400.9-102. Definitions and index of definitions.
Definitions and index of definitions.
400.9-102. (a) In this article:
(1) "Accession" means goods that are physically united with othergoods in such a manner that the identity of the original goods is not lost;
(2) "Account", except as used in "account for", means a right topayment of a monetary obligation, whether or not earned by performance, (i)for property that has been or is to be sold, leased, licensed, assigned, orotherwise disposed of, (ii) for services rendered or to be rendered, (iii)for a policy of insurance issued or to be issued, (iv) for a secondaryobligation incurred or to be incurred, (v) for energy provided or to beprovided, (vi) for the use or hire of a vessel under a charter or othercontract, (vii) arising out of the use of a credit or charge card orinformation contained on or for use with the card, or (viii) as winnings ina lottery or other game of chance operated or sponsored by a state,governmental unit of a state, or person licensed or authorized to operatethe game by a state or governmental unit of a state. The term includeshealth-care-insurance receivables. The term does not include (i) rights topayment evidenced by chattel paper or an instrument, (ii) commercial tortclaims, (iii) deposit accounts, (iv) investment property, (v)letter-of-credit rights or letters of credit, or (vi) rights to payment formoney or funds advanced or sold, other than rights arising out of the useof a credit or charge card or information contained on or for use with thecard;
(3) "Account debtor" means a person obligated on an account, chattelpaper, or general intangible. The term does not include persons obligatedto pay a negotiable instrument, even if the instrument constitutes part ofchattel paper;
(4) "Accounting", except as used in "accounting for", means a record:
(A) Authenticated by a secured party;
(B) Indicating the aggregate unpaid secured obligations as of a datenot more than thirty-five days earlier or thirty-five days later than thedate of the record; and
(C) Identifying the components of the obligations in reasonabledetail;
(5) "Agricultural lien" means an interest, other than a securityinterest, in farm products:
(A) Which secures payment or performance of an obligation for:
(i) Goods or services furnished in connection with a debtor's farmingoperation; or
(ii) Rent on real property leased by a debtor in connection with itsfarming operation;
(B) Which is created by statute in favor of a person that:
(i) In the ordinary course of its business furnished goods orservices to a debtor in connection with a debtor's farming operation; or
(ii) Leased real property to a debtor in connection with the debtor'sfarming operation; and
(C) Whose effectiveness does not depend on the person's possession ofthe personal property;
(6) "As-extracted collateral" means:
(A) Oil, gas, or other minerals that are subject to a securityinterest that:
(i) Is created by a debtor having an interest in the minerals beforeextraction; and
(ii) Attaches to the minerals as extracted; or
(B) Accounts arising out of the sale at the wellhead or minehead ofoil, gas, or other minerals in which the debtor had an interest beforeextraction;
(7) "Authenticate" means:
(A) To sign; or
(B) To execute or otherwise adopt a symbol, or encrypt or similarlyprocess a record in whole or in part, with the present intent of theauthenticating person to identify the person and adopt or accept a record;
(8) "Bank" means an organization that is engaged in the business ofbanking. The term includes savings banks, savings and loan associations,credit unions, and trust companies;
(9) "Cash proceeds" means proceeds that are money, checks, depositaccounts, or the like;
(10) "Certificate of title" means a certificate of title with respectto which a statute provides for the security interest in question to beindicated on the certificate as a condition or result of the securityinterest's obtaining priority over the rights of a lien creditor withrespect to the collateral;
(11) "Chattel paper" means a record or records that evidence both amonetary obligation and a security interest in specific goods, a securityinterest in specific goods and software used in the goods, a securityinterest in specific goods and license of software used in the goods, alease of specific goods, or a lease of specific goods and license ofsoftware used in the goods. In this paragraph, "monetary obligation" meansa monetary obligation secured by the goods or owed under a lease of thegoods and includes a monetary obligation with respect to software used inthe goods. The term does not include (i) charters or other contractsinvolving the use or hire of a vessel or (ii) records that evidence a rightto payment arising out of the use of a credit or charge card or informationcontained on or for use with the card. If a transaction is evidenced byrecords that include an instrument or series of instruments, the group ofrecords taken together constitutes chattel paper;
(12) "Collateral" means the property subject to a security interestor agricultural lien. The term includes:
(A) Proceeds to which a security interest attaches;
(B) Accounts, chattel paper, payment intangibles, and promissorynotes that have been sold; and
(C) Goods that are the subject of a consignment;
(13) "Commercial tort claim" means a claim arising in tort withrespect to which:
(A) The claimant is an organization; or
(B) The claimant is an individual and the claim:
(i) Arose in the course of the claimant's business or profession; and
(ii) Does not include damages arising out of personal injury to orthe death of an individual;
(14) "Commodity account" means an account maintained by a commodityintermediary in which a commodity contract is carried for a commoditycustomer;
(15) "Commodity contract" means a commodity futures contract, anoption on a commodity futures contract, a commodity option, or anothercontract if the contract or option is:
(A) Traded on or subject to the rules of a board of trade that hasbeen designated as a contract market for such a contract pursuant tofederal commodities laws; or
(B) Traded on a foreign commodity board of trade, exchange, ormarket, and is carried on the books of a commodity intermediary for acommodity customer;
(16) "Commodity customer" means a person for which a commodityintermediary carries a commodity contract on its books;
(17) "Commodity intermediary" means a person that:
(A) Is registered as a futures commission merchant under federalcommodities law; or
(B) In the ordinary course of its business provides clearance orsettlement services for a board of trade that has been designated as acontract market pursuant to federal commodities law;
(18) "Communicate" means:
(A) To send a written or other tangible record;
(B) To transmit a record by any means agreed upon by the personssending and receiving the record; or
(C) In the case of transmission of a record to or by a filing office,to transmit a record by any means prescribed by filing-office rule;
(19) "Consignee" means a merchant to which goods are delivered in aconsignment;
(20) "Consignment" means a transaction, regardless of its form, inwhich a person delivers goods to a merchant for the purpose of sale and:
(A) The merchant:
(i) Deals in goods of that kind under a name other than the name ofthe person making delivery;
(ii) Is not an auctioneer; and
(iii) Is not generally known by its creditors to be substantiallyengaged in selling the goods of others;
(B) With respect to each delivery, the aggregate value of the goodsis one thousand dollars or more at the time of delivery;
(C) The goods are not consumer goods immediately before delivery; and
(D) The transaction does not create a security interest that securesan obligation;
(21) "Consignor" means a person that delivers goods to a consignee ina consignment;
(22) "Consumer debtor" means a debtor in a consumer transaction;
(23) "Consumer goods" means goods that are used or bought for useprimarily for personal, family, or household purposes;
(24) "Consumer-goods transaction" means a consumer transaction inwhich:
(A) An individual incurs an obligation primarily for personal,family, or household purposes; and
(B) A security interest in consumer goods secures the obligation;
(25) "Consumer obligor" means an obligor who is an individual and whoincurred the obligation as part of a transaction entered into primarily forpersonal, family, or household purposes;
(26) "Consumer transaction" means a transaction in which (i) anindividual incurs an obligation primarily for personal, family, orhousehold purposes, (ii) a security interest secures the obligation, and(iii) the collateral is held or acquired primarily for personal, family, orhousehold purposes. The term includes consumer-goods transactions;
(27) "Continuation statement" means an amendment of a financingstatement which:
(A) Identifies, by its file number, the initial financing statementto which it relates; and
(B) Indicates that it is a continuation statement for, or that it isfiled to continue the effectiveness of, the identified financing statement;
(28) "Debtor" means:
(A) A person having an interest, other than a security interest orother lien, in the collateral, whether or not the person is an obligor;
(B) A seller of accounts, chattel paper, payment intangibles, orpromissory notes; or
(C) A consignee;
(29) "Deposit account" means a demand, time, savings, passbook, orsimilar account maintained with a bank. The term does not includeinvestment property or accounts evidenced by an instrument;
(30) "Document" means a document of title or a receipt of the typedescribed in section 400.7-201(2);
(31) "Electronic chattel paper" means chattel paper evidenced by arecord or records consisting of information stored in an electronic medium;
(32) "Encumbrance" means a right, other than an ownership interest,in real property. The term includes mortgages and other liens on realproperty;
(33) "Equipment" means goods other than inventory, farm products, orconsumer goods;
(34) "Farm products" means goods, other than standing timber, withrespect to which the debtor is engaged in a farming operation and whichare:
(A) Crops grown, growing, or to be grown, including:
(i) Crops produced on trees, vines, and bushes; and
(ii) Aquatic goods produced in aquacultural operations;
(B) Livestock, born or unborn, including aquatic goods produced inaquacultural operations;
(C) Supplies used or produced in a farming operation; or
(D) Products of crops or livestock in their unmanufactured states;
(35) "Farming operation" means raising, cultivating, propagating,fattening, grazing, or any other farming, livestock, or aquaculturaloperation;
(36) "File number" means the number assigned to an initial financingstatement pursuant to section 400.9-519(a);
(37) "Filing office" means an office designated in section 400.9-501as the place to file a financing statement;
(38) "Filing-office rule" means a rule adopted pursuant to section400.9-526;
(39) "Financing statement" means a record or records composed of aninitial financing statement and any filed record relating to the initialfinancing statement;
(40) "Fixture filing" means the filing of a financing statementcovering goods that are or are to become fixtures and satisfying section400.9-502(a) and (b). The term includes the filing of a financingstatement covering goods of a transmitting utility which are or are tobecome fixtures;
(41) "Fixtures" means goods that have become so related to particularreal property that an interest in them arises under real property law;
(42) "General intangible" means any personal property, includingthings in action, other than accounts, chattel paper, commercial tortclaims, deposit accounts, documents, goods, instruments, investmentproperty, letter-of-credit rights, letters of credit, money, and oil, gas,or other minerals before extraction. The term includes payment intangiblesand software;
(43) "Good faith" means honesty in fact;
(44) "Goods" means all things that are movable when a securityinterest attaches. The term includes (i) fixtures, (ii) standing timberthat is to be cut and removed under a conveyance or contract for sale,(iii) the unborn young of animals, (iv) crops grown, growing, or to begrown, even if the crops are produced on trees, vines, or bushes, and (v)manufactured homes. The term also includes a computer program embedded ingoods and any supporting information provided in connection with atransaction relating to the program if (i) the program is associated withthe goods in such a manner that it customarily is considered part of thegoods, or (ii) by becoming the owner of the goods, a person acquires aright to use the program in connection with the goods. The term does notinclude a computer program embedded in goods that consist solely of themedium in which the program is embedded. The term also does not includeaccounts, chattel paper, commercial tort claims, deposit accounts,documents, general intangibles, instruments, investment property,letter-of-credit rights, letters of credit, money, or oil, gas, or otherminerals before extraction;
(45) "Governmental unit" means a subdivision, agency, department,county, parish, municipality, or other unit of the government of the UnitedStates, a state, or a foreign country. The term includes an organizationhaving a separate corporate existence if the organization is eligible toissue debt on which interest is exempt from income taxation under the lawsof the United States;
(46) "Health-care-insurance receivable" means an interest in or claimunder a policy of insurance which is a right to payment of a monetaryobligation for health-care goods or services provided;
(47) "Instrument" means a negotiable instrument or any other writingthat evidences a right to the payment of a monetary obligation, is notitself a security agreement or lease, and is of a type that in ordinarycourse of business is transferred by delivery with any necessaryindorsement or assignment. The term does not include (i) investmentproperty, (ii) letters of credit, or (iii) writings that evidence a rightto payment arising out of the use of a credit or charge card or informationcontained on or for use with the card;
(48) "Inventory" means goods, other than farm products, which:
(A) Are leased by a person as lessor;
(B) Are held by a person for sale or lease or to be furnished under acontract of service;
(C) Are furnished by a person under a contract of service; or
(D) Consist of raw materials, work in process, or materials used orconsumed in a business;
(49) "Investment property" means a security, whether certificated oruncertificated, security entitlement, securities account, commoditycontract, or commodity account;
(50) "Jurisdiction of organization", with respect to a registeredorganization, means the jurisdiction under whose law the organization isorganized;
(51) "Letter-of-credit right" means a right to payment or performanceunder a letter of credit, whether or not the beneficiary has demanded or isat the time entitled to demand payment or performance. The term does notinclude the right of a beneficiary to demand payment or performance under aletter of credit;
(52) "Lien creditor" means:
(A) A creditor that has acquired a lien on the property involved byattachment, levy, or the like;
(B) An assignee for benefit of creditors from the time of assignment;
(C) A trustee in bankruptcy from the date of the filing of thepetition; or
(D) A receiver in equity from the time of appointment;
(53) "Manufactured home" means a structure, transportable in one ormore sections, which, in the traveling mode, is eight body feet or more inwidth or forty body feet or more in length, or, when erected on site, isthree hundred twenty or more square feet, and which is built on a permanentchassis and designed to be used as a dwelling with or without a permanentfoundation when connected to the required utilities, and includes theplumbing, heating, air-conditioning, and electrical systems containedtherein. The term includes any structure that meets all of therequirements of this paragraph except the size requirements and withrespect to which the manufacturer voluntarily files a certificationrequired by the United States Secretary of Housing and Urban Developmentand complies with the standards established under Title 42 of the UnitedStates Code;
(54) "Manufactured-home transaction" means a secured transaction:
(A) That creates a purchase-money security interest in a manufacturedhome, other than a manufactured home held as inventory; or
(B) In which a manufactured home, other than a manufactured home heldas inventory, is the primary collateral;
(55) "Mortgage" means a consensual interest in real property,including fixtures, which secures payment or performance of an obligation;
(56) "New debtor" means a person that becomes bound as debtor undersection 400.9-203(d) by a security agreement previously entered into byanother person;
(57) "New value" means (i) money, (ii) money's worth in property,services, or new credit, or (iii) release by a transferee of an interest inproperty previously transferred to the transferee. The term does notinclude an obligation substituted for another obligation;
(58) "Noncash proceeds" means proceeds other than cash proceeds;
(59) "Obligor" means a person that, with respect to an obligationsecured by a security interest in or an agricultural lien on thecollateral, (i) owes payment or other performance of the obligation, (ii)has provided property other than the collateral to secure payment or otherperformance of the obligation, or (iii) is otherwise accountable in wholeor in part for payment or other performance of the obligation. The termdoes not include issuers or nominated persons under a letter of credit;
(60) "Original debtor", except as used in section 400.9-310(c), meansa person that, as debtor, entered into a security agreement to which a newdebtor has become bound under section 400.9-203(d);
(61) "Payment intangible" means a general intangible under which theaccount debtor's principal obligation is a monetary obligation;
(62) "Person related to", with respect to an individual, means:
(A) The spouse of the individual;
(B) A brother, brother-in-law, sister, or sister-in-law of theindividual;
(C) An ancestor or lineal descendant of the individual or theindividual's spouse; or
(D) Any other relative, by blood or marriage, of the individual orthe individual's spouse who shares the same home with the individual;
(63) "Person related to", with respect to an organization, means:
(A) A person directly or indirectly controlling, controlled by, orunder common control with the organization;
(B) An officer or director of, or a person performing similarfunctions with respect to, the organization;
(C) An officer or director of, or a person performing similarfunctions with respect to, a person described in subparagraph (A);
(D) The spouse of an individual described in subparagraph (A), (B),or (C); or
(E) An individual who is related by blood or marriage to anindividual described in subparagraph (A), (B), (C), or (D) and shares thesame home with the individual;
(64) "Proceeds", except as used in section 400.9-609(b), means thefollowing property:
(A) Whatever is acquired upon the sale, lease, license, exchange, orother disposition of collateral;
(B) Whatever is collected on, or distributed on account of,collateral;
(C) Rights arising out of collateral;
(D) To the extent of the value of collateral, claims arising out ofthe loss, nonconformity, or interference with the use of, defects orinfringement of rights in, or damage to, the collateral; or
(E) To the extent of the value of collateral and to the extentpayable to the debtor or the secured party, insurance payable by reason ofthe loss or nonconformity of, defects or infringement of rights in, ordamage to, the collateral;
(65) "Promissory note" means an instrument that evidences a promiseto pay a monetary obligation, does not evidence an order to pay, and doesnot contain an acknowledgment by a bank that the bank has received fordeposit a sum of money or funds;
(66) "Proposal" means a record authenticated by a secured party whichincludes the terms on which the secured party is willing to acceptcollateral in full or partial satisfaction of the obligation it securespursuant to sections 400.9-620, 400.9-621 and 400.9-622;
(67) "Pursuant to commitment", with respect to an advance made orother value given by a secured party, means pursuant to the secured party'sobligation, whether or not a subsequent event of default or other event notwithin the secured party's control has relieved or may relieve the securedparty from its obligation;
(68) "Record", except as used in "for record", "of record", "recordor legal title", and "record owner", means information that is inscribed ona tangible medium or which is stored in an electronic or other medium andis retrievable in perceivable form;
(69) "Registered organization" means an organization organized solelyunder the law of a single state or the United States and as to which thestate or the United States must maintain a public record showing theorganization to have been organized;
(70) "Secondary obligor" means an obligor to the extent that:
(A) The obligor's obligation is secondary; or
(B) The obligor has a right of recourse with respect to an obligationsecured by collateral against the debtor, another obligor, or property ofeither;
(71) "Secured party" means:
(A) A person in whose favor a security interest is created orprovided for under a security agreement, whether or not any obligation tobe secured is outstanding;
(B) A person that holds an agricultural lien;
(C) A consignor;
(D) A person to which accounts, chattel paper, payment intangibles,or promissory notes have been sold;
(E) A trustee, indenture trustee, agent, collateral agent, or otherrepresentative in whose favor a security interest or agricultural lien iscreated or provided for; or
(F) A person that holds a security interest arising under sections400.2-401, 400.2-505, 400.2-711(3), 400.2A-508(5), 400.4-210 or 400.5-118;
(72) "Security agreement" means an agreement that creates or providesfor a security interest;
(73) "Send", in connection with a record or notification, means:
(A) To deposit in the mail, deliver for transmission, or transmit byany other usual means of communication, with postage or cost oftransmission provided for, addressed to any address reasonable under thecircumstances; or
(B) To cause the record or notification to be received within thetime that it would have been received if properly sent under subparagraph(A);
(74) "Software" means a computer program and any supportinginformation provided in connection with a transaction relating to theprogram. The term does not include a computer program that is included inthe definition of goods;
(75) "State" means a state of the United States, the District ofColumbia, Puerto Rico, the United States Virgin Islands, or any territoryor insular possession subject to the jurisdiction of the United States;
(76) "Supporting obligation" means a letter-of-credit right orsecondary obligation that supports the payment or performance of anaccount, chattel paper, a document, a general intangible, an instrument, orinvestment property;
(77) "Tangible chattel paper" means chattel paper evidenced by arecord or records consisting of information that is inscribed on a tangiblemedium;
(78) "Termination statement" means an amendment of a financingstatement which:
(A) Identifies, by its file number, the initial financing statementto which it relates; and
(B) Indicates either that it is a termination statement or that theidentified financing statement is no longer effective;
(79) "Transmitting utility" means a person primarily engaged in thebusiness of:
(A) Operating a railroad, subway, street railway, or trolley bus;
(B) Transmitting communications electrically, electromagnetically, orby light;
(C) Transmitting goods by pipeline or sewer; or
(D) Transmitting or producing and transmitting electricity, steam,gas, or water.
(b) The following definitions in other articles apply to thisarticle:
"Applicant" Section 400.5-102.
"Beneficiary" Section 400.5-102.
"Broker" Section 400.8-102.
"Certificated security" Section 400.8-102.
"Check" Section 400.3-104.
"Clearing corporation" Section 400.8-102.
"Contract for sale" Section 400.2-106.
"Customer" Section 400.4-104.
"Entitlement holder" Section 400.8-102.
"Financial asset" Section 400.8-102.
"Holder in due course" Section 400.3-302.
"Issuer" (with respect to a letter of
credit or letter-of-credit right) Section 400.5-102.
"Issuer" (with respect to a security) Section 400.8-201.
"Lease" Section 400.2A-103.
"Lease agreement" Section 400.2A-103.
"Lease contract" Section 400.2A-103.
"Leasehold interest" Section 400.2A-103.
"Lessee" Section 400.2A-103.
"Lessee in ordinary course of
business" Section 400.2A-103.
"Lessor" Section 400.2A-103.
"Lessor's residual interest" Section 400.2A-103.
"Letter of credit" Section 400.5-102.
"Merchant" Section 400.2-104.
"Negotiable instrument" Section 400.3-104.
"Nominated person" Section 400.5-102.
"Note" Section 400.3-104.
"Proceeds of a letter of credit" Section 400.5-114.
"Prove" Section 400.3-103.
"Sale" Section 400.2-106.
"Securities account" Section 400.8-501.
"Securities intermediary" Section 400.8-102.
"Security" Section 400.8-102.
"Security certificate" Section 400.8-102.
"Security entitlement" Section 400.8-102.
"Uncertificated security" Section 400.8-102.
(c) This section contains general definitions and principles ofconstruction and interpretation applicable throughout sections 400.9-103 to400.9-708.
(L. 1963 p. 503 § 9-102, A.L. 1988 S.B. 583, A.L. 2001 S.B. 288, A.L. 2002 S.B. 895)