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]