Source: Laws of New York, N.Y. Uniform Commercial Code (UCC), official NYS Legislature server (public.leginfo.state.ny.us, Legislative Bill Drafting Commission). Retrieved 2026-07-10. Extracted from the full-UCC single-page render (lawssrch.cgi?NVLWO: QLAWDATA=**UCC). This file contains the full Section-Captions index (all articles) followed by the Article 1 body text only.
ARTICLE 1
GENERAL PROVISIONS
PART 1
SHORT TITLE, CONSTRUCTION, APPLICATION AND
SUBJECT MATTER OF THE ACT
Section 1--101. Short Title
1--102. Scope of Article
1--103. Construction of Uniform Commercial Code to Promote its
Purposes and Policies; Applicability of Supplemental
Principles of Law
1--104. Construction Against Implied Repeal
1--105. Severability
1--106. Use of Singular and Plural; Gender
1--107. Section Captions
1--108. Relation to Electronic Signatures in Global and National
Commerce Act
PART 2
GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
Section 1--201. General Definitions
1--202. Notice; Knowledge
1--203. Lease Distinguished From Security Interest
1--204. Value
1--205. Reasonable Time; Seasonableness
1--206. Presumptions
1--207. Statute of Frauds for Kinds of Personal Property Not
Otherwise Covered
PART 3
TERRITORIAL APPLICABILITY AND GENERAL RULES
1--301. Territorial Applicability; Parties' Power to Choose
Applicable Law
1--302. Variation by Agreement
1--303. Course of Performance, Course of Dealing, and Usage of
Trade
1--304. Obligation of Good Faith
1--305. Remedies to be Liberally Administered
1--306. Waiver or Renunciation of Claim or Right After Breach
1--307. Prima Facie evidence by Third-party Documents
1--308. Performance or Acceptance Under Reservation of Rights
1--309. Option to Accelerate at Will
1--310. Subordinated Obligations
ARTICLE 2
SALES
PART 1
SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER
Section 2--101. Short Title
2--102. Scope; Certain Security and Other Transactions Excluded
From This Article
2--103. Definitions and Index of Definitions
2--104. Definitions: "Merchant"; "Between Merchants"; "Financing
Agency"
2--105. Definitions: Transferability; "Goods"; "Future" Goods;
"Lot"; "Commercial Unit"
2--106. Definitions. "Contract"; "Agreement"; "Contract for
Sale"; "Sale"; "Present Sale"; "Conforming" to
Contract; "Termination"; "Cancellation"; "Hybrid
Transaction"
2--107. Goods to Be Severed From Realty: Recording
PART 2
FORM, FORMATION AND READJUSTMENT OF CONTRACT
Section 2--201. Formal Requirements; Statute of Frauds
2--202. Final Written Expression: Parol or Extrinsic Evidence
2--203. Seals Inoperative
2--204. Formation in General
2--205. Firm Offers
2--206. Offer and Acceptance in Formation of Contract
2--207. Additional Terms in Acceptance or Confirmation
2--208. Course of Performance or Practical Construction
2--209. Modification, Rescission and Waiver
2--210. Delegation of Performance; Assignment of Rights
PART 3
GENERAL OBLIGATION AND CONSTRUCTION
OF CONTRACT
Section 2--301. General Obligations of Parties
2--302. Unconscionable Contract or Clause
2--303. Allocation or Division of Risks
2--304. Price Payable in Money, Goods, Realty, or Otherwise
2--305. Open Price Term
2--306. Output, Requirements and Exclusive Dealings
2--307. Delivery in Single Lot or Several Lots
2--308. Absence of Specified Place for Delivery
2--309. Absence of Specific Time Provisions; Notice of
Termination
2--310. Open Time for Payment or Running of Credit; Authority to
Ship Under Reservation
2--311. Options and Cooperation Respecting Performance
2--312. Warranty of Title and Against Infringement; Buyer's
Obligation Against Infringement
2--313. Express Warranties by Affirmation, Promise, Description,
Sample
2--314. Implied Warranty: Merchantability; Usage of Trade
2--315. Implied Warranty: Fitness for Particular Purpose
2--316. Exclusion or Modification of Warranties
2--317. Cumulation and Conflict of Warranties Express or Implied
2--318. Third Party Beneficiaries of Warranties Express or
Implied
2--319. F.O.B. and F.A.S. Terms
2--320. C.I.F. and C.& F. Terms
2--321. C.I.F. or C.& F.: "Net Landed Weights"; "Payment on
Arrival"; Warranty of Condition on Arrival
2--322. Delivery "Ex-Ship"
2--323. Form of Bill of Lading Required in Overseas Shipment;
"Overseas"
2--324. "No Arrival, No Sale" Term
2--325. "Letter of Credit" Term; "Confirmed Credit"
2--326. Sale on Approval and Sale or Return; Rights of Creditors
2--327. Special Incidents of Sale on Approval and Sale or Return
2--328. Sale by Auction
PART 4
TITLE, CREDITORS AND GOOD FAITH PURCHASERS
Section 2--401. Passing of Title; Reservation for Security; Limited
Application of This Section
2--402. Rights of Seller's Creditors Against Sold Goods
2--403. Power to Transfer; Good Faith Purchase of Goods;
"Entrusting"
PART 5
PERFORMANCE
Section 2--501. Insurable Interest in Goods; Manner of Identification of
Goods
2--502. Buyer's Right to Goods on Seller's Repudiation, Failure
to Deliver, or Insolvency
2--503. Manner of Seller's Tender of Delivery
2--504. Shipment by Seller
2--505. Seller's Shipment Under Reservation
2--506. Rights of Financing Agency
2--507. Effect of Seller's Tender; Delivery on Condition
2--508. Cure by Seller of Improper Tender or Delivery;
Replacement
2--509. Risk of Loss in the Absence of Breach
2--510. Effect of Breach on Risk of Loss
2--511. Tender of Payment by Buyer; Payment by Check
2--512. Payment by Buyer Before Inspection
2--513. Buyer's Right to Inspection of Goods
2--514. When Documents Deliverable on Acceptance; When on
Payment
2--515. Preserving Evidence of Goods in Dispute
PART 6
BREACH, REPUDIATION AND EXCUSE
Section 2--601. Buyer's Rights on Improper Delivery
2--602. Manner and Effect of Rightful Rejection
2--603. Merchant Buyer's Duties as to Rightfully Rejected Goods
2--604. Buyer's Options as to Salvage of Rightfully Rejected
Goods
2--605. Waiver of Buyer's Objections by Failure to Particularize
2--606. What Constitutes Acceptance of Goods
2--607. Effect of Acceptance; Notice of Breach; Burden of
Establishing Breach After Acceptance; Notice of Claim
or Litigation to Person Answerable Over
2--608. Revocation of Acceptance in Whole or in Part
2--609. Right to Adequate Assurance of Performance
2--610. Anticipatory Repudiation
2--611. Retraction of Anticipatory Repudiation
2--612. "Installment Contract"; Breach
2--613. Casualty to Identified Goods
2--614. Substituted Performance
2--615. Excuse by Failure of Presupposed Conditions
2--616. Procedure on Notice Claiming Excuse
PART 7
REMEDIES
Section 2--701. Remedies for Breach of Collateral Contracts Not Impaired
2--702. Seller's Remedies on Discovery of Buyer's Insolvency
2--703. Seller's Remedies in General
2--704. Seller's Right to Identify Goods to the Contract
Notwithstanding Breach or to Salvage Unfinished Goods
2--705. Seller's Stoppage of Delivery in Transit or Otherwise
2--706. Seller's Resale Including Contract for Resale
2--707. "Person in the Position of a Seller"
2--708. Seller's Damages for Non-acceptance or Repudiation
2--709. Action for the Price
2--710. Seller's Incidental Damages
2--711. Buyer's Remedies in General; Buyer's Security Interest
in Rejected Goods
2--712. "Cover"; Buyer's Procurement of Substitute Goods
2--713. Buyer's Damages for Non-Delivery or Repudiation
2--714. Buyer's Damages for Breach in Regard to Accepted Goods
2--715. Buyer's Incidental and Consequential Damages
2--716. Buyer's Right to Specific Performance or Replevin
2--717. Deduction of Damages From the Price
2--718. Liquidation or Limitation of Damages; Deposits
2--719. Contractual Modification or Limitation of Remedy
2--720. Effect of "Cancellation" or "Rescission" on Claims for
Antecedent Breach
2--721. Remedies for Fraud
2--722. Who Can Sue Third Parties for Injury to Goods
2--723. Proof of Market Price: Time and Place
2--724. Admissibility of Market Quotations
2--725. Statute of Limitations in Contracts for Sale
ARTICLE 2-A
LEASES
PART 1
GENERAL PROVISIONS
Section 2-A-101. Short Title
2-A-102. Scope
2-A-103. Definitions and Index of Definitions
2-A-104. Leases Subject to Other Law
2-A-105. Territorial Application of Article to Goods Covered by
Certificate of Title
2-A-106. Limitation on Power of Parties to Consumer Lease to
Choose Applicable Law and Judicial Forum
2-A-107. Waiver or Renunciation of Claim or Right After Default
2-A-108. Unconscionability
2-A-109. Option to Accelerate at Will
PART 2
FORMATION AND CONSTRUCTION OF LEASE CONTRACT
Section 2-A-201. Statute of Frauds
2-A-202. Final Written Expression: Parol or Extrinsic Evidence
2-A-203. Seals Inoperative
2-A-204. Formation in General
2-A-205. Firm Offers
2-A-206. Offer and Acceptance in Formation of Lease Contract
2-A-208. Modification, Rescission and Waiver
2-A-209. Lessee Under Finance Lease as Beneficiary of Supply
Contract
2-A-210. Express Warranties
2-A-211. Warranties Against Interference and Against
Infringement; Lessee's Obligation Against
Infringement
2-A-212. Implied Warranty of Merchantability
2-A-213. Implied Warranty of Fitness for Particular Purpose
2-A-214. Exclusion or Modification of Warranties
2-A-215. Cumulation and Conflict of Warranties Express or
Implied
2-A-216. Third-Party Beneficiaries of Express or Implied
Warranties
2-A-217. Identification
2-A-218. Insurance and Proceeds
2-A-219. Risk of Loss
2-A-220. Effect of Default on Risk of Loss
2-A-221. Casualty to Identified Goods
PART 3
EFFECT OF LEASE CONTRACT
Section 2-A-301. Enforceability of Lease Contract
2-A-302. Title to and Possession of Goods
2-A-303. Alienability of Party's Interest Under Lease Contract
or of Lessor's Residual Interest in Goods; Delegation
of Performance; Transfer of Rights
2-A-304. Subsequent Lease of Goods by Lessor
2-A-305. Sale or Sublease of Goods by Lessee
2-A-306. Priority of Certain Liens Arising by Operation of Law
2-A-307. Priority of Liens Arising by Attachment or Levy on,
Security Interests in, and Other Claims to Goods
2-A-308. Special Rights of Creditors
2-A-309. Lessor's and Lessee's Rights When Goods Become Fixtures
2-A-310. Lessor's and Lessee's Rights When Goods Become
Accessions
2-A-311. Priority Subject to Subordination
PART 4
PERFORMANCE OF LEASE CONTRACT: REPUDIATED, SUBSTITUTED AND EXCUSED
Section 2-A-401. Insecurity: Adequate Assurance of Performance
2-A-402. Anticipatory Repudiation
2-A-403. Retraction of Anticipatory Repudiation
2-A-404. Substituted Performance
2-A-405. Excused Performance
2-A-406. Procedure on Excused Performance
2-A-407. Irrevocable Promises: Finance Leases
PART 5
DEFAULT
A. IN GENERAL
Section 2-A-501. Default: Procedure
2-A-502. Notice After Default
2-A-503. Modification or Impairment of Rights and Remedies
2-A-504. Liquidation of Damages
2-A-505. Cancellation and Termination and Effect of
Cancellation, Termination, Rescission, or Fraud on
Rights and Remedies
2-A-506. Statute of Limitations
2-A-507. Proof of Market Rent: Time and Place
B. DEFAULT BY LESSOR
Section 2-A-508. Lessee's Remedies
2-A-509. Lessee's Rights on Improper Delivery: Rightful
Rejection
2-A-510. Installment Lease Contracts: Rejection and Default
2-A-511. Merchant Lessee's Duties as to Rightfully Rejected
Goods
2-A-512. Lessee's Duties as to Rightfully Rejected Goods
2-A-513. Cure by Lessor of Improper Tender or Delivery;
Replacement
2-A-514. Waiver of Lessee's Objections
2-A-515. Acceptance of Goods
2-A-516. Effect of Acceptance of Goods; Notice of Default;
Burden of Establishing Default After Acceptance;
Notice of Claim or Litigation to Person Answerable
Over
2-A-517. Revocation of Acceptance of Goods
2-A-518. Cover; Substitute Goods
2-A-519. Lessee's Damages for Non-delivery, Repudiation,
Default, and Breach of Warranty in Regard to Accepted
Goods
2-A-520. Lessee's Incidental and Consequential Damages
2-A-521. Lessee's Right to Specific Performance or Replevin
2-A-522. Lessee's Right to Goods on Lessor's Insolvency
C. DEFAULT BY LESSEE
Section 2-A-523. Lessor's Remedies
2-A-524. Lessor's Right to Identify Goods to Lease Contract
2-A-525. Lessor's Right to Possession of Goods
2-A-526. Lessor's Stoppage of Delivery in Transit or Otherwise
2-A-527. Lessor's Rights to Dispose of Goods
2-A-528. Lessor's Damages for Non-acceptance, Failure to Pay,
Repudiation, or Other Default
2-A-529. Lessor's Action for the Rent
2-A-530. Lessor's Incidental Damages
2-A-531. Standing to Sue Third Parties for Injury to Goods
2-A-532. Lessor's Rights to Residual Interest
ARTICLE 3
COMMERCIAL PAPER
PART 1
SHORT TITLE, FORM AND INTERPRETATION
Section 3--101. Short Title.
3--102. Definitions and Index of Definitions
3--103. Limitations on Scope of Article
3--104. Form of Negotiable Instruments; "Draft"; "Check";
"Certificate of Deposit"; "Note"
3--105. When Promise or Order Unconditional
3--106. Sum Certain
3--107. Money
3--108. Payable on Demand
3--109. Definite Time
3--110. Payable to Order
3--111. Payable to Bearer
3--112. Terms and Omissions Not Affecting Negotiability
3--113. Seal
3--114. Date, Antedating, Postdating
3--115. Incomplete Instruments
3--116. Instruments Payable to Two or More Persons
3--117. Instruments Payable With Words of Description
3--118. Ambiguous Terms and Rules of Construction
3--119. Other Writings Affecting Instrument
3--120. Instruments "Payable Through" Bank
3--121. Instruments Payable at Bank
3--122. Accrual of Cause of Action
PART 2
TRANSFER AND NEGOTIATION
Section 3--201. Transfer: Right to Indorsement
3--202. Negotiation
3--203. Wrong or Misspelled Name
3--204. Special Indorsement; Blank Indorsement
3--205. Restrictive Indorsements
3--206. Effect of Restrictive Indorsement
3--207. Negotiation Effective Although It May Be Rescinded
3--208. Reacquisition
PART 3
RIGHTS OF A HOLDER
Section 3--301. Rights of a Holder
3--302. Holder in Due Course
3--303. Taking for Value
3--304. Notice to Purchaser
3--305. Rights of a Holder in Due Course
3--306. Rights of One Not Holder in Due Course
3--307. Burden of Establishing Signatures, Defenses and Due
Course
PART 4
LIABILITY OF PARTIES
Section 3--401. Signature
3--402. Signature in Ambiguous Capacity
3--403. Signature by Authorized Representative
3--404. Unauthorized Signatures
3--405. Impostors; Signature in Name of Payee
3--406. Negligence Contributing to Alteration or Unauthorized
Signature
3--407. Alteration
3--408. Consideration
3--409. Draft Not an Assignment
3--410. Definition and Operation of Acceptance
3--411. Certification of a Check
3--412. Acceptance Varying Draft
3--413. Contract of Maker, Drawer and Acceptor
3--414. Contract of Indorser; Order of Liability
3--415. Contract of Accommodation Party
3--416. Contract of Guarantor
3--417. Warranties on Presentment and Transfer
3--418. Finality of Payment or Acceptance
3--419. Conversion of Instrument; Innocent Representative
PART 5
PRESENTMENT, NOTICE OF DISHONOR AND PROTEST
Section 3--501. When Presentment, Notice of Dishonor, and Protest
Necessary or Permissible
3--502. Unexcused Delay; Discharge
3--503. Time of Presentment
3--504. How Presentment Made
3--505. Rights of Party to Whom Presentment Is Made
3--506. Time Allowed for Acceptance or Payment
3--507. Dishonor; Holder's Right of Recourse; Term Allowing
Re-Presentment
3--508. Notice of Dishonor
3--509. Protest; Noting for Protest
3--510. Evidence of Dishonor and Notice of Dishonor
3--511. Waived or Excused Presentment, Protest or Notice of
Dishonor or Delay Therein
PART 6
DISCHARGE
Section 3--601. Discharge of Parties
3--602. Effect of Discharge Against Holder in Due Course
3--603. Payment or Satisfaction
3--604. Tender of Payment
3--605. Cancellation and Renunciation
3--606. Impairment of Recourse or of Collateral
PART 7
ADVICE OF INTERNATIONAL SIGHT DRAFT
Section 3--701. Letter of Advice of International Sight Draft
PART 8
MISCELLANEOUS
Section 3--801. Drafts in a Set
3--802. Effect of Instrument on Obligation for Which It Is Given
3--803. Notice to Third Party
3--804. Lost, Destroyed or Stolen Instruments
3--805. Instruments Not Payable to Order or to Bearer
ARTICLE 4
BANK DEPOSITS AND COLLECTIONS
PART 1 GENERAL PROVISIONS AND DEFINITIONS
Section 4--101. Short Title
4--102. Applicability
4--103. Variation by Agreement; Measure of Damages; Certain
Action Constituting Ordinary Care
4--104. Definitions and Index of Definitions
4--105. "Depositary Bank"; "Intermediary Bank"; "Collecting
Bank"; "Payor Bank"; "Presenting Bank"; "Remitting
Bank"
4--106. Separate Office of a Bank
4--107. Time of Receipt of Items
4--108. Delays
4--109. Process of Posting
PART 2
COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS
Section 4--201. Presumption and Duration of Agency Status of Collecting
Banks and Provisional Status of Credits; Applicability
of Article; Item Indorsed "Pay Any Bank"
4--202. Responsibility for Collection; When Action Seasonable
4--203. Effect of Instructions
4--204. Methods of Sending and Presenting; Sending Direct to
Payor Bank
4--205. Supplying Missing Indorsement; No Notice From Prior
Indorsement
4--206. Transfer Between Banks
4--207. Warranties of Customer and Collecting Bank on Transfer
or Presentment of Items; Time for Claims
4--208. Security Interest of Collecting Bank in Items,
Accompanying Documents and Proceeds
4--209. When Bank Gives Value for Purposes of Holder in Due
Course
4--210. Presentment by Notice of Item Not Payable by, Through or
at a Bank; Liability of Secondary Parties
4--211. Media of Remittance; Provisional and Final Settlement in
Remittance Cases
4--212. Right of Charge-Back or Refund
4--213. Final Payment of Item by Payor Bank; When Provisional
Debits and Credits Become Final; When Certain Credits
Become Available for Withdrawal
4--214. Insolvency and Preference
PART 3
COLLECTION OF ITEMS: PAYOR BANKS
Section 4--301. Deferred Posting; Recovery of Payment by Return of
Items; Time of Dishonor
4--302. Payor Bank's Responsibility for Late Return of Item
4--303. When Items Subject to Notice, Stop-Order, Legal Process
or Setoff; Order in Which Items May Be Charged or
Certified
PART 4
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER
Section 4--401. When Bank May Charge Customer's Account
4--402. Bank's Liability to Customer for Wrongful Dishonor
4--403. Customer's Right to Stop Payment; Burden of Proof of
Loss
4--404. Bank Not Obligated to Pay Check More Than Six Months Old
4--405. Death or Incompetence of Customer
4--406. Customer's Duty to Discover and Report Unauthorized
Signature or Alteration
4--407. Payor Bank's Right to Subrogation on Improper Payment
4--408. Rights and Liabilities of Remitter or Payee With Respect
to Cashier's Check, Teller's Check and Certified Check
PART 5
COLLECTION OF DOCUMENTARY DRAFTS
Section 4--501. Handling of Documentary Drafts; Duty to Send for
Presentment and to Notify Customer of Dishonor
4--502. Presentment of "On Arrival" Drafts
4--503. Responsibility of Presenting Bank for Documents and
Goods; Report of Reasons for Dishonor; Referee in Case
of Need
4--504. Privilege of Presenting Bank to Deal With Goods;
Security Interest for Expenses
ARTICLE 4-A
FUNDS TRANSFERS
PART 1
SUBJECT MATTER AND DEFINITIONS
Section 4-A-101. Short Title
4-A-102. Subject Matter
4-A-103. Payment Order-Definitions
4-A-104. Funds Transfer-Definitions
4-A-105. Other Definitions
4-A-106. Time Payment Order is Received
4-A-107. Federal Reserve Regulations and Operating Circulars
4-A-108. Relationship to Electronic Fund Transfer Act
PART 2
ISSUE AND ACCEPTANCE OF PAYMENT ORDER
Section 4-A-201. Security Procedure
4-A-202. Authorized and Verified Payment Orders
4-A-203. Unenforceability of Certain Verified Payment Orders
4-A-204. Refund of Payment and Duty of Customer to Report With
Respect to Unauthorized Payment Order
4-A-205. Erroneous Payment Orders
4-A-206. Transmission of Payment Order Through Funds-Transfer or
Other Communication System
4-A-207. Misdescription of Beneficiary
4-A-208. Misdescription of Intermediary Bank or Beneficiary's
Bank
4-A-209. Acceptance of Payment Order
4-A-210. Rejection of Payment Order
4-A-211. Cancellation and Amendment of Payment Order
4-A-212. Liability and Duty of Receiving Bank Regarding
Unaccepted Payment Order
PART 3
EXECUTION OF SENDER'S PAYMENT
ORDER BY RECEIVING BANK
Section 4-A-301. Execution and Execution Date
4-A-302. Obligations of Receiving Bank in Execution of Payment
Order
4-A-303. Erroneous Execution of Payment Order
4-A-304. Duty of Sender to Report Erroneously Executed Payment
Order
4-A-305. Liability for Late or Improper Execution or Failure to
Execute Payment Order
PART 4
PAYMENT
Section 4-A-401. Payment Date
4-A-402. Obligation of Sender to Pay Receiving Bank
4-A-403. Payment by Sender to Receiving Bank
4-A-404. Obligation of Beneficiary's Bank to Pay and Give Notice
to Beneficiary
4-A-405. Payment by Beneficiary's Bank to Beneficiary
4-A-406. Payment by Originator to Beneficiary; Discharge of
Underlying Obligation
PART 5
MISCELLANEOUS PROVISIONS
Section 4-A-501. Variation by Agreement and Effect of Funds-Transfer
System Rule
4-A-502. Creditor Process Served on Receiving Bank; Set Off by
Beneficiary's Bank
4-A-503. Injunction or Restraining Order with Respect to Funds
Transfer
4-A-504. Order in Which Items and Payment Orders May Be Charged
to Account; Order of Withdrawals From Account
4-A-505. Preclusion of Objection to Debit of Customer's Account
4-A-506. Rate of Interest
4-A-507. Choice of Law
ARTICLE 5
LETTERS OF CREDIT
Section 5--101. Short title
5--102. Definitions
5--103. Scope
5--104. Formal requirements
5--105. Consideration
5--106. Issuance, amendment, cancellation, and duration
5--107. Confirmer, nominated person, and advisor
5--108. Issuer's rights and obligations
5--109. Fraud and forgery
5--110. Warranties
5--111. Remedies
5--112. Transfer of letter of credit
5--113. Transfer by operation of law
5--114. Assignment of proceeds
5--115. Statute of limitations
5--116. Choice of law and forum
5--117. Subrogation of issuer, applicant, and nominated person
5--118. Security Interest of Issuer or Nominated Person
5--119. Applicability
5--120. Savings clause
ARTICLE 7
DOCUMENTS OF TITLE
PART 1
GENERAL
Section 7--101. Short Title
7--102. Definitions and Index of Definitions
7--103. Relation of Article to Treaty or Statute
7--104. Negotiable and Nonnegotiable Document of Title
7--105. Reissuance in Alternative Medium
7--106. Control of Electronic Document of Title
PART 2
WAREHOUSE RECEIPTS: SPECIAL PROVISIONS
Section 7--201. Person That May Issue a Warehouse Receipt; Storage Under
Bond
7--202. Form of Warehouse Receipt; Effect of Omission
7--203. Liability for Nonreceipt or Misdescription
7--204. Duty of Care; Contractual Limitation of Warehouse's
Liability
7--205. Title Under Warehouse Receipt Defeated in Certain Cases
7--206. Termination of Storage at Warehouse's Option
7--207. Goods Must be Kept Separate; Fungible Goods
7--208. Altered Warehouse Receipts
7--209. Lien of Warehouse
7--210. Enforcement of Warehouse's Lien
PART 3
BILLS OF LADING: SPECIAL PROVISIONS
Section 7--301. Liability for Nonreceipt or Misdescription; "Said to
Contain"; "Shipper's Weight, Load, and Count";
Improper Handling
7--302. Through Bills of Lading and Similar Documents of Title
7--303. Diversion; Reconsignment; Change of Instructions
7--304. Tangible Bills of Lading in a Set
7--305. Destination Bills
7--306. Altered Bills of Lading
7--307. Lien of Carrier
7--308. Enforcement of Carrier's Lien
7--309. Duty of Care; Contractual Limitation of Carrier's
Liability
PART 4
WAREHOUSE RECEIPTS AND BILLS OF LADING: GENERAL OBLIGATIONS
Section 7--401. Irregularities in Issue of Receipt or Bill or Conduct of
Issuer
7--402. Duplicate Document of Title; Overissue
7--403. Obligation of Bailee to Deliver; Excuse
7--404. No Liability for Good-Faith Delivery Pursuant to
Document of Title
PART 5
WAREHOUSE RECEIPTS AND BILLS OF LADING: NEGOTIATION AND TRANSFER
Section 7--501. Form of Negotiation and Requirements of Due Negotiation
7--502. Rights Acquired by Due Negotiation
7--503. Document of Title to Goods Defeated in Certain Cases
7--504. Rights Acquired in Absence of Due Negotiation; Effect of
Diversion; Stoppage of Delivery
7--505. Indorser Not a Guarantor for Other Parties
7--506. Delivery Without Indorsement: Right to Compel
Indorsement
7--507. Warranties on Negotiation or Delivery of Document of
Title
7--508. Warranties of Collecting Bank as to Documents of Title
7--509. Adequate Compliance With Commercial Contract
PART 6
WAREHOUSE RECEIPTS AND BILLS OF LADING: MISCELLANEOUS PROVISIONS
Section 7--601. Lost, Stolen, or Destroyed Documents of Title
7--602. Judicial Process Against Goods Covered by Negotiable
Document of Title
7--603. Conflicting Claims; Interpleader
ARTICLE 8
INVESTMENT SECURITIES
PART 1
SHORT TITLE AND GENERAL MATTERS
Section 8--101. Short Title.
8--102. Definitions.
8--103. Rules for Determining Whether Certain Obligations and
Interests are Securities or Financial Assets.
8--104. Acquisition of Security or Financial Asset or Interest
Therein.
8--105. Notice of Adverse Claim.
8--106. Control.
8--107. Whether Indorsement, Instruction, or Entitlement Order
is Effective.
8--108. Warranties in Direct Holding.
8--109. Warranties in Indirect Holding.
8--110. Applicability; Choice of Law.
8--111. Clearing Corporation Rules.
8--112. Creditor's Legal Process.
8--113. Statute of Frauds Generally Inapplicable.
8--114. Evidentiary Rules Concerning Certificated Securities.
8--115. Securities Intermediary and Others Not Liable to Adverse
Claimant.
8--116. Securities Intermediary as Purchaser for Value.
PART 2
ISSUE AND ISSUER
Section 8--201. Issuer.
8--202. Issuer's Responsibility and Defenses; Notice of Defect
or Defense.
8--203. Staleness as Notice of Defect or Defense.
8--204. Effect of Issuer's Restriction on Transfer.
8--205. Effect of Unauthorized Signature on Security
Certificate.
8--206. Completion or Alteration of Security Certificate.
8--207. Rights and Duties of Issuer with respect to Registered
Owners.
8--208. Effect of Signature of Authenticating Trustee,
Registrar, or Transfer Agent.
8--209. Issuer's Lien.
8--210. Overissue.
PART 3
TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES
Section 8--301. Delivery.
8--302. Rights of Purchaser.
8--303. Protected Purchaser.
8--304. Indorsement.
8--305. Instruction.
8--306. Effect of Guaranteeing Signature, Indorsement, or
Instruction.
8--307. Purchaser's Right to Requisites for Registration of
Transfer.
PART 4
REGISTRATION
Section 8--401. Duty of Issuer to Register Transfer.
8--402. Assurance that Indorsement or Instruction is Effective.
8--403. Demand that Issuer Not Register Transfer.
8--404. Wrongful Registration.
8--405. Replacement of Lost, Destroyed, or Wrongfully taken
Security Certificate.
8--406. Obligation to Notify Issuer of Lost, Destroyed, or
Wrongfully taken Security Certificate.
8--407. Authenticating Trustee, Transfer Agent, and Registrar.
PART 5
SECURITY ENTITLEMENTS
Section 8--501. Securities Account; Acquisition of Security Entitlement
from Securities Intermediary.
8--502. Assertion of Adverse Claim against Entitlement Holder.
8--503. Property Interest of Entitlement Holder in Financial
Asset held by Securities Intermediary.
8--504. Duty of Securities Intermediary to Maintain Financial
Asset.
8--505. Duty of Securities Intermediary with respect to Payments
and Distributions.
8--506. Duty of Securities Intermediary to Exercise Rights as
directed by Entitlement Holder.
8--507. Duty of Securities Intermediary to comply with
Entitlement Order.
8--508. Duty of Securities Intermediary to change Entitlement
Holder's Position to Other Form of Security Holding.
8--509. Specification of Duties of Securities Intermediary by
Other Statute or Regulation; Manner of Performance of
Duties of Securities Intermediary and Exercise of
Rights of Entitlement Holder.
8--510. Rights of Purchaser of Security Entitlement from
Entitlement Holder.
8--511. Priority Among Security Interests and Entitlement
Holders.
PART 6
TRANSITION PROVISIONS FOR REVISED ARTICLE 8 AND FOR THE CONFORMING
AMENDMENTS TO ARTICLES 1, 5, 9 and 13
Section 8--601. Savings Clause; Effect on Prior Perfected Security
Interest.
8--602. Cross-References to former Article 8; Meaning or
Interpretation.
ARTICLE 9
SECURED TRANSACTIONS
PART 1
GENERAL PROVISIONS
SUBPART 1. SHORT TITLE, DEFINITIONS, AND GENERAL CONCEPTS
Section 9--101. Short Title
9--102. Definitions and Index of Definitions
9--103. Purchase-money Security Interest; Application of
Payments; Burden of Establishing
9--104. Control of Deposit Account
9--105. Control of Electronic Copy of Record Evidencing Chattel
Paper
9--105A. Control of Electronic Money.
9--106. Control of Investment Property
9--107. Control of Letter-of-credit Right
9--107A. Control of Controllable Electronic Record, Controllable
Account, or Controllable Payment Intangible.
9--107B. No Requirement to Acknowledge or Confirm; No Duties.
9--108. Sufficiency of Description
SUBPART 2. APPLICABILITY OF ARTICLE
Section 9--109. Scope
9--110. Security Interests Arising Under Article 2 or 2-A
PART 2
EFFECTIVENESS OF SECURITY AGREEMENT; ATTACHMENT OF SECURITY INTEREST;
RIGHTS OF PARTIES TO SECURITY AGREEMENT
SUBPART 1. EFFECTIVENESS AND ATTACHMENT
Section 9--201. General Effectiveness of Security Agreement
9--202. Title to Collateral Immaterial
9--203. Attachment and Enforceability of Security Interest;
Proceeds; Supporting Obligations; Formal Requisites
9--204. After-acquired Property; Future Advances
9--205. Use or Disposition of Collateral Permissible
9--206. Security Interest Arising in Purchase or Delivery of
Financial Asset
SUBPART 2. RIGHTS AND DUTIES
Section 9--207. Rights and Duties of Secured Party Having Possession or
Control of Collateral.
9--208. Additional Duties of Secured Party Having Control of
Collateral
9--209. Duties of Secured Party if Account Debtor Has Been
Notified of Assignment
9--210. Request for Accounting; Request Regarding List of
Collateral or Statement of Account
PART 3
PERFECTION AND PRIORITY
SUBPART 1. LAW GOVERNING PERFECTION AND PRIORITY
Section 9--301. Law Governing Perfection and Priority of Security
Interests
9--302. Law Governing Perfection and Priority of Agricultural
Liens
9--303. Law Governing Perfection and Priority of Security
Interests in Goods Covered by a Certificate of Title
9--304. Law Governing Perfection and Priority of Security
Interests in Deposit Accounts
9--305. Law Governing Perfection and Priority of Security
Interests in Investment Property
9--306. Law Governing Perfection and Priority of Security
Interests in Letter-of-credit Rights
9-306A. Law Governing Perfection and Priority of Security
Interests in Chattel Paper.
9-306B. Law Governing Perfection and Priority of Security
Interests in Controllable Accounts, Controllable
Electronic Records, and Controllable Payment
Intangibles.
9--307. Location of Debtor
SUBPART 2. PERFECTION
Section 9--308. When Security Interest or Agricultural Lien Is
Perfected; Continuity of Perfection
9--309. Security Interest Perfected upon Attachment
9--310. When Filing Required to Perfect Security Interest or
Agricultural Lien; Security Interests and Agricultural
Liens to Which Filing Provisions Do Not Apply
9--311. Perfection of Security Interests in Property Subject to
Certain Statutes, Regulations, and Treaties
9--312. Perfection of Security Interests in Chattel Paper,
Controllable Accounts, Controllable Electronic
Records, Controllable Payment Intangibles, Deposit
Accounts, Documents, Goods Covered by Documents,
Instruments, Investment Property, Letter-of-credit
Rights, and Money; Perfection by Permissive Filing;
Temporary Perfection Without Filing or Transfer of
Possession
9--313. When Possession by or Delivery to Secured Party Perfects
Security Interest Without Filing
9--314. Perfection by Control
9-314A. Perfection by Possession and Control of Chattel Paper.
9--315. Secured Party's Rights on Disposition of Collateral and
in Proceeds
9--316. Effect of Change in Governing Law
SUBPART 3. PRIORITY
Section 9--317. Interests That Take Priority over or Take Free of
Security Interest or Agricultural Lien
9--318. No Interest Retained in Right to Payment That Is Sold;
Rights and Title of Seller of Account or Chattel Paper
with Respect to Creditors and Purchasers
9--319. Rights and Title of Consignee With Respect to Creditors
and Purchasers
9--320. Buyer of Goods
9--321. Licensee of General Intangible and Lessee of Goods in
Ordinary Course of Business
9--322. Priorities among Conflicting Security Interests in and
Agricultural Liens on Same Collateral
9--323. Future Advances
9--324. Priority of Purchase-money Security Interests
9--325. Priority of Security Interests in Transferred Collateral
9--326. Priority of Security Interests Created by New Debtor
9-326A. Priority of Security Interest in Controllable Account,
Controllable Electronic Record, and Controllable
Payment Intangible.
9--327. Priority of Security Interests in Deposit Account
9--328. Priority of Security Interests in Investment Property
9--329. Priority of Security Interests in Letter-of-credit Right
9--330. Priority of Purchaser of Chattel Paper or Instrument
9--331. Priority of Rights of Purchasers of Controllable
Accounts, Controllable Electronic Records,
Controllable Payment Intangibles, Documents,
Instruments, and Securities under Other Articles;
Priority of Interests in Financial Assets and Security
Entitlements and Protection Against Assertion of Claim
under Articles 8 and 12
9--332. Transfer of Money; Transfer of Funds from Deposit
Account
9--333. Priority of Certain Liens Arising by Operation of Law
9--334. Priority of Security Interests in Fixtures and Crops
9--335. Accessions
9--336. Commingled Goods
9--337. Priority of Security Interests in Goods Covered by
Certificate of Title
9--338. Priority of Security Interest or Agricultural Lien
Perfected by Filed Financing Statement Providing
Certain Incorrect Information
9--339. Priority Subject to Subordination
SUBPART 4. RIGHTS OF BANK
Section 9--340. Effectiveness of Right of Recoupment or Set-off Against
Deposit Account
9--341. Bank's Rights and Duties with Respect to Deposit Account
9--342. Bank's Right to Refuse to Enter into or Disclose
Existence of Control Agreement
PART 4
RIGHTS OF THIRD PARTIES
Section 9--401. Alienability of Debtor's Rights
9--402. Secured Party Not Obligated on Contract of Debtor or in
Tort
9--403. Agreement Not to Assert Defenses Against Assignee
9--404. Rights Acquired by Assignee; Claims and Defenses Against
Assignee
9--405. Modification of Assigned Contract
9--406. Discharge of Account Debtor; Notification of Assignment;
Identification and Proof of Assignment; Restrictions
on Assignment of Accounts, Chattel Paper, Payment
Intangibles, and Promissory Notes Ineffective
9--407. Restrictions on Creation or Enforcement of Security
Interest in Leasehold Interest or in Lessor's Residual
Interest
9--408. Restrictions on Assignment of Promissory Notes,
Health-care-insurance Receivables, and Certain General
Intangibles Ineffective
9--409. Restrictions on Assignment of Letter-of-credit Rights
Ineffective
PART 5
FILING
SUBPART 1. FILING OFFICE; CONTENTS AND EFFECTIVENESS OF FINANCING
STATEMENT
Section 9--501. Filing Office
9--502. Contents of Financing Statement; Record of Mortgage as
Financing Statement; Time of Filing Financing
Statement; Contents of Cooperative Addendum
9--503. Name of Debtor and Secured Party
9--504. Indication of Collateral
9--505. Filing and Compliance with Other Statutes and Treaties
for Consignments, Leases, Other Bailments, and Other
Transactions
9--506. Effect of Errors or Omissions
9--507. Effect of Certain Events on Effectiveness of Financing
Statement
9--508. Effectiveness of Financing Statement If New Debtor
Becomes Bound by Security Agreement
9--509. Persons Entitled to File a Record
9--510. Effectiveness of Filed Record
9--511. Secured Party of Record
9--512. Amendment of Financing Statement
9--513. Termination Statement
9--514. Assignment of Powers of Secured Party of Record
9--515. Duration and Effectiveness of Financing Statement;
Effect of Lapsed Financing Statement
9--516. What Constitutes Filing; Effectiveness of Filing
9--517. Effect of Indexing Errors
9--518. Claim Concerning Inaccurate or Wrongfully Filed Record
SUBPART 2. DUTIES AND OPERATION OF FILING OFFICE
Section 9--519. Numbering, Maintaining, and Indexing Records;
Communicating Information Provided in Records
9--520. Acceptance and Refusal to Accept Record
9--521. Uniform Form of Written Financing Statement; Amendment;
and Cooperative Addendum
9--522. Maintenance and Destruction of Records
9--523. Information from Filing Office; Sale or License of
Records
9--524. Delay by Filing Office
9--525. Fees
9--526. Filing-office Rules
9--527. Duty to Report
PART 6
DEFAULT
SUBPART 1. DEFAULT AND ENFORCEMENT OF SECURITY INTEREST
Section 9--601. Rights after Default; Judicial Enforcement; Consignor or
Buyer of Accounts, Chattel Paper, Payment Intangibles,
or Promissory Notes
9--602. Waiver and Variance of Rights and Duties
9--603. Agreement on Standards Concerning Rights and Duties
9--604. Procedure If Security Agreement Covers Real Property,
Fixtures, or Cooperative Interests
9--605. Unknown Debtor or Secondary Obligor
9--606. Time of Default for Agricultural Lien
9--607. Collection and Enforcement by Secured Party
9--608. Application of Proceeds of Collection or Enforcement;
Liability for Deficiency and Right to Surplus
9--609. Secured Party's Right to Take Possession after Default
9--610. Disposition of Collateral after Default
9--611. Notification Before Disposition of Collateral
9--612. Timeliness of Notification Before Disposition of
Collateral
9--613. Contents and Form of Notification Before Disposition of
Collateral: General
9--614. Contents and Form of Notification Before Disposition of
Collateral: Consumer-goods Transaction
9--615. Application of Proceeds of Disposition; Liability for
Deficiency and Right to Surplus
9--616. Explanation of Calculation of Surplus or Deficiency
9--617. Rights of Transferee of Collateral
9--618. Rights and Duties of Certain Secondary Obligors
9--619. Transfer of Record or Legal Title
9--620. Acceptance of Collateral in Full or Partial Satisfaction
of Obligation; Compulsory Disposition of Collateral
9--621. Notification of Proposal to Accept Collateral
9--622. Effect of Acceptance of Collateral
9--623. Right to Redeem Collateral
9--624. Waiver
SUBPART 2. NONCOMPLIANCE WITH ARTICLE
Section 9--625. Remedies for Secured Party's Failure to Comply with
Article
9--626. Action in Which Deficiency or Surplus is in Issue
9--627. Determination of Whether Conduct Was Commercially
Reasonable
9--628. Nonliability and Limitation on Liability of Secured
Party; Liability of Secondary Obligor
PART 7
TRANSITION
Section 9--700. Definitions
9--701. Effective Date
9--702. Savings Clause
9--703. Security Interest Perfected Before Effective Date
9--704. Security Interest Unperfected Before Effective Date
9--705. Effectiveness of Action Taken Before Effective Date
9--706. When Initial Financing Statement Suffices to Continue
Effectiveness of Financing Statement
9--707. Amendment of Pre-effective-date Financing Statement
9--708. Persons Entitled to File Initial Financing Statement or
Continuation Statement
9--709. Priority
9--710. Transitional Provision for Maintaining and Searching
Local-Filing Office Records
ARTICLE 11
PROVISIONS FOR TRANSITION FROM ORIGINAL ARTICLE 9 TO REVISED ARTICLE 9.
Section 11--101. Definitions.
11--102. Preservation of Old Transition Provision.
11--103. Transition to Revised Article 9--General Rule.
11--104. Transition Provision on Change of Requirement of
Filing.
11--105. Transition Provision on Change of Place of Filing.
11--106. Required Refilings.
11--107. Transition Provisions as to Priorities.
11--108. Presumption that Rule of Law Continues Unchanged.
ARTICLE 12
CONTROLLABLE ELECTRONIC RECORDS
12--101. Short title
12--102. Definitions
12--103. Relation to Article 9 and Consumer Laws
12--104. Rights in Controllable Account, Controllable Electronic
Record, and Controllable Payment Intangible
12--105. Control of Controllable Electronic Record
12--106. Discharge of Account Debtor on Controllable Account or
Controllable Payment Intangible
12--107. Governing Law
ARTICLE 12-A
TRANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL CODE AMENDMENTS
PART 1
GENERAL PROVISIONS AND DEFINITIONS
12-A-101. Title
12-A-102. Definitions
PART 2
GENERAL TRANSITIONAL PROVISION
12-A-201. Saving Clause
PART 3
TRANSITIONAL PROVISIONS FOR ARTICLES 9 AND 12
12-A-301. Saving Clause
12-A-302. Security Interest Perfected Before Effective Date
12-A-303. Security Interest Unperfected Before Effective Date
12-A-304. Effectiveness of Actions Taken Before Effective Date
12-A-305. Priority
12-A-306. Priority of Claims When Priority Rules of Article 9 Do
Not Apply
ARTICLE 13
EFFECTIVE DATE AND REPEALER
Section 13--101. Application of Act
13--102. Laws Repealed; Provision for Transition
13--103. Inconsistent Laws; Which Law Governs
13--104. Laws Not Repealed
13--105. Effective Date
ARTICLE 1
PART 1
GENERAL PROVISIONS
Section 1--101. Short Titles.
(a) This act may be cited as the Uniform Commercial Code.
(b) This article may be cited as Uniform Commercial Code -- General
Provisions.
Section 1--102. Scope of Article.
This article applies to a transaction to the extent that it is
governed by another article of this act.
Section 1--103. Construction of Uniform Commercial Code to Promote its
Purposes and Policies; Applicability of Supplemental
Principles of Law.
(a) This act must 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 act, 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 supplement its provisions.
Section 1--104. Construction Against Implied Repeal.
This act 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.
Section 1--105. Severability.
If any provision or clause of this act or its application to any
person or circumstance is held invalid, the invalidity does not affect
other provisions or applications of this act which can be given effect
without the invalid provision or application, and to this end the
provisions of this act are severable.
Section 1--106. Use of Singular and Plural; Gender.
In this act, unless the statutory context otherwise requires:
(1) words in the singular number include the plural, and those in the
plural include the singular; and
(2) words of any gender also refer to any other gender.
Section 1--107. Section Captions.
Section captions are part of this act. The subsection headings in
article nine are not part of this act for purposes of construction.
Section 1--108. Relation to Electronic Signatures in Global and National
Commerce Act.
This article modifies, limits, and supersedes the federal Electronic
Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001
et seq., except that nothing in this article modifies, limits, or
supersedes Section 7001(c) of that act or authorizes electronic delivery
of any of the notices described in Section 7003(b) of that act.
PART 2
GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
Section 1--201. General Definitions.
(a) Unless the context otherwise requires, words or phrases defined in
this section, or in the additional definitions contained in other
articles of this act that apply to particular articles or parts thereof,
have the meanings stated.
(b) Subject to definitions contained in other articles of this Act
that apply to particular articles or parts thereof:
(1) "Action", in the sense of a judicial proceeding, includes
recoupment, counterclaim, set-off, suit in equity, and any other
proceeding in which rights are determined.
(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 Section 1--303.
(4) "Bank" means a person engaged in the business of banking and
includes a savings bank, savings and loan association, credit union, and
trust company.
(5) "Bearer" means a person in control of a negotiable electronic
document of title or a person in possession of a negotiable instrument,
negotiable tangible document of title, or certificated security that is
payable to bearer or indorsed in blank.
(6) "Bill of lading" means a document of title evidencing the receipt
of goods for shipment issued by a person engaged in the business of
directly or indirectly transporting or forwarding goods. The term does
not include a warehouse receipt.
(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 ordinary course of business may buy for cash,
by exchange of other property, or on secured or unsecured credit, and
may acquire goods or documents of title under a preexisting contract for
sale. Only a buyer that takes possession of the goods or has a right to
recover the goods from the seller under article 2 may be a buyer in
ordinary course of business. "Buyer in ordinary course of business" does
not include a person that acquires goods in a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
(10) "Conspicuous", with reference to a term, means so written,
displayed, or presented that, based on the totality of the
circumstances, 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.
(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 act as supplemented by any other applicable laws.
(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 electronic document of title means
voluntary transfer of control and with respect to an instrument, a
tangible document of title, or an authoritative tangible copy of a
record evidencing chattel paper, means voluntary transfer of possession.
(16) "Document of title" means a record (A) that in the regular course
of business or financing is treated as adequately evidencing that the
person in possession or control of the record is entitled to receive,
control, hold, and dispose of the record and the goods the record covers
and (B) that purports to be issued by or addressed to a bailee and to
cover goods in the bailee's possession which are either identified or
are fungible portions of an identified mass. The term includes a bill of
lading, transport document, dock warrant, dock receipt, warehouse
receipt, and order for delivery of goods. An electronic document of
title means a document of title evidenced by a record consisting of
information stored in an electronic medium. A tangible document of title
means a document of title evidenced by a record consisting of
information that is inscribed on a tangible medium.
(16-a) "Electronic" means relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic, or similar
capabilities.
(17) "Fault" means a default, breach, or wrongful act or omission.
(18) "Fungible goods" means:
(A) goods of which any unit, by nature or usage of trade, is the
equivalent of any other like unit; or
(B) goods that by agreement are treated as equivalent.
(19) "Genuine" means free of forgery or counterfeiting.
(20) "Good faith" means honesty in fact in the transaction or conduct
concerned.
(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 negotiable tangible document of
title if the goods are deliverable either to bearer or to the order of
the person in possession; or
(C) the person in control, other than pursuant to Section 7--106(g),
of a negotiable electronic document of title.
(22) "Insolvency proceeding" includes an 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 federal bankruptcy law.
(24) "Money" means a medium of exchange that is currently authorized
or adopted by a domestic or foreign government. The term includes a
monetary unit of account established by an intergovernmental
organization or by agreement between two or more countries. The term
does not include an electronic record that is a medium of exchange
recorded and transferable in a system that existed and operated for the
medium of exchange before the medium of exchange was authorized or
adopted by the government.
(25) "Organization" means a person other than an individual.
(26) "Party", as distinguished from "third party", means a person that
has engaged in a transaction or made an agreement subject to this act.
(27) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, government, governmental subdivision, agency, or any
other legal or commercial entity. The term includes a protected series,
however denominated, of an entity if the protected series is established
under law other than this act that limits, or limits if conditions
specified under the law are satisfied, the ability of a creditor of the
entity or of any other protected series of the entity to satisfy a claim
from assets of the protected series.
(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, lease, 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 that 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) "Right" includes remedy.
(35) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation.
"Security interest" includes any interest of a consignor and a buyer of
accounts, chattel paper, a payment intangible, or a promissory note in a
transaction that is subject to Article 9. "Security interest" does not
include the special property interest of a buyer of goods on
identification of those goods to a contract for sale under Section
2--401, but a buyer may also acquire a "security interest" by complying
with article 9. Except as otherwise provided in Section 2--505, the
right of a seller or lessor of goods under Article 2 or 2-A to retain or
acquire possession of the goods is not a "security interest", but a
seller or lessor may also acquire a "security interest" by complying
with article 9. The retention or reservation of title by a seller of
goods notwithstanding shipment or delivery to the buyer under section
2--401 is limited in effect to a reservation of a "security interest."
Whether a transaction in the form of a lease creates a "security
interest" is determined pursuant to section 1--203.
(36) "Send", in connection with a record or notification means:
(A) to deposit in the mail, deliver for transmission, or transmit by
any other usual means of communication with postage or cost of
transmission provided for, addressed to any address reasonable under the
circumstances; or
(B) to cause the record or notification to be received within the time
it would have been received if properly sent pursuant to subparagraph
(A).
(37) "Sign" means, with present intent to authenticate or adopt a
record:
(A) execute or adopt a tangible symbol; or
(B) attach to or logically associate with the record an electronic
symbol, sound, or process.
"Signed, "signing", and "signature" have corresponding meanings.
(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 a 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 document of title issued by a person
engaged in the business of storing goods for hire.
(43) "Writing" includes printing, typewriting, or any other
intentional reduction to tangible form. "Written" has a corresponding
meaning.
Section 1--202. Notice; Knowledge.
(a) Subject to subsection (f), 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) "Knowledge" means actual knowledge. "Knows" has a corresponding
meaning.
(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 ordinary course, whether or not the other person
actually comes to know of it.
(e) Subject to subsection (f), 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 is 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.
Section 1--203. Lease Distinguished From Security Interest.
(a) Whether a transaction in the form of a lease creates a lease or
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 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 for
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 for 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.
Section 1--204. Value.
Except as otherwise provided in articles 3, 4, 5, and 12 of this act a
person gives value for rights if the person acquires them:
(a) 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;
(b) as security for, or in total or partial satisfaction of, a
preexisting claim;
(c) by accepting delivery under a preexisting contract for purchase;
or
(d) in return for any consideration sufficient to support a simple
contract.
Section 1--205. Reasonable Time; Seasonableness.
(a) Whether a time for taking an action required by this act is
reasonable depends on the nature, purpose, and circumstances of the
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.
Section 1--206. Presumptions.
Whenever this act 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 unless and until evidence is introduced that
supports a finding of its nonexistence.
Section 1--207. Statute of Frauds for Kinds of Personal Property Not
Otherwise Covered.
(a) Except in the cases described in subsection (b) of this section a
contract for the sale of personal property is not enforceable by way of
action or defense beyond five thousand dollars 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.
(b) Subsection (a) of this section does not apply to contracts for the
sale of goods (Section 2--201) nor of securities (Section 8--113) nor to
security agreements (Section 9--203).
(c) Subsection (a) of this section does not apply to a qualified
financial contract as that term is defined in paragraph two of
subdivision b of section 5-701 of the general obligations law if either
(1) there is, as provided in paragraph three of subdivision b of section
5-701 of such law, sufficient evidence to indicate that a contract has
been made or (2) the parties thereto, by means of a prior or subsequent
written contract, have agreed to be bound by the terms of such qualified
financial contract from the time they reach agreement (by telephone, by
exchange of electronic messages, or otherwise) on those terms.
PART 3
TERRITORIAL APPLICABILITY AND GENERAL RULES
Section 1--301. Territorial Applicability; Parties' Power to Choose
Applicable Law.
(a) Except as otherwise provided in this 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 so long
as none of the parties to the transaction is a consumer and a resident
of New York. Where a consumer is a resident of the state of New York,
New York state law shall apply.
(b) In the absence of an agreement effective under subsection (a), and
except as provided in subsection (c), this act applies to transactions
bearing an appropriate relation to this state.
(c) If one of the following provisions of this act specifies the
applicable law, that provision governs and a contrary agreement is
effective only to the extent permitted by the law so specified:
(1) Section 2--402;
(2) Sections 2-A--105 and 2-A--106;
(3) Section 4--102;
(4) Section 4-A--507;
(5) Section 5--116;
(6) Section 8--110;
(7) Sections 9--301 through 9--307; and
(8) Section 12--107.
Section 1--302. Variation by Agreement.
(a) Except as otherwise provided in subsection (b) or elsewhere in
this act, the effect of provisions of this act may be varied by
agreement.
(b) The obligations of good faith, diligence, reasonableness, and care
prescribed by this act may not be disclaimed by agreement. The parties,
by agreement, may determine the standards by which the performance of
those obligations is to be measured if those standards are not
manifestly unreasonable. Whenever this act 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 act 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 section.
Section 1--303. Course of Performance, Course of Dealing, and Usage of
Trade.
(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 to 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), the express terms
of an agreement and any applicable course of performance, course of
dealing, or usage of trade must 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 Section 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 is not
admissible unless that party has given the other party notice that the
court finds sufficient to prevent unfair surprise to the other party.
Section 1--304. Obligation of Good Faith.
Every contract or duty within this act imposes an obligation of good
faith in its performance and enforcement.
Section 1--305. Remedies to be Liberally Administered.
(a) The remedies provided by this act must 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 act or by other rule of law.
(b) Any right or obligation declared by this act is enforceable by
action unless the provision declaring it specifies a different and
limited effect.
Section 1--306. Waiver or Renunciation of Claim or Right After Breach.
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 a signed record.
Section 1--307. Prima Facie evidence by Third-party Documents.
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 is prima facie evidence of its
own authenticity and genuineness and of the facts stated in the document
by the third party.
Section 1--308. Performance or Acceptance Under Reservation of Rights.
A party that 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.
Section 1--309. Option to Accelerate at Will.
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, means that the party has 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 which the power has been exercised.
Section 1--310. Subordinated Obligations.
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.
Subordination does not create a security interest as against either the
common debtor or a subordinated creditor.