of business or
financing is treated as adequately evidencing that the person in possession of
it is entitled to receive, hold, and dispose of the document and the goods it
covers. To be a document of title, a document must purport to be issued by or
addressed to a bailee and purport to cover goods in the bailee's possession
which are either identified or are fungible portions of an identified mass.
(17) "Fault" means a default, breach, or wrongful act or
omission.
(18) "Fungible goods" means:
(A) Goods of which any unit, by nature or usage of trade, is
the equivalent of any other like unit; or
(B) Goods that by agreement are treated as equivalent.
(19) "Genuine" means free of forgery or counterfeiting.
(20) "Good faith" means honesty in fact in the conduct or
transaction concerned.
(21) "Holder" means:
(A) The person in possession of a negotiable instrument that
is payable either to bearer or to an identified person that is the person in
possession; or
(B) The person in possession of a document of title if the
goods are deliverable either to bearer or to the order of the person in
possession.
(22) "Insolvency proceeding" includes an assignment for the
benefit of creditors or other proceeding intended to liquidate or rehabilitate
the estate of the person involved.
(23) "Insolvent" means:
(A) Having generally ceased to pay debts in the ordinary
course of business other than as a result of bona fide dispute;
(B) Being unable to pay debts as they become due; or
(C) Being insolvent within the meaning of federal bankruptcy
law.
(24) "Money" means a medium of exchange currently authorized
or adopted by a domestic or foreign government. The term includes a monetary
unit of account established by an intergovernmental organization or by
agreement between two (2) or more countries.
(25) "Organization" means a person other than an individual.
(26) "Party", as distinguished from "third-party", means a
person that has engaged in a transaction or made an agreement subject to title
6A.
(27) "Person" means an individual, corporation, business
trust, estate, trust, partnership, limited liability company, association,
joint venture, government, governmental subdivision, agency, or
instrumentality, public corporation, or any other legal or commercial entity.
(28) "Present value" means the amount as of a date certain of
one or more sums payable in the future, discounted to the date certain by use
of either an interest rate specified by the parties if that rate is not
manifestly unreasonable at the time the transaction is entered into or, if an
interest rate is not so specified, a commercially reasonable rate that takes
into account the facts and circumstances at the time the transaction is entered
into.
(29) "Purchase" means taking by sale, lease, discount,
negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift,
or any other voluntary transaction creating an interest in property.
(30) "Purchaser" means a person that takes by purchase.
(31) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(32) "Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(33) "Representative" means a person empowered to act for
another, including an agent, an officer of a corporation or association, and a
trustee, executor, or administrator of an estate.
(34) "Right" includes remedy.
(35) "Security interest" means an interest in personal
property or fixtures which secures payment or performance of an obligation.
"Security interest" includes any interest of a consignor and a buyer of
accounts, chattel paper, a payment intangible, or a promissory note in a
transaction that is subject to Chapter 9. "Security interest" does not include
the special property interest of a buyer of goods on identification of those
goods to a contract for sale under § 6A-2-401, but a buyer may also
acquire a "security interest" by complying with Chapter 9. Except as otherwise
provided in § 6A-2-505, the right of a seller or lessor of goods under
Chapter 2 or 2.1 to retain or acquire possession of the goods is not a
"security interest", but a seller or lessor may also acquire a "security
interest" by complying with Chapter 9. The retention or reservation of title by
a seller of goods notwithstanding shipment or delivery to the buyer under
§ 6A-2-401 is limited in effect to a reservation of a "security interest."
Whether a transaction in the form of a lease creates a "security interest" is
determined pursuant to § 6A-1-203.
(36) "Send" in connection with a writing, record, or notice
means:
(A) To deposit in the mail or deliver for transmission by any
other usual means of communication with postage or cost of transmission
provided for and properly addressed and, in the case of an instrument, to an
address specified thereon or otherwise agreed, or if there be none to any
address reasonable under the circumstances; or
(B) In any other way to cause to be received any record or
notice within the time it would have arrived if properly sent.
(37) "Signed" includes using any symbol executed or adopted
with present intention to adopt or accept a writing.
(38) "State" means a State of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or
insular possession subject to the jurisdiction of the United States.
(39) "Surety" includes a guarantor or other secondary obligor.
(40) "Term" means a portion of an agreement that relates to a
particular matter.
(41) "Unauthorized signature" means a signature made without
actual, implied, or apparent authority. The term includes a forgery.
(42) "Warehouse receipt" means a receipt issued by a person
engaged in the business of storing goods for hire.
(43) "Writing" includes printing, typewriting, or any other
intentional reduction to tangible form. "Written" has a corresponding meaning.
History of Section.
(P.L. 1960, ch. 147, § 1; P.L. 1979, ch. 172, § 1; P.L. 1987, ch.
271, § 3; P.L. 1991, ch. 305, §§ 4, 5; P.L. 2000, ch. 182,
§ 7; P.L. 2000, ch. 238, § 5; P.L. 2000, ch. 420, § 7; P.L.
2000, ch. 421, § 5; P.L. 2006, ch. 112, § 1; P.L. 2006, ch. 135,
§ 1; P.L. 2007, ch. 19, § 2; P.L. 2007, ch. 34, § 2.)