41-02-03. (2-103) Definitions and index of definitions.
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/nd/title-41/chapter-41-02-sales/41-02-03·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
1. In this chapter, unless the context otherwise requires:
a. "Buyer" means a person who buys or contracts to buy goods.
b. Reserved.
c. "Receipt" of goods means taking physical possession of them.
d. "Seller" means a person who sells or contracts to sell goods.
2. Other definitions applying to this chapter or to specified parts thereof, and the sections
in which they appear are:
a. "Acceptance". Section 41-02-69.
b. "Banker's credit". Section 41-02-42.
c. "Between merchants". Section 41-02-04.
d. "Cancellation". Subsection 2 of section 41-02-06.
e. "Commercial unit". Section 41-02-05.
f. "Confirmed credit". Section 41-02-42.
g. "Conforming to contract". Section 41-02-06.
h. "Contract for sale". Section 41-02-06.
i. "Cover". Section 41-02-91.
j. "Entrusting". Section 41-02-48.
k. "Financing agency". Section 41-02-04.
l. "Future goods". Section 41-02-05.
m. "Goods". Section 41-02-05.
n. "Identification". Section 41-02-49.
o. "Installment contract". Section 41-02-75.
p. "Letter of credit". Section 41-02-42.
q. "Lot". Section 41-02-05.
r. "Merchant". Section 41-02-04.
s. "Overseas". Section 41-02-40.
t. "Person in position of seller". Section 41-02-86.
u. "Present sale". Section 41-02-06.
v. "Sale". Section 41-02-06.
w. "Sale on approval". Section 41-02-43.
x. "Sale or return". Section 41-02-43.
y. "Termination". Section 41-02-06. 3. "Control" as provided under section 41-07-06 and the following definitions in other
chapters apply to this chapter:
a. "Check". Section 41-03-04.
b. "Consignee". Section 41-07-02.
c. "Consignor". Section 41-07-02.
d. "Consumer goods". Section 41-09-02.
e. "Dishonor". Section 41-03-59.
f. "Draft". Section 41-03-04. 4. In addition, chapter 41-01 contains general definitions and principles of construction
and interpretation applicable throughout this chapter.
41-02-04. (2-104) Between merchants, financing agency, and merchant defined. 1. "Between merchants" means in any transaction with respect to which both parties are
chargeable with the knowledge or skill of merchants. 2. "Financing agency" means a bank, finance company, or other person who in the
ordinary course of business makes advances against goods or documents of title or
who by arrangement with either the seller or the buyer intervenes in ordinary course to
make or collect payment due or claimed under the contract for sale, as by purchasing
or paying the seller's draft or making advances against it or by merely taking it for
collection whether or not documents of title accompany or are associated with the
draft. "Financing agency" includes also a bank or other person who similarly
intervenes between persons who are in the position of seller and buyer in respect to
the goods (section 41-02-86). 3. "Merchant" means a person who deals in goods of the kind or otherwise by the
person's occupation holds out as having knowledge or skill peculiar to the practices or
goods involved in the transaction or to whom such knowledge or skill may be attributed
by the person's employment of an agent or broker or other intermediary who by the
employed person's occupation holds out as having such knowledge or skill.
41-02-05. (2-105) Commercial unit, goods, and lot defined - Transferability. 1. "Commercial unit" means such a unit of goods as by commercial usage is a single
whole for purposes of sale and division of which materially impairs its character or
value on the market or in use. A commercial unit may be a single article (as a
machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a
quantity (as a bale, gross, or carload) or any other unit treated in use or in the relevant
market as a single whole. 2. "Goods" means all things (including specially manufactured goods) which are movable
at the time of identification to the contract for sale other than the money in which the
price is to be paid, investment securities (chapter 41-08), and things in action. "Goods"
also includes the unborn young of animals and growing crops and other identified
things attached to realty as described in the section on goods to be severed from
realty (section 41-02-07). 3. Goods must be both existing and identified before any interest in them can pass.
Goods which are not both existing and identified are "future" goods. A purported
present sale of future goods or of any interest therein operates as a contract to sell. 4. There may be a sale of a part interest in existing identified goods. 5. An undivided share in an identified bulk of fungible goods is sufficiently identified to be
sold although the quantity of the bulk is not determined. Any agreed proportion of such
a bulk or any quantity thereof agreed upon by number, weight, or other measure may
to the extent of the seller's interest in the bulk be sold to the buyer who then becomes
an owner in common. 6. "Lot" means a parcel or a single article which is the subject matter of a separate sale
or delivery, whether or not it is sufficient to perform the contract.
41-02-06. (2-106) Definitions. 1. In this chapter, unless the context otherwise requires:
a. "Agreement" and "contract" are limited to those relating to the present or future
sale of goods.
b. "Contract for sale" includes both a present sale of goods and a contract to sell
goods at a future time.
c. "Present sale" means a sale that is accomplished by the making of the contract.
d. "Sale" consists in the passing of title from the seller to the buyer for a price
(section 41-02-46). 2. "Cancellation" occurs when either party puts an end to the contract for breach by the
other and its effect is the same as that of "termination" except that the canceling party
also retains any remedy for breach of the whole contract or any unperformed balance. 3. Goods or conduct including any part of a performance are "conforming" or conform to
the contract when they are in accordance with the obligations under the contract. 4. "Hybrid transaction" means a single transaction involving a sale of goods and:
a. The provision of services;
b. A lease of other goods; or
c. A sale, lease, or license of property other than goods. 5. "Termination" occurs when either party pursuant to a power created by agreement or
law puts an end to the contract otherwise than for its breach. On "termination" all
obligations which are still executory on both sides are discharged but any right based
on prior breach or performance survives.
41-02-07. (2-107) Goods to be severed from realty - Recording. 1. A contract for the sale of minerals or the like (including oil and gas) or a structure or its
materials to be removed from realty is a contract for the sale of goods within this
chapter if they are to be severed by the seller but until severance a purported present
sale thereof which is not effective as a transfer of an interest in land is effective only as
a contract to sell. 2. A contract for the sale apart from the land of growing crops or other things attached to
realty and capable of severance without material harm thereto but not described in
subsection 1 or of timber to be cut is a contract for the sale of goods within this chapter
whether the subject matter is to be severed by the buyer or by the seller even though it
forms part of the realty at the time of contracting, and the parties can by identification
effect a present sale before severance. 3. The provisions of this section are subject to any third-party rights provided by the law
relating to realty records, and the contract for sale may be executed and recorded as a
document transferring an interest in land and shall then constitute notice to third
parties of the buyer's rights under the contract for sale.
41-02-08. (2-201) Formal requirements - Statute of frauds. 1. Except as otherwise provided in this section, a contract for the sale of goods for the
price of five hundred dollars or more is not enforceable by way of action or defense
unless there is a record sufficient to indicate that a contract for sale has been made
between the parties and signed by the party against whom enforcement is sought or
by the party's authorized agent or broker. A record is not insufficient because it omits
or incorrectly states a term agreed upon but the contract is not enforceable under this
subsection beyond the quantity of goods shown in the record. 2. Between merchants if within a reasonable time a record in confirmation of the contract
and sufficient against the sender is received and the party receiving it has reason to
know its contents, it satisfies the requirements of subsection 1 against the party unless
notice in a record of objection to its contents is given within ten days after it is
received. 3. A contract that does not satisfy the requirements of subsection 1 but which is valid in
other respects is enforceable:
a. If the goods are to be specially manufactured for the buyer and are not suitable
for sale to others in the ordinary course of the seller's business and the seller,
before notice of repudiation is received and under circumstances which
reasonably indicate that the goods are for the buyer, has made either a
substantial beginning of their manufacture or commitments for their procurement;
b. If the party against whom enforcement is sought admits in that party's pleading,
testimony, or otherwise in court that a contract for sale was made, but the
contract is not enforceable under this provision beyond the quantity of goods
admitted; or
c. With respect to goods for which payment has been made and accepted or which
have been received and accepted (section 41-02-69).