§ 25-1-201. General definitions. - North Carolina Statutes

PART 2.

GENERAL DEFINITIONS ANDPRINCIPLES OF INTERPRETATION.

§ 25‑1‑201. General definitions.

(a)        Unless the contextotherwise requires, words or phrases defined in this section, or in theadditional definitions contained in other Articles of this Chapter that applyto particular Articles or Parts thereof, have the meanings stated.

(b)        Subject todefinitions contained in other articles of this Chapter that apply toparticular articles or parts thereof:

(1)        "Action,"in the sense of a judicial proceeding, includes recoupment, counterclaim,setoff, suit in equity, and any other proceeding in which rights aredetermined.

(2)        "Aggrievedparty" means a party entitled to pursue a remedy.

(3)        "Agreement,"as distinguished from "contract," means the bargain of the parties infact, as found in their language or inferred from other circumstances,including course of performance, course of dealing, or usage of trade asprovided in G.S. 25‑1‑303.

(4)        "Bank"means a person engaged in the business of banking and includes a savings bank,savings and loan association, credit union, and trust company.

(5)        "Bearer"means a person in control of a negotiable electronic document of title or aperson in possession of a negotiable instrument, negotiable tangible documentof title, or certificated security that is payable to bearer or indorsed inblank.

(6)        "Bill oflading" means a document of title evidencing the receipt of goods forshipment issued by a person engaged in the business of directly or indirectlytransporting or forwarding goods. The term does not include a warehousereceipt.

(7)        "Branch"includes a separately incorporated foreign branch of a bank.

(8)        "Burden ofestablishing" a fact means the burden of persuading the trier of fact thatthe existence of the fact is more probable than its nonexistence.

(9)        "Buyer inordinary course of business" means a person that buys goods in good faith,without knowledge that the sale violates the rights of another person in thegoods, and in the ordinary course from a person, other than a pawnbroker, inthe business of selling goods of that kind. A person buys goods in the ordinarycourse if the sale to the person comports with the usual or customary practicesin the kind of business in which the seller is engaged or with the seller's ownusual or customary practices. A person that sells oil, gas, or other mineralsat the wellhead or minehead is a person in the business of selling goods ofthat kind. A buyer in ordinary course of business may buy for cash, by exchangeof other property, or on secured or unsecured credit, and may acquire goods ordocuments of title under a preexisting contract for sale. Only a buyer thattakes possession of the goods or has a right to recover the goods from theseller under Article 2 of this Chapter may be a buyer in ordinary course ofbusiness. "Buyer in ordinary course of business" does not include aperson that acquires goods in a transfer in bulk or as security for or in totalor partial satisfaction of a money debt.

(10)      "Conspicuous,"with reference to a term, means so written, displayed, or presented that areasonable person against which it is to operate ought to have noticed it.Whether a term is "conspicuous" or not is a decision for the court.Conspicuous terms include the following:

a.         A heading incapitals equal to or greater in size than the surrounding text, or incontrasting type, font, or color to the surrounding text of the same or lessersize; and

b.         Language in the bodyof a record or display in larger type than the surrounding text, or incontrasting type, font, or color to the surrounding text of the same size, orset off from surrounding text of the same size by symbols or other marks thatcall attention to the language.

(11)      "Consumer"means an individual who enters into a transaction primarily for personal,family, or household purposes.

(12)      "Contract,"as distinguished from "agreement," means the total legal obligationthat results from the parties' agreement as determined by this Chapter assupplemented by any other applicable laws.

(13)      "Creditor"includes a general creditor, a secured creditor, a lien creditor, and anyrepresentative of creditors, including an assignee for the benefit ofcreditors, a trustee in bankruptcy, a receiver in equity, and an executor oradministrator of an insolvent debtor's or assignor's estate.

(14)      "Defendant"includes a person in the position of defendant in a counterclaim, cross‑claim,or third‑party claim.

(15)      "Delivery",with respect to an electronic document of title means voluntary transfer of controland with respect to an instrument, a tangible document of title, or chattelpaper, means voluntary transfer of possession.

(16)      "Document oftitle" means a record (i) that in the regular course of business orfinancing is treated as adequately evidencing that the person in possession orcontrol of the record is entitled to receive, control, hold, and dispose of therecord and the goods the record covers and (ii) that purports to be issued byor addressed to a bailee and to cover goods in the bailee's possession whichare either identified or are fungible portions of an identified mass. The termincludes a bill of lading, transport document, dock warrant, dock receipt,warehouse receipt, and order for delivery of goods. An electronic document oftitle means a document of title evidenced by a record consisting of informationstored in an electronic medium. A tangible document of title means a documentof title evidenced by a record consisting of information that is inscribed on atangible medium.

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

(18)      "Fungiblegoods" means:

a.         Goods of which anyunit, by nature or usage of trade, are the equivalent of any other like unit;or

b.         Goods that byagreement are treated as equivalent.

(19)      "Genuine"means free of forgery or counterfeiting.

(20)      "Goodfaith," except as otherwise provided in Article 5 of this Chapter, meanshonesty in fact and the observance of reasonable commercial standards of fairdealing.

(21)      "Holder"means:

a.         The person in possessionof a negotiable instrument that is payable either to bearer or to an identifiedperson that is the person in possession;

b.         The person inpossession of a negotiable tangible document of title if the goods aredeliverable either to bearer or to the order of the person in possession; or

c.         The person incontrol of a negotiable electronic document of title.

(22)      "Insolvencyproceeding" includes an assignment for the benefit of creditors or otherproceeding intended to liquidate or rehabilitate the estate of the personinvolved.

(23)      "Insolvent"means:

a.         Having generallyceased to pay debts in the ordinary course of business other than as a resultof bona fide dispute;

b.         Being unable to paydebts as they become due; or

c.         Being insolventwithin the meaning of federal bankruptcy law.

(24)      "Money"means a medium of exchange currently authorized or adopted by a domestic orforeign government. The term includes a monetary unit of account established byan intergovernmental organization or by agreement between two or morecountries.

(25)      "Organization"means a person other than an individual.

(26)      "Party," asdistinguished from "third party," means a person that has engaged ina transaction or made an agreement subject to this Chapter.

(27)      "Person"means an individual, corporation, business trust, estate, trust, partnership,limited liability company, association, joint venture, government, governmentalsubdivision, agency, or instrumentality, public corporation, or any other legalor commercial entity.

(28)      "Presentvalue" means the amount as of a date certain of one or more sums payablein the future, discounted to the date certain by use of either an interest ratespecified by the parties if that rate is not manifestly unreasonable at thetime the transaction is entered into or, if an interest rate is not sospecified, a commercially reasonable rate that takes into account the facts andcircumstances at the time the transaction is entered into.

(29)      "Purchase"means taking by sale, lease, discount, negotiation, mortgage, pledge, lien,security interest, issue or reissue, gift, or any other voluntary transactioncreating an interest in property.

(30)      "Purchaser"means a person that takes by purchase.

(31)      "Record"means information that is inscribed on a tangible medium or that is stored inan electronic or other medium and is retrievable in perceivable form.

(32)      "Remedy"means any remedial right to which an aggrieved party is entitled with orwithout resort to a tribunal.

(33)      "Representative"means a person empowered to act for another, including an agent, an officer ofa corporation or association, and a trustee, executor, or administrator of anestate.

(34)      "Right"includes remedy.

(35)      "Securityinterest" means an interest in personal property or fixtures which securespayment or performance of an obligation. "Security interest" includesany interest of a consignor and a buyer of accounts, chattel paper, a paymentintangible, or a promissory note in a transaction that is subject to Article 9of this Chapter. "Security interest" does not include the specialproperty interest of a buyer of goods on identification of those goods to acontract for sale under G.S. 25‑2‑401, but a buyer may also acquirea "security interest" by complying with Article 9 of this Chapter.Except as otherwise provided in G.S. 25‑2‑505, the right of aseller or lessor of goods under Article 2 or 2A of this Chapter to retain oracquire possession of the goods is not a "security interest," but aseller or lessor may also acquire a "security interest" by complyingwith Article 9 of this Chapter. The retention or reservation of title by aseller of goods notwithstanding shipment or delivery to the buyer under G.S. 25‑2‑401is limited in effect to a reservation of a "security interest." Whethera transaction in the form of a lease creates a "security interest" isdetermined pursuant to G.S. 25‑1‑203.

(36)      "Send" inconnection with a writing, record, or notice means:

a.         To deposit in themail or deliver for transmission by any other usual means of communication withpostage or cost of transmission provided for and properly addressed and, in thecase of an instrument, to an address specified thereon or otherwise agreed, orif there be none to any address reasonable under the circumstances; or

b.         In any other way tocause to be received any record or notice within the time it would have arrivedif properly sent.

(37)      "Signed"includes using any symbol executed or adopted with present intention to adoptor accept a writing.

(38)      "State"means a State of the United States, the District of Columbia, Puerto Rico, theUnited States Virgin Islands, or any territory or insular possession subject tothe jurisdiction of the United States.

(39)      "Surety"includes a guarantor or other secondary obligor.

(40)      "Term"means a portion of an agreement that relates to a particular matter.

(41)      "Unauthorizedsignature" means a signature made without actual, implied, or apparentauthority. The term includes a forgery.

(42)      "Warehousereceipt" means a document of title issued by a person engaged in thebusiness of storing goods for hire.

(43)      "Writing"includes printing, typewriting, or any other intentional reduction to tangibleform. "Written" has a corresponding meaning. (1899, c. 733, ss. 25, 56,191; Rev., ss. 2173, 2205, 2340, 3032; 1917, c. 37, ss. 4, 5, 58; 1919, c. 65,ss. 1, 10, 32, 42; c. 290; C.S., ss. 280, 283, 292, 314, 2976, 3005, 3037,4037, 4044, 4046; 1941, c. 353, s. 22; G.S., s. 55‑102; 1955, c. 1371, s.2; 1961, c. 574; 1965, c. 700, s. 1; 1967, c. 562, s. 1; 1975, c. 862, ss. 2,3; 1989 (Reg. Sess., 1990), c. 1024, s. 8(a)‑(c); 1993, c. 463, s. 2;1995, c. 232, s. 3; 2000‑169, ss. 5‑7; 2006‑112, ss. 1, 26.)