(3.5) "Authenticate" means:
(A) A heading in capital letters 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.
(10.5) "Consumer" means an individual who enters into a transaction primarily for personal, family, or household purposes.
(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.
(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;
(B) 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
(A) Has generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute as to the debts;
(B) Is unable to pay debts as they become due; or
(C) Is insolvent within the meaning of federal bankruptcy law.
(A) 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 is none, to any address reasonable under the circumstances; or
(B) In any other way cause to be received any record or notice within the time it would have arrived if properly sent.
Source: L. 2006: Entire article R&RE, p. 458, § 1, effective September 1. L. 2007: (b)(5), (b)(15), (b)(20)(A), and (b)(20)(C) amended, p. 374, § 26, effective August 3.
Editor's note: This section is similar to former § 4-1-201 as it existed prior to 2006.
Cross references: For offenses relating to security interest, see §§ 18-5-504, 18-5-505, and 18-5-511.
Source: Former Section 1-201.
Changes from former law: In order to make it clear that all definitions in the Uniform Commercial Code -- not just those in Article 1 -- do not apply if the context otherwise requires, a new subsection (a) to that effect has been added. The reference to the "context" is intended to refer to the context in which the defined term is used in the UCC. In other words, the definition applies whenever the defined term is used unless the context in which the defined term is used in the statute indicates that the term was not used in its defined sense. Consider, for example, UCC §§ 3-103(a)(9) (defining "promise," in relevant part, as "a written undertaking to pay money signed by the person undertaking to pay") and 3-303(a)(1) (indicating that an instrument is issued or transferred for value if "the instrument is issued or transferred for a promise of performance, to the extent that the promise has been performed." It is clear from the statutory context of the use of the word "promise" in § 3-303(a)(1) that the term was not used in the sense of its definition in § 3-103(a)(9). Thus, the § 3-103(a)(9) definition should not be used to give meaning to the word "promise" in § 3-303(a). The remainder of former Section 1-201, as revised, now appears as subsection (b).
Other than minor stylistic changes, the definitions in this draft are as in former Article 1 (as amended, most recently, in conjunction with revisions to Article 9) except as noted below. It should be noted that numbering of existing definitions has been left constant even though some new definitions have been added to this section and some others have been moved to other sections.
3a. "Authenticate." This is the standard definition of the term used in acts prepared by the National Conference of Commissioners on Uniform State Laws.
The first sentence of paragraph (9) makes clear that a buyer from a pawnbroker cannot be a buyer in ordinary course of business. The second sentence tracks Section 6-102(1)(m). It explains what it means to buy "in the ordinary course." The penultimate sentence prevents a buyer that does not have the right to possession as against the seller from being a buyer in ordinary course of business. Concerning when a buyer obtains possessory rights, see Sections 2-502 and 2-716. However, the penultimate sentence is not intended to affect a buyer's status as a buyer in ordinary course of business in cases (such as a "drop shipment") involving delivery by the seller to a person buying from the buyer or a donee from the buyer. The requirement relates to whether as against the seller the buyer or one taking through the buyer has possessory rights.
11a. "Consumer." Derived from Section 9-102(a)(25).
Dock warrants were within the Sales Act definition of document of title apparently for the purpose of recognizing a valid tender by means of such paper. In current commercial practice a dock warrant or receipt is a kind of interim certificate issued by steamship companies upon delivery of the goods at the dock, entitling a designated person to have issued to him at the company's office a bill of lading. The receipt itself is invariably nonnegotiable in form although it may indicate that a negotiable bill is to be forthcoming. Such a document is not within the general compass of the definition, although trade usage may in some cases entitle such paper to be treated as a document of title. If the dock receipt actually represents a storage obligation undertaken by the shipping company, then it is a warehouse receipt within this Section regardless of the name given to the instrument.
The goods must be "described," but the description may be by marks or labels and may be qualified in such a way as to disclaim personal knowledge of the issuer regarding contents or condition. However, baggage and parcel checks and similar "tokens" of storage which identify stored goods only as those received in exchange for the token are not covered by this Article.
The definition is broad enough to include an airway bill.
Over time, however, amendments to the UCC brought the Article 2 merchant concept of good faith (subjective honesty and objective reasonableness) into other Articles. First, Article 2A explicitly incorporated the Article 2 standard. See current UCC Section 2A-103(7). Then, other Articles broadened the applicability of that standard by adopting it for all parties rather than just for merchants. See, e.g., UCC Sections 3-103(a)(4), 4A-105(a)(6), 8-102(a)(10), and 9-102(a)(43). See also Draft of Revised Article 2. All of these definitions are comprised of two elements -- honesty in fact and the observance of reasonable commercial standards of fair dealing. Only revised Article 5 defines "good faith" solely in terms of subjective honesty, and only Article 6 and Article 7 are without definitions of good faith. (It should be noted that, while revised Article 6 did not define good faith, Comment 2 to revised UCC section 6-102 states that "this Article adopts the definition of 'good faith' in Article 1 in all cases, even when the buyer is a merchant.") Given this near unanimity, it is appropriate to move the broader definition of "good faith" to Article 1. Of course, this definition is subject to the applicability of the narrower definition in revised Article 5.
22. "Insolvency proceedings." Unchanged from former Section 1-201.
23. "Insolvent." Derived from former Section 1-201. The three tests of insolvency -- "generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute as to them," "unable to pay debts as they become due," and "insolvent within the meaning of the federal bankruptcy law" -- are expressly set up as alternative tests and must be approached from a commercial standpoint.
24. "Money." Unchanged from former Section 1-201. The test is that of sanction of government, whether by authorization before issue or adoption afterward, which recognizes the circulating medium as a part of the official currency of that government. The narrow view that money is limited to legal tender is rejected.
28. "Organization." The former definition of this word has been replaced with the standard definition used in acts prepared by the National Conference of Commissioners on Uniform State Laws.
29. "Party." Substantively identical to former Section 1-201. Mention of a party includes, of course, a person acting through an agent. However, where an agent comes into opposition or contrast to the principal, particular account is taken of that situation.
30. "Person." The former definition of this word has been replaced with the standard definition used in acts prepared by the National Conference of Commissioners on Uniform State Laws.
30a. "Present value." This definition was formerly contained within the definition of "security interest" in former Section 1-201(37).
31. "Presumption." Unchanged from former Section 1-201.
32. "Purchase." Derived from former UCC Section 1-201. The form of definition has been changed from "includes" to "means."
33. "Purchaser." Unchanged from former Section 1-201.
33a. "Record." Derived from Section 9-102(a)(69).
34. "Remedy." Unchanged from former Section 1-201. The purpose is to make it clear that both remedy and right (as defined) include those remedial rights of "self help" which are among the most important bodies of rights under the Uniform Commercial Code, remedial rights being those to which an aggrieved party can resort on its own motion.
35. "Representative." Derived from former Section 1-201. Reorganized, and form changed from "includes" to "means."
36. "Right." Unchanged from former Section 1-201.
37. "Security Interest." The definition is the first paragraph of the definition of "security interest" in former Section 1-201. The remaining portion has been moved to Section 1-203. Notice that in view of Article 9 the term includes the interest of certain outright buyers of certain kinds of property.
38. "Send." New. Compare "notifies".
39. "Signed." Derived from former Section 1-201. Former Section 1-201 referred to "intention to authenticate"; because authenticate is now a defined term, the language has been changed to "intention to adopt or accept." The latter formulation is derived from the definition of "authenticate," The definition of "signed" is to make clear that, as the term is used in the Uniform Commercial Code, a complete signature is not necessary. The symbol may be printed, stamped or written; it may be by initials or by thumbprint. It may be on any part of the document and in appropriate cases may be found in a billhead or letterhead. No catalog of possible situations can be complete and the court must use common sense and commercial experience in passing upon these matters. The question always is whether the symbol was executed or adopted by the party with present intention to adopt or accept the writing.
39a. "State." This is the standard definition of the term used in acts prepared by the National Conference of Commissioners on Uniform State Laws.
40. "Surety." This definition makes it clear that "surety" includes all secondary obligors, not just those whose obligation refers to them person obligated as a surety. As to the nature of secondary obligations generally, see Restatement of Suretyship and Guaranty § 1.
42. "Term." Unchanged from former Section 1-201.
43. "Unauthorized signature." Unchanged from former Section 1-201.
45. "Warehouse receipt." Unchanged from former Section 1-201, which was derived from Section 76(1), Uniform Sales Act; Section 1, Uniform Warehouse Receipts Act. Receipts issued by a field warehouse are included, provided the warehouseman and the depositor of the goods are different persons.
46. "Written" or "writing." Unchanged from former Section 1-201.