================================================================== SOURCE-PROVENANCE HEADER (added on capture; statute text follows below the rule) Citation: O.C.G.A. Title 11, Article 1 (General Provisions), 11-1-101 through 11-1-209 Article/coverage: UCC Article 1 - General Provisions (entire article) Jurisdiction: Georgia - Official Code of Georgia Annotated (O.C.G.A.) Source: law.resource.org public-domain OCGA machine-readable release https://law.resource.org/pub/us/code/ga/gov.ga.ocga.2019.08.21.release.73.zip (OCGA Release 73, 2019-08-21; per-title ODT extracted from the full-code release zip) Extracted from: gov.ga.ocga.2019.08.21.r73.title.11.odt (content.xml -> plain text) Currency: 2019 codification (Release 73). Post-2019 amendments NOT reflected. Public-domain basis: Georgia v. Public.Resource.Org, 590 U.S. 255 (2020). Retrieved: 2026-07-10 ================================================================== TITLE 11 COMMERCIAL CODE ARTICLE 1 GENERAL PROVISIONS Part 1 General Provisions. 11-1-101. Short titles. 11-1-102. Scope of article. 11-1-103. Rules of construction to promote purposes and policies; applicability of supplemental principles of law. 11-1-104. Construction against implicit repeal. 11-1-105. Severability. 11-1-106. Use of singular and plural; gender. 11-1-107. Section captions. 11-1-108. Relation to Electronic Signatures in Global and National Commerce Act. 11-1-109. Section captions [Repealed]. Part 2 General Definitions and Principles of Interpretation. 11-1-201. General definitions. 11-1-202. Notice; knowledge. 11-1-203. Lease distinguished from security interest. 11-1-204. Value. 11-1-205. Reasonable time; seasonableness. 11-1-206. Presumptions. 11-1-207 through 11-1-209. [Repealed]. Part 3 Territorial Applicability and General Rules. 11-1-301. Territorial applicability; parties' power to choose applicable law. 11-1-302. Variation by agreement. 11-1-303. Course of performance, course of dealing, and usage of trade. 11-1-304. Obligation of good faith. 11-1-305. Remedies to be liberally administered. 11-1-306. Waiver or renunciation of claim or right after breach. 11-1-307. Prima-facie evidence by third party documents. 11-1-308. Performance or acceptance under reservation of rights. 11-1-309. Option to accelerate at will. 11-1-310. Subordinated obligations. Annotations Law reviews. - For note discussing the Uniform Commercial Code and consumer protection, see 25 Emory L.J. 445 (1976). RESEARCH REFERENCES Am. Jur. 2d. - 15A Am. Jur. 2d, Commercial Code, § 1, 16 et seq. —————————— PART 1 GENERAL PROVISIONS Annotations Editor's notes. - Ga. L. 2015, p. 996, § 1-1/SB 65, not codified by the General Assembly, provides that: "(a) This Act shall be known and may be cited as the 'Debtor-Creditor Uniform Law Modernization Act of 2015.' "(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships." 11-1-101. Short titles. Statute text (a) This Title 11 shall be known as and may be cited as the "Uniform Commercial Code." (b) This article shall be known as and may be cited as the "Uniform Commercial Code - General Provisions." History (Code 1933, § 109A-1 - 101, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, designated the existing provisions as subsection (a), and added subsection (b). Law reviews. - For article, "The Good Faith Purchase Idea and the Uniform Commercial Code," see 15 Ga. L. Rev. 605 (1981). JUDICIAL DECISIONS Effect of prior case law. - Cases dealing with rescission and with measure of damages for breach of warranty decided prior to the adoption O.C.G.A. § 11-1-101 in 1962 are not controlling in cases arising under O.C.G.A. § 11-1-101. Jacobs v. Metro Chrysler-Plymouth, Inc., 125 Ga. App. 462, 188 S.E.2d 250 (1972). Cited in Tidwell v. Slocumb (In re Ga. Steel, Inc.), 71 Bankr. 903 (Bankr. M.D. Ga. 1987); AgriCommodities, Inc. v. J. D. Heiskell & Co., 297 Ga. App. 210, 676 S.E.2d 847 (2009); Sun Nurseries, Inc. v. Lake Erma, LLC, 316 Ga. App. 832, 730 S.E.2d 556 (2012). RESEARCH REFERENCES Am. Jur. 2d. - 11 Am. Jur. 2d, Bills and Notes, § 5. 6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 1:1. C.J.S. - 82 C.J.S., Statutes, §§ 217 et seq., 238. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-101. ALR. - Recognition of action for damages for wrongful foreclosure - general views, 81 A.L.R.6th 161. Recognition of action for damages for wrongful foreclosure - types of actions, 82 A.L.R.6th 43. 11-1-102. Scope of article. Statute text This article shall apply to a transaction to the extent that it is governed by another article of this title. History (Code 1981, § 11-1-102, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations Effective date. - This Code section became effective January 1, 2016. Editor's notes. - Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016, redesignated former Code Section 11-1-102 as present Code Section 11-1-103. 11-1-103. Rules of construction to promote purposes and policies; applicability of supplemental principles of law. Statute text (a) This title shall be liberally construed and applied to promote its underlying purposes and policies which are: (1) To simplify, clarify, and modernize the law governing commercial transactions; (2) To permit the continued expansion of commercial practices through custom, usage, and agreement of the parties; and (3) To make uniform the law among the various jurisdictions. (b) Unless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause shall supplement its provisions. History (Code 1933, § 109A-1 - 102, enacted by Ga. L. 1962, p. 156, § 1; Code 1981, § 11-1-103, as redesignated by Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, redesignated former Code Section 11-1-102 as present Code Section 11-1-103 and rewrote this Code section. Editor's notes. - Former Code Section 11-1-103, pertaining to supplementary general principles of law applicable, was repealed by Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016. The former Code section was based on Ga. L. 1962, p. 156, § 1. Law reviews. - For article on choice-of-law of contracts in Georgia, see 21 Mercer L. Rev. 389 (1970). For article discussing the resolution of conflicting claims to goods between an unsecured seller of goods and a creditor of a buyer claiming under an after-acquired property clause, see 28 Mercer L. Rev. 625 (1977). For article discussing the applicability of warranty provisions under the Uniform Commercial Code to domestic solar energy devices, see 30 Mercer L. Rev. 547 (1979). For article, "Computer Software: Does Article 2 of the Uniform Commercial Code Apply?," see 35 Emory L.J. 853 (1986). For article, "Contract Litigation and the Elite Bar in New York City, 1960-1980," see 39 Emory L.J. 413 (1990). For note, "Negotiable Promissory Notes Containing Time and Demand Provisions: The Need for Consistent Interpretation," see 19 Ga. L. Rev. 717 (1984). For note, "Enforcing Manufacturers' Warranty Exclusions Against Non-Privity Commercial Purchasers: The Need for Uniform Guidelines," see 20 Ga. L. Rev. 461 (1986). JUDICIAL DECISIONS Legislative intent. - The passage of the Uniform Commercial Code by the legislature evinced an intent to have that body of law control all commercial transactions. City Dodge, Inc. v. Gardner, 232 Ga. 766, 208 S.E.2d 794 (1974). Liberal construction. - O.C.G.A. § 11-1-102 specifies that the Uniform Commercial Code shall be liberally construed and applied to promote its underlying purposes and policies, one of which, of course, is to broaden within the framework provided the protection of warranties beyond the original notion of privity of contract. Chastain v. Fuqua Indus., Inc., 156 Ga. App. 719, 275 S.E.2d 679 (1980). Release of an "Assignment of Proceeds from the Sale of Dairy Products" constituted a waiver of the lienholder's security interest in milk products. Thomas v. Ralston Purina Co., 43 Bankr. 201 (Bankr. M.D. Ga. 1984). Assignability statute not preempted by UCC. - Lender's assignee had no standing to pursue a fraudulent transfer claim against a guarantor because such claims were not assignable under O.C.G.A. § 44-12-24; therefore, the assignee could not prevail on a legal malpractice action against attorneys who failed to timely assert a fraudulent transfer claim. O.C.G.A. § 44-12-24 was not preempted by 12 U.S.C. § 1821 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) or by O.C.G.A. § 11-1-103 of the Uniform Commercial Code. RES-GA McDonough, LLC v. Taylor English Duma LLP, 302 Ga. 444, 807 S.E.2d 381 (2017). Customer's assent to limitations on warehouse receipt a jury question. - In a dispute over a storage facility's storage of a customer's seed, in which the facility sought to bind the customer to limitations printed on the reverse of the facility's warehouse receipts, the trial court erred by concluding that evidence that the facility routinely mailed warehouse receipts to the facility's customers was sufficient to bind the customer as a matter of law; because the customer denied receiving the receipts, the customer's assent was a question for the jury. Turfgrass Group v. Ga. Cold Storage Co., 346 Ga. App. 659, 816 S.E.2d 716 (2018). Cited in Maley v. National Acceptance Co., 250 F. Supp. 841 (N.D. Ga. 1966); Wooden v. Michigan Nat'l Bank, 117 Ga. App. 852, 162 S.E.2d 222 (1968); Reddick v. White Consol. Indus., Inc., 295 F. Supp. 243 (S.D. Ga. 1968); Steelman v. Associates Disct. Corp., 121 Ga. App. 649, 175 S.E.2d 62 (1970); In re Carmichael Enters., Inc., 334 F. Supp. 94 (N.D. Ga. 1971); Atkins v. Citizens & S. Nat'l Bank, 127 Ga. App. 348, 193 S.E.2d 187 (1972); In re Firth, 363 F. Supp. 369 (M.D. Ga. 1973); Barclays Bank v. Mercantile Nat'l Bank, 481 F.2d 1224 (5th Cir. 1973); Brannon v. First Nat'l Bank, 137 Ga. App. 275, 223 S.E.2d 473 (1976); Argonaut Ins. Co. v. C & S Bank, 140 Ga. App. 807, 232 S.E.2d 135 (1976); Pepsico Truck Rental, Inc. v. Eastern Foods, Inc., 145 Ga. App. 410, 243 S.E.2d 662 (1978); Booker v. Commercial Credit Corp., 9 Bankr. 710 (M.D. Ga. 1981); International Harvester Credit Corp. v. Clenny, 505 F. Supp. 983 (M.D. Ga. 1981); Varner v. Century Fin. Co., 738 F.2d 1143 (11th Cir. 1984); Dalton Point, L.P. v. Regions Bank, Inc., 287 Ga. App. 468, 651 S.E.2d 549 (2007); Ole Mexican Foods, Inc. v. Hanson Staple Co., 285 Ga. 288, 676 S.E.2d 169 (2009); SunTrust Bank v. Venable, 299 Ga. 655, 791 S.E.2d 5 (2016). RESEARCH REFERENCES Am. Jur. 2d. - 11 Am. Jur. 2d, Bills and Notes, §§ 6, 19. 15A Am. Jur. 2d, Commercial Code, §§ 2 et seq., 15 et seq., 30. 67 Am. Jur. 2d, Sales, §§ 70, 71. C.J.S. - 31 C.J.S., Estoppel, §§ 55 et seq., 58 et seq., 86. 82 C.J.S., Statutes, § 309. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-102. ALR. - What language in conveyance or contract amounts to assumption of mortgage by grantee, 101 A.L.R. 281. Effect on negotiability of instrument, under terms of UCC § 3-104(1), of statements expressly limiting negotiability or transferability, 58 A.L.R.4th 632. 11-1-104. Construction against implicit repeal. Statute text This title being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided. History (Code 1933, § 109A-1 - 104, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations Editor's notes. - Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016, reenacted this Code section without change. JUDICIAL DECISIONS Cited in Cleveland Lumber Co. v. Proctor & Schwartz, Inc., 397 F. Supp. 1088 (N.D. Ga. 1975). RESEARCH REFERENCES Am. Jur. 2d. - 15A Am. Jur. 2d, Commercial Code, §§ 25, 30. C.J.S. - 82 C.J.S., Statutes, § 287. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-104. 11-1-105. Severability. Statute text If any provision or clause of this title or application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this title which can be given effect without the invalid provision or application, and to this end the provisions of this title are declared to be severable. History (Code 1933, § 109A-1 - 105, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1978, p. 1081, § 2; Ga. L. 1992, p. 2685, § 1; Ga. L. 1993, p. 633, § 2; Ga. L. 1998, p. 1323, § 15; Ga. L. 2001, p. 362, § 2; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2001 amendment, effective July 1, 2001, substituted "Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens. Code Sections 11-9-301 through 11-9-307." for "Perfection provisions of the article of this title on secured transactions (Article 9 of this title). Code Section 11-9-103." in the sixth undesignated paragraph of subsection (2). The 2015 amendment, effective January 1, 2016, rewrote this Code section. Editor's notes. - Ga. L. 1993, p. 633, which amended this Code section, provides, in § 5, not codified by the General Assembly, that: "This Act shall become effective on July 1, 1993, for all lease contracts that are first made or that first become effective between the parties on or after that date. This Act shall not apply to any lease first made or that first became effective between the parties before July 1, 1993, or to any extension, amendment, modification, renewal, or supplement of or to any such lease contract, unless the parties thereto specifically agree in writing that such lease contract, as extended, amended, modified, renewed, or supplemented, shall be governed by this Act." Law reviews. - For article on choice-of-law of contracts in Georgia, see 21 Mercer L. Rev. 389 (1970). For essay on Georgia conflict of laws questions in contracts cases in the eleventh circuit and certification reform, see 11 Ga. St. U.L. Rev. 531 (1995). For note on 1992 amendment of this Code section, see 9 Ga. St. U.L. Rev. 163 (1992). For note on 1993 amendment of this section, see 10 Ga. St. U.L. Rev. 34 (1993). JUDICIAL DECISIONS Contracting parties may choose applicable state law. - O.C.G.A. § 11-1-105 allows contracting parties to make their own choice of the applicable state law. Crompton-Richmond Co. v. Briggs, 560 F.2d 1195 (5th Cir. 1977). O.C.G.A. § 11-1-105 permits parties to provide by agreement which state's law shall govern their transaction but only if transaction bears "reasonable relation" to state so designated. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981); Manderson & Assocs. v. Gore, 193 Ga. App. 723, 389 S.E.2d 251 (1989). The parties may by contract stipulate that the law of another jurisdiction will govern the transaction. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983). Limitation on broad choice of law rule of subsection (1). - Broad choice of law rule provided in O.C.G.A. § 11-1-105(1) is expressly limited by O.C.G.A. § 11-1-105(2), which states that for specific matters listed therein, other conflict of laws provisions located in the Code govern; among specific exclusions from general conflicts rule are article 9 secured transactions, which prior to 1978 were governed by conflicts or situs choice of law rule provided in O.C.G.A. § 11-9-102. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981). Conflict of laws rule of forum state determines what state's substantive law applies. - Where question of whether lessee was entitled to prevail on its failure of consideration defense in diversity action brought for breach of lease depended upon what state's substantive law applied, it was necessary to look to conflict of laws rule of forum state. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981). Georgia adheres to the traditional choice of law system. - Under this system tort actions are adjudicated according to the law of the place where the wrong occurred, and contract actions are regulated by the law of the state where the contract was made when matters of execution, interpretation, or validity are at issue, and by the law of the state where it is to be performed when the issue is one concerning performance. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983). In a products liability diversity action brought on the theory of breach of implied warranty of merchantability, Georgia procedural law, which looked to the lex loci delicti, controlled the claim. Since the injury took place in Georgia, Georgia substantive law, which required privity, was applied. The plaintiff, who was an employee of the purchaser of the product, failed to satisfy this privity requirement. Morgan v. Mar-Bel, Inc., 614 F. Supp. 438 (N.D. Ga. 1985). Contract may bear "appropriate relation" to Georgia, though entered into in another state. - The phrase "applies to transactions bearing an appropriate relation to this state" means, that notwithstanding a contract has been entered into in another state, if it is litigated in Georgia and bears an "appropriate relation" to Georgia, its validity will be governed by Georgia law. Gulf Collateral, Inc. v. Morgan, 415 F. Supp. 319 (S.D. Ga. 1976). "Appropriate relation," which means essentially the same as "significant contacts," is something more than minimum contacts. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981). Sale-leaseback agreement. - Absent effect designation, substantive law applied to sale-leaseback agreement is determined by "appropriate relation" test. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981). Defective hand grenade bought in another state but injuring citizen in Georgia. - Where plaintiff, a Georgia citizen who was injured by explosion of a defective hand grenade at an army base in Georgia, brought suit pursuant to O.C.G.A. § 9-10-91 against the hand grenade's manufacturer which was allegedly doing business in the State of Georgia, the transactions in which defendant manufactured and sold the defective hand grenades to the United States Army in the States of Tennessee and Texas, were "appropriately related" to the State of Georgia within the meaning of O.C.G.A. § 11-1-105. Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010 (5th Cir. 1969). Repossessions of collateral located in Georgia. - Absent an agreement that the law of another state shall govern, Georgia law applies to the repossession, resale, and right to a deficiency judgment where the collateral was located in Georgia at the time of the repossession and resale. Lewis v. First Nat'l Bank, 134 Ga. App. 798, 216 S.E.2d 347 (1975). Unilateral reservation of rights in endorsing draft. - In a tort action in Georgia, where defendant's insurer, a Florida corporation, tendered to plaintiff a draft payable through a Florida bank and plaintiff crossed out the printed endorsement/release before endorsing the draft to a body shop and added a handwritten endorsement reserving defendant's rights, the lex fori, i.e., the law of Georgia, should be applied where both parties are Georgia residents, since the relationship of the insurer to the parties and the action is that of defendant's agent for the payment of a sum or sums due plaintiff under the terms of the contract of insurance between defendant and the insurer and the collecting bank is the agent of the insurer. The residence of the agent or subagent is irrelevant, absent special circumstances. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983). Foreign jurisdiction's applicable law. - Where consignment agreement between foreign, debtor-aviation company and domestic aerospace corporation provided for its construction in accordance with the laws of the Province of Ontario, Canada, and the consignment transaction bore a reasonable relationship to Ontario, the court applied Ontario law to determine the validity and effect of the parties' interests. ATG Aerospace, Inc. v. High-Line Aviation Ltd., 149 Bankr. 730 (Bankr. N.D. Ga. 1992). Cited in Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975); Moore v. Emery (In re Am. Steel Prod., Inc.), 203 Bankr. 504 (Bankr. S.D. Ga. 1996). RESEARCH REFERENCES Am. Jur. 2d. - 15A Am. Jur. 2d, Commercial Code, §§ 11 et seq., 41 et seq., 75. 16 Am. Jur. 2d, Conflict of Laws, §§ 2, 55. 67A Am. Jur. 2d, Sales, §§ 963-970, 981-985. 68A Am. Jur. 2d, Secured Transactions, §§ 8, 9. C.J.S. - 17 C.J.S., Contracts, § 13 et seq. 21 C.J.S., Courts, § 204. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-105. ALR. - Duty of one selling interest in property to another with view to their mutual exploitation of it to disclose what property cost him, 10 A.L.R. 193. Conflict of law as to conditional sales of chattels, 25 A.L.R. 1153; 57 A.L.R. 535; 87 A.L.R. 1308; 148 A.L.R. 375; 13 A.L.R.2d 1312. Law of the forum as governing the right to and rate of interest as damages for delay in payment of money or discharge of other obligations, 78 A.L.R. 1047. Federal constitutional provisions as affecting right of court of forum, when entertaining jurisdiction of action on foreign contract or cause of action, to refuse, on ground of its own public policy or local statute, to give effect to provisions of the contract valid by its proper law or to other rights or obligations available under that law, 92 A.L.R. 932. Conflict of laws as to chattel mortgages and conditional sales of chattels, 13 A.L.R.2d 1312. Conflict of laws as to disposition of and relative rights to bank deposits in the names of more than one person, 25 A.L.R.2d 1240. Law governing assignment of wages or salary, 1 A.L.R.3d 927. Statute of frauds and conflict of laws, 47 A.L.R.3d 137. What constitutes "reasonable" or "appropriate" relation to a transaction within the meaning of Uniform Commercial Code § 1-105(1), 63 A.L.R.3d 341. Choice of law as to applicable statute of limitations in contract actions, 78 A.L.R.3d 639. Choice of law as to application of comparative negligence doctrine, 86 A.L.R.3d 1206. Conflict of laws as to validity and effect of arbitration provision in contract for purchase or sale of goods, products, or services, 95 A.L.R.3d 1145. 11-1-106. Use of singular and plural; gender. Statute text In this title unless the statutory context otherwise requires: (1) Words in the singular number include the plural, and words in the plural include the singular; and (2) Words of any gender also refer to any other gender. History (Code 1933, § 109A-1 - 106, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, rewrote this Code section. JUDICIAL DECISIONS Cited in Emmons v. Burkett, 256 Ga. 855, 353 S.E.2d 908 (1987); Unique Designs, Inc. v. Pittard Mach. Co., 200 Ga. App. 647, 409 S.E.2d 241 (1991); White County Bank v. Noland Co., 214 Ga. App. 780, 449 S.E.2d 325 (1994); Latex Equip. Sales & Serv., Inc. v. Apache Mills, Inc., 225 Ga. App. 516, 484 S.E.2d 274 (1997). RESEARCH REFERENCES Am. Jur. 2d. - 11 Am. Jur. 2d, Bills and Notes, § 19. 12 Am. Jur. 2d, Bills and Notes, § 627. 15A Am. Jur. 2d, Commercial Code, §§ 17, 24. 67A Am. Jur. 2d, Sales, § 987. C.J.S. - 2 C.J.S., Actions, §§ 5, 9. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-106. ALR. - Damages for breach by seller or former employee of covenant, express or implied, not to engage in like business or enter employment of competitor of covenantee, 127 A.L.R. 1152. Awarding damages for delay, in addition to specific performance, of contract for sale of corporate stock, 28 A.L.R.3d 1401. 11-1-107. Section captions. Statute text Section captions are parts of this title. History (Code 1933, § 109A-1 - 107, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, substituted the present provisions of this Code section for the former provisions, which read: "Any claim or right arising out of an alleged breach can be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party." Law reviews. - For note, "The Scope and Meaning of Waiver in Section 2-209 of the Uniform Commercial Code," see 5 Ga. L. Rev. 783 (1971). RESEARCH REFERENCES Am. Jur. 2d. - 1 Am. Jur. 2d, Accord and Satisfaction, § 12. 11 Am. Jur. 2d, Bills and Notes, § 417. 12 Am. Jur. 2d, Bills and Notes, §§ 554, 555. 15A Am. Jur. 2d, Commercial Code, § 4. 28 Am. Jur. 2d, Estoppel and Waiver, § 162. 67 Am. Jur. 2d, Sales, §§ 20, 216, 224, 318, 519, 539, 575. 9A Am. Jur. Pleading and Practice Forms, Estoppel and Waiver, § 39. C.J.S. - 17B C.J.S., Contracts, § 557 et seq. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-107. ALR. - Agent's promise to make endorsement upon policy as a waiver or estoppel to assert provision that any privilege or permission shall be void unless in writing, 38 A.L.R. 636. 11-1-108. Relation to Electronic Signatures in Global and National Commerce Act. Statute text This article modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001, et seq., but shall not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b). History (Code 1933, § 109A-1 - 108, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, substituted the present provisions of this Code section for the former provisions, which read: "If any provision or clause of this title or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the title which can be given effect without the invalid provision or application, and to this end the provisions of this title are declared to be severable." RESEARCH REFERENCES Am. Jur. 2d. - 15A Am. Jur. 2d, Commercial Code, §§ 30, 31. C.J.S. - 82 C.J.S., Statutes, § 82 et seq. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-108. 11-1-109. Section captions. Statute text Repealed by Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016. Annotations Editor's notes. - This Code section was based on Code 1933, § 109A-1-109, enacted by Ga. L. 1962, p. 156, § 1. —————————— PART 2 GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION Annotations Editor's notes. - Ga. L. 2015, p. 996, § 1-1/SB 65, not codified by the General Assembly, provides that: "(a) This Act shall be known and may be cited as the 'Debtor-Creditor Uniform Law Modernization Act of 2015.' "(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships." Law reviews. - For note, "Not So Good: The Classification of 'Smart Goods' Under UCC Article 2," see 34 Ga. St. U. L. Rev. 453 (2018). 11-1-201. General definitions. Statute text (a) Unless the context otherwise requires, words or phrases defined in this Code section, or in the additional definitions contained in other articles of this title that apply to particular articles or parts thereof, have the meanings stated. (b) Subject to additional definitions contained in the other articles of this title that are applicable to specific articles or parts thereof, in this title: (1) "Action" in the sense of a judicial proceeding includes recoupment, counterclaim, setoff, suit in equity, and any other proceedings in which rights are determined. (2) "Aggrieved party" means a party entitled to pursue a remedy. (3) "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 Code Section 11-1-303. (4) "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, or trust company. (5) "Bearer" means a person in control of a negotiable instrument, document of title, or certificated security payable to bearer or indorsed in blank. (6) "Bill of lading" means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods. (7) "Branch" includes a separately incorporated foreign branch of a bank. (8) "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. (9) "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 the 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 of this title may be a buyer in ordinary course of business. A person that acquires goods in a transfer in bulk or as security for or in total or partial satisfaction of a money debt is not a buyer in ordinary course of business. (10) "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: (A) 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 (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 the surrounding text of the same size by symbols or other marks that call attention to the language. (11) "Consumer" means an individual who enters into a transaction primarily for personal, family, or household purposes. (12) "Contract," as distinguished from "agreement," means the total legal obligation that results from the parties' agreement as determined by this title and any other applicable law. (13) "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. (14) "Defendant" includes a person in the position of defendant in a counterclaim, cross-claim, or third-party claim. (15) "Delivery" with respect to an instrument, document of title, or chattel paper means voluntary transfer of possession. (16) "Document of title" includes a bill of lading, dock warrant, dock receipt, warehouse receipt, or order for delivery of goods and any other document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers. To be a document of title, a document must purport to be issued by or addressed to a bailee and purport to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass. (17) "Fault" means a default, breach, or wrongful act or omission. (18) "Fungible goods" means: (A) Goods of which any unit is, by nature or usage of trade, the equivalent of any other like unit; or (B) Goods that by agreement are treated as equivalent. (19) "Genuine" means free of forgery or counterfeiting. (20) "Good faith," except as otherwise provided in Article 5 of this title, means honesty in fact and the observance of reasonable commercial standards of fair dealing. (21) "Holder" means: (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; or (B) The person in possession of a document of title if the goods are deliverable either to bearer or to the order of the person in possession. (22) "Insolvency proceeding" includes any assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved. (23) "Insolvent" means: (A) Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute; (B) Being unable to pay debts as they become due; or (C) Being insolvent within the meaning of the federal bankruptcy law. (24) "Money" means a medium of exchange authorized or adopted by a domestic or foreign government and includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries. (25) "Organization" means a person other than an individual. (26) "Party," as distinct from "third party," means a person who has engaged in a transaction or made an agreement subject to this title. (27) "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. (28) "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. (29) "Purchase" means taking by sale, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property. (30) "Purchaser" means a person who takes by purchase. (31) "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. (32) "Remedy" means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal. (33) "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. (34) "Rights" includes remedies. (35) "Security interest" means an interest in personal property or fixtures which secures payment or performance of an obligation. The term also 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 of this title. The term does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under Code Section 11-2-401, but a buyer may also acquire a "security interest" by complying with Article 9 of this title. Except as otherwise provided in Code Section 11-2-505, the right of a seller or lessor of goods under Article 2 or 2A of this title 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 of this title. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under Code Section 11-2-401 is limited in effect to a reservation of a "security interest." Whether a transaction in the form of a lease creates a "security interest" shall be determined pursuant to Code Section 11-1-203. (36) "Send" in connection with a writing, record, or notice means: (A) 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 (B) In any other way to cause to be received any record or notice within the time it would have arrived if properly sent. (37) "Signed" includes using any symbol executed or adopted with present intention to adopt or accept a writing. (38) "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. (39) "Surety" includes a guarantor or other secondary obligor. (40) "Term" means that portion of an agreement that relates to a particular matter. (41) "Unauthorized signature" means a signature made without actual, implied, or apparent authority. The term includes a forgery. (42) "Warehouse receipt" means a receipt issued by a person engaged in the business of storing goods for hire. (43) "Written" or "writing" includes printing, typewriting, or any other intentional reduction to tangible form. History (Code 1933, § 109A-1 - 201, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1963, p. 188, § 1; Ga. L. 1978, p. 1081, §§ 3, 4; Ga. L. 1981, p. 634, § 2; Ga. L. 1985, p. 825, § 1; Ga. L. 1992, p. 6, § 11; Ga. L. 1992, p. 2626, § 1; Ga. L. 1993, p. 633, § 3; Ga. L. 1996, p. 1306, § 1; Ga. L. 2000, p. 136, § 11; Ga. L. 2001, p. 362, § 3; Ga. L. 2010, p. 481, § 2-1/HB 451; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2000 amendment, effective March 16, 2000, part of an Act to revise, modernize, and correct the Code, substituted "mean 'branch office' as that term is" for "mean not only 'branch bank,' but also 'bank office' and 'bank facility' as those terms are" in the last sentence of subsection (4). The 2001 amendment, effective July 1, 2001, rewrote subsection (9), inserted "security interest," in subsection (32), and, in the first paragraph of subsection (37), deleted the former second sentence, which read "The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer (Code Section 11-2-401) is limited in effect to a reservation of a 'security interest.'", in the current second sentence, inserted "consignor and a", and substituted "accounts, chattel paper, a payment intangible, or a promissory note in a transaction that" for "accounts or chattel paper which", deleted the former fifth sentence, which read "Unless a consignment is intended as security, reservation of title thereunder is not a 'security interest,' but a consignment in any event is subject to the provisions on consignment sales (Code Section 11-2-326).", and added the last two sentences. The 2010 amendment, effective May 27, 2010, in subsection (5), substituted "a person in control of a negotiable electronic document of title or" for "the" near the beginning, inserted "a negotiable tangible", and inserted "a"; substituted the present provisions of subsection (6) for the former provisions, which read: "'Bill of lading' means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods, and includes an airbill. 'Airbill' means a document serving for air transportation as a bill of lading does for marine or rail transportation, and includes an air consignment note or air waybill."; rewrote subsection (10); substituted "to an electronic document of title means voluntary transfer of control and with respect to instruments, tangible" for "to instruments," in the middle of subsection (14); rewrote subsections (15), (20), (25), and (26); in subsection (27), substituted "the individual's" for "his" near the end of the first sentence and added the last two sentences; in subsection (38), substituted "a writing, a record, or notice means:" for "any writing or notice means" at the end of the introductory paragraph, designated the paragraphs, in paragraph (38)(a), inserted commas throughout, substituted "To deposit" for "to deposit" at the beginning and substituted "; or" for a period at the end, and, in paragraph (38)(b), substituted "In any other way to cause to be received any record" for "The receipt of any writing" at the beginning, deleted "at which" following "time" in the middle, and deleted "has the effect of a proper sending" following "properly" at the end; and substituted "document of title" for "receipt" in the middle of subsection (45). See the Editor's notes for applicability. The 2015 amendment, effective January 1, 2016, rewrote this Code section. Editor's notes. - Ga. L. 1993, p. 633, which amended this Code section, provides, in § 5, not codified by the General Assembly: "This Act shall become effective on July 1, 1993, for all lease contracts that are first made or that first become effective between the parties on or after that date. This Act shall not apply to any lease first made or that first became effective between the parties before July 1, 1993, or to any extension, amendment, modification, renewal, or supplement of or to any such lease contract, unless the parties thereto specifically agree in writing that such lease contract, as extended, amended, modified, renewed, or supplemented, shall be governed by this Act." Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010. Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010. U.S. Code. - The bankruptcy law, referred to in paragraph (23) of this section, is codified as 11 U.S.C.S. § 101 et seq. Law reviews. - For article on the 1963 amendment to the Georgia Uniform Commercial Code, see 14 Mercer L. Rev. 378 (1963). For article, "Lease or Security Interest: A Classic Problem of Commercial Law," see 28 Mercer L. Rev. 599 (1977). For article on Georgia cases dealing with commercial law from June 1977 through May 1978, see 30 Mercer L. Rev. 15 (1978). For article, "The Good Faith Purchase Idea and the Uniform Commercial Code," see 15 Ga. L. Rev. 605 (1981). For article surveying developments in Georgia commercial law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 33 (1981). For article discussing judicial activism in cases involving claims and defenses under the Uniform Commercial Code, see 17 Ga. L. Rev. 569 (1983). For article, "Impracticability As Risk Allocation: The Effect of Changed Circumstances upon Contract Obligations for the Sale of Goods," see 22 Ga. L. Rev. 503 (1988). For note, "The Law of Evidence in the Uniform Commercial Code," see 1 Ga. L. Rev. 44 (1966). For note on 1992 amendment of this Code section, see 9 Ga. St. U.L. Rev. 168 (1992). For note on 1993 amendment of this section, see 10 Ga. St. U.L. Rev. 34 (1993). For comment on Sherrock v. Commercial Credit Corp., 290 A.2d 648 (Del. S. Ct. 1972), see 10 Ga. St. B.J. 110 (1973). For comment on Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977), see 27 Emory L.J. 393 (1978). For comment, "Lender Liability for Breach of the Obligation of Good Faith Performance," see 36 Emory L.J. 917 (1987). JUDICIAL DECISIONS ANALYSIS General Consideration Agreement Buyer in Ordinary Course of Business Conspicuous Term or Clause Good Faith Holder Notice Public Sale Security Interest Signature Unauthorized Signature or Endorsement General Consideration UCC definitions inapplicable to criminal prosecution. Thogerson v. State, 224 Ga. App. 76, 479 S.E.2d 463 (1996). The drawer of a check made payable to a third party was deemed to have used the instrument in contemplation of its presentment for payment upon the action of a collecting bank and, thus, was engaged in a transaction governed by the UCC subject to the damage limitation provision of O.C.G.A. § 11-4-103. Farr v. Trust Co. Bank, 220 Ga. App. 423, 469 S.E.2d 501 (1996). Cited in Bennett v. Cannon, 114 Ga. App. 479, 151 S.E.2d 828 (1966); Scarboro v. Universal C.I.T. Credit Corp., 364 F.2d 10 (5th Cir. 1966); McDonald v. Peoples Auto. Loan & Fin. Corp., 115 Ga. App. 483, 154 S.E.2d 886 (1967); Sanders v. National Acceptance Co. of Am., 383 F.2d 606 (5th Cir. 1967); Decatur Coca-Cola Bottling Co. v. Variety Vending Corp., 277 F. Supp. 393 (N.D. Ga. 1967); Northside Bldg. & Inv. Co. v. Finance Co. of Am., 119 Ga. App. 131, 166 S.E.2d 608 (1969); First Nat'l Bank & Trust Co. v. Smithloff, 119 Ga. App. 284, 167 S.E.2d 190 (1969); First Nat'l Bank & Trust Co. v. McElmurray, 120 Ga. App. 134, 169 S.E.2d 720 (1969); Steelman v. Associates Disct. Corp., 121 Ga. App. 649, 175 S.E.2d 62 (1970); United States v. Big Z Whse., 311 F. Supp. 283 (S.D. Ga. 1970); Greater S. Distrib. Co. v. Usry, 124 Ga. App. 525, 184 S.E.2d 486 (1971); Rockwin Corp. v. Kincaid, 124 Ga. App. 570, 184 S.E.2d 509 (1971); International Harvester Credit Corp. v. Commercial Credit Equip. Corp., 125 Ga. App. 477, 188 S.E.2d 110 (1972); L.M. Berry & Co. v. Blackmon, 129 Ga. App. 347, 199 S.E.2d 610 (1973); Harris v. Hill, 129 Ga. App. 403, 199 S.E.2d 847 (1973); First Nat'l Bank & Trust Co. v. Olivetti Corp. of Am., 130 Ga. App. 896, 204 S.E.2d 781 (1974); Geohagan v. Commercial Credit Corp., 130 Ga. App. 828, 204 S.E.2d 784 (1974); REA Express, Inc. v. Ginn, 131 Ga. App. 33, 205 S.E.2d 94 (1974); Chrysler Corp. v. Wilson Plumbing Co., 132 Ga. App. 435, 208 S.E.2d 321 (1974); International Harvester Credit Corp. v. Associates Fin. Servs. Co., 133 Ga. App. 488, 211 S.E.2d 430 (1974); Kennedy v. Thruway Serv. City, Inc., 133 Ga. App. 858, 212 S.E.2d 492 (1975); Weaver v. Ralston Motor Hotel, Inc., 135 Ga. App. 536, 218 S.E.2d 260 (1975); Brannon v. First Nat'l Bank, 137 Ga. App. 275, 223 S.E.2d 473 (1976); Peoples Bank v. Northwest Ga. Bank, 139 Ga. App. 264, 228 S.E.2d 181 (1976); UIV Corp. v. Oswald, 139 Ga. App. 697, 229 S.E.2d 512 (1976); Rollins Communications, Inc. v. Georgia Inst. of Real Estate, Inc., 140 Ga. App. 448, 231 S.E.2d 397 (1976); Billas v. Dwyer, 140 Ga. App. 774, 232 S.E.2d 102 (1976); Jones v. Cranman's Sporting Goods, 142 Ga. App. 838, 237 S.E.2d 402 (1977); BVA Credit Corp. v. Mullins, 552 F.2d 1145 (5th Cir. 1977); Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977); Anthony v. Community Loan & Inv. Corp., 559 F.2d 1363 (5th Cir. 1977); Ginn v. Citizens & S. Nat'l Bank, 145 Ga. App. 175, 243 S.E.2d 528 (1978); B & P Lumber Co. v. First Nat'l Bank, 147 Ga. App. 762, 250 S.E.2d 505 (1978); Footpress Corp. v. Strickland, 242 Ga. 686, 251 S.E.2d 278 (1978); Barton v. Chemical Bank, 577 F.2d 1329 (5th Cir. 1978); Central Bank v. American Charms, Inc., 149 Ga. App. 218, 253 S.E.2d 857 (1979); Vincent Brass & Aluminum Co. v. Johnson, 149 Ga. App. 537, 254 S.E.2d 752 (1979); Cox Caulking & Insulating Co. v. Brockett Distrib. Co., 150 Ga. App. 424, 258 S.E.2d 51 (1979); Broun v. Bank of Early, 243 Ga. 319, 253 S.E.2d 755 (1979); Johnson v. Vincent Brass & Aluminum Co., 244 Ga. 412, 260 S.E.2d 325 (1979); Trust Co. Bank v. Atlanta IBM Employees Fed. Credit Union, 245 Ga. 262, 264 S.E.2d 202 (1980); First Bank v. Kilpatrick-Smith Constr. Co., 153 Ga. App. 112, 264 S.E.2d 576 (1980); Trust Co. of Ga. Bank v. Port Term. & Warehousing Co., 153 Ga. App. 735, 266 S.E.2d 254 (1980); Commercial Credit Equip. Corp. v. Bates, 154 Ga. App. 71, 267 S.E.2d 469 (1980); Clements v. Central Bank, 155 Ga. App. 27, 270 S.E.2d 194 (1980); Guthrie v. Pilgrim Realty Co., 156 Ga. App. 692, 275 S.E.2d 686 (1980); Trust Co. v. Milam, 4 Bankr. 621 (M.D. Ga. 1980); Mayo v. Bank of Carroll County, 157 Ga. App. 148, 276 S.E.2d 660 (1981); Trust Co. v. Cowart, 158 Ga. App. 488, 280 S.E.2d 886 (1981); First Nat'l Bank v. Rivercliff Hdwe., Inc., 161 Ga. App. 259, 287 S.E.2d 701 (1982); Sterling Nat'l Bank & Trust Co. v. Southwire Co., 713 F.2d 684 (11th Cir. 1983); Loeb v. G.A. Gertmenian & Sons (In re A.J. Nichols, Ltd.), 21 Bankr. 612 (Bankr. N.D. Ga. 1982); Ford v. Rollins Protective Servs. Co., 171 Ga. App. 882, 322 S.E.2d 62 (1984); Thomas v. Ralston Purina Co., 43 Bankr. 201 (Bankr. M.D. Ga. 1984); Edmondson v. Northrup King & Co., 817 F.2d 742 (11th Cir. 1987); Trust Co. Bank v. Henderson, 185 Ga. App. 367, 364 S.E.2d 289 (1987); Mark Singleton Buick, Inc. v. Taylor, 194 Ga. App. 630, 391 S.E.2d 435 (1990); Perimeter Ford, Inc. v. Edwards, 197 Ga. App. 747, 399 S.E.2d 520 (1990); Calhoon v. Mr. Locksmith Co., 200 Ga. App. 618, 409 S.E.2d 226 (1991); In re Leeds Bldg. Prods., Inc., 141 Bankr. 265 (Bankr. N.D. Ga. 1992); Perez-Medina v. First Team Auction, Inc., 206 Ga. App. 719, 426 S.E.2d 397 (1992); Tompkins v. Mayers, 209 Ga. App. 809, 434 S.E.2d 798 (1993); D.L. Lee & Sons v. ADT Sec. Sys., 916 F. Supp. 1571 (S.D. Ga. 1995); Lewis v. Lease Atlanta, Inc., 234 Ga. App. 812, 508 S.E.2d 188 (1998); Fedeli v. UAPA Ag. Chem., Inc., 237 Ga. App. 337, 514 S.E.2d 684 (1999); Trust Assoc. v. Snead, 253 Ga. App. 475, 559 S.E.2d 502 (2002); Gerber & Gerber, P.C. v. Regions Bank, 266 Ga. App. 8, 596 S.E.2d 174 (2004); Stein v. GEICO Indem. Ins. Co., 289 Ga. App. 739, 658 S.E.2d 153 (2008); In re Estate of Miraglia, 290 Ga. App. 28, 658 S.E.2d 777 (2008); Cars v. W. Funding II, Ga. App. , 826 S.E.2d 370 (2019). Agreement Agreement governs rights and liabilities of parties. - It is elementary that under the law of contracts the agreement itself governs the rights and liabilities of the parties. Nothing in the Uniform Commercial Code as adopted in Georgia requires a different result. Tri-County Livestock Auction Co. v. Bank of Madison, 228 Ga. 325, 185 S.E.2d 393 (1971). Agreement not a lease. - Claimant's unwritten agreement with an individual concerning a vehicle was not a lease because the claimant offered no evidence that the individual had the right to voluntarily terminate the individual's payment obligation under the agreement, i.e., to pay less than the full amount of consideration under the lease, or that the individual could purchase the vehicle only after paying additional consideration. United States v. Bushay, 34 F. Supp. 3d 1260 (N.D. Ga. Aug. 5, 2014). Buyer in Ordinary Course of Business Buyer's special relationship with seller does not preclude buyer from being buyer in the ordinary sense. - Although the fact that a person had a special relationship with the seller would not preclude the person from being a buyer in the ordinary course, this factor, along with other factors that the sale was not handled in every material way as a sale out of inventory to any retail customer, may preclude such person from being a buyer in the ordinary course of business. Hanington v. Palmer, 103 Bankr. 348 (Bankr. M.D. Ga. 1989). Knowledge of security interest. - A buyer who merely knows of a security interest of another party covering certain goods constitutes a buyer in ordinary course of business and takes free of that security interest, whereas a buyer who knows that the sale actually violates some term of the security agreement not waived by the secured party takes subject to that security interest. First Nat'l Bank v. Atlanta Classic Cars, Inc., 184 Ga. App. 784, 363 S.E.2d 16 (1987). Although a bank's security interests in equipment were properly perfected and remained so throughout a buyer's acquisition of the equipment from the debtor, those security interests were deemed never to have been perfected as against a purchaser for value when the bank failed to file timely continuation statements, under O.C.G.A. § 11-9-515(b), and the buyer took free of the security interests under O.C.G.A. § 11-9-317(b) because the buyer did not have actual knowledge of the security interests. Four County Bank v. Tidewater Equip. Co., 331 Ga. App. 753, 771 S.E.2d 437 (2015). Fractionalizing not permitted. - Fractionalizing was not allowed by O.C.G.A. § 11-1-201(9) to permit labeling a transferee a buyer in the ordinary course of business to the extent that the purchase price was not in satisfaction of a money debt, but not a buyer in the ordinary course of business to the extent that the purchase price was in satisfaction of a money debt. First Nat'l Bank v. Proceeding Ayres Aviation Holdings, Inc. (In re Ayres Aviation Holdings, Inc.), 342 Bankr. 104 (Bankr. M.D. Ga. 2006). Because plaintiff cellular telephone trademark holder's packages contained terms and conditions inside and language on the outside of the packages that referenced those terms and conditions, there was a valid "shrink-wrap" contract between the holder and purchasers of the cell phones, and allegations that defendant competitor removed the phones from their original packaging and shipped the phones outside the United States sufficiently raised a reasonable expectation that discovery would reveal evidence that the competitor was aware of the terms and conditions, was afforded an opportunity to reject the terms and conditions, and failed to reject the terms and conditions, such that a breach of contract claim was plausible, and, because the allegations indicated a lack of good faith by the competitor, the bona fide purchaser for value and buyer in the ordinary course defenses under O.C.G.A. §§ 11-1-201 and 11-2-403(1)(a) were not available. Tracfone Wireless, Inc. v. Zip Wireless Prods., 716 F. Supp. 2d 1275 (N.D. Ga. 2010). Conspicuous Term or Clause Disclaimer of implied warranty was adequate. - Where the disclaimer was in letters larger than any other type on the form, where significant portions of the disclaimer were capitalized, thus distinguishing them from other language on the form, and where the language was conspicuously set forth, the limitation of the implied warranty of merchantability met the requirements of O.C.G.A. § 11-2-316(2). Harris v. Sulcus Computer Corp., 175 Ga. App. 140, 332 S.E.2d 660 (1985). Warranty disclaimer language was "conspicuous" where it appeared in capital letters, in a separate paragraph on the front of an invoice, and in a type style which was otherwise employed on the form only with regard to language relating to the limitation of remedies. Apex Supply Co. v. Benbow Indus., Inc., 189 Ga. App. 598, 376 S.E.2d 694 (1988). Roofing material vendor's disclaimer of warranty, which stated in capitalized letters that the vendor made no warranties, express or implied, including merchantability or fitness for a particular purpose, except as expressly stated therein, was sufficient to preclude an action against the vendor for breach of the implied warranties of merchantability and fitness. Steele v. Gold Kist, Inc., 186 Ga. App. 569, 368 S.E.2d 196, cert. denied, 186 Ga. App. 919, 368 S.E.2d 196 (1988). Disclaimer inadequate. - Where a paragraph in a lease purporting to disclaim implied warranties of merchantibility and fitness was in the same size font as the rest of the printed terms and, although separately numbered, was not otherwise set apart from the other paragraphs, the language was not "conspicuous" within the meaning of O.C.G.A. § 11-1-201(10). Bailey v. Tucker Equip. Sales, Inc., 236 Ga. App. 289, 510 S.E.2d 904 (1999). A reasonable person would not necessarily have noticed and understood that, by the mere mention of "as is" in the context in which it appeared in a lease agreement, without any mention of any warranties or any disclaimers of warranties, he or she was agreeing to forego any rights to lease a piece of equipment in fit and suitable working condition. Bailey v. Tucker Equip. Sales, Inc., 236 Ga. App. 289, 510 S.E.2d 904 (1999). Notice conspicuous. - Limitation of liability language on a directory advertising order that appeared in all capital letters satisfied O.C.G.A. § 11-1-201(10). Elliott Irrigation Co. v. L. M. Berry & Co., F. Supp. 2d (N.D. Ga. Mar. 14, 2005). Statement of payment in full conspicuous. - Deposit of a check constituted an accord and satisfaction under O.C.G.A. § 11-3-311 of a settlement agreement in a debt dispute as a dispute under O.C.G.A. § 13-4-103(b)(1) existed as to the fee portion of the settlement and the letter sent with the check contained a conspicuous statement under O.C.G.A. § 11-1-201(10) that the tender of the check was full payment and satisfaction of the settlement. Blitch v. Walker Pharm., 295 Ga. App. 347, 671 S.E.2d 842 (2008). Good Faith Determination of "good faith" is a question of fact requiring consideration of all circumstances attending a transaction; however, where facts of relevant event are clear and fully developed in motion for summary judgment, it remains only for court to determine proper legal inference to be drawn from the facts. First Nat'l Bank v. Trust Co., 510 F. Supp. 651 (N.D. Ga. 1981). The 1996 amendments of the UCC definitions of "good faith" and "holder in due course" (O.C.G.A. §§ 11-3-103 and 11-3-302) did not apply retroactively to transactions before their effective date; rather, the definitions in O.C.G.A. §§ 11-1-201 and 11-3-302 (former version) applied. Choo Choo Tire Serv., Inc v. Union Planters Nat'l Bank, 231 Ga. App. 346, 498 S.E.2d 799 (1998). Illustrative cases. - A bank was a good faith purchaser for value of certain cars under the following circumstances: The proprietor of a used-car business maintained a special checking account with the bank; the proprietor purchased cars from a car auction company with checks drawn upon this account; the proprietor then executed a promissory note to the bank, which loaned the proprietor the purchase price and took a security interest in the car; the account became overdrawn and the bank refused to honor the checks made out to the auction company. Georgia Cas. & Sur. Co. v. Tennille Banking Co. (In re Smith), 51 Bankr. 904 (Bankr. M.D. Ga. 1985). Bank actions in failing to inform customers of a rule change on signature verification, allowing an employee of customer to place funds in a checking account from the customer's line of credit, and arranging personal loans for the employee were not evidence of a lack of good faith on the part of the bank in paying forged checks. Eason Publications, Inc. v. Nationsbank, 217 Ga. App. 726, 458 S.E.2d 899 (1995). Holder Bank is holder of instrument issued to it even if payee does not endorse it. - Even if payee does not personally endorse an instrument, a bank is holder of that instrument as long as the instrument was issued to the bank. Pazol v. Citizens Nat'l Bank, 110 Ga. App. 319, 138 S.E.2d 442 (1964). Bank not holder of instrument lacking joint payee's endorsement. - A bank never became a holder in due course where a check made payable jointly to the bank's customer and a third party was never endorsed by the third party before deposit in the bank. Citizens & S. Nat'l Bank v. Sun Belt Elec. Constructors, Inc., 64 Bankr. 377 (Bankr. N.D. Ga. 1986). The procedural benefit afforded by O.C.G.A. § 13-7-7 is not available to a party who is the original payee of negotiable paper even though the original payee may qualify as a "holder" under O.C.G.A. § 11-1-201. Jones v. FDIC, 151 Ga. App. 619, 260 S.E.2d 751 (1979). A party can establish status as holder of instruments sued on by producing the instruments in evidence. James Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451 (5th Cir.), cert. denied, 404 U.S. 940, 92 S. Ct. 280, 30 L. Ed. 2d 253 (1971). Possession. - Although the corporation met the requirements for being a holder in due course to the extent that it took the promissory note regarding the mortgage for value, in good faith, and without notice of any claim to the instrument, the corporation was not a holder in due course because it was not in possession of the promissory note at the time it purchased the mortgage; since it was not in possession, it failed to achieve holder-in-due-course status and the bank's security interest prevailed. Provident Bank v. Morequity, Inc., 262 Ga. App. 331, 585 S.E.2d 625 (2003). Payee of a check who never received possession of the check and who was unaware that the check had been made out to the payee was not a "holder" of the check. Jenkins v. Wachovia Bank, Nat'l Ass'n, 309 Ga. App. 562, 711 S.E.2d 80 (2011). Pursuant to O.C.G.A. § 11-1-201(20)(a), the holder of a check is entitled to negotiate the check, and a holder is one who has possession of the check. Sun Nurseries, Inc. v. Lake Erma, LLC, 316 Ga. App. 832, 730 S.E.2d 556 (2012). Notice Knowledge refers to actual knowledge. - Knowledge of a fact is defined in the Uniform Commercial Code as actual knowledge. Hopkins v. Kemp Motor Sales, Inc., 139 Ga. App. 471, 228 S.E.2d 607 (1976). Where security interest in an automobile was not properly recorded and was documented only in divorce decree's incorporated agreement, the secured party failed to carry burden of proving that buyer had actual knowledge of secured party's interest, even assuming the buyer had knowledge of the divorce. Freeman v. Bentley, 205 Ga. App. 409, 422 S.E.2d 435 (1992). Shortly after a bank made a loan to a farmer, it mailed a cotton gin written notice of its security interest in the farmer's cotton crop. As the gin's president admitted reading the bank's letter, the gin had "actual knowledge" of the bank's security interest under O.C.G.A. § 11-1-201(25), (27), despite the president's claim that no documentation had been enclosed with the letter. Bank of Dawson v. Worth Gin Co., 295 Ga. App. 256, 671 S.E.2d 279 (2008). Notice not required. - Lessor was not required to comply with the notice provisions of O.C.G.A. §§ 10-1-36 and 11-9-504 because the motor vehicle lease agreement the lessor entered into with the lessee was intended to be a true lease and not to evince a secured transaction; the lessor retained a meaningful reversionary interest in the car because the option price was more than nominal since the purchase option price was approximately one-third of the car's value, and the agreement contained no provision purporting to grant the lessee equity in the vehicle prior to exercise of the purchase option. Aniebue v. Jaguar Credit Corp., 308 Ga. App. 1, 708 S.E.2d 4 (2011). Jury question. - Where there is conflicting evidence on the nature and extent of the debtor's knowledge, the debtor should not be estopped from raising lack of notice as a defense. Rather, the question of "reasonable notification" should be submitted to the jury. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979). Public Sale When sale is commercially reasonable. - Sale is commercially reasonable where it is done in public, during business hours, upon adequate notice within reasonable time of repossession, and under conditions reasonably calculated to bring fair market price. Hardin v. Norlin Music, Inc., 159 Ga. App. 167, 283 S.E.2d 21 (1981). Burden of showing reasonable conduct of sale. - Secured party bears burden under O.C.G.A. § 11-1-201(31.1) to show that sale was conducted in reasonable fashion. Hardin v. Norlin Music, Inc., 159 Ga. App. 167, 283 S.E.2d 21 (1981). Opportunity for competitive bidding required. - Where advertised sale under O.C.G.A. § 11-1-201(31.1) is held as scheduled, and proper notice is given, any person has right to enter competitive bid. Opportunity for competitive bidding is established and that is all that is required, even if no third party bids at sale. Hardin v. Norlin Music, Inc., 159 Ga. App. 167, 283 S.E.2d 21 (1981). To require that secured party rebut mere supposition that bidding may have been chilled would be unfair. Hardin v. Norlin Music, Inc., 159 Ga. App. 167, 283 S.E.2d 21 (1981). Security Interest "Magic words" not required. - Georgia law does not require "magic words" to create a valid security interest. Rather, the court must refer to the general law of contracts and determine whether the parties intended to create a security agreement. National Traveler, Inc. v. Paccom Leasing Corp., 110 Bankr. 619 (Bankr. M.D. Ga. 1990). Filing requirements do not apply to leases. - Where the agreement is a lease it is beyond the requirements for filing O.C.G.A. § 11-1-201. Sanders v. Commercial Credit Corp., 398 F.2d 988 (5th Cir. 1968). A "lease intended as security" is one which has the ultimate intent of a sale. In re Atlanta Times, Inc., 259 F. Supp. 820 (N.D. Ga. 1966), aff'd sub nom. Sanders v. National Acceptance Co. of Am., 383 F.2d 606 (5th Cir. 1967). Three elements for determining whether a lease is a security agreement: one, there must be an agreement by the lessee to pay lessor a set amount; two, amount must be equivalent to value of leased goods; and three, lessee must become owner or have option to become owner of leased goods. If any one of these elements is lacking, the lease is not a financing agreement but is a true lease. Trax, Inc. v. Wood, 7 Bankr. 543 (Bankr. N.D. Ga. 1980); Shamrock Rental Co. v. Huffman, 63 Bankr. 737 (Bankr. N.D. Ga. 1986). Lease not a security agreement. - In a Chapter 13 bankruptcy, in which an automobile lease required the debtor to surrender possession of vehicle at the end of the lease, unless the debtor exercised the debtor's option to purchase vehicle, and the debtor was not required to purchase the vehicle or renew the lease, and the debtor could not purchase the vehicle at the end of the lease for a nominal amount - rather, the end-of-lease purchase price exceeded the market value of the vehicle at that point - pursuant to O.C.G.A. § 11-1-201(37) (2002), the lease was a true lease, not a security agreement, and the debtor, thus, had to assume the lease or surrender the vehicle, rather than paying the lessor's claim in accordance with 11 U.S.C. § 1325(a)(5). Freeway Auto Credit v. Bonner (In re Bonner), Bankr. (Bankr. M.D. Ga. July 19, 2006). Security agreement need not be in any particular form. The requirements are as follows: (1) there must be a writing; (2) the language must reflect an intent to create a security interest; (3) the writing must reasonably describe the collateral; and (4) the agreement must be signed by the debtor. Trust Co. Bank v. Walker, 35 Bankr. 237 (Bankr. N.D. Ga. 1983). Article 9 applies to lease intended as security interest, but not to bona fide leases. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981). While the terms of the agreement created a lease rather than a secured transaction, any ambiguity caused by the option purchase price at the end of the lease ceased to exist when the parties entered into the addendum, prior to performance by either party, which made the purchase price the fair market value. Summerhill Neighborhood Dev. Corp. v. Telerent Leasing Corp., 242 Ga. App. 142, 528 S.E.2d 889 (2000). Name given to transaction by parties not conclusive. - Whether lease is intended as security is to be determined by facts of each case; name which parties give it is not conclusive. Ford Motor Credit Co. v. Dowdy, 159 Ga. App. 666, 284 S.E.2d 679 (1981), overruled on other grounds, Adams v. D & D Leasing Co., 191 Ga. App. 121, 381 S.E.2d 94 (1989). Motor vehicle lease agreement. - Considering the facts of the case in light of the plain language of the Georgia Code, an agreement giving debtor right to possession and use of a new truck in return for certain payments constituted a lease under Georgia law, even though the contract did not give debtor the power to terminate the agreement prior to the expiration of the term of the agreement. In re Paz, 179 Bankr. 743 (Bankr. S.D. Ga. 1995). The best test for determining the intent of an agreement which provides for an option to buy - that is, whether it is a lease or a security agreement - is a comparison of the option price with the market value of the equipment at the time the option is to be exercised. Such a comparison shows whether the lessee is paying actual value (evidencing a lease) or acquiring the property at a substantially lower price (evidencing a security agreement). Mejia v. Citizens & S. Bank, 175 Ga. App. 80, 332 S.E.2d 170 (1985). When an alleged automobile lease agreement contains an option to purchase the leased vehicle, the "best test" for determining the agreement's purpose and the parties' contractual intent is a comparison of the option price with the market value of the equipment at the time the option is to be exercised. If the lessees can acquire the property under the purchase option for little or no additional consideration in relation to its true value, the lease is one intended for security. If the lessees are required to pay at least a reasonable price, if not a price equal to or greater than the actual value of the automobile, at option time in order to exercise their purchase option, the agreement is intended to be and is in fact a true lease and not a disguised security transaction. Woods v. General Elec. Credit Auto Lease, Inc., 187 Ga. App. 57, 369 S.E.2d 334 (1988). Factors tending to establish that "lease" transaction is a conditional sale are: lessor's purchase of equipment from supplier; requirement that lessee be responsible for payment of all taxes, insurance and expenses for repairs, an initial down payment, and additional payment of security deposit. Ford Motor Credit Co. v. Dowdy, 159 Ga. App. 666, 284 S.E.2d 679 (1981), overruled on other grounds, Adams v. D & D Leasing Co., 191 Ga. App. 121, 381 S.E.2d 94 (1989). Additional factors which tend to establish that a transaction is a conditional sale instead of a true lease include an initial down payment and the requirement that the lessee be responsible for payment of taxes and insurance. Walton v. Howard, 198 Ga. App. 804, 403 S.E.2d 90 (1991). Lease creating security interest. - A lease will create a security interest if: (a) it secures payment or performance of an obligation upon personal property reserved by the lease; and (b) the lease is intended as security. Such intention is to be determined objectively on the basis of the facts of the case. Citizens & S. Equip. Leasing, Inc. v. Atlanta Fed. Sav. & Loan Ass'n, 144 Ga. App. 800, 243 S.E.2d 243 (1978). A lease-purchase agreement meeting the requirements of O.C.G.A. § 10-1-681 constituted a true lease, not a security agreement, and was subject to § 365 of the Bankruptcy Code, 11 U.S.C.S. § 365. Central Rents, Inc. v. Johnson, 203 Bankr. 498 (Bankr. S.D. Ga. 1996). Lease disguised as security agreement. - Creditor's unqualified right to require the debtor to repurchase equipment during or at termination of a purported lease, coupled with a letter agreement that was intended to insure the return of the creditor's investment and a return on the investment of a certain percentage indicated that the lease was a disguised security agreement. Moore v. Emery (In re Am. Steel Prod., Inc.), 203 Bankr. 504 (Bankr. S.D. Ga. 1996). "Lease" which requires lessee to purchase the property upon cancellation. - An agreement termed a "lease," which requires the lessee to purchase the vehicle upon cancellation, is equivalent to a secured sale, even though the lessor retains all indicia of ownership. Pierce v. Leasing Int'l, Inc., 142 Ga. App. 371, 235 S.E.2d 752 (1977). Where a "lessee" has not been given an option to purchase collateral at a nominal price, but is under a contractual duty to make the purchase, it is the purchaser, and the "lessor" is the seller and secured party. USI Capital & Leasing v. Medical Oxygen Serv., Inc., 36 Bankr. 341 (Bankr. N.D. Ga. 1984). Lease of equipment providing that title remain in lessor and for redelivery to lessor at expiration of term. - A lease of equipment for five years at an agreed price, with title to the property remaining in the lessor and with delivery of possession of the equipment to lessor to be made at the expiration of the lease, cannot be construed as the creation of a security interest. McGuire v. Associates Capitol Servs. Corp., 133 Ga. App. 408, 210 S.E.2d 862 (1974). Lessee becoming owner for nominal, or no, consideration upon compliance with lease. - An agreement whereby upon compliance with the terms of a lease the lessee shall become or has the option to become the owner of the property for no additional consideration or for a nominal consideration makes the lease one intended for security. Mann Inv. Co. v. Columbia Nitrogen Corp., 173 Ga. App. 77, 325 S.E.2d 612 (1984). A lease agreement covering machinery and equipment was a security instrument, rather than a true lease, where the agreement provided that "the Lessee shall have the option to purchase . . . for the sum of $1.00" and there was evidence which indicated the machinery and equipment were worth much more than $1.00 upon the termination date of the lease. Melton v. J.M. Kenith Co., 182 Ga. App. 184, 355 S.E.2d 115, overruled on other grounds, Bank S. v. Jones, 185 Ga. App. 125, 364 S.E.2d 281 (1987). Computer equipment lease agreement was "true lease," where the terms of the lease required payment of more than a "nominal" price to exercise an option to purchase the equipment. Third Century, Inc. v. Morgan, 187 Ga. App. 718, 371 S.E.2d 262 (1988). Rental purchase agreements between a rent-to-own business and renter were true leases where, even though they contained some provisions found in secured sales agreements, the renter could return the property without any further obligation, was not required to renew the agreements or purchase the property, or to make a down payment or security deposit, the company was responsible for maintaining and paying taxes on the property, and the agreements expressly provided that the renter intended to rent rather than purchase the property and would not own the property unless the renter bought it or acquired ownership as provided by the agreements. Mr. C's Rent to Own v. Jarrells, 205 Bankr. 994 (Bankr. M.D. Ga. 1997). Contract to lease washing machine for one week, with option to renew lease "for an additional term at the conclusion of each term or rental period, by the payment to the lessor of the rental payment," was a "true lease" and no security interest was created therein. Elcan Invs., Inc. v. Kirk, 187 Ga. App. 676, 371 S.E.2d 146 (1988). Telephone equipment lease agreement was a true lease, not a secured transaction, where the initial term was for five years and the lessee was not required to renew the lease or purchase the equipment at the end of the term and did not have the option to renew the lease or purchase the property at the end of the term for a nominal consideration. Carter v. Tokai Fin. Servs., Inc., 231 Ga. App. 755, 500 S.E.2d 638 (1998). Agreement to "lease" equipment for a fixed period for an amount which approximated the original purchase price, with an option to purchase for no additional consideration, was a security agreement rather than a true lease. Tri Leasing Corp. v. Fulton Textiles, Inc., 116 Bankr. 302 (Bankr. N.D. Ga. 1990). Three-year "lease agreement contract," by which "lessee" would make monthly payments and, at the end of the three years, without any additional payments, would own the leased equipment, was a security agreement and not a lease. National Traveler, Inc. v. Paccom Leasing Corp., 110 Bankr. 619 (Bankr. M.D. Ga. 1990). Agreement which did not stipulate a purchase price but indicated an intent to negotiate a purchase price was a true lease, and not a conditional sale. Chapman v. Avco Fin. Servs. Leasing Co., 193 Ga. App. 147, 387 S.E.2d 391 (1989). Farmers Home Administration. - Despite the fact that the form executed by the debtors did not contain a clause that "granted" a security interest to the Farmers Home Administration (FmHA), considering other language in the form, including a heading "Security Agreement (chattels and crops)," a reference to the FmHA as the "Secured Party," and a provision which read: "It is the purpose and intent of this instrument that . . . this instrument shall secure payment of the note," the debtors did grant the FmHA a security interest in crops, livestock and offspring, farm equipment, and farm products. United States v. Hollie, 42 Bankr. 111 (Bankr. M.D. Ga. 1984). Evidence indicative of motor vehicle lease agreement. - In a "motor vehicle lease" agreement involving a question as to whether the agreement was really a security transaction, the fact that the original lessor was in the automobile rental business and that the lessor did not require a financing statement indicated that a true lease agreement was involved. Mejia v. Citizens & S. Bank, 175 Ga. App. 80, 332 S.E.2d 170 (1985). Summary judgment premature without Bright-Line test. - Trial court erred in entering summary judgment for a lessor without addressing whether the parties' contract for a car was a lease or a security agreement under the Bright-Line Test. Coleman v. DaimlerChrysler Servs. of N. Am., LLC, 276 Ga. App. 336, 623 S.E.2d 189 (2005). Signature Maker's intent. - Whatever a maker intends as the maker's signature is the maker's signature and gives effect to the maker's contract. Kohlmeyer & Co. v. Bowen, 126 Ga. App. 700, 192 S.E.2d 400 (1972). A complete signature is not necessary. - Under O.C.G.A. § 11-1-201(39) a complete signature is not necessary to constitute an authentication, as it may be printed and may be on any part of the document including a billhead or letterhead. Evans v. Moore, 131 Ga. App. 169, 205 S.E.2d 507 (1974). Signature of face does not authenticate title retention agreement on back. - Placing of initials and/or signature on face of documents does not suffice to authenticate title retention agreement on reverse and as a consequence does not entitle it to priority over disputed collateral. Food Serv. Equip. Co. v. First Nat'l Bank, 121 Ga. App. 421, 174 S.E.2d 216 (1970). Absence of notary seal. - Jury verdict imposing liability on guarantors for a debt of a corporation was reversed where there was no evidence that the guarantors wrote their names on or otherwise signed the guaranty, where a witness's opinion that the guaranty "appeared" to be executed by the guarantors lacked any basis whatsoever, other than the fact that their names appeared on the signature lines, and where the notary attestation was invalid, if for no other reason, because the guaranty did not contain a notary seal. Friedrich v. APAC-Georgia, Inc., 265 Ga. App. 769, 595 S.E.2d 620 (2004). Unauthorized Signature or Endorsement Apparent authority to execute indorsements. - Where its president-treasurer had at least apparent authority - if not actual authority - to execute indorsements, a corporation could not defeat such indorsements merely by alleging that in truth and in fact the officer had no such authority and that the officer's act in indorsing the paper had not been ratified. Bank S. v. Midstates Group, Inc., 185 Ga. App. 342, 364 S.E.2d 58 (1987); Holliday Constr. Co. v. Sandy Springs Assocs., 198 Ga. App. 20, 400 S.E.2d 380 (1990). OPINIONS OF THE ATTORNEY GENERAL A contract of guaranty is a collateral "obligation" which is just as enforceable as any other contract. 1971 Op. Att'y Gen. No. 71-69. RESEARCH REFERENCES Am. Jur. 2d. - 11 Am. Jur. 2d, Bills and Notes, §§ 54, 84 et seq., 186, 236 et seq., 287 et seq., 361 et seq., 387. 12 Am. Jur. 2d, Bills and Notes, §§ 586, 631. 13 Am. Jur. 2d, Business Trusts, § 1. 15A Am. Jur. 2d, Commercial Code, § 1 et seq. 17A Am. Jur. 2d, Contracts, §§ 1-3. 27A Am. Jur. 2d, Equity, §§ 1, 207. 53A Am. Jur. 2d, Money, § 1. 67 Am. Jur. 2d, Sales, §§ 10-27, 31. 68A Am. Jur. 2d, Secured Transactions, § 31 et seq. Status as "Buyer in Ordinary Course of Business," 2 POF2d 165. Ratification of Forged or Unauthorized Signature, 7 POF2d 675. 14 Am. Jur. Pleading and Practice Forms, Insolvency, § 2. C.J.S. - 82 C.J.S., Statutes, § 309. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-201. ALR. - Character of bill of lading contemplated by a guaranty of payment of a draft with bill of lading attached, 13 A.L.R. 166. Right of trustee in bankruptcy as regards property held in trust for bankrupt, 16 A.L.R. 552; 138 A.L.R. 1349. Right of surety who discharges obligation due to government to be subrogated to priority or preference of latter, 24 A.L.R. 1502; 83 A.L.R. 1131. Right of receiver, assignee, or trustee in bankruptcy to possession and administration of collateral validly pledged by his insolvent, 28 A.L.R. 409. What money is legal tender, 31 A.L.R. 246. Public records as affecting one's character as a holder in due course of negotiable paper, 37 A.L.R. 860. Branch banks, 50 A.L.R. 1340; 136 A.L.R. 471. Construction, application, and effect of statute relating to question as to time as essence of contract, 79 A.L.R. 410. Who must sign and form of signature, in case of partnership, in order to comply with statute of frauds, 114 A.L.R. 1005. Branch banks, 136 A.L.R. 471. Right of trustee in bankruptcy as regards property held in trust for bankrupt, 138 A.L.R. 1349. What constitutes a "public sale,", 4 A.L.R.2d 575. Right to follow chattel into hands of purchaser who took in payment of pre-existing debt, 11 A.L.R.3d 1028. Extent of duty of transferee of bulk sale to investigate regarding seller's creditors under Uniform Commercial Code Article 6, 67 A.L.R.3d 1056. Construction and effect of UCC § 2-316(2) providing that implied warranty disclaimer must be "conspicuous,", 73 A.L.R.3d 248. Who is "person in business of selling goods of that kind" within provision of UCC § 1-201(9) defining buyer in ordinary course of business for purposes of UCC § 9-307(1), 73 A.L.R.3d 338. Maintenance of computer terminal in retail store for purpose of effecting transfer of funds between financial institution and its depositors as conduct of banking business by store, 73 A.L.R.3d 1282. Equipment leases as security interest within Uniform Commercial Code § 1-201(37), 76 A.L.R.3d 11. Who is "buyer in ordinary course of business" under the Uniform Commercial Code, 87 A.L.R.3d 11. What constitutes "money" within meaning of Uniform Commercial Code, 40 A.L.R.4th 346. 11-1-202. Notice; knowledge. Statute text (a) Subject to subsection (f) of this Code section, a person has "notice" of a fact if the person: (1) Has actual knowledge of it; (2) Has received a notice or notification of it; or (3) From all the facts and circumstances known to the person at the time in question, has reason to know that it exists. (b) "Knows" or "knowledge" means actual knowledge. (c) "Discover," "learn," or words of similar import refer to knowledge rather than to reason to know. (d) A person "notifies" or "gives" a notice or notification to another person by taking such steps as may be reasonably required to inform the other person in the ordinary course, whether or not the other person actually comes to know of it. (e) Subject to subsection (f) of this Code section, a person "receives" a notice or notification when: (1) It comes to that person's attention; or (2) It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications. (f) Notice, knowledge, or a notice or notification received by an organization shall be effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction and, in any event, from the time it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information. History (Code 1933, § 109A-1 - 202, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65; Ga. L. 2016, p. 864, § 11/HB 737.) Annotations The 2015 amendment, effective January 1, 2016, substituted the present provisions of this Code section for the former provisions, which read: "A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or any other document authorized or required by the contract to be issued by a third party shall be prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the third party." The 2016 amendment, effective May 3, 2016, part of an Act to revise, modernize, and correct the Code, substituted "a notice or notification" for "notice or notification" in subsection (e). Cross references. - Duty of certified public weigher to obtain official seal from Department of Agriculture, and as to effect of impressing of seal on certificates, § 10-2-45. Law reviews. - For note, "The Law of Evidence in the Uniform Commercial Code," see 1 Ga. L. Rev. 44 (1966). RESEARCH REFERENCES Am. Jur. 2d. - 15A Am. Jur. 2d, Commercial Code, §§ 32, 51, 58. C.J.S. - 32A C.J.S., Evidence, §§ 819 et seq., 967. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-202. ALR. - Construction and effect of § 1-202 of the Uniform Commercial Code dealing with documents which are prima facie evidence of their own authenticity and genuineness, 72 A.L.R.3d 1243. 11-1-203. Lease distinguished from security interest. Statute text (a) Whether a transaction in the form of a lease creates a security interest is determined by the facts of each case. (b) A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay to the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and: (1) The original term of the lease is equal to or greater than the remaining economic life of the goods; (2) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods; (3) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement; or (4) The lessee has an option to become the owner of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement. (c) A transaction in the form of a lease does not create a security interest merely because: (1) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into; (2) The lessee assumes risk of loss of the goods; (3) The lessee agrees to pay, with respect to the goods, taxes, insurance, filing, recording, or registration fees, or service or maintenance costs; (4) The lessee has an option to renew the lease or to become the owner of the goods; (5) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed; or (6) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed. (d) Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if: (1) When the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed; or (2) When the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed. (e) The "remaining economic life of the goods" and "reasonably predictable" fair market rent, fair market value, or cost of performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction is entered into. History (Code 1933, § 109A-1 - 203, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, substituted the present provisions of this Code section for the former provisions, which read: "Every contract or duty within this title imposes an obligation of good faith in its performance or enforcement." Law reviews. - For survey article on contracts - employment at will, see 34 Mercer L. Rev. 86 (1982). For article, "Baseline Questions in Legal Reasoning: The Example of Property in Jobs," see 23 Ga. L. Rev. 911 (1989). For annual survey article discussing the obligation of good faith, see 46 Mercer L. Rev. 95 (1994). For article, "Common Fact Patterns of Stock Broker Fraud and Misconduct," see 7 Ga. St. B.J. 14 (2002). For note, "The Growth of Lender Liability: An Economic Perspective," see 21 Ga. L. Rev. 723 (1987). For comment, "Lender Liability for Breach of the Obligation of Good Faith Performance," see 36 Emory L.J. 917 (1987). JUDICIAL DECISIONS Section construed. - O.C.G.A. § 11-1-203 in effect states that what is not regulated by contract should be done in such a way as to show good faith in carrying out of what is expressed. Fulton Nat'l Bank v. Willis Denney Ford, Inc., 154 Ga. App. 846, 269 S.E.2d 916 (1980). O.C.G.A. § 11-1-203 does not state a cause of action for which a claim of relief may be granted. Management Assistance, Inc. v. Computer Dimensions, Inc., 546 F. Supp. 666 (N.D. Ga. 1982), aff'd sub nom. Computer Dimensions v. Basic Four, 747 F.2d 708 (11th Cir. 1984). No independent cause of action created by O.C.G.A. § 11-1-203. - Inasmuch as a borrower could not prevail on its breach of contract claim against a lender, it could not prevail on a cause of action based on the failure to act in good faith in performing the contract because there was no independent cause of action for breach of duty of good faith in performing a contract governed by the Uniform Commercial Code. Heritage Creek Dev. Corp. v. Colonial Bank, 268 Ga. App. 369, 601 S.E.2d 842 (2004). Inapplicable in financing of residential lots. - The implied covenant of good faith under the Uniform Commercial Code was inapplicable to a case involving the financing of residential lots, rather than the sale of goods. Lake Tightsqueeze, Inc. v. Chrysler First Fin. Servs. Corp., 210 Ga. App. 178, 435 S.E.2d 486 (1993). Good faith required in foreclosing on security deed. - Homeowner stated a claim for breach of contract and breach of the duty of good faith and fair dealing against the homeowner's mortgage lender based on the lender's legal duty in the security agreement to conduct the foreclosure of the property fairly, acting as the owner's agent. Stewart v. SunTrust Mortg., Inc., 331 Ga. App. 635, 770 S.E.2d 892 (2015). Inapplicable to franchise agreement. - Because a franchise agreement primarily governed issues regarding the proper operation of a franchise restaurant, advertising, the use of trademarks, trade names, and service marks, and the provisions regarding goods were incidental at best, the court concluded that non-sale aspects predominated the franchise agreement, and the duty of good faith and fair dealing embodied in O.C.G.A. § 11-1-203 did not apply. Am. Casual Dining, L.P. v. Moe's Southwest Grill, L.L.C., 426 F. Supp. 2d 1356 (N.D. Ga. 2006). Substantial compliance with spirit of contract. - "Good faith" is merely a shorter way of saying substantial compliance with the spirit, and not the letter only, of the contract. Crooks v. Chapman Co., 124 Ga. App. 718, 185 S.E.2d 787 (1971). Banking provision enforceable subject to good faith requirement. - Business checking account agreement containing provision that bank may charge any indebtedness of depositor to bank, whether or not matured, against account if the bank deems itself insecure with respect to any such indebtedness, is enforceable, subject to the general requirement of good faith in its enforcement as set forth in O.C.G.A. § 11-1-203. First Nat'l Bank v. Appalachian Indus., Inc., 146 Ga. App. 630, 247 S.E.2d 422 (1978). No bad faith discharge of notes due to charge backs under factoring agreement. - Delta Diversified, Inc. v. Citizens & S. Nat'l Bank, 171 Ga. App. 625, 320 S.E.2d 767 (1984). Good faith not violated. - Bank's failure to foreclose sooner on secured collateral did not constitute a breach of good faith and fair dealing owed to guarantors. Greenwald v. Columbus Bank & Trust Co., 228 Ga. App. 527, 492 S.E.2d 248 (1997). When plaintiff Jobber petroleum distributors' only allegations of wrongdoing was defendant oil company's purported recapture of the cost of a prompt-pay discount when setting its price, and the parties' contract imposed no limits on the costs that could be recouped in setting the price, the good-faith safe harbor provided in O.C.G.A. § 11-2-305(2) applied; O.C.G.A. § 11-2-103 did not support imposing fundamental substantive limitations on the pricing methodology set out in the contract. Autry Petroleum Co. v. BP Prods. North America, Inc., F.3d (11th Cir. June 26, 2009)(Unpublished). Cited in Geohagan v. Commercial Credit Corp., 130 Ga. App. 828, 204 S.E.2d 784 (1974); Central Soya Co. v. Bundrick, 137 Ga. App. 63, 222 S.E.2d 852 (1975); Interstate Sec. Police, Inc. v. Citizens & S. Emory Bank, 237 Ga. 37, 226 S.E.2d 583 (1976); Henderson Few & Co. v. Rollins Communications, Inc., 148 Ga. App. 139, 250 S.E.2d 830 (1978); Fratelli Gardino v. Caribbean Lumber Co., 447 F. Supp. 1337 (S.D. Ga. 1978); Brack v. Brownlee, 246 Ga. 818, 273 S.E.2d 390 (1980); Smithloff v. Benson, 173 Ga. App. 870, 328 S.E.2d 759 (1985); West v. Koufman, 259 Ga. 505, 384 S.E.2d 664 (1989); Four County Bank v. Tidewater Equip. Co., 331 Ga. App. 753, 771 S.E.2d 437 (2015). RESEARCH REFERENCES Am. Jur. 2d. - 11 Am. Jur. 2d, Banks and Financial Institutions, § 918. 11 Am. Jur. 2d, Bills and Notes, §§ 276, 283, 295 et seq. 12 Am. Jur. 2d, Bills and Notes, § 586. 15A Am. Jur. 2d, Commercial Code, § 20. 17A Am. Jur. 2d, Contracts, § 342. 67 Am. Jur. 2d, Sales, §§ 21-23. C.J.S. - 17B C.J.S., Contracts, § 562. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-203. ALR. - Enforceability of transaction entered into pursuant to referral sales arrangement, 14 A.L.R.3d 1420. Failure to deliver ordered merchandise to customer on date promised as unfair or deceptive trade practice, 7 A.L.R.4th 1257. 11-1-204. Value. Statute text Except as otherwise provided in Articles 3, 4, 5, and 6 of this title, a person gives value for rights if the person acquires them: (1) In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection; (2) As security for, or in total or partial satisfaction of, a preexisting claim; (3) By accepting delivery under a preexisting contract for purchase; or (4) In return for any consideration sufficient to support a simple contract. History (Code 1981, § 11-1-204, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations Effective date. - This Code section became effective January 1, 2016. Editor's notes. - Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016, redesignated former Code Section 11-1-204 as present Code Section 11-1-205. 11-1-205. Reasonable time; seasonableness. Statute text (a) Whether a time for taking any action required by this title is reasonable depends on the nature, purpose, and circumstances of such action. (b) An action is taken "seasonably" if it is taken at or within the time agreed, or if no time is agreed, at or within a reasonable time. History (Code 1933, § 109A-1 - 204, enacted by Ga. L. 1962, p. 156, § 1; Code 1981, § 11-1-205, as redesignated by Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, redesignated former Code Section 11-1-204 as present Code Section 11-1-205; and substituted the present provisions of this Code section for the former provisions, which read: "(1) Whenever this title requires any action to be taken within a reasonable time, any time which is not manifestly unreasonable may be fixed by agreement. "(2) What is a reasonable time for taking any action depends on the nature, purpose, and circumstances of such action. "(3) An action is taken 'seasonably' when it is taken at or within the time agreed or if no time is agreed at or within a reasonable time." Editor's notes. - Former Code Section 11-1-205, pertaining to course of dealing and usage of trade, was repealed by Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016. The former Code section was based on Ga. L. 1962, p. 156, § 1. JUDICIAL DECISIONS "Reasonable time" does not mean "immediately." Trailmobile Div. of Pullman, Inc. v. Jones, 118 Ga. App. 472, 164 S.E.2d 346 (1968); Solomon Refrigeration, Inc. v. Osburn, 148 Ga. App. 772, 252 S.E.2d 686 (1979). What is a reasonable time is ordinarily a matter of fact to be determined by jury under particular circumstances of the case. Trailmobile Div. of Pullman, Inc. v. Jones, 118 Ga. App. 472, 164 S.E.2d 346 (1968); Solomon Refrigeration, Inc. v. Osburn, 148 Ga. App. 772, 252 S.E.2d 686 (1979). Notice of rejection not reasonable under circumstances involved. - Economy Forms Corp. v. Kandy, Inc., 391 F. Supp. 944 (N.D. Ga. 1974), aff'd, 511 F.2d 1400 (5th Cir. 1975). One opportunity to cure was unreasonable. - Motor coach buyer's revocation of acceptance claim under O.C.G.A. § 11-2-608(1)(b) failed because the buyer's providing only one opportunity to repair before the extent of the defect was truly apparent was not reasonable under O.C.G.A. § 11-1-204; the futility exception to providing an opportunity to cure did not apply because there was no evidence that the buyer knew prior to revocation that the seller would have been unable to repair the coach. Car Transp. Brokerage Co. v. Blue Bird Body Co., F.3d (11th Cir. Apr. 10, 2009)(Unpublished). Cited in Alimenta (U.S.A.), Inc. v. Cargill, Inc., 861 F.2d 650 (11th Cir. 1988); Amatulli Imports, Inc. v. House of Persia, Inc., 191 Ga. App. 827, 383 S.E.2d 192 (1989); Wal-Mart Stores, Inc. v. Wheeler, 262 Ga. App. 607, 586 S.E.2d 83 (2003). RESEARCH REFERENCES Am. Jur. 2d. - 15A Am. Jur. 2d, Commercial Code, §§ 26, 117. 17A Am. Jur. 2d, Contracts, §§ 478, 479. 67 Am. Jur. 2d, Sales, § 72. C.J.S. - 86 C.J.S., Time, § 4. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-204. ALR. - Constitutionality of statute regulating time-measuring instruments or devices, 37 A.L.R. 134. Time for exercise of reserved option to terminate, cancel, or rescind contract, 164 A.L.R. 1014. Time within which buyer must make inspection, trial, or test to determine whether goods are of requisite quality, 52 A.L.R.2d 900. Time for revocation of acceptance of goods under UCC § 2-608(2), 65 A.L.R.3d 354. 11-1-206. Presumptions. Statute text Whenever this title creates a "presumption" with respect to a fact, or provides that a fact is "presumed," the trier of fact must find the existence of the fact presumed unless and until evidence is introduced that supports a finding of its nonexistence. History (Code 1933, § 109A-1 - 206, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1998, p. 1323, § 16; Ga. L. 2015, p. 996, § 3A-1/SB 65.) Annotations The 2015 amendment, effective January 1, 2016, substituted the present provisions of this Code section for the former provisions, which read: "(1) Except in the cases described in subsection (2) of this Code section a contract for the sale of personal property is not enforceable by way of action or defense beyond $5,000.00 in amount or value of remedy unless there is some writing which indicates that a contract for sale has been made between the parties at a defined or stated price, reasonably identifies the subject matter, and is signed by the party against whom enforcement is sought or by his authorized agent. "(2) Subsection (1) of this Code section does not apply to contracts for the sale of goods (Code Section 11-2-201) nor of securities (Code Section 11-8-113) nor to security agreements (Code Section 11-9-203)." Cross references. - Statute of frauds generally, § 13-5-30 et seq. JUDICIAL DECISIONS A school tuition payment is a payment for services rather than for the purchase of personal property. The inclusion of such incidental items as uniforms, lockers, books, etc. in the tuition fee clearly would not reduce the essential character of the transaction to a sale of personal property. Bishop v. Westminster Schools, Inc., 196 Ga. App. 891, 397 S.E.2d 143 (1990). Effect of performance by a party. - The statute of frauds does not bar enforcement of a contract which has been fully performed on one side. Bishop v. Westminster Schools, Inc., 196 Ga. App. 891, 397 S.E.2d 143 (1990). Cited in L.M. Berry & Co. v. Blackmon, 129 Ga. App. 347, 199 S.E.2d 610 (1973). RESEARCH REFERENCES Am. Jur. 2d. - 72 Am. Jur. 2d, Statute of Frauds, §§ 110, 111. C.J.S. - 77A C.J.S., Sales, § 68 et seq. U.L.A. - Uniform Commercial Code (U.L.A.) § 1-206. ALR. - Oral contract to enter into written contract as within statute of frauds, 58 A.L.R. 1015. Statute of frauds: sufficiency of identification of vendor or purchaser in memorandum, 70 A.L.R. 196. Who must sign and form of signature, in case of partnership, in order to comply with statute of frauds, 114 A.L.R. 1005. Terms "bags," "bales," "cars," or other terms indefinite as to quantity or weight, as satisfying statute of frauds, 129 A.L.R. 1230. Contract to fill in land as one for sale of goods within statute of frauds, 161 A.L.R. 1158. Statute of frauds: validity of lease or sublease subscribed by one of the parties only, 46 A.L.R.3d 619. Construction and application of statute of frauds provision under UCC § 1-206 governing personal property not otherwise covered, 62 A.L.R.5th 137. 11-1-207. through 11-1-209. Statute text Repealed by Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016. Annotations Editor's notes. - These Code sections were based on Code 1933, §§ 109A-1 - 207 through 109A-1 - 209, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1978, p. 1081, § 7; Ga. L. 1996, p. 1306, § 2. —————————— PART 3 TERRITORIAL APPLICABILITY AND GENERAL RULES Annotations Editor's notes. - This part became effective January 1, 2016. Ga. L. 2015, p. 996, § 1-1/SB 65(a), not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Debtor-Creditor Uniform Law Modernization Act of 2015.' "(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships." 11-1-301. Territorial applicability; parties' power to choose applicable law. Statute text (a) Except as otherwise provided in this Code section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. (b) In the absence of an agreement under subsection (a) of this Code section, and except as provided in subsection (c) of this Code section, this title applies to transactions bearing an appropriate relation to this state. (c) If one of the following provisions of this title specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law so specified: (1) Code Section 11-2-402; (2) Code Sections 11-2A-105 and 11-2A-106; (3) Code Section 11-4-102; (4) Code Section 11-4A-507; (5) Code Section 11-5-116; (6) Code Section 11-6-103; (7) Code Section 11-8-110; or (8) Code Sections 11-9-301 through 11-9-307. History (Code 1981, § 11-1-301, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-302. Variation by agreement. Statute text (a) Except as otherwise provided in subsection (b) of this Code section or elsewhere in this title, the effect of provisions of this title may be varied by agreement. (b) The obligations of good faith, diligence, reasonableness, and care prescribed by this title may not be disclaimed by agreement. The parties may by agreement determine the standards by which the performance of such obligations is to be measured if such standards are not manifestly unreasonable. Whenever this title requires an action to be taken within a reasonable time, a time that is not manifestly unreasonable may be fixed by agreement. (c) The presence in certain provisions of this title of the phrase "unless otherwise agreed" or words of similar import does not imply that the effect of other provisions may not be varied by agreement under this Code section. History (Code 1981, § 11-1-302, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-303. Course of performance, course of dealing, and usage of trade. Statute text (a) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if: (1) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection. (b) A "course of dealing" is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. (c) A "usage of trade" is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law. (d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance. (e) Except as otherwise provided in subsection (f) of this Code section, the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade shall be construed whenever reasonable as consistent with each other. If such a construction is unreasonable: (1) Express terms prevail over course of performance, course of dealing, and usage of trade; (2) Course of performance prevails over course of dealing and usage of trade; and (3) Course of dealing prevails over usage of trade. (f) Subject to Code Section 11-2-209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance. (g) Evidence of a relevant usage of trade offered by one party shall not be admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party. History (Code 1981, § 11-1-303, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-304. Obligation of good faith. Statute text Every contract or duty within this title imposes an obligation of good faith in its performance and enforcement. History (Code 1981, § 11-1-304, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-305. Remedies to be liberally administered. Statute text (a) The remedies provided by this title shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in this title or by other rule of law. (b) Any right or obligation declared by this title shall be enforceable by action unless the provision declaring it specifies a different and limited effect. History (Code 1981, § 11-1-305, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-306. Waiver or renunciation of claim or right after breach. Statute text A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record. History (Code 1981, § 11-1-306, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-307. Prima-facie evidence by third party documents. Statute text A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or any other document authorized or required by the contract to be issued by a third party shall be prima-facie evidence of its own authenticity and genuineness and of the facts stated in the document by the third party. History (Code 1981, § 11-1-307, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-308. Performance or acceptance under reservation of rights. Statute text (a) A party who, with explicit reservation of rights, performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as "without prejudice," "under protest," or the like are sufficient. (b) Subsection (a) of this Code section shall not apply to an accord and satisfaction. History (Code 1981, § 11-1-308, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-309. Option to accelerate at will. Statute text A term providing that one party or that party's successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or when the party "deems itself insecure" or words of similar import shall be construed to mean that the party shall have power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against whom the power has been exercised. History (Code 1981, § 11-1-309, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) 11-1-310. Subordinated obligations. Statute text An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Such a subordination does not create a security interest as against either the common debtor or a subordinated creditor. History (Code 1981, § 11-1-310, enacted by Ga. L. 2015, p. 996, § 3A-1/SB 65.) ——————————