§12A-2A-103. Definitions and index of definitions.
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DEFINITIONS AND INDEX OF DEFINITIONS
(1)In this article unless the context otherwise requires:
(a)"Buyer in the ordinary course of business" means a
person who in good faith and without knowledge that
the sale to him or her is in violation of the
ownership rights or security interest or leasehold
interest of a third party in the goods, buys in the
ordinary course from a person in the business of
selling goods of that kind but does not include a
pawnbroker. "Buying" may be for cash or by exchange
of other property or on secured or unsecured credit
and includes acquiring goods or documents of title
under a preexisting contract for sale but does not
include a transfer in bulk or as security for or in
total or partial satisfaction of a money debt.
(b)"Cancellation" occurs when either party puts an end to
the lease contract for default by the other party.
(c)"Commercial unit" means such a unit of goods as by
commercial usage is a single whole for purposes of
lease 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 a
line of machinery, or a quantity, as a gross or
carload, or any other unit treated in use or in the
relevant market as a single whole.
(d)"Conforming" goods or performance under a lease
contract means goods or performance that are in
accordance with the obligations under the lease
contract.
(e)"Consumer lease" means a lease that a lessor regularly
engaged in the business of leasing or selling makes to
a lessee who is an individual and who takes under the
lease primarily for a personal, family, or household
purpose, if the total payments to be made under the
lease contract, excluding payments for options to
renew or buy, do not exceed Forty-five Thousand
Dollars ($45,000.00).
(f)"Fault" means wrongful act, omission, breach, or
default.
(g)"Finance lease" means a lease with respect to which:
(i)the lessor does not select, manufacture or supply
the goods;
(ii)the lessor acquires the goods or the right to
possession and use of the goods in connection
with the lease; and
(iii)one of the following occurs:
the lessee receives a copy of the contract
by which the lessor acquired the goods or
the right to possession and use of the goods
before signing the lease contract;
(B)the lessee's approval of the contract by
which the lessor acquired the goods or the
right to possession and use of the goods is
a condition to effectiveness of the lease
contract;
(C)the lessee, before signing the lease
contract, receives an accurate and complete
statement designating the promises and
warranties, and any disclaimers of
warranties, limitations or modifications of
remedies, or liquidated damages, including
those of a third party, such as the
manufacturer of the goods, provided to the
lessor by the person supplying the goods in
connection with or as part of the contract
by which the lessor acquired the goods or
the right to possession and use of the
goods; or
(D)if the lease is not a consumer lease, the
lessor, before the lessee signs the lease
contract, informs the lessee in writing
of the identity of the person supplying the
goods to the lessor, unless the lessee has
selected that person and directed the lessor
to acquire the goods or the right to
possession and use of the goods from that
person,
(b)that the lessee is entitled
under this article to the promises and
warranties, including those of any third
party, provided to the lessor by the person
supplying the goods in connection with or as
part of the contract by which the lessor
acquired the goods or the right to
possession and use of the goods, and
that the lessee may communicate with the
person supplying the goods to the lessor and
receive an accurate and complete statement
of those promises and warranties, including
any disclaimers and limitations of them or
of remedies.
(h)"Goods" means all things that are movable at the time
of identification to the lease contract, or are
fixtures (Section 2A-309 of this title). The term
includes future goods, specially manufactured goods,
and the unborn young of animals. The term does not
include information, the money in which the price is
to be paid, investment securities under Article 8 of
the Uniform Commercial Code, minerals or the like,
including oil and gas, before extraction, or choses in
action.
(i)"Hybrid lease" means a single transaction involving a
lease of goods and:
(i)the provision of services;
(ii)a sale of other goods; or
(iii)a sale, lease, or license of property other than
goods.
(j)"Installment lease contract" means a lease contract
that authorizes or requires the delivery of goods in
separate lots to be separately accepted, even though
the lease contract contains a clause "each delivery is
a separate lease" or its equivalent.
(k)"Lease" means a transfer of the right to possession
and use of goods for a term in return for
consideration, but a sale, including a sale on
approval or a sale or return, or retention or creation
of a security interest or license of information is
not a lease. Unless the context clearly indicates
otherwise, the term includes a sublease.
(l)"Lease agreement" means the bargain, with respect to
the lease, of the lessor and the lessee in fact as
found in their language or by implication from other
circumstances including course of dealing of usage of
trade or course of performance as provided in this
article. Unless the context clearly indicates
otherwise, the term includes a sublease agreement.
(m)"Lease contract" means the total legal obligation that
results from the lease agreement as affected by this
article and any other applicable rules of law. Unless
the context clearly indicates otherwise, the term
includes a sublease contract.
(n)"Leasehold interest" means the interest of the lessor
or the lessee under a lease contract.
(o)"Lessee" means a person who acquires the right to
possession and use of goods under a lease. Unless the
context clearly indicates otherwise, the term includes
a sublessee.
(p)"Lessee in the ordinary course of business" means a
person who in good faith and without knowledge that
the lease to him or her is in violation of the
ownership rights or security interest or leasehold
interest of a third party in the goods leases in the
ordinary course from a person in the business of
selling or leasing goods of that kind but does not
include a pawnbroker. "Leasing" may be for cash or by
exchange of other property or on secured or unsecured
credit and includes acquiring goods or documents of
title under a preexisting lease contract but does not
include a transfer in bulk or as security for or in
total or partial satisfaction of a money debt.
(q)"Lessor" means a person who transfers the right to
possession and use of goods under a lease. Unless the
context clearly indicates otherwise, the term includes
a sublessor.
(r)"Lessor's residual interest" means the lessor's
interest in the goods after expiration, termination,
or cancellation of the lease contract.
(s)"Lien" means a charge against or interest in goods to
secure payment of a debt or performance of an
obligation, but the term does not include a security
interest.
(t)"Lot" means a parcel or a single article that is the
subject matter of a separate lease or delivery,
whether or not it is sufficient to perform the lease
contract.
(u)"Merchant lessee" means a lessee that is a merchant
with respect to goods of the kind subject to the
lease.
(v)"Present value" means the amount as of a date certain
of one or more sums payable in the future, discounted
to the date certain. The discount is determined by
the interest rate specified by the parties if the rate
was not manifestly unreasonable at the time the
transaction was entered into; otherwise, the discount
is determined by a commercially reasonable rate that
takes into account the facts and circumstances of each
case at the time the transaction was entered into.
(w)"Purchase" includes taking by sale, lease, mortgage,
security interest, pledge, gift, or any other
voluntary transaction creating an interest in goods.
(x)"Sublease" means a lease of goods the right to
possession and use of which was acquired by the lessor
as a lessee under an existing lease.
(y)"Supplier" means a person from whom a lessor buys or
leases goods to be leased under a finance lease.
(z)"Supply contract" means a contract under which a
lessor buys or leases goods to be leased.
(aa)"Termination" occurs when either party pursuant to a
power created by agreement or law puts an end to the
lease contract otherwise than for default.
(2)Other definitions applying to this article and the sections in which they appear are:
"Accessions". Subsection
(1)of Section 2A-310 of this
title.
"Construction mortgage". Paragraph
(d)of subsection
of Section 2A-309 of this title.
"Encumbrance". Paragraph
(e)of subsection
(1)of Section
2A-309 of this title.
"Fixtures". Paragraph
(a)of subsection
(1)of Section 2A-
309 of this title.
"Fixture filing". Paragraph
(b)of subsection
(1)of
Section 2A-309 of this title.
"Purchase money lease". Paragraph
(c)of subsection
(1)of
Section 2A-309 of this title.
(3)The following definitions in other articles apply to this article:
"Account". Paragraph
(2)of subsection
(a)of Section 1-9-
102 of this title.
"Between merchants". Subsection
(3)of Section 2-104 of
this title.
"Buyer". Paragraph
(a)of subsection
(1)of Section 2-103
of this title.
"Chattel paper". Paragraph
(11)of subsection
(a)of
Section 1-9-102 of this title.
"Consumer goods". Paragraph
(23)of subsection
(a)of
Section 1-9-102 of this title.
"Document". Paragraph
(30)of subsection
(a)of Section 1-
9-102 of this title.
"Entrusting". Paragraph
(3)of Section 2-403 of this
title.
"General intangible". Paragraph
(42)of subsection
(a)of
Section 1-9-102 of this title.
"Instrument". Paragraph
(47)of subsection
(a)of Section
1-9-102 of this title.
"Merchant". Subsection
(1)of Section 2-104 of this title.
"Mortgage". Paragraph
(55)of subsection
(a)of Section 1-
9-102 of this title.
"Pursuant to commitment". Paragraph
(69)of subsection
of Section 1-9-102 of this title.
"Receipt". Subsection
(c)of paragraph
(1)of Section 2-
103 of this title.
"Sale". Paragraph
(1)of Section 2-106 of this title.
"Sale on approval". Section 2-326 of this title.
"Sale or return". Section 2-326 of this title.
"Seller". Subparagraph
(c)of paragraph
(1)of Section 2-
103 of this title.
(4)In addition, Article 1 of this title, contains general definitions and principles of construction and interpretation applicable throughout this article. Added by Laws 1988, c. 86, § 3, eff. Nov. 1, 1988. Amended by Laws 1991, c. 117, § 3, eff. Jan. 1, 1992; Laws 2000, c. 371, § 153, eff. July 1, 2001; Laws 2005, c. 140, § 53, eff. Jan. 1, 2006; Laws 2005, c. 473, § 2, emerg. eff. June 9, 2005; Laws 2015, c. 374, § 26, eff. Nov. 1, 2015; Laws 2024, c. 13, § 13, eff. Nov. 1, 2024. NOTE: Laws 2005, c. 139, § 28 repealed by Laws 2005, c. 473, § 3, emerg. eff. June 9, 2005.