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S1440................................................by JUDICIARY AND RULES
UNIFORM COMMERCIAL CODE - Repeals and adds to existing law relating to the
Uniform Commercial Code to define terms.
03/08 Senate intro - 1st rdg - to printing
03/09 Rpt prt - to Jud
Rpt out - rec d/p - to 2nd rdg
03/10 2nd rdg - to 3rd rdg
03/11 3rd rdg - PASSED - 34-0-1
AYES -- Andreason(Andreason), Bailey, Brandt, Bunderson, Burkett,
Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk
NAYS -- None
Absent and excused -- Williams
Floor Sponsor - Davis
Title apvd - to House
03/11 House intro - 1st rdg - to Bus
03/16 Rpt out - rec d/p - to 2nd rdg
03/17 2nd rdg - to 3rd rdg
Rls susp - PASSED - 70-0-0
AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
Jaquet, Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez,
McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato,
Nielsen, Pasley-Stuart, Raybould, Ridinger, Ring, Ringo, Roberts,
Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen,
Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills,
Wood, Mr. Speaker
NAYS -- None
Absent and excused -- None
Floor Sponsor - Kellogg
Title apvd - to Senate
03/18 To enrol
03/19 Rpt enrol - Pres signed - Sp signed
03/22 To Governor
03/24 Governor signed
Session Law Chapter 309
Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE SENATE
SENATE BILL NO. 1440
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO THE UNIFORM COMMERCIAL CODE; REPEALING SECTION 28-1-201, IDAHO
3 CODE, RELATING TO GENERAL DEFINITIONS; AND AMENDING PART 2, CHAPTER 1,
4 TITLE 28, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 28-1-201, IDAHO
5 CODE, TO DEFINE TERMS.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 28-1-201, Idaho Code, be, and the same is hereby
8 repealed.
9 SECTION 2. That Part 2, Chapter 1, Title 28, Idaho Code, be, and the same
10 is hereby amended by the addition thereto of a NEW SECTION, to be known and
11 designated as Section 28-1-201, Idaho Code, and to read as follows:
12 28-1-201. GENERAL DEFINITIONS. (a) Unless the context otherwise
13 requires, words or phrases defined in this section, or in the additional defi-
14 nitions contained in other chapters of the uniform commercial code that apply
15 to particular chapters or parts thereof, have the meanings stated.
16 (b) Subject to definitions contained in other articles of the uniform
17 commercial code that apply to particular articles or parts thereof:
18 (1) "Action," in the sense of a judicial proceeding, includes recoupment,
19 counterclaim, set-off, suit in equity, and any other proceeding in which
20 rights are determined.
21 (2) "Aggrieved party" means a party entitled to pursue a remedy.
22 (3) "Agreement," as distinguished from "contract," means the bargain of
23 the parties in fact, as found in their language or inferred from other
24 circumstances, including course of performance, course of dealing or usage
25 of trade as provided in section 28-1-303, Idaho Code.
26 (4) "Bank" means a person engaged in the business of banking and includes
27 a savings bank, savings and loan association, credit union, and trust com-
28 pany.
29 (5) "Bearer" means a person in control of a negotiable electronic document
30 of title or a person in possession of a negotiable instrument, negotiable
31 tangible document of title, or certificated security that is payable to
32 bearer or indorsed in blank.
33 (6) "Bill of lading" means a document of title evidencing the receipt of
34 goods for shipment issued by a person engaged in the business of directly
35 or indirectly transporting or forwarding goods. The term does not include
36 a warehouse receipt.
37 (7) "Branch" includes a separately incorporated foreign branch of a bank.
38 (8) "Burden of establishing" a fact means the burden of persuading the
39 trier of fact that the existence of the fact is more probable than its
40 nonexistence.
41 (9) "Buyer in ordinary course of business" means a person that buys goods
42 in good faith, without knowledge that the sale violates the rights of
2
1 another person in the goods, and in the ordinary course from a person,
2 other than a pawnbroker, in the business of selling goods of that kind. A
3 person buys goods in the ordinary course if the sale to the person
4 comports with the usual or customary practices in the kind of business in
5 which the seller is engaged or with the seller's own usual or customary
6 practices. A person that sells oil, gas or other minerals at the wellhead
7 or minehead is a person in the business of selling goods of that kind. A
8 buyer in ordinary course of business may buy for cash, by exchange of
9 other property, or on secured or unsecured credit, and may acquire goods
10 or documents of title under a preexisting contract for sale. Only a buyer
11 that takes possession of the goods or has a right to recover the goods
12 from the seller under chapter 2, title 28, Idaho Code, may be a buyer in
13 ordinary course of business. "Buyer in ordinary course of business" does
14 not include a person that acquires goods in a transfer in bulk or as secu-
15 rity for or in total or partial satisfaction of a money debt.
16 (10) "Conspicuous," with reference to a term, means so written, displayed,
17 or presented that a reasonable person against which it is to operate ought
18 to have noticed it. Whether a term is "conspicuous" or not is a decision
19 for the court. Conspicuous terms include the following:
20 (A) A heading in capitals equal to or greater in size than the sur-
21 rounding text, or in contrasting type, font, or color to the sur-
22 rounding text of the same or lesser size; and
23 (B) Language in the body of a record or display in larger type than
24 the surrounding text, or in contrasting type, font, or color to the
25 surrounding text of the same size, or set off from the surrounding
26 text of the same size by symbols or other marks that call attention
27 to the language.
28 (11) "Consumer" means an individual who enters into a transaction primar-
29 ily for personal, family, or household purposes.
30 (12) "Contract," as distinguished from "agreement," means the total legal
31 obligation that results from the parties' agreement as determined by the
32 uniform commercial code as supplemented by any other applicable laws.
33 (13) "Creditor" includes a general creditor, a secured creditor, a lien
34 creditor, and any representative of creditors, including an assignee for
35 the benefit of creditors, a trustee in bankruptcy, a receiver in equity,
36 and an executor or administrator of an insolvent debtor's or assignor's
37 estate.
38 (14) "Defendant" includes a person in the position of defendant in a coun-
39 terclaim, cross-claim, or third-party claim.
40 (15) "Delivery," with respect to an electronic document of title means
41 voluntary transfer of control and with respect to an instrument, a tangi-
42 ble document of title, or chattel paper, means voluntary transfer of pos-
43 session.
44 (16) "Document of title" means a record (i) that in the regular course of
45 business or financing is treated as adequately evidencing that the person
46 in possession or control of the record is entitled to receive, control,
47 hold, and dispose of the record and the goods the record covers and (ii)
48 that purports to be issued by or addressed to a bailee and to cover goods
49 in the bailee's possession which are either identified or are fungible
50 portions of an identified mass. The term includes a bill of lading, trans-
51 port document, dock warrant, dock receipt, warehouse receipt, and order
52 for delivery of goods. An electronic document of title means a document of
53 title evidenced by a record consisting of information stored in an elec-
54 tronic medium. A tangible document of title means a document of title evi-
55 denced by a record consisting of information that is inscribed on a tangi-
3
1 ble medium.
2 (17) "Fault" means a default, breach, or wrongful act or omission.
3 (18) "Fungible goods" means:
4 (A) Goods of which any unit, by nature or usage of trade, is the
5 equivalent of any other like unit; or
6 (B) Goods that by agreement are treated as equivalent.
7 (19) "Genuine" means free of forgery or counterfeiting.
8 (20) "Good faith" means honesty in fact in the conduct or transaction con-
9 cerned.
10 (21) "Holder" means:
11 (A) The person in possession of a negotiable instrument that is pay-
12 able either to bearer or to an identified person that is the person
13 in possession;
14 (B) The person in possession of a negotiable tangible document of
15 title if the goods are deliverable either to bearer or to the order
16 of the person in possession; or
17 (C) The person in control of a negotiable electronic document of
18 title.
19 (22) "Insolvency proceeding" includes an assignment for the benefit of
20 creditors or other proceeding intended to liquidate or rehabilitate the
21 estate of the person involved.
22 (23) "Insolvent" means:
23 (A) Having generally ceased to pay debts in the ordinary course of
24 business other than as a result of bona fide dispute;
25 (B) Being unable to pay debts as they become due; or
26 (C) Being insolvent within the meaning of federal bankruptcy law.
27 (24) "Money" means a medium of exchange currently authorized or adopted by
28 a domestic or foreign government. The term includes a monetary unit of
29 account established by an intergovernmental organization or by agreement
30 between two (2) or more countries.
31 (25) "Organization" means a person other than an individual.
32 (26) "Party," as distinguished from "third party," means a person that has
33 engaged in a transaction or made an agreement subject to the uniform com-
34 mercial code.
35 (27) "Person" means an individual, corporation, business trust, estate,
36 trust, partnership, limited liability company, association, joint venture,
37 government, governmental subdivision, agency, or instrumentality, public
38 corporation, or any other legal or commercial entity.
39 (28) "Present value" means the amount as of a date certain of one (1) or
40 more sums payable in the future, discounted to the date certain by use of
41 either an interest rate specified by the parties if that rate is not mani-
42 festly unreasonable at the time the transaction is entered into or, if an
43 interest rate is not so specified, a commercially reasonable rate that
44 takes into account the facts and circumstances at the time the transaction
45 is entered into.
46 (29) "Purchase" means taking by sale, lease, discount, negotiation, mort-
47 gage, pledge, lien, security interest, issue or reissue, gift, or any
48 other voluntary transaction creating an interest in property.
49 (30) "Purchaser" means a person that takes by purchase.
50 (31) "Record" means information that is inscribed on a tangible medium or
51 that is stored in an electronic or other medium and is retrievable in
52 perceivable form.
53 (32) "Remedy" means any remedial right to which an aggrieved party is
54 entitled with or without resort to a tribunal.
55 (33) "Representative" means a person empowered to act for another, includ-
4
1 ing an agent, an officer of a corporation or association, and a trustee,
2 executor, or administrator of an estate.
3 (34) "Rights" includes remedy.
4 (35) "Security interest" means an interest in personal property or fix-
5 tures which secures payment or performance of an obligation. "Security
6 interest" includes any interest of a consignor and a buyer of accounts,
7 chattel paper, a payment intangible, or a promissory note in a transaction
8 that is subject to chapter 9, title 28, Idaho Code. "Security interest"
9 does not include the special property interest of a buyer of goods on
10 identification of those goods to a contract for sale under section
11 28-2-401, Idaho Code, but a buyer may also acquire a "security interest"
12 by complying with chapter 9, title 28, Idaho Code. Except as otherwise
13 provided in section 28-2-505, Idaho Code, the right of a seller or lessor
14 of goods under chapter 2 or chapter 12, title 28, Idaho Code, to retain or
15 acquire possession of the goods is not a "security interest," but a seller
16 or lessor may also acquire a "security interest" by complying with chapter
17 9, title 28, Idaho Code. The retention or reservation of title by a seller
18 of goods notwithstanding shipment or delivery to the buyer under section
19 28-2-401, Idaho Code, is limited in effect to a reservation of a "security
20 interest." Whether a transaction in the form of a lease creates a
21 "security interest" is determined pursuant to section 28-1-203, Idaho
22 Code.
23 (36) "Send" in connection with a writing, record, or notice means:
24 (A) To deposit in the mail or deliver for transmission by any other
25 usual means of communication with postage or cost of transmission
26 provided for and properly addressed and, in the case of an instru-
27 ment, to an address specified thereon or otherwise agreed, or if
28 there be none to any address reasonable under the circumstances; or
29 (B) In any other way to cause to be received any record or notice
30 within the time it would have arrived if properly sent.
31 (37) "Signed" includes using any symbol executed or adopted with present
32 intention to adopt or accept a writing.
33 (38) "State" means a state of the United States, the District of Columbia,
34 Puerto Rico, the United States Virgin Islands, or any territory or insular
35 possession subject to the jurisdiction of the United States.
36 (39) "Surety" includes a guarantor or other secondary obligor.
37 (40) "Term" means a portion of an agreement that relates to a particular
38 matter.
39 (41) "Unauthorized signature" means a signature made without actual,
40 implied, or apparent authority. The term includes a forgery.
41 (42) "Warehouse receipt" means a document of title issued by a person
42 engaged in the business of storing goods for hire.
43 (43) "Written" or "writing" includes printing, typewriting, or any other
44 intentional reduction to tangible form.
STATEMENT OF PURPOSE
RS 14250
This legislation is a trailer bill to Senate Bills 1227 and 1228.
The purpose of this legislation is to provide a consistent set of
definitions between Article 1 and Article 7 of the Uniform
Commercial Code that were revised by Senate Bills 1227 and 1228.
FISCAL IMPACT
No fiscal impact on the General Fund.
Contact
Name: Senator Bart M. Davis
(208) 332-1305
Dale G. Higer, Uniform Law Commissioner
(208) 387-4288
Rex Blackburn, Uniform Law Commissioner
(208) 489-8989
STATEMENT OF PURPOSE/FISCAL NOTE S 1440