PART 2. 

GENERAL DEFINITIONS AND

PRINCIPLES

OF INTERPRETATION

 

     §490:1-201  General definitions.  (a) 

Unless the context otherwise requires, words or phrases defined in this

section, or in the additional definitions contained in other articles of this

chapter that apply to particular articles or parts thereof, have the meanings

stated.

     (b)  Subject to definitions contained in other

articles of this chapter that apply to particular articles or parts thereof:

     "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.

     "Aggrieved party" means a party

entitled to pursue a remedy.

     "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 section

490:1-303.

     "Bank" means a person engaged in the

business of banking and includes a savings bank, savings and loan association,

credit union, financial services loan company, and trust company.

     "Bearer" means a person in control of

a negotiable electronic document of title or a person in possession of a

negotiable instrument, negotiable tangible document of title, or certificated

security that is payable to bearer or indorsed in blank.

     "Bill of lading" means a document of

title evidencing the receipt of goods for shipment issued by a person engaged

in the business of directly or indirectly transporting or forwarding goods. 

The term does not include a warehouse receipt.

     "Branch" includes a separately

incorporated foreign branch of a bank.

     "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.

     "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 article 2 may be a buyer in ordinary course of business. 

"Buyer in the 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.

     "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:

     (1)  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

     (2)  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.

     "Consumer" means an individual who

enters into a transaction primarily for personal, family, or household

purposes.

     "Contract", as distinguished from

"agreement", means the total legal obligation that results from the

parties' agreement as determined by this chapter and as supplemented by any

other applicable law.

     "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.

     "Defendant" includes a person in the

position of defendant in a counterclaim, cross-claim, or third-party claim.

     "Delivery", with respect to an

electronic document of title means voluntary transfer of control, and with

respect to an instrument, a tangible document of title, or chattel paper, means

voluntary transfer of possession.

     "Document of title" means a record:

     (1)  That in the regular course of business or

financing is treated as adequately evidencing that the person in possession or

control of the record is entitled to receive, control, hold, and dispose of the

record and the goods the record covers; and

     (2)  That purports to be issued by or addressed to a

bailee and to cover goods in the bailee's possession which are either

identified or are fungible portions of an identified mass.

     The term includes a bill of lading, transport

document, dock warrant, dock receipt, warehouse receipt, and order for delivery

of goods.  An electronic document of title means a document of title evidenced

by a record consisting of information stored in an electronic medium.  A

tangible document of title means a document of title evidenced by a record

consisting of information that is inscribed on a tangible medium.

     "Fault" means a default, breach, or

wrongful act or omission.

     "Fungible goods" means:

     (1)  Goods that any unit, by nature or usage of trade,

is the equivalent of any other like unit; or

     (2)  Goods that by agreement are treated as

equivalent.

     "Genuine" means free of forgery or

counterfeiting.

     "Good faith" means honesty in fact.

     "Holder" means:

     (1)  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;

     (2)  The person in possession of a negotiable tangible

document of title if the goods are deliverable either to bearer or to the order

of the person in possession; or

     (3)  The person in control of a negotiable electronic

document of title.

     "Insolvency proceeding" includes an

assignment for the benefit of creditors or other proceeding intended to

liquidate or rehabilitate the estate of the person involved.

     "Insolvent" means:

     (1)  Having generally ceased to pay debts in the

ordinary course of business other than as a result of bona fide dispute;

     (2)  Being unable to pay debts as they become due; or

     (3)  Being insolvent within the meaning of federal

bankruptcy law.

     "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 or more countries.

     "Organization" means a person other

than an individual.

     "Party", as distinct from a

"third party", means a person that has engaged in a transaction or

made an agreement subject to this chapter.

     "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.

     "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.

     "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.

     "Purchaser" means a person that takes

by purchase.

     "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.

     "Remedy" means any remedial right to

which an aggrieved party is entitled with or without resort to a tribunal.

     "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.

     "Right" includes remedy.

     "Security interest" means an interest

in personal property or fixtures that 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 article 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 section

490:2-401, but a buyer may also acquire a "security interest" by

complying with article 9.  Except as otherwise provided in section 490:2-505,

the right of a seller or lessor of goods under article 2 or 2A 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 article 9.  The retention or reservation of title by a seller of goods

notwithstanding shipment or delivery to the buyer under section 490:2-401 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 section 490:1-203.

     "Send" in connection with a writing,

record, or notice means:

     (1)  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

     (2)  In any other way to cause to be received any

record or notice within the time it would have arrived if properly sent.

     "Signed" includes any symbol executed

or adopted with present intention to adopt or accept a writing.

     "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.

     "Surety" includes a guarantor or

other secondary obligor.

     "Term" means a portion of an

agreement that relates to a particular matter.

     "Unauthorized signature" means a

signature made without actual, implied, or apparent authority.  The term

includes a forgery.

     "Warehouse receipt" means a document

of title issued by a person engaged in the business of storing goods for hire.

     "Writing" includes printing,

typewriting, or any other intentional reduction to tangible form. 

"Written" has a corresponding meaning. [L 2004, c 162, pt of §1 and c

163, §3]