§490:2A-103 - Definitions and index of definitions.

§490:2A-103 Definitions and index of
definitions. (a) In this article unless the context otherwise requires:

(1) "Buyer in ordinary course of business"
means a person who in good faith and without knowledge that the sale to that
person is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods, buys in ordinary course from
a person in the business of selling goods of that kind but does not include a
pawnbroker. "Buying" may be for cash or by exchange of other
property or on secured or unsecured credit and includes acquiring goods or
documents of title under a preexisting contract for sale but does not include a
transfer in bulk or as security for or in total or partial satisfaction of a
money debt.

(2) "Cancellation" occurs when either party
puts an end to the lease contract for default by the other party.

(3) "Commercial unit" means such a unit of
goods as by commercial usage is a single whole for purposes of lease and
division of which materially impairs its character or value on the market or in
use. A commercial unit may be a single article, as a machine, or a set of
articles, as a suite of furniture or a line of machinery, or a quantity, as a
gross or carload, or any other unit treated in use or in the relevant market as
a single whole.

(4) "Conforming" goods or performance under
a lease contract means goods or performance that are in accordance with the
obligations under the lease contract.

(5) "Consumer lease" means a lease that a
lessor regularly engaged in the business of leasing or selling makes to a
lessee who is an individual and who takes under the lease primarily for a
personal, family, or household purpose, if the total payments to be made under
the lease contract, excluding payments for options to renew or buy, do not
exceed $25,000.

(6) "Fault" means wrongful act, omission,
breach, or default.

(7) "Finance lease" means a lease with
respect to which:

(i) The lessor does not select, manufacture,
or supply the goods;

(ii) The lessor acquires the goods or the right
to possession and use of the goods in connection with the lease; and

(iii) One of the following occurs:

(A) The lessee receives a copy of the contract
by which the lessor acquired the goods or the right to possession and use of
the goods before signing the lease contract;

(B) The lessee's approval of the contract by
which the lessor acquired the goods or the right to possession and use of the
goods is a condition to effectiveness of the lease contract;

(C) The lessee, before signing the lease
contract, receives an accurate and complete statement designating the promises
and warranties, and any disclaimers of warranties, limitations or modifications
of remedies, or liquidated damages, including those of a third party, such as
the manufacturer of the goods, provided to the lessor by the person supplying
the goods in connection with or as part of the contract by which the lessor
acquired the goods or the right to possession and use of the goods; or

(D) If the lease is not a consumer lease, the
lessor, before the lessee signs the lease contract, informs the lessee in
writing (a) of the identity of the person supplying the goods to the lessor,
unless the lessee has selected that person and directed the lessor to acquire
the goods or the right to possession and use of the goods from that person, (b)
that the lessee is entitled under this article to the promises and warranties,
including those of any third party, provided to the lessor by the person
supplying the goods in connection with or as part of the contract by which the
lessor acquired the goods or the right to possession and use of the goods, and
(c) that the lessee may communicate with the person supplying the goods to the
lessor and receive an accurate and complete statement of those promises and
warranties, including any disclaimers and limitations of them or of remedies.

(8) "Goods" means all things that are
movable at the time of identification to the lease contract, or are fixtures
(section 490:2A-309), but the term does not include money, documents,
instruments, accounts, chattel paper, general intangibles, or minerals or the
like, including oil and gas, before extraction. The term also includes the
unborn young of animals.

(9) "Installment lease contract" means a
lease contract that authorizes or requires the delivery of goods in separate
lots to be separately accepted, even though the lease contract contains a
clause "each delivery is a separate lease" or its equivalent.

(10) "Lease" means a transfer of the right
to possession and use of goods for a term in return for consideration, but a
sale, including a sale on approval or a sale or return, or retention or
creation of a security interest is not a lease. Unless the context clearly
indicates otherwise, the term includes a sublease.

(11) "Lease agreement" means the bargain,
with respect to the lease, of the lessor and the lessee in fact as found in
their language or by implication from other circumstances including course of
dealing or usage of trade or course of performance as provided in this article.
Unless the context clearly indicates otherwise, the term includes a sublease
agreement.

(12) "Lease contract" means the total legal
obligation that results from the lease agreement as affected by this article
and any other applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.

(13) "Leasehold interest" means the interest
of the lessor or the lessee under a lease contract.

(14) "Lessee" means a person who acquires
the right to possession and use of goods under a lease. Unless the context
clearly indicates otherwise, the term includes a sublessee.

(15) "Lessee in ordinary course of business"
means a person who in good faith and without knowledge that the lease to that
person is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods leases in ordinary course from
a person in the business of selling or leasing goods of that kind but does not include
a pawnbroker. "Leasing" may be for cash or by exchange of other
property or on secured or unsecured credit and includes acquiring goods or
documents of title under a preexisting lease contract but does not include a
transfer in bulk or as security for or in total or partial satisfaction of a
money debt.

(16) "Lessor" means a person who transfers
the right to possession and use of goods under a lease. Unless the context
clearly indicates otherwise, the term includes a sublessor.

(17) "Lessor's residual interest" means the
lessor's interest in the goods after expiration, termination, or cancellation
of the lease contract.

(18) "Lien" means a charge against or
interest in goods to secure payment of a debt or performance of an obligation,
but the term does not include a security interest.

(19) "Lot" means a parcel or a single
article that is the subject matter of a separate lease or delivery, whether or
not it is sufficient to perform the lease contract.

(20) "Merchant lessee" means a lessee that
is a merchant with respect to goods of the kind subject to the lease.

(21) "Present value" means the amount as of
a date certain of one or more sums payable in the future, discounted to the
date certain. The discount is determined by the interest rate specified by the
parties if the rate was not manifestly unreasonable at the time the transaction
was entered into; otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and circumstances of each
case at the time the transaction was entered into.

(22) "Purchase" includes taking by sale,
lease, mortgage, security interest, pledge, gift, or any other voluntary
transaction creating an interest in goods.

(23) "Sublease" means a lease of goods the
right to possession and use of which was acquired by the lessor as a lessee
under an existing lease.

(24) "Supplier" means a person from whom a
lessor buys or leases goods to be leased under a finance lease.

(25) "Supply contract" means a contract
under which a lessor buys or leases goods to be leased.

(26) "Termination" occurs when either party
pursuant to a power created by agreement or law puts an end to the lease
contract otherwise than for default.

(b) Other definitions applying to this article
and the sections in which they appear are:

"Accessions". Section 490:2A-310(a).

"Construction mortgage". Section
490:2A-309(a)(4).

"Encumbrance". Section
490:2A-309(a)(5).

"Fixtures". Section
490:2A-309(a)(1).

"Fixture filing". Section
490:2A-309(a)(2).

"Purchase money lease". Section
490:2A-309(a)(3).

"Account". Section 490:9-102(a).

"Between merchants". Section
490:2-104(3).

"Buyer". Section 490:2-103(1)(a).

"Chattel paper". Section
490:9-102(a).

"Consumer goods". Section
490:9-102(a).

"Document". Section 490:9-102(a).

"Entrusting". Section 490:2-403(3).

"General intangible". Section
490:9-102(a).

"Good faith". Section
490:2-103(1)(b).

"Instrument". Section 490:9-102(a).

"Merchant". Section 490:2-104(1).

"Mortgage". Section 490:9-102(a).

"Pursuant to commitment". Section
490:9-102(a).

"Receipt". Section 490:2-103(1)(c).

"Sale". Section 490:2-106(1).

"Sale on approval". Section
490:2-326.

"Sale or return". Section 490:2-326.

"Seller". Section 490:2-103(1)(d).

(d) In addition, article 1 contains general
definitions and principles of construction and interpretation applicable
throughout this article. [L 1991, c 40, pt of §1; am L 2000, c 241, §16; am L
2004, c 163, §15]