uniform commercial code - legal ucclegalucc.com/free_study_material/ucc-workbook.pdf · [ 5 ] §...

UNIFORMCOMMERCIAL

CODE

U.C.C.WORKBOOK

U.C.C.UNIFORMCOMMERCIALCODEArticle1.GeneralProvisionsArticle2.SalesArticle2A.LeasesArticle3.NegotiableInstrumentsArticle4.BankDepositArticle4A.FundsTransfersArticle5.LettersofCreditArticle6.BulkTransfersand[Revised]BulkSalesArticle7.WarehouseReceipts,BillsofLadingandOtherDocumentsofTitleArticle8.InvestmentSecuritiesArticle9.SecuredTransactionsCopyright2005byTheAmericanLawInstituteandtheNationalConferenceofCommissionersonUniformStateLaws;reproduced,publishedanddistributedforthelimitedpurposesofstudy,teaching,andacademicresearch.

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U.C.C.ARTICLE1GENERALPROVISIONSPART1.GENERALPROVISIONS

1101.ShortTitles. 1102.ScopeofArticle. 1103.Constructionof[UniformCommercialCode]toPromoteitsPurposesand

Policies:ApplicabilityofSupplementalPrinciplesofLaw. 1104.ConstructionAgainstImpliedRepeal. 1105.Severability. 1106.UseofSingularandPlural;Gender. 1107.SectionCaptions. 1108.RelationtoElectronicSignaturesinGlobalandNationalCommerceAct.

PART2.GENERALDEFINITIONSANDPRINCIPLESOFINTERPRETATION 1201.GeneralDefinitions. 1202.Notice;Knowledge. 1203.LeaseDistinguishedfromSecurityInterest. 1204.Value. 1205.Reasonabletime;Seasonableness. 1206.Presumptions.

PART3.TERRITORIALAPPLICABILITYANDGENERALRULES 1301.TerritorialApplicability;Parties'PowertoChooseApplicableLaw. 1302.VariationbyAgreement. 1303.CourseofPerformance,CourseofDealing,andUsageofTrade. 1304.ObligationofGoodFaith. 1305.RemediestobeLiberallyAdministered. 1306.WaiverorRenunciationofClaimorRightAfterBreach. 1307.PrimaFacieEvidencebyThirdPartyDocuments. 1308.PerformanceorAcceptanceUnderReservationofRights. 1309.OptiontoAccelerateatWill. 1310.SubordinatedObligations.

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PART1.GENERALPROVISIONS

1101.ShortTitles.

(a)This[Act]maybecitedastheUniformCommercialCode.(b)ThisarticlemaybecitedasUniformCommercialCodeGeneralProvisions.

1102.ScopeofArticle.

Thisarticleappliestoatransactiontotheextentthatitisgovernedbyanotherarticleof[theUniformCommercialCode].

1103.Constructionof[UniformCommercialCode]toPromoteitsPurposesandPolicies:ApplicabilityofSupplementalPrinciplesofLaw.

(a)[TheUniformCommercialCode]mustbeliberallyconstruedandappliedtopromoteitsunderlyingpurposesandpolicies,whichare:(1)tosimplify,clarify,andmodernizethelawgoverningcommercialtransactions;(2)topermitthecontinuedexpansionofcommercialpracticesthroughcustom,usage,andagreementoftheparties;and(3)tomakeuniformthelawamongthevariousjurisdictions.(b)Unlessdisplacedbytheparticularprovisionsof[theUniformCommercialCode],theprinciplesoflawandequity,includingthelawmerchantandthelawrelativetocapacitytocontract,principalandagent,estoppel,fraud,misrepresentation,duress,coercion,mistake,bankruptcy,andothervalidatingorinvalidatingcausesupplementitsprovisions.

1104.ConstructionAgainstImpliedRepeal.

[TheUniformCommercialCode]beingageneralactintendedasaunifiedcoverageofitssubjectmatter,nopartofitshallbedeemedtobeimpliedlyrepealedbysubsequentlegislationifsuchconstructioncanreasonablybeavoided.

1105.Severability.

Ifanyprovisionorclauseof[theUniformCommercialCode]oritsapplicationtoanypersonorcircumstanceisheldinvalid,theinvaliditydoesnotaffectotherprovisionsorapplicationsof[theUniformCommercialCode]whichcanbegiveneffectwithouttheinvalidprovisionorapplication,andtothisendtheprovisionsof[theUniformCommercialCode]areseverable.

1106.UseofSingularandPlural;Gender.

In[theUniformCommercialCode],unlessthestatutorycontextotherwiserequires:(1)wordsinthesingularnumberincludetheplural,andthoseinthepluralincludethesingular;and(2)wordsofanygenderalsorefertoanyothergender.

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1107.SectionCaptions.

Sectioncaptionsarepartof[theUniformCommercialCode].1108.RelationtoElectronicSignaturesinGlobalandNationalCommerceAct.

Thisarticlemodifies,limits,andsupersedesthefederalElectronicSignaturesinGlobalandNationalCommerceAct,15U.S.C.Section7001etseq.,exceptthatnothinginthisarticlemodifies,limits,orsupersedesSection7001(c)ofthatActorauthorizeselectronicdeliveryofanyofthenoticesdescribedinSection7003(b)ofthatAct.

PART2.GENERALDEFINITIONSANDPRINCIPLESOFINTERPRETATION

1201.GeneralDefinitions.

(a)Unlessthecontextotherwiserequires,wordsorphrasesdefinedinthissection,orintheadditionaldefinitionscontainedinotherarticlesof[theUniformCommercialCode]thatapplytoparticulararticlesorpartsthereof,havethemeaningsstated.(b)Subjecttodefinitionscontainedinotherarticlesof[theUniformCommercialCode]thatapplytoparticulararticlesorpartsthereof:

(1)"Action",inthesenseofajudicialproceeding,includesrecoupment,counterclaim,setoff,suitinequity,andanyotherproceedinginwhichrightsaredetermined.(2)"Aggrievedparty"meansapartyentitledtopursuearemedy.(3)"Agreement",asdistinguishedfrom"contract",meansthebargainofthepartiesinfact,asfoundintheirlanguageorinferredfromothercircumstances,includingcourseofperformance,courseofdealing,orusageoftradeasprovidedinSection1303.(4)"Bank"meansapersonengagedinthebusinessofbankingandincludesasavingsbank,savingsandloanassociation,creditunion,andtrustcompany.(5)"Bearer"meansapersoninpossessionofanegotiableinstrument,documentoftitle,orcertificatedsecuritythatispayabletobearerorindorsedinblank.(6)"Billoflading"meansadocumentevidencingthereceiptofgoodsforshipmentissuedbyapersonengagedinthebusinessoftransportingorforwardinggoods.(7)"Branch"includesaseparatelyincorporatedforeignbranchofabank.(8)"Burdenofestablishing"afactmeanstheburdenofpersuadingthetrieroffactthattheexistenceofthefactismoreprobablethanitsnonexistence.

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(9)"Buyerinordinarycourseofbusiness"meansapersonthatbuysgoodsingoodfaith,withoutknowledgethatthesaleviolatestherightsofanotherpersoninthegoods,andintheordinarycoursefromaperson,otherthanapawnbroker,inthebusinessofsellinggoodsofthatkind.Apersonbuysgoodsintheordinarycourseifthesaletothepersoncomportswiththeusualorcustomarypracticesinthekindofbusinessinwhichthesellerisengagedorwiththeseller'sownusualorcustomarypractices.Apersonthatsellsoil,gas,orothermineralsatthewellheadormineheadisapersoninthebusinessofsellinggoodsofthatkind.Abuyerinordinarycourseofbusinessmaybuyforcash,byexchangeofotherproperty,oronsecuredorunsecuredcredit,andmayacquiregoodsordocumentsoftitleunderapreexistingcontractforsale.OnlyabuyerthattakespossessionofthegoodsorhasarighttorecoverthegoodsfromthesellerunderArticle2maybeabuyerinordinarycourseofbusiness."Buyerinordinarycourseofbusiness"doesnotincludeapersonthatacquiresgoodsinatransferinbulkorassecurityfororintotalorpartialsatisfactionofamoneydebt.(10)"Conspicuous",withreferencetoaterm,meanssowritten,displayed,orpresentedthatareasonablepersonagainstwhichitistooperateoughttohavenoticedit.Whetheratermis"conspicuous"ornotisadecisionforthecourt.Conspicuoustermsincludethefollowing:(A)aheadingincapitalsequaltoorgreaterinsizethanthesurroundingtext,orincontrastingtype,font,orcolortothesurroundingtextofthesameorlessersize;and(B)languageinthebodyofarecordordisplayinlargertypethanthesurroundingtext,orincontrastingtype,font,orcolortothesurroundingtextofthesamesize,orsetofffromsurroundingtextofthesamesizebysymbolsorothermarksthatcallattentiontothelanguage.(11)"Consumer"meansanindividualwhoentersintoatransactionprimarilyforpersonal,family,orhouseholdpurposes.(12)"Contract",asdistinguishedfrom"agreement",meansthetotallegalobligationthatresultsfromtheparties'agreementasdeterminedby[theUniformCommercialCode]assupplementedbyanyotherapplicablelaws.(13)"Creditor"includesageneralcreditor,asecuredcreditor,aliencreditor,andanyrepresentativeofcreditors,includinganassigneeforthebenefitofcreditors,atrusteeinbankruptcy,areceiverinequity,andanexecutororadministratorofaninsolventdebtor'sorassignor'sestate.(14)"Defendant"includesapersoninthepositionofdefendantinacounterclaim,crossclaim,orthirdpartyclaim.(15)"Delivery",withrespecttoaninstrument,documentoftitle,orchattelpaper,meansvoluntarytransferofpossession.(16)"Documentoftitle"includesbilloflading,dockwarrant,dockreceipt,warehousereceiptororderforthedeliveryofgoods,andalsoanyotherdocumentwhichintheregularcourseofbusinessorfinancingistreatedasadequatelyevidencingthatthepersoninpossessionofitisentitledtoreceive,

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hold,anddisposeofthedocumentandthegoodsitcovers.Tobeadocumentoftitle,adocumentmustpurporttobeissuedbyoraddressedtoabaileeandpurporttocovergoodsinthebailee'spossessionwhichareeitheridentifiedorarefungibleportionsofanidentifiedmass.(17)"Fault"meansadefault,breach,orwrongfulactoromission.(18)"Fungiblegoods"means:(A)goodsofwhichanyunit,bynatureorusageoftrade,istheequivalentofanyotherlikeunit;or(B)goodsthatbyagreementaretreatedasequivalent.(19)"Genuine"meansfreeofforgeryorcounterfeiting.(20)"Goodfaith,"exceptasotherwiseprovidedinArticle5,meanshonestyinfactandtheobservanceofreasonablecommercialstandardsoffairdealing.(21)"Holder"means:(A)thepersoninpossessionofanegotiableinstrumentthatispayableeithertobearerortoanidentifiedpersonthatisthepersoninpossession;or(B)thepersoninpossessionofadocumentoftitleifthegoodsaredeliverableeithertobearerortotheorderofthepersoninpossession.(22)"Insolvencyproceeding"includesanassignmentforthebenefitofcreditorsorotherproceedingintendedtoliquidateorrehabilitatetheestateofthepersoninvolved.(23)"Insolvent"means:(A)havinggenerallyceasedtopaydebtsintheordinarycourseofbusinessotherthanasaresultofbonafidedispute;(B)beingunabletopaydebtsastheybecomedue;or(C)beinginsolventwithinthemeaningoffederalbankruptcylaw.(24)"Money"meansamediumofexchangecurrentlyauthorizedoradoptedbyadomesticorforeigngovernment.Thetermincludesamonetaryunitofaccountestablishedbyanintergovernmentalorganizationorbyagreementbetweentwoormorecountries.(25)"Organization"meansapersonotherthananindividual.(26)"Party",asdistinguishedfrom"thirdparty",meansapersonthathasengagedinatransactionormadeanagreementsubjectto[theUniformCommercialCode].(27)"Person"meansanindividual,corporation,businesstrust,estate,trust,partnership,limitedliabilitycompany,association,jointventure,government,governmentalsubdivision,agency,orinstrumentality,publiccorporation,oranyotherlegalorcommercialentity.(28)"Presentvalue"meanstheamountasofadatecertainofoneormoresumspayableinthefuture,discountedtothedatecertainbyuseofeitheraninterestratespecifiedbythepartiesifthatrateisnotmanifestlyunreasonableatthe

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timethetransactionisenteredintoor,ifaninterestrateisnotsospecified,acommerciallyreasonableratethattakesintoaccountthefactsandcircumstancesatthetimethetransactionisenteredinto.(29)"Purchase"meanstakingbysale,lease,discount,negotiation,mortgage,pledge,lien,securityinterest,issueorreissue,gift,oranyothervoluntarytransactioncreatinganinterestinproperty.(30)"Purchaser"meansapersonthattakesbypurchase.(31)"Record"meansinformationthatisinscribedonatangiblemediumorthatisstoredinanelectronicorothermediumandisretrievableinperceivableform.(32)"Remedy"meansanyremedialrighttowhichanaggrievedpartyisentitledwithorwithoutresorttoatribunal.(33)"Representative"meansapersonempoweredtoactforanother,includinganagent,anofficerofacorporationorassociation,andatrustee,executor,oradministratorofanestate.(34)"Right"includesremedy.(35)"Securityinterest"meansaninterestinpersonalpropertyorfixtureswhichsecurespaymentorperformanceofanobligation."Securityinterest"includesanyinterestofaconsignorandabuyerofaccounts,chattelpaper,apaymentintangible,orapromissorynoteinatransactionthatissubjecttoArticle9."Securityinterest"doesnotincludethespecialpropertyinterestofabuyerofgoodsonidentificationofthosegoodstoacontractforsaleunderSection2505,therightofasellerorlessorofgoodsunderArticle2or2Atoretainoracquirepossessionofthegoodsisnota"securityinterest",butasellerorlessormayalsoacquirea"securityinterest"bycomplyingwithArticle9.TheretentionorreservationoftitlebyasellerofgoodsnotwithstandingshipmentordeliverytothebuyerunderSection2401islimitedineffecttoareservationofa"securityinterest."Whetheratransactionintheformofaleasecreatesa"securityinterest"isdeterminedpursuanttoSection1203.(36)"Send"inconnectionwithawriting,record,ornoticemeans:(A)todepositinthemailordeliverfortransmissionbyanyotherusualmeansofcommunicationwithpostageorcostoftransmissionprovidedforandproperlyaddressedand,inthecaseofaninstrument,toanaddressspecifiedthereonorotherwiseagreed,oriftherebenonetoanyaddressreasonableunderthecircumstances;or(B)inanyotherwaytocausetobereceivedanyrecordornoticewithinthetimeitwouldhavearrivedifproperlysent.(37)"Signed"includesusinganysymbolexecutedoradoptedwithpresentintentiontoadoptoracceptawriting.

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(38)"State"meansaStateoftheUnitedStates,theDistrictofColumbia,PuertoRico,theUnitedStatesVirginIslands,oranyterritoryorinsularpossessionsubjecttothejurisdictionoftheUnitedStates.(39)"Surety"includesaguarantororothersecondaryobligor.(40)"Term"meansaportionofanagreementthatrelatestoaparticularmatter.(41)"Unauthorizedsignature"meansasignaturemadewithoutactual,implied,orapparentauthority.Thetermincludesaforgery.(42)"Warehousereceipt"meansareceiptissuedbyapersonengagedinthebusinessofstoringgoodsforhire.(43)"Writing"includesprinting,typewriting,oranyotherintentionalreductiontotangibleform."Written"hasacorrespondingmeaning.

1202.Notice;Knowledge.

(a)Subjecttosubsection(f),apersonhas"notice"ofafactiftheperson:(1)hasactualknowledgeofit;(2)hasreceivedanoticeornotificationofit;or(3)fromallthefactsandcircumstancesknowntothepersonatthetimeinquestion,hasreasontoknowthatitexists.(b)"Knowledge"meansactualknowledge."Knows"hasacorrespondingmeaning.(c)"Discover","learn",orwordsofsimilarimportrefertoknowledgeratherthantoreasontoknow.(d)Aperson"notifies"or"gives"anoticeornotificationtoanotherpersonbytakingsuchstepsasmaybereasonablyrequiredtoinformtheotherpersoninordinarycourse,whetherornottheotherpersonactuallycomestoknowofit.(e)Subjecttosubsection(f),aperson"receives"anoticeornotificationwhen:(1)itcomestothatperson'sattention;or(2)itisdulydeliveredinaformreasonableunderthecircumstancesattheplaceofbusinessthroughwhichthecontractwasmadeoratanotherlocationheldoutbythatpersonastheplaceforreceiptofsuchcommunications.(f)Notice,knowledge,oranoticeornotificationreceivedbyanorganizationiseffectiveforaparticulartransactionfromthetimeitisbroughttotheattentionoftheindividualconductingthattransactionand,inanyevent,fromthetimeitwouldhavebeenbroughttotheindividual'sattentioniftheorganizationhadexercisedduediligence.Anorganizationexercisesduediligenceifitmaintainsreasonableroutinesforcommunicatingsignificantinformationtothepersonconductingthetransactionandthereisreasonablecompliancewiththeroutines.Duediligencedoesnotrequireanindividualactingfortheorganizationtocommunicateinformationunlessthecommunicationispartoftheindividual'sregulardutiesortheindividualhasreasonto

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knowofthetransactionandthatthetransactionwouldbemateriallyaffectedbytheinformation.

1203.LeaseDistinguishedfromSecurityInterest.

(a)Whetheratransactionintheformofaleasecreatesaleaseorsecurityinterestisdeterminedbythefactsofeachcase.(b)Atransactionintheformofaleasecreatesasecurityinterestiftheconsiderationthatthelesseeistopaythelessorfortherighttopossessionanduseofthegoodsisanobligationforthetermoftheleaseandisnotsubjecttoterminationbythelessee,and:(1)theoriginaltermoftheleaseisequaltoorgreaterthantheremainingeconomiclifeofthegoods;(2)thelesseeisboundtorenewtheleasefortheremainingeconomiclifeofthegoodsorisboundtobecometheownerofthegoods;(3)thelesseehasanoptiontorenewtheleasefortheremainingeconomiclifeofthegoodsfornoadditionalconsiderationorfornominaladditionalconsiderationuponcompliancewiththeleaseagreement;or(4)thelesseehasanoptiontobecometheownerofthegoodsfornoadditionalconsiderationorfornominaladditionalconsiderationuponcompliancewiththeleaseagreement.(c)Atransactionintheformofaleasedoesnotcreateasecurityinterestmerelybecause:(1)thepresentvalueoftheconsiderationthelesseeisobligatedtopaythelessorfortherighttopossessionanduseofthegoodsissubstantiallyequaltoorisgreaterthanthefairmarketvalueofthegoodsatthetimetheleaseisenteredinto;(2)thelesseeassumesriskoflossofthegoods;(3)thelesseeagreestopay,withrespecttothegoods,taxes,insurance,filing,recording,orregistrationfees,orserviceormaintenancecosts;(4)thelesseehasanoptiontorenewtheleaseortobecometheownerofthegoods;(5)thelesseehasanoptiontorenewtheleaseforafixedrentthatisequaltoorgreaterthanthereasonablypredictablefairmarketrentfortheuseofthegoodsforthetermoftherenewalatthetimetheoptionistobeperformed;or(6)thelesseehasanoptiontobecometheownerofthegoodsforafixedpricethatisequaltoorgreaterthanthereasonablypredictablefairmarketvalueofthegoodsatthetimetheoptionistobeperformed.(d)Additionalconsiderationisnominalifitislessthanthelessee'sreasonablypredictablecostofperformingundertheleaseagreementiftheoptionisnotexercised.Additionalconsiderationisnotnominalif:(1)whentheoptiontorenewtheleaseisgrantedtothelessee,therentisstatedtobethefairmarketrentfortheuseofthegoodsforthetermoftherenewaldeterminedatthetimetheoptionistobeperformed;or(2)whentheoptiontobecometheownerofthegoodsisgrantedtothelessee,thepriceisstatedtobethefairmarketvalueofthegoodsdeterminedatthetimetheoptionistobeperformed.(e)The"remainingeconomiclifeofthegoods"and"reasonablypredictable"fairmarketrent,fairmarketvalue,orcostofperformingundertheleaseagreementmustbedeterminedwithreferencetothefactsandcircumstancesatthetimethetransactionisenteredinto.

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1204.Value.

ExceptasotherwiseprovidedinArticles3,4,[and]5,[and6],apersongivesvalueforrightsifthepersonacquiresthem:(1)inreturnforabindingcommitmenttoextendcreditorfortheextensionofimmediatelyavailablecredit,whetherornotdrawnuponandwhetherornotachargebackisprovidedforintheeventofdifficultiesincollection;(2)assecurityfor,orintotalorpartialsatisfactionof,apreexistingclaim;(3)byacceptingdeliveryunderapreexistingcontractforpurchase;or(4)inreturnforanyconsiderationsufficienttosupportasimplecontract.

1205.Reasonabletime;Seasonableness.

(a)Whetheratimefortakinganactionrequiredby[theUniformCommercialCode]isreasonabledependsonthenature,purpose,andcircumstancesoftheaction.(b)Anactionistakenseasonablyifitistakenatorwithinthetimeagreedor,ifnotimeisagreed,atorwithinareasonabletime.

1206.Presumptions.

Whenever[theUniformCommercialCode]createsa"presumption"withrespecttoafact,orprovidesthatafactis"presumed,"thetrieroffactmustfindtheexistenceofthefactunlessanduntilevidenceisintroducedthatsupportsafindingofitsnonexistence.

PART3.TERRITORIALAPPLICABILITYANDGENERALRULES

1301.TerritorialApplicability;Parties'PowertoChooseApplicableLaw.

(a)Inthissection:(1)"Domestictransaction"meansatransactionotherthananinternationaltransaction.(2)"Internationaltransaction"meansatransactionthatbearsareasonablerelationtoacountryotherthantheUnitedStates.

(b)Thissectionappliestoatransactiontotheextentthatitisgovernedbyanotherarticleofthe[UniformCommercialCode].(c)Exceptasotherwiseprovidedinthissection:

(1)anagreementbypartiestoadomestictransactionthatanyoralloftheirrightsandobligationsaretobedeterminedbythelawofthisStateorofanotherStateiseffective,whetherornotthetransactionbearsarelationtotheStatedesignated;and(2)anagreementbypartiestoaninternationaltransactionthatanyoralloftheirrightsandobligationsaretobedeterminedbythelawofthisStateorof

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anotherStateorcountryiseffective,whetherornotthetransactionbearsarelationtotheStateorcountrydesignated.

(d)Intheabsenceofanagreementeffectiveundersubsection(c),andexceptasprovidedinsubsections(e)and(g),therightsandobligationsofthepartiesaredeterminedbythelawthatwouldbeselectedbyapplicationofthisState'sconflictoflawsprinciples.(e)Ifoneofthepartiestoatransactionisaconsumer,thefollowingrulesapply:

(1)Anagreementreferredtoinsubsection(c)isnoteffectiveunlessthetransactionbearsareasonablerelationtotheStateorcountrydesignated.(2)ApplicationofthelawoftheStateorcountrydeterminedpursuanttosubsection(c)or(d)maynotdeprivetheconsumeroftheprotectionofanyruleoflawgoverningamatterwithinthescopeofthissection,whichbothisprotectiveofconsumersandmaynotbevariedbyagreement:(A)oftheStateorcountryinwhichtheconsumerprincipallyresides,unlesssubparagraph(B)applies;or(B)ifthetransactionisasaleofgoods,oftheStateorcountryinwhichtheconsumerbothmakesthecontractandtakesdeliveryofthosegoods,ifsuchStateorcountryisnottheStateorcountryinwhichtheconsumerprincipallyresides.

(f)Anagreementotherwiseeffectiveundersubsection(c)isnoteffectivetotheextentthatapplicationofthelawoftheStateorcountrydesignatedwouldbecontrarytoafundamentalpolicyoftheStateorcountrywhoselawwouldgovernintheabsenceofagreementundersubsection(d).(g)Totheextentthat[theUniformCommercialCode]governsatransaction,ifoneofthefollowingprovisionsof[theUniformCommercialCode]specifiestheapplicablelaw,thatprovisiongovernsandacontraryagreementiseffectiveonlytotheextentpermittedbythelawsospecified:(1)Section2402;(2)Sections2A105and2A106;(3)Section4102;(4)Section4A507;(5)Section5116;[(6)Section6103;](7)Section8110;(8)Sections9301through9307.

1302.VariationbyAgreement.

(a)Exceptasotherwiseprovidedinsubsection(b)orelsewherein[theUniformCommercialCode],theeffectofprovisionsof[theUniformCommercialCode]maybevariedbyagreement.(b)Theobligationsofgoodfaith,diligence,reasonableness,andcareprescribedby[theUniformCommercialCode]maynotbedisclaimedbyagreement.Theparties,byagreement,maydeterminethestandardsbywhichtheperformanceofthoseobligationsistobemeasuredifthosestandardsarenotmanifestlyunreasonable.Whenever[theUniformCommercialCode]requiresanactiontobetakenwithinareasonabletime,atimethatisnotmanifestlyunreasonablemaybefixedbyagreement.

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(c)Thepresenceincertainprovisionsof[theUniformCommercialCode]ofthephrase"unlessotherwiseagreed",orwordsofsimilarimport,doesnotimplythattheeffectofotherprovisionsmaynotbevariedbyagreementunderthissection.

1303.CourseofPerformance,CourseofDealing,andUsageofTrade.

(a)A"courseofperformance"isasequenceofconductbetweenthepartiestoaparticulartransactionthatexistsif:(1)theagreementofthepartieswithrespecttothetransactioninvolvesrepeatedoccasionsforperformancebyaparty;and(2)theotherparty,withknowledgeofthenatureoftheperformanceandopportunityforobjectiontoit,acceptstheperformanceoracquiescesinitwithoutobjection.(b)A"courseofdealing"isasequenceofconductconcerningprevioustransactionsbetweenthepartiestoaparticulartransactionthatisfairlytoberegardedasestablishingacommonbasisofunderstandingforinterpretingtheirexpressionsandotherconduct.(c)A"usageoftrade"isanypracticeormethodofdealinghavingsuchregularityofobservanceinaplace,vocation,ortradeastojustifyanexpectationthatitwillbeobservedwithrespecttothetransactioninquestion.Theexistenceandscopeofsuchausagemustbeprovedasfacts.Ifitisestablishedthatsuchausageisembodiedinatradecodeorsimilarrecord,theinterpretationoftherecordisaquestionoflaw.(d)Acourseofperformanceorcourseofdealingbetweenthepartiesorusageoftradeinthevocationortradeinwhichtheyareengagedorofwhichtheyareorshouldbeawareisrelevantinascertainingthemeaningoftheparties'agreement,maygiveparticularmeaningtospecifictermsoftheagreement,andmaysupplementorqualifythetermsoftheagreement.Ausageoftradeapplicableintheplaceinwhichpartoftheperformanceundertheagreementistooccurmaybesoutilizedastothatpartoftheperformance.(e)Exceptasotherwiseprovidedinsubsection(f),theexpresstermsofanagreementandanyapplicablecourseofperformance,courseofdealing,orusageoftrademustbeconstruedwheneverreasonableasconsistentwitheachother.Ifsuchaconstructionisunreasonable:(1)expresstermsprevailovercourseofperformance,courseofdealing,andusageoftrade;(2)courseofperformanceprevailsovercourseofdealingandusageoftrade;and(3)courseofdealingprevailsoverusageoftrade.(f)SubjecttoSection2209,acourseofperformanceisrelevanttoshowawaiverormodificationofanyterminconsistentwiththecourseofperformance.(g)Evidenceofarelevantusageoftradeofferedbyonepartyisnotadmissibleunlessthatpartyhasgiventheotherpartynoticethatthecourtfindssufficienttopreventunfairsurprisetotheotherparty.

1304.ObligationofGoodFaith.

Everycontractordutywithin[theUniformCommercialCode]imposesanobligationofgoodfaithinitsperformanceandenforcement.

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1305.RemediestobeLiberallyAdministered.

(a)Theremediesprovidedby[theUniformCommercialCode]mustbeliberallyadministeredtotheendthattheaggrievedpartymaybeputinasgoodapositionasiftheotherpartyhadfullyperformedbutneitherconsequentialorspecialdamagesnorpenaldamagesmaybehadexceptasspecificallyprovidedin[theUniformCommercialCode]orbyotherruleoflaw.(b)Anyrightorobligationdeclaredby[theUniformCommercialCode]isenforceablebyactionunlesstheprovisiondeclaringitspecifiesadifferentandlimitedeffect.

1306.WaiverorRenunciationofClaimorRightAfterBreach.

Aclaimorrightarisingoutofanallegedbreachmaybedischargedinwholeorinpartwithoutconsiderationbyagreementoftheaggrievedpartyinanauthenticatedrecord.

1307.PrimaFacieEvidencebyThirdPartyDocuments.

Adocumentindueformpurportingtobeabilloflading,policyorcertificateofinsurance,officialweigher'sorinspector'scertificate,consularinvoice,oranyotherdocumentauthorizedorrequiredbythecontracttobeissuedbyathirdpartyisprimafacieevidenceofitsownauthenticityandgenuinenessandofthefactsstatedinthedocumentbythethirdparty.

1308.PerformanceorAcceptanceUnderReservationofRights.

(a)Apartythatwithexplicitreservationofrightsperformsorpromisesperformanceorassentstoperformanceinamannerdemandedorofferedbytheotherpartydoesnottherebyprejudicetherightsreserved.Suchwordsas"withoutprejudice,""underprotest,"orthelikearesufficient.(b)Subsection(a)doesnotapplytoanaccordandsatisfaction.

1309.OptiontoAccelerateatWill.

Atermprovidingthatonepartyorthatparty'ssuccessorininterestmayacceleratepaymentorperformanceorrequirecollateraloradditionalcollateral"atwill"orwhentheparty"deemsitselfinsecure,"orwordsofsimilarimport,meansthatthepartyhaspowertodosoonlyifthatpartyingoodfaithbelievesthattheprospectofpaymentorperformanceisimpaired.Theburdenofestablishinglackofgoodfaithisonthepartyagainstwhichthepowerhasbeenexercised.

1310.SubordinatedObligations.

Anobligationmaybeissuedassubordinatedtoperformanceofanotherobligationofthepersonobligated,oracreditormaysubordinateitsrighttoperformanceofanobligationbyagreementwitheitherthepersonobligatedoranothercreditorofthepersonobligated.Subordinationdoesnotcreateasecurityinterestasagainsteitherthecommondebtororasubordinatedcreditor.

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M.I.C.NOTES[UCCARTICLE1:GENERALPROVISIONS]___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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U.C.C.ARTICLE2SALESPART1.SHORTTITLE,GENERALCONSTRUCTIONANDSUBJECTMATTER

2101.ShortTitle. 2102.Scope;CertainSecurityandOtherTransactionsExcludedFromThisArticle. 2103.DefinitionsandIndexofDefinitions. 2104.Definitions:"Merchant";"BetweenMerchants";"FinancingAgency". 2105.Definitions:Transferability;"Goods";"Future"Goods;"Lot";"Commercial

Unit". 2106.Definitions:"Contract";"Agreement";"Contractforsale";"Sale";"Presentsale";

"Conforming"toContract;"Termination";"Cancellation". 2107.GoodstoBeSeveredFromRealty:Recording.

PART2.FORM,FORMATIONANDREADJUSTMENTOFCONTRACT 2201.FormalRequirements;StatuteofFrauds. 2202.FinalWrittenExpression:ParolorExtrinsicEvidence. 2203.SealsInoperative. 2204.FormationinGeneral. 2205.FirmOffers. 2206.OfferandAcceptanceinFormationofContract. 2207.AdditionalTermsinAcceptanceorConfirmation. 2209.Modification,RescissionandWaiver. 2210.DelegationofPerformance;AssignmentofRights.

PART3.GENERALOBLIGATIONANDCONSTRUCTIONOFCONTRACT 2301.GeneralObligationsofParties. 2302.UnconscionablecontractorClause. 2303.AllocationorDivisionofRisks. 2304.PricePayableinMoney,Goods,Realty,orOtherwise. 2305.OpenPriceTerm. 2306.Output,RequirementsandExclusiveDealings. 2307.DeliveryinSingleLotorSeveralLots. 2308.AbsenceofSpecifiedPlaceforDelivery. 2309.AbsenceofSpecificTimeProvisions;NoticeofTermination. 2310.OpenTimeforPaymentorRunningofCredit;AuthoritytoShipUnder

Reservation. 2311.OptionsandCooperationRespectingPerformance. 2312.WarrantyofTitleandAgainstInfringement;Buyer'sObligationAgainst

Infringement. 2313.ExpressWarrantiesbyAffirmation,Promise,Description,Sample. 2313A.ObligationtoRemotePurchaserCreatedbyRecordPackagedWithor

AccompanyingGoods 2313B.ObligationtoRemotePurchaserCreatedbyCommunicationtothePublic 2314.ImpliedWarranty:Merchantability;UsageofTrade.

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2315.ImpliedWarranty:FitnessforParticularPurpose. 2316.ExclusionorModificationofWarranties. 2317.CumulationandConflictofWarrantiesExpressorImplied. 2318.ThirdPartyBeneficiariesofWarrantiesExpressorImplied. 2319.F.O.B.andF.A.S.Terms. 2320.C.I.F.andC.&F.Terms. 2321.C.I.F.orC.&F.:"NetLandedWeights";"PaymentonArrival";Warrantyof

ConditiononArrival. 2322.Delivery"ExShip". 2323.FormofBillofLadingRequiredinOverseasShipment;"Overseas". 2324."NoArrival,Nosale"Term. 2325."LetterofCredit"Term;"ConfirmedCredit". 2326.SaleonApprovalandSaleorReturn;ConsignmentSalesandRightsof

Creditors. 2327.SpecialIncidentsofSaleonApprovalandSaleorReturn. 2328.SalebyAuction.

PART4.TITLE,CREDITORSANDGOODFAITHPURCHASERS 2401.PassingofTitle;ReservationforSecurity;LimitedApplicationofThisSection. 2402.RightsofSeller'sCreditorsAgainstSoldGoods. 2403.PowertoTransfer;GoodFaithPurchaseofGoods;"Entrusting".

PART5.PERFORMANCE 2501.InsurableInterestinGoods;MannerofIdentificationofGoods. 2502.Buyer'sRighttoGoodsonSeller'sRepudiation,FailuretoDeliveror

Insolvency. 2503.MannerofSeller'sTenderofDelivery. 2504.ShipmentbySeller. 2505.Seller'sShipmentUnderReservation. 2506.RightsofFinancingagency. 2507.EffectofSeller'sTender;DeliveryonCondition. 2508.CurebySellerofImproperTenderorDelivery;Replacement. 2509.RiskofLossintheAbsenceofBreach. 2510.EffectofBreachonRiskofLoss. 2511.TenderofPaymentbyBuyer;PaymentbyCheck. 2512.PaymentbyBuyerBeforeInspection. 2513.Buyer'sRighttoInspectionofGoods. 2514.WhenDocumentsDeliverableonAcceptance;WhenonPayment. 2515.PreservingEvidenceofGoodsinDispute.

PART6.BREACH,REPUDIATIONANDEXCUSE 2601.Buyer'sRightsonImproperDelivery. 2602.MannerandEffectofRightfulRejection. 2603.MerchantBuyer'sDutiesastoRightfullyRejectedGoods. 2604.Buyer'sOptionsastoSalvageofRightfullyRejectedGoods. 2605.WaiverofBuyer'sObjectionsbyFailuretoParticularize.

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2606.WhatConstitutesAcceptanceofGoods. 2607.EffectofAcceptance;NoticeofBreach;BurdenofEstablishingBreachAfter

Acceptance;NoticeofClaimorLitigationtoPersonAnswerableOver. 2608.RevocationofAcceptanceinWholeorinPart. 2609.RighttoAdequateAssuranceofPerformance. 2610.AnticipatoryRepudiation. 2611.RetractionofAnticipatoryRepudiation. 2612."Installmentcontract";Breach. 2613.CasualtytoIdentifiedGoods. 2614.SubstitutedPerformance. 2615.ExcusebyFailureofPresupposedConditions. 2616.ProcedureonNoticeClaimingExcuse.

PART7.REMEDIES 2701.RemediesforBreachofCollateralcontractsNotImpaired. 2702.Seller'sRemediesonDiscoveryofBuyer'sInsolvency. 2703.Seller'sRemediesinGeneral. 2704.Seller'sRighttoIdentifyGoodstotheContractNotwithstandingBreachorto

SalvageUnfinishedGoods. 2705.Seller'sStoppageofDeliveryinTransitorOtherwise. 2706.Seller'sResaleIncludingContractforResale. 2707."PersoninthePositionofaSeller". 2708.Seller'sDamagesforNonacceptanceorRepudiation. 2709.ActionforthePrice. 2710.Seller'sIncidentalDamages. 2711.Buyer'sRemediesinGeneral;Buyer'sSecurityInterestinRejectedGoods. 2712."Cover";Buyer'sProcurementofSubstituteGoods. 2713.Buyer'sDamagesforNondeliveryorRepudiation. 2714.Buyer'sDamagesforBreachinRegardtoAcceptedGoods. 2715.Buyer'sIncidentalandConsequentialDamages. 2716.Buyer'sRighttoSpecificPerformanceorReplevin. 2717.DeductionofDamagesFromthePrice. 2718.LiquidationorLimitationofDamages;Deposits. 2719.ContractualModificationorLimitationofRemedy. 2720.Effectof"Cancellation"or"Rescission"onClaimsforAntecedentBreach. 2721.RemediesforFraud. 2722.WhoCanSueThirdPartiesforInjurytoGoods. 2723.ProofofMarketPrice:TimeandPlace. 2724.AdmissibilityofMarketQuotations. 2725.StatuteofLimitationsinContractsforSale.

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PART1.SHORTTITLE,GENERALCONSTRUCTIONANDSUBJECTMATTER

2101.ShortTitle.

ThisArticleshallbeknownandmaybecitedasUniformCommercialCodeSales.2102.Scope;CertainSecurityandOtherTransactionsExcludedFromThisArticle.

Unlessthecontextotherwiserequires,thisArticleappliestotransactionsingoods;itdoesnotapplytoanytransactionwhichalthoughintheformofanunconditionalcontracttosellorpresentsaleisintendedtooperateonlyasasecuritytransactionnordoesthisArticleimpairorrepealanystatuteregulatingsalestoconsumers,farmersorotherspecifiedclassesofbuyers.

2103.DefinitionsandIndexofDefinitions.

(1)InthisArticleunlessthecontextotherwiserequires(a)"Buyer"meansapersonthatbuysorcontractstobuygoods.(b)"Conspicuous",withreferencetoaterm,meanssowritten,displayed,orpresentedthatareasonablepersonagainstwhichitistooperateoughttohavenoticedit.Aterminanelectronicrecordintendedtoevokearesponsebyanelectronicagentisconspicuousifitispresentedinaformthatwouldenableareasonablyconfiguredelectronicagenttotakeitintoaccountorreacttoitwithoutreviewoftherecordbyanindividual.Whetheratermis"conspicuous"ornotisadecisionforthecourt.Conspicuoustermsincludethefollowing:

(i)foraperson:(A)aheadingincapitalsequaltoorgreaterinsizethanthesurroundingtext,orincontrastingtype,font,orcolortothesurroundingtextofthesameorlessersize;and(B)languageinthebodyofarecordordisplayinlargertypethanthesurroundingtext,orincontrastingtype,font,orcolortothesurroundingtextofthesamesize,orsetofffromsurroundingtextofthesamesizebysymbolsorothermarksthatcallattentiontothelanguage;and

(ii)forapersonoranelectronicagent,atermthatissoplacedinarecordordisplaythatthepersonorelectronicagentmaynotproceedwithouttakingactionwithrespecttotheparticularterm.

(c)"Consumer"meansanindividualwhobuysorcontractstobuygoodsthat,atthetimeofcontracting,areintendedbytheindividualtobeusedprimarilyforpersonal,family,orhouseholdpurposes.

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(d)"Consumercontract"meansacontractbetweenamerchantsellerandaconsumer.(e)"Delivery"meansthevoluntarytransferofphysicalpossessionorcontrolofgoods.(f)"Electronic"meansrelatingtotechnologyhavingelectrical,digital,magnetic,wireless,optical,electromagnetic,orsimilarcapabilities.(g)"Electronicagent"meansacomputerprogramoranelectronicorotherautomatedmeansusedindependentlytoinitiateanactionorrespondtoelectronicrecordsorperformancesinwholeorinpart,withoutrevieworactionbyanindividual.(h)"Electronicrecord"meansarecordcreated,generated,sent,communicated,received,orstoredbyelectronicmeans.(i)"Foreignexchangetransaction"meansatransactioninwhichonepartyagreestodeliveraquantityofaspecifiedmoneyorunitofaccountinconsiderationoftheotherparty'sagreementtodeliveranotherquantityofadifferentmoneyorunitofaccounteithercurrentlyoratafuturedate,andinwhichdeliveryistobethroughfundstransfer,bookentryaccounting,orotherformofpaymentorder,orotheragreedmeanstotransferacreditbalance.Thetermincludesatransactionofthistypeinvolvingtwoormoremoneysandspot,forward,option,orotherproductsderivedfromunderlyingmoneysandanycombinationofthesetransactions.Thetermdoesnotincludeatransactioninvolvingtwoormoremoneysinwhichoneorbothofthepartiesisobligatedtomakephysicaldelivery,atthetimeofcontractingorinthefuture,ofbanknotes,coins,orotherformoflegaltenderorspecie.[(j)Reserved][(j)"Goodfaith"meanshonestyinfactandtheobservanceofreasonablecommercialstandardsoffairdealing.]LegislativeNote:Thedefinitionof"goodfaith"shouldnotbeadoptedifthejurisdictionhasenactedthisdefinitionaspartofArticle1.(k)"Goods"meansallthingsthataremovableatthetimeofidentificationtoacontractforsale.Thetermincludesfuturegoods,speciallymanufacturedgoods,theunbornyoungofanimals,growingcrops,andotheridentifiedthingsattachedtorealtyasdescribedinSection2107.Thetermdoesnotincludeinformation,themoneyinwhichthepriceistobepaid,investmentsecuritiesunderArticle8,thesubjectmatterofforeignexchangetransactions,orchosesinaction.(l)"Receiptofgoods"meanstakingphysicalpossessionofgoods.(m)"Record"meansinformationthatisinscribedonatangiblemediumorthatisstoredinanelectronicorothermediumandisretrievableinperceivableform.

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LegislativeNote:Thedefinitionof"record"shouldnotbeadoptedifthejurisdictionhasenactedrevisedArticle1.(n)"Remedialpromise"meansapromisebythesellertorepairorreplacegoodsortorefundallorpartofthepriceofgoodsuponthehappeningofaspecifiedevent.(o)"Seller"meansapersonthatsellsorcontractstosellgoods.(p)"Sign"means,withpresentintenttoauthenticateoradoptarecord:

(i)toexecuteoradoptatangiblesymbol;or(ii)toattachtoorlogicallyassociatewiththerecordanelectronicsound,symbol,orprocess.

(2)OtherdefinitionsapplyingtothisArticleortospecifiedPartsthereof,andthesectionsinwhichtheyappearare:"Acceptance".Section2606."Betweenmerchants".Section2104."Cancellation".Section2106(4)."Commercialunit".Section2105."Conformingtocontract".Section2106."Contractforsale".Section2106."Cover".Section2712."Entrusting".Section2403."Financingagency".Section2104."FutureGoods".Section2105."Goods".Section2103."Identification".Section2501."Installmentcontract".Section2612."Lot".Section2105."Merchant".Section2104.

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"PersoninpositionofSeller".Section2707."Presentsale".Section2106."Sale".Section2106."Saleonapproval".Section2326."Saleorreturn".Section2326."Termination".Section2106.(3)"Control"asprovidedinSection7106andthefollowingdefinitionsinotherArticlesapplytothisArticle:"Check".Section3104(f)."Consignee".Section7102(3)."Consignor".Section7102(4)."ConsumerGoods".Section9102(a)(23)."Dishonor".Section3502."Draft".Section3104(e)."Honor".Section5102(a)(8)."Injunctionagainsthonor".Section5109(b)."Letterofcredit".Section5102(a)(10).(4)InadditionArticle1containsgeneraldefinitionsandprinciplesofconstructionandinterpretationapplicablethroughoutthisArticle.

2104.Definitions:"Merchant";"BetweenMerchants";"FinancingAgency".

(1)"Merchant"meansapersonthatdealsingoodsofthekindorotherwiseholdsitselfoutbyoccupationashavingknowledgeorskillpeculiartothepracticesorgoodsinvolvedinthetransactionortowhichtheknowledgeorskillmaybeattributedbytheperson'semploymentofanagentorbrokerorotherintermediarythatholdsitselfoutbyoccupationashavingtheknowledgeorskill.(2)"Financingagency"meansabank,financecompanyorotherpersonthatintheordinarycourseofbusinessmakesadvancesagainstgoodsordocumentsoftitleorthatbyarrangementwitheitherthesellerorthebuyerintervenesinordinarycoursetomakeorcollectpaymentdueorclaimedunderthecontractforsale,asbypurchasingorpayingtheseller'sdraftormakingadvancesagainstitorbymerelytakingitfor

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collectionwhetherornotdocumentsoftitleaccompanyorareassociatedwiththedraft.Thetermincludesalsoabankorotherpersonthatsimilarlyintervenesbetweenpersonsthatareinthepositionofsellerandbuyerinrespecttothegoods(Section2707).(3)"BetweenMerchants"meansinanytransactionwithrespecttowhichbothpartiesarechargeablewiththeknowledgeorskillofmerchants.

2105.Definitions:Transferability;"Future"Goods;"Lot";"CommercialUnit".

(1)Goodsmustbebothexistingandidentifiedbeforeanyinterestinthemmaypass.Goodsthatarenotbothexistingandidentifiedare"future"goods.Apurportedpresentsaleoffuturegoodsorofanyinterestthereinoperatesasacontracttosell.(2)Theremaybeasaleofapartinterestinexistingidentifiedgoods.(3)Anundividedshareinanidentifiedbulkoffungiblegoodsissufficientlyidentifiedtobesoldalthoughthequantityofthebulkisnotdetermined.Anyagreedproportionofthebulkoranyquantitythereofagreeduponbynumber,weight,orothermeasuremaytotheextentoftheseller'sinterestinthebulkbesoldtothebuyerthatthenbecomesanownerincommon.(4)"Lot"meansaparcelorasinglearticlewhichisthesubjectmatterofaseparatesaleordelivery,whetherornotitissufficienttoperformthecontract.(5)"Commercialunit"meanssuchaunitofgoodsasbycommercialusageisasinglewholeforpurposesofsaleanddivisionofwhichmateriallyimpairsitscharacterorvalueonthemarketorinuse.Acommercialunitmaybeasinglearticle(asamachine)orasetofarticles(asasuiteoffurnitureoranassortmentofsizes)oraquantity(asabale,gross,orcarload)oranyotherunittreatedinuseorintherelevantmarketasasinglewhole.

2106.Definitions:"Contract";"Agreement";"Contractforsale";"Sale";"Presentsale";"Conforming"toContract;"Termination";"Cancellation".

(1)InthisArticleunlessthecontextotherwiserequires"contract"and"agreement"arelimitedtothoserelatingtothepresentorfuturesaleofgoods."Contractforsale"includesbothapresentsaleofgoodsandacontracttosellgoodsatafuturetime.A"sale"consistsinthepassingoftitlefromthesellertothebuyerforaprice(Section2401).A"presentsale"meansasalewhichisaccomplishedbythemakingofthecontract.(2)Goodsorconductincludinganypartofaperformanceare"conforming"orconformtothecontractwhentheyareinaccordancewiththeobligationsunderthecontract.(3)"Termination"occurswheneitherpartypursuanttoapowercreatedbyagreementorlawputsanendtothecontractotherwisethanforitsbreach.On"termination"allobligationswhicharestillexecutoryonbothsidesaredischargedbutanyrightbasedonpriorbreachorperformancesurvives.

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(4)"Cancellation"occurswheneitherpartyputsanendtothecontractforbreachbytheotheranditseffectisthesameasthatof"termination"exceptthatthecancellingpartyalsoretainsanyremedyforbreachofthewholecontractoranyunperformedbalance.

2107.GoodstoBeSeveredFromRealty:Recording.

(1)Acontractforthesaleofmineralsorthelike(includingoilandgas)orastructureoritsmaterialstoberemovedfromrealtyisacontractforthesaleofgoodswithinthisArticleiftheyaretobeseveredbythesellerbutuntilseveranceapurportedpresentsalethereofwhichisnoteffectiveasatransferofaninterestinlandiseffectiveonlyasacontracttosell.(2)Acontractforthesaleapartfromthelandofgrowingcropsorotherthingsattachedtorealtyandcapableofseverancewithoutmaterialharmtheretobutnotdescribedinsubsection(1)oroftimbertobecutisacontractforthesaleofgoodswithinthisArticlewhetherthesubjectmatteristobeseveredbythebuyerorbythesellereventhoughitformspartoftherealtyatthetimeofcontracting,andthepartiescanbyidentificationeffectapresentsalebeforeseverance.(3)Theprovisionsofthissectionaresubjecttoanythirdpartyrightsprovidedbythelawrelatingtorealtyrecords,andthecontractforsalemaybeexecutedandrecordedasadocumenttransferringaninterestinlandandshallthenconstitutenoticetothirdpartiesofthebuyer'srightsunderthecontractforsale.

2108.TransactionsSubjecttoOtherLaw

(1)Atransactionsubjecttothisarticleisalsosubjecttoanyapplicable:(a)[listanycertificateoftitlestatutesofthisStatecoveringautomobiles,trailers,mobilehomes,boats,farmtractors,orthelike],exceptwithrespecttotherightsofabuyerinordinarycourseofbusinessunderSection2403(2)whicharisebeforeacertificateoftitlecoveringthegoodsiseffectiveinthenameofanyotherbuyer;(b)ruleoflawthatestablishesadifferentruleforconsumers;or(c)statuteofthisstateapplicabletothetransaction,suchasastatutedealingwith:

(i)thesaleorleaseofagriculturalproducts;(ii)thetransferofhumanblood,bloodproducts,tissues,orparts;(iii)theconsignmentortransferbyartistsofworksofartorfineprints;(iv)distributionagreements,franchises,andotherrelationshipsthroughwhichgoodsaresold;

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(v)themisbrandingoradulterationoffoodproductsordrugs;and(vi)dealersinparticularproducts,suchasautomobiles,motorizedwheelchairs,agriculturalequipment,andhearingaids.

(2)Exceptfortherightsofabuyerinordinarycourseofbusinessundersubsection(1)(a),intheeventofaconflictbetweenthisarticleandalawreferredtoinsubsection(1),thatlawgoverns.(3)Forpurposesofthisarticle,failuretocomplywithalawreferredtoinsubsection(1)hasonlytheeffectspecifiedinthatlaw.(4)Thisarticlemodifies,limits,andsupersedesthefederalElectronicSignaturesinGlobalandNationalCommerceAct,15U.S.C.Section7001etseq.,exceptthatnothinginthisarticlemodifies,limits,orsupersedesSection7001(c)ofthatActorauthorizeselectronicdeliveryofanyofthenoticesdescribedinSection7003(b)ofthatAct.

PART2.FORM,FORMATIONANDREADJUSTMENTOFCONTRACT

2201.FormalRequirements;StatuteofFrauds.

(1)Acontractforthesaleofgoodsforthepriceof$5,000ormoreisnotenforceablebywayofactionordefenseunlessthereissomerecordsufficienttoindicatethatacontractforsalehasbeenmadebetweenthepartiesandsignedbythepartyagainstwhichenforcementissoughtorbytheparty'sauthorizedagentorbroker.Arecordisnotinsufficientbecauseitomitsorincorrectlystatesatermagreeduponbutthecontractisnotenforceableunderthissubsectionbeyondthequantityofgoodsshownintherecord.(2)Betweenmerchantsifwithinareasonabletimearecordinconfirmationofthecontractandsufficientagainstthesenderisreceivedandthepartyreceivingithasreasontoknowitscontents,itsatisfiestherequirementsofsubsection(1)againsttherecipientunlessnoticeofobjectiontoitscontentsisgiveninarecordwithin10daysafteritisreceived.(3)Acontractthatdoesnotsatisfytherequirementsofsubsection(1)butwhichisvalidinotherrespectsisenforceable:

(a)ifthegoodsaretobespeciallymanufacturedforthebuyerandarenotsuitableforsaletoothersintheordinarycourseoftheseller'sbusinessandtheseller,beforenoticeofrepudiationisreceivedandundercircumstancesthatreasonablyindicatethatthegoodsareforthebuyer,hasmadeeitherasubstantialbeginningoftheirmanufactureorcommitmentsfortheirprocurement;(b)ifthepartyagainstwhichenforcementissoughtadmitsintheparty'spleading,orintheparty'stestimonyorotherwiseunderoaththatacontractforsalewasmade,butthecontractisnotenforceableunderthisparagraphbeyondthequantityofgoodsadmitted;or

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(c)withrespecttogoodsforwhichpaymenthasbeenmadeandacceptedorwhichhavebeenreceivedandaccepted(Sec.2606).

(4)Acontractthatisenforceableunderthissectionisnotunenforceablemerelybecauseitisnotcapableofbeingperformedwithinoneyearoranyotherperiodafteritsmaking.

2202.FinalExpressioninaRecord:ParolorExtrinsicEvidence.

(1)Termswithrespecttowhichtheconfirmatoryrecordsofthepartiesagreeorwhichareotherwisesetforthinarecordintendedbythepartiesasafinalexpressionoftheiragreementwithrespecttosuchtermsasareincludedthereinmaynotbecontradictedbyevidenceofanyprioragreementorofacontemporaneousoralagreementbutmaybesupplementedbyevidenceof:

(a)courseofperformance,courseofdealing,orusageoftrade(Section1303);and(b)consistentadditionaltermsunlessthecourtfindstherecordtohavebeenintendedalsoasacompleteandexclusivestatementofthetermsoftheagreement.

(2)Termsinarecordmaybeexplainedbyevidenceofcourseofperformance,courseofdealing,orusageoftradewithoutapreliminarydeterminationbythecourtthatthelanguageusedisambiguous.

2203.SealsInoperative.

Theaffixingofasealtoarecordevidencingacontractforsaleoranoffertobuyorsellgoodsdoesnotconstitutetherecordasealedinstrument.Thelawwithrespecttosealedinstrumentsdoesnotapplytosuchacontractoroffer.

2204.FormationinGeneral.

(1)Acontractforsaleofgoodsmaybemadeinanymannersufficienttoshowagreement,includingofferandacceptance,conductbybothpartieswhichrecognizestheexistenceofacontract,theinteractionofelectronicagents,andtheinteractionofanelectronicagentandanindividual.(2)Anagreementsufficienttoconstituteacontractforsalemaybefoundevenifthemomentofitsmakingisundetermined.(3)Evenifoneormoretermsareleftopen,acontractforsaledoesnotfailforindefinitenessifthepartieshaveintendedtomakeacontractandthereisareasonablycertainbasisforgivinganappropriateremedy.(4)ExceptasotherwiseprovidedinSections2211through2213,thefollowingrulesapply:

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(a)Acontractmaybeformedbytheinteractionofelectronicagentsoftheparties,evenifnoindividualwasawareoforreviewedtheelectronicagents'actionsortheresultingtermsandagreements.(b)Acontractmaybeformedbytheinteractionofanelectronicagentandanindividualactingontheindividual'sownbehalforforanotherperson.Acontractisformediftheindividualtakesactionsthattheindividualisfreetorefusetotakeormakesastatement,andtheindividualhasreasontoknowthattheactionsorstatementwill:

(i)causetheelectronicagenttocompletethetransactionorperformance;or(ii)indicateacceptanceofanoffer,regardlessofotherexpressionsoractionsbytheindividualtowhichtheelectronicagentcannotreact.

2205.FirmOffers.

Anofferbyamerchanttobuyorsellgoodsinasignedrecordthatbyitstermsgivesassurancethatitwillbeheldopenisnotrevocable,forlackofconsideration,duringthetimestatedorifnotimeisstatedforareasonabletime,butinnoeventmaysuchperiodofirrevocabilityexceedthreemonths;butinnoeventmaytheperiodofirrevocabilityexceedthreemonths.Anysuchtermofassuranceinaformsuppliedbytheoffereemustbeseparatelysignedbytheofferor.

2206.OfferandAcceptanceinFormationofContract.

(1)Unlessotherwiseunambiguouslyindicatedbythelanguageorcircumstances(a)anoffertomakeacontractshallbeconstruedasinvitingacceptanceinanymannerandbyanymediumreasonableinthecircumstances:(b)anorderorotheroffertobuygoodsforpromptorcurrentshipmentshallbeconstruedasinvitingacceptanceeitherbyapromptpromisetoshiporbythepromptorcurrentshipmentofconformingornonconforminggoods,buttheshipmentofnonconforminggoodsisnotanacceptanceifthesellerseasonablynotifiesthebuyerthattheshipmentisofferedonlyasanaccommodationtothebuyer.

(2)Ifthebeginningofarequestedperformanceisareasonablemodeofacceptance,anofferorthatisnotnotifiedofacceptancewithinareasonabletimemaytreattheofferashavinglapsedbeforeacceptance.(3)Adefiniteandseasonableexpressionofacceptanceinarecordoperatesasanacceptanceevenifitcontainstermsadditionaltoordifferentfromtheoffer.

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2207.TermsofContract;EffectofConfirmation.

SubjecttoSection2202,if(i)conductbybothpartiesrecognizestheexistenceofacontractalthoughtheirrecordsdonototherwiseestablishacontract,(ii)acontractisformedbyanofferandacceptance,or(iii)acontractformedinanymannerisconfirmedbyarecordthatcontainstermsadditionaltoordifferentfromthoseinthecontractbeingconfirmed,thetermsofthecontractare:

(a)termsthatappearintherecordsofbothparties;(b)terms,whetherinarecordornot,towhichbothpartiesagree;and(c)termssuppliedorincorporatedunderanyprovisionofthisAct.

[2208.Reserved]

2209.Modification,RescissionandWaiver.

(1)AnagreementmodifyingacontractwithinthisArticleneedsnoconsiderationtobebinding.(2)Anagreementinasignedrecordwhichexcludesmodificationorrescissionexceptbyasignedrecordmaynotbeotherwisemodifiedorrescinded,butexceptasbetweenmerchantssucharequirementinaformsuppliedbythemerchantmustbeseparatelysignedbytheotherparty.(3)TherequirementsofSection2201mustbesatisfiedifthecontractasmodifiediswithinitsprovisions.(4)Althoughanattemptatmodificationorrescissiondoesnotsatisfytherequirementsofsubsection(2)or(3),itmayoperateasawaiver.(5)Apartythathasmadeawaiveraffectinganexecutoryportionofacontractmayretractthewaiverbyreasonablenotificationreceivedbytheotherpartythatstrictperformancewillberequiredofanytermwaived,unlesstheretractionwouldbeunjustinviewofamaterialchangeofpositioninrelianceonthewaiver.

2210.DelegationofPerformance;AssignmentofRights.

(1)Ifthesellerorbuyerassignsrightsunderacontract,thefollowingrulesapply:(a)Subjecttoparagraph(b)andexceptasotherwiseprovidedinSection9406orasotherwiseagreed,allrightsofthesellerorthebuyermaybeassignedunlesstheassignmentwouldmateriallychangethedutyoftheotherparty,increasemateriallytheburdenorriskimposedonthatpartybythecontract,orimpairmateriallythatparty'schanceofobtainingreturnperformance.Arighttodamagesforbreachofthewholecontractorarightarisingoutoftheassignor's

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dueperformanceofitsentireobligationmaybeassigneddespiteanagreementotherwise.(b)Thecreation,attachment,perfection,orenforcementofasecurityinterestintheseller'sinterestunderacontractisnotanassignmentthatmateriallychangesthedutyoformateriallyincreasestheburdenorriskimposedonthebuyerormateriallyimpairsthebuyer'schanceofobtainingreturnperformanceunderparagraph(a)unless,andonlytotheextentthat,enforcementofthesecurityinterestresultsinadelegationofamaterialperformanceoftheseller.Eveninthatevent,thecreation,attachment,perfection,andenforcementofthesecurityinterestremaineffective.However,thesellerisliabletothebuyerfordamagescausedbythedelegationtotheextentthatthedamagescouldnotreasonablybepreventedbythebuyer,andacourtmaygrantotherappropriaterelief,includingcancellationofthecontractoraninjunctionagainstenforcementofthesecurityinterestorconsummationoftheenforcement.

(2)Ifthesellerorbuyerdelegatesperformanceofitsdutiesunderacontract,thefollowingrulesapply:

(a)Apartymayperformitsdutiesthroughadelegateunlessotherwiseagreedorunlesstheotherpartyhasasubstantialinterestinhavingtheoriginalpromisorperformorcontroltheactsrequiredbythecontract.Delegationofperformancedoesnotrelievethedelegatingpartyofanydutytoperformorliabilityforbreach.(b)Acceptanceofadelegationofdutiesbytheassigneeconstitutesapromisetoperformthoseduties.Thepromiseisenforceablebyeithertheassignorortheotherpartytotheoriginalcontract.(c)TheotherpartymaytreatanydelegationofdutiesascreatingreasonablegroundsforinsecurityandmaywithoutprejudicetoitsrightsagainsttheassignordemandassurancesfromtheassigneeunderSection2609.(d)Acontractualtermprohibitingthedelegationofdutiesotherwisedelegableunderparagraph(a)isenforceable,andanattempteddelegationisnoteffective.

(3)Anassignmentof"thecontract"orof"allmyrightsunderthecontract"oranassignmentinsimilargeneraltermsisanassignmentofrightsandunlessthelanguageorthecircumstances,asinanassignmentforsecurity,indicatethecontrary,itisalsoadelegationofperformanceofthedutiesoftheassignor.(4)Unlessthecircumstancesindicatethecontrary,aprohibitionofassignmentof"thecontract"istobeconstruedasbarringonlythedelegationtotheassigneeoftheassignor'sperformance.

2211.LegalRecognitionofElectronicContracts,Records,andSignatures

(1)Arecordorsignaturemaynotbedeniedlegaleffectorenforceabilitysolelybecauseitisinelectronicform.

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(2)Acontractmaynotbedeniedlegaleffectorenforceabilitysolelybecauseanelectronicrecordwasusedinitsformation.(3)Thisarticledoesnotrequirearecordorsignaturetobecreated,generated,sent,communicated,received,stored,orotherwiseprocessedbyelectronicmeansorinelectronicform.(4)AcontractformedbytheinteractionofanindividualandanelectronicagentunderSection2204(4)(b)doesnotincludetermsprovidedbytheindividualiftheindividualhadreasontoknowthattheagentcouldnotreacttothetermsasprovided.

2212.ATTRIBUTION

Anelectronicrecordorelectronicsignatureisattributabletoapersonifitwastheactofthepersonortheperson'selectronicagentorthepersonisotherwiselegallyboundbytheact.

2213.ELECTRONICCOMMUNICATION

(1)Ifthereceiptofanelectroniccommunicationhasalegaleffect,ithasthateffectevenifnoindividualisawareofitsreceipt.(2)Receiptofanelectronicacknowledgmentofanelectroniccommunicationestablishesthatthecommunicationwasreceivedbut,initself,doesnotestablishthatthecontentsentcorrespondstothecontentreceived.

PART3.GENERALOBLIGATIONANDCONSTRUCTIONOFCONTRACT

2301.GeneralObligationsofParties.

Theobligationoftheselleristotransferanddeliverandthatofthebuyeristoacceptandpayinaccordancewiththecontract.

2302.UnconscionablecontractorTerm.

(1)Ifthecourtasamatteroflawfindsthecontractoranytermofthecontracttohavebeenunconscionableatthetimeitwasmadethecourtmayrefusetoenforcethecontract,oritmayenforcetheremainderofthecontractwithouttheunconscionableterm,oritmaysolimittheapplicationofanyunconscionabletermastoavoidanyunconscionableresult.(2)Ifitisclaimedorappearstothecourtthatthecontractoranytermthereofmaybeunconscionablethepartiesshallbeaffordedareasonableopportunitytopresentevidenceastoitscommercialsetting,purpose,andeffecttoaidthecourtinmakingthedetermination.

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2303.AllocationorDivisionofRisks.

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