§ 25-9-102. Definitions and index of definitions. - North Carolina Statutes

§ 25‑9‑102. Definitions and index of definitions.

(a)        Article 9definitions. – In this Article:

(1)        "Accession"means goods that are physically united with other goods in such a manner thatthe identity of the original goods is not lost.

(2)        "Account",except as used in "account for", means a right to payment of amonetary obligation, whether or not earned by performance, (i) for propertythat has been or is to be sold, leased, licensed, assigned, or otherwisedisposed of, (ii) for services rendered or to be rendered, (iii) for a policyof insurance issued or to be issued, (iv) for a secondary obligation incurredor to be incurred, (v) for energy provided or to be provided, (vi) for the useor hire of a vessel under a charter or other contract, (vii) arising out of theuse of a credit or charge card or information contained on or for use with thecard, or (viii) as winnings in a lottery or other game of chance operated orsponsored by a state, governmental unit of a state, or person licensed orauthorized to operate the game by a state or governmental unit of a state. Theterm includes health‑care‑insurance receivables. The term does notinclude (i) rights to payment evidenced by chattel paper or an instrument, (ii)commercial tort claims, (iii) deposit accounts, (iv) investment property, (v)letter‑of‑credit rights or letters of credit, or (vi) rights topayment for money or funds advanced or sold, other than rights arising out ofthe use of a credit or charge card or information contained on or for use with thecard.

(3)        "Accountdebtor" means a person obligated on an account, chattel paper, or generalintangible. The term does not include persons obligated to pay a negotiableinstrument, even if the instrument constitutes part of chattel paper.

(4)        "Accounting",except as used in "accounting for", means a record:

a.         Authenticated by asecured party;

b.         Indicating theaggregate unpaid secured obligations as of a date not more than 35 days earlieror 35 days later than the date of the record; and

c.         Identifying thecomponents of the obligations in reasonable detail.

(5)        "Agriculturallien" means an interest, other than a security interest, in farm products:

a.         Which securespayment or performance of an obligation for:

1.         Goods or servicesfurnished in connection with a debtor's farming operation; or

2.         Rent on realproperty leased by a debtor in connection with its farming operation;

b.         Which is created bystatute in favor of a person that:

1.         In the ordinarycourse of its business furnished goods or services to a debtor in connectionwith a debtor's farming operation; or

2.         Leased real propertyto a debtor in connection with the debtor's farming operation; and

c.         Whose effectivenessdoes not depend on the person's possession of the personal property.

(6)        "As‑extractedcollateral" means:

a.         Oil, gas, or otherminerals that are subject to a security interest that:

1.         Is created by adebtor having an interest in the minerals before extraction; and

2.         Attaches to theminerals as extracted; or

b.         Accounts arising outof the sale at the wellhead or minehead of oil, gas, or other minerals in whichthe debtor had an interest before extraction.

(7)        "Authenticate"means:

a.         To sign; or

b.         To execute orotherwise adopt a symbol, or encrypt or similarly process a record in whole orin part, with the present intent of the authenticating person to identify theperson and adopt or accept a record.

(8)        "Bank"means an organization that is engaged in the business of banking. The termincludes savings banks, savings and loan associations, credit unions, and trustcompanies.

(9)        "Cashproceeds" means proceeds that are money, checks, deposit accounts, or thelike.

(10)      "Certificate oftitle" means a certificate of title with respect to which a statuteprovides for the security interest in question to be indicated on thecertificate as a condition or result of the security interest's obtainingpriority over the rights of a lien creditor with respect to the collateral.

(11)      "Chattelpaper" means a record or records that evidence both a monetary obligationand a security interest in specific goods, a security interest in specificgoods and software used in the goods, a security interest in specific goods andlicense of software used in the goods, a lease of specific goods, or a lease ofspecific goods and license of software used in the goods. In this subdivision,"monetary obligation" means a monetary obligation secured by thegoods or owed under a lease of the goods and includes a monetary obligationwith respect to software used in the goods. The term does not include (i)charters or other contracts involving the use or hire of a vessel or (ii)records that evidence a right to payment arising out of the use of a credit orcharge card or information contained on or for use with the card. If atransaction is evidenced by records that include an instrument or series ofinstruments, the group of records taken together constitutes chattel paper.

(12)      "Collateral"means the property subject to a security interest or agricultural lien. Theterm includes:

a.         Proceeds to which asecurity interest attaches;

b.         Accounts, chattelpaper, payment intangibles, and promissory notes that have been sold; and

c.         Goods that are thesubject of a consignment.

(13)      "Commercial tortclaim" means a claim arising in tort with respect to which:

a.         The claimant is anorganization; or

b.         The claimant is anindividual and the claim:

1.         Arose in the courseof the claimant's business or profession; and

2.         Does not includedamages arising out of personal injury to or the death of an individual.

(14)      "Commodityaccount" means an account maintained by a commodity intermediary in whicha commodity contract is carried for a commodity customer.

(15)      "Commoditycontract" means a commodity futures contract, an option on a commodity futurescontract, a commodity option, or another contract if the contract or option is:

a.         Traded on or subjectto the rules of a board of trade that has been designated as a contract marketfor such a contract pursuant to federal commodities laws; or

b.         Traded on a foreigncommodity board of trade, exchange, or market, and is carried on the books of acommodity intermediary for a commodity customer.

(16)      "Commoditycustomer" means a person for which a commodity intermediary carries acommodity contract on its books.

(17)      "Commodityintermediary" means a person that:

a.         Is registered as afutures commission merchant under federal commodities law; or

b.         In the ordinarycourse of its business provides clearance or settlement services for a board oftrade that has been designated as a contract market pursuant to federalcommodities law.

(18)      "Communicate"means:

a.         To send a written orother tangible record;

b.         To transmit a recordby any means agreed upon by the persons sending and receiving the record; or

c.         In the case oftransmission of a record to or by a filing office, to transmit a record by anymeans prescribed by filing‑office rule.

(19)      "Consignee"means a merchant to which goods are delivered in a consignment.

(20)      "Consignment"means a transaction, regardless of its form, in which a person delivers goodsto a merchant for the purpose of sale and:

a.         The merchant:

1.         Deals in goods ofthat kind under a name other than the name of the person making delivery;

2.         Is not anauctioneer; and

3.         Is not generallyknown by its creditors to be substantially engaged in selling the goods ofothers;

b.         With respect to eachdelivery, the aggregate value of the goods is one thousand dollars ($1,000) ormore at the time of delivery;

c.         The goods are notconsumer goods immediately before delivery; and

d.         The transaction doesnot create a security interest that secures an obligation.

(21)      "Consignor"means a person that delivers goods to a consignee in a consignment.

(22)      "Consumerdebtor" means a debtor in a consumer transaction.

(23)      "Consumergoods" means goods that are used or bought for use primarily for personal,family, or household purposes.

(24)      "Consumer‑goodstransaction" means a consumer transaction in which:

a.         An individual incursan obligation primarily for personal, family, or household purposes; and

b.         A security interestin consumer goods secures the obligation.

(25)      "Consumerobligor" means an obligor who is an individual and who incurred theobligation as part of a transaction entered into primarily for personal,family, or household purposes.

(26)      "Consumertransaction" means a transaction in which (i) an individual incurs anobligation primarily for personal, family, or household purposes, (ii) asecurity interest secures the obligation, and (iii) the collateral is held oracquired primarily for personal, family, or household purposes. The termincludes consumer‑goods transactions.

(27)      "Continuationstatement" means an amendment of a financing statement which:

a.         Identifies, by itsfile number, the initial financing statement to which it relates; and

b.         Indicates that it isa continuation statement for, or that it is filed to continue the effectivenessof, the identified financing statement.

(28)      "Debtor"means:

a.         A person having aninterest, other than a security interest or other lien, in the collateral,whether or not the person is an obligor;

b.         A seller ofaccounts, chattel paper, payment intangibles, or promissory notes; or

c.         A consignee.

(29)      "Depositaccount" means a demand, time, savings, passbook, or similar accountmaintained with a bank. The term does not include investment property oraccounts evidenced by an instrument.

(30)      "Document"means a document of title or a receipt of the type described in G.S. 25‑7‑201(b).

(31)      "Electronicchattel paper" means chattel paper evidenced by a record or recordsconsisting of information stored in an electronic medium.

(32)      "Encumbrance"means a right, other than an ownership interest, in real property. The termincludes mortgages and other liens on real property.

(33)      "Equipment"means goods other than inventory, farm products, or consumer goods.

(34)      "Farmproducts" means goods, other than standing timber, with respect to whichthe debtor is engaged in a farming operation and which are:

a.         Crops grown, growing,or to be grown, including:

1.         Crops produced ontrees, vines, and bushes; and

2.         Aquatic goodsproduced in aquacultural operations;

b.         Livestock, born orunborn, including aquatic goods produced in aquacultural operations;

c.         Supplies used orproduced in a farming operation; or

d.         Products of crops orlivestock in their unmanufactured states.

(35)      "Farmingoperation" means raising, cultivating, propagating, fattening, grazing, orany other farming, livestock, or aquacultural operation.

(36)      "File number"means the number assigned to an initial financing statement pursuant to G.S. 25‑9‑519(a).

(37)      "Filingoffice" means an office designated in G.S. 25‑9‑501 as theplace to file a financing statement.

(38)      "Filing‑officerule" means a rule adopted pursuant to G.S. 25‑9‑526.

(39)      "Financingstatement" means a record or records composed of an initial financingstatement and any filed record relating to the initial financing statement.

(40)      "Fixturefiling" means the filing of a financing statement covering goods that areor are to become fixtures and satisfying G.S. 25‑9‑502(a) and (b).The term includes the filing of a financing statement covering goods of atransmitting utility which are or are to become fixtures.

(41)      "Fixtures"means goods that have become so related to particular real property that aninterest in them arises under real property law.

(42)      "Generalintangible" means any personal property, including things in action, otherthan accounts, chattel paper, commercial tort claims, deposit accounts,documents, goods, instruments, investment property, letter‑of‑creditrights, letters of credit, money, and oil, gas, or other minerals beforeextraction. The term includes payment intangibles and software.

(43)      Repealed by SessionLaws 2006‑112, s. 21, effective October 1, 2006.

(44)      "Goods"means all things that are movable when a security interest attaches. The termincludes (i) fixtures, (ii) standing timber that is to be cut and removed undera conveyance or contract for sale, (iii) the unborn young of animals, (iv)crops grown, growing, or to be grown, even if the crops are produced on trees,vines, or bushes, and (v) manufactured homes. The term also includes a computerprogram embedded in goods and any supporting information provided in connectionwith a transaction relating to the program if (i) the program is associatedwith the goods in such a manner that it customarily is considered part of thegoods, or (ii) by becoming the owner of the goods, a person acquires a right touse the program in connection with the goods. The term does not include acomputer program embedded in goods that consist solely of the medium in whichthe program is embedded. The term also does not include accounts, chattelpaper, commercial tort claims, deposit accounts, documents, generalintangibles, instruments, investment property, letter‑of‑creditrights, letters of credit, money, or oil, gas, or other minerals beforeextraction.

(45)      "Governmentalunit" means a subdivision, agency, department, county, parish, municipality,or other unit of the government of the United States, a state, or a foreigncountry. The term includes an organization having a separate corporateexistence if the organization (i) is eligible to issue debt on which interestis exempt from income taxation under the laws of the United States, or (ii) wascreated to facilitate the issuance of notes, bonds, other evidences ofindebtedness or payment obligations for borrowed money by, or in conjunctionwith, installment or lease purchase financings for, this State or any county,municipality, or other agency or political subdivision thereof as evidenced bythe documents creating the organization.

(46)      "Health‑care‑insurancereceivable" means an interest in or claim under a policy of insurancewhich is a right to payment of a monetary obligation for health‑caregoods or services provided.

(47)      "Instrument"means a negotiable instrument or any other writing that evidences a right tothe payment of a monetary obligation, is not itself a security agreement or lease,and is of a type that in ordinary course of business is transferred by deliverywith any necessary indorsement or assignment. The term does not include (i)investment property, (ii) letters of credit, or (iii) writings that evidence aright to payment arising out of the use of a credit or charge card orinformation contained on or for use with the card.

(48)      "Inventory"means goods, other than farm products, which:

a.         Are leased by aperson as lessor;

b.         Are held by a personfor sale or lease or to be furnished under a contract of service;

c.         Are furnished by aperson under a contract of service; or

d.         Consist of rawmaterials, work in process, or materials used or consumed in a business.

(49)      "Investmentproperty" means a security, whether certificated or uncertificated,security entitlement, securities account, commodity contract, or commodityaccount.

(50)      "Jurisdiction oforganization", with respect to a registered organization, means thejurisdiction under whose law the organization is organized.

(51)      "Letter‑of‑creditright" means a right to payment or performance under a letter of credit,whether or not the beneficiary has demanded or is at the time entitled todemand payment or performance. The term does not include the right of abeneficiary to demand payment or performance under a letter of credit.

(52)      "Liencreditor" means:

a.         A creditor that hasacquired a lien on the property involved by attachment, levy, or the like;

b.         An assignee forbenefit of creditors from the time of assignment;

c.         A trustee inbankruptcy from the date of the filing of the petition; or

d.         A receiver in equityfrom the time of appointment.

(53)      "Manufacturedhome" means a structure, transportable in one or more sections, which, inthe traveling mode, is eight body feet or more in width or 40 body feet or morein length, or, when erected on site, is 320 or more square feet, and which isbuilt on a permanent chassis and designed to be used as a dwelling with orwithout a permanent foundation when connected to the required utilities, andincludes the plumbing, heating, air‑conditioning, and electrical systemscontained therein. The term includes any structure that meets all of therequirements of this subdivision except the size requirements and with respectto which the manufacturer voluntarily files a certification required by theUnited States Secretary of Housing and Urban Development and complies with thestandards established under Title 42 of the United States Code.

(54)      "Manufactured‑hometransaction" means a secured transaction:

a.         That creates apurchase‑money security interest in a manufactured home, other than amanufactured home held as inventory; or

b.         In which amanufactured home, other than a manufactured home held as inventory, is theprimary collateral.

(55)      "Mortgage"means a consensual interest in real property, including fixtures, which securespayment or performance of an obligation.

(56)      "Newdebtor" means a person that becomes bound as debtor under G.S. 25‑9‑203(d)by a security agreement previously entered into by another person.

(57)      "New value"means (i) money, (ii) money's worth in property, services, or new credit, or(iii) release by a transferee of an interest in property previously transferredto the transferee. The term does not include an obligation substituted foranother obligation.

(58)      "Noncashproceeds" means proceeds other than cash proceeds.

(59)      "Obligor"means a person that, with respect to an obligation secured by a securityinterest in or an agricultural lien on the collateral, (i) owes payment orother performance of the obligation, (ii) has provided property other than thecollateral to secure payment or other performance of the obligation, or (iii)is otherwise accountable in whole or in part for payment or other performanceof the obligation. The term does not include issuers or nominated persons undera letter of credit.

(60)      "Originaldebtor", except as used in G.S. 25‑9‑310(c), means a personthat, as debtor, entered into a security agreement to which a new debtor hasbecome bound under G.S. 25‑9‑203(d).

(61)      "Paymentintangible" means a general intangible under which the account debtor'sprincipal obligation is a monetary obligation.

(62)      "Person relatedto", with respect to an individual, means:

a.         The spouse of theindividual;

b.         A brother, brother‑in‑law,sister, or sister‑in‑law of the individual;

c.         An ancestor orlineal descendant of the individual or the individual's spouse; or

d.         Any other relative,by blood or marriage, of the individual or the individual's spouse who sharesthe same home with the individual.

(63)      "Person relatedto", with respect to an organization, means:

a.         A person directly orindirectly controlling, controlled by, or under common control with theorganization;

b.         An officer ordirector of, or a person performing similar functions with respect to, theorganization;

c.         An officer ordirector of, or a person performing similar functions with respect to, a persondescribed in sub‑subdivision a. of this subdivision;

d.         The spouse of anindividual described in sub‑subdivision a., b., or c. of thissubdivision; or

e.         An individual who isrelated by blood or marriage to an individual described in sub‑subdivisiona., b., c., or d. of this subdivision and shares the same home with theindividual.

(64)      "Proceeds",except as used in G.S. 25‑9‑609(b), means the following property:

a.         Whatever is acquiredupon the sale, lease, license, exchange, or other disposition of collateral;

b.         Whatever iscollected on, or distributed on account of, collateral;

c.         Rights arising outof collateral;

d.         To the extent of thevalue of collateral, claims arising out of the loss, nonconformity, orinterference with the use of, defects or infringement of rights in, or damageto, the collateral; or

e.         To the extent of thevalue of collateral and to the extent payable to the debtor or the securedparty, insurance payable by reason of the loss or nonconformity of, defects orinfringement of rights in, or damage to, the collateral.

(65)      "Production‑moneycrops" means crops that secure a production‑money obligationincurred with respect to the production of those crops.

(66)      "Production‑moneyobligation" means an obligation of an obligor incurred for new value givento enable the debtor to produce crops if the value is in fact used for theproduction of the crops.

(67)      "Production ofcrops" includes tilling and otherwise preparing land for growing,planting, cultivating, fertilizing, irrigating, harvesting, gathering, andcuring crops, and protecting them from damage or disease.

(68)      "Promissory note"means an instrument that evidences a promise to pay a monetary obligation, doesnot evidence an order to pay, and does not contain an acknowledgment by a bankthat the bank has received for deposit a sum of money or funds.

(69)      "Proposal"means a record authenticated by a secured party which includes the terms onwhich the secured party is willing to accept collateral in full or partialsatisfaction of the obligation it secures pursuant to G.S. 25‑9‑620,25‑9‑621, and 25‑9‑622.

(70)      "Public‑financetransaction" means a secured transaction in connection with which:

a.         Debt securities areissued;

b.         All or a portion ofthe securities issued have an initial stated maturity of at least 20 years; and

c.         The debtor, obligor,secured party, account debtor or other person obligated on collateral, assignoror assignee of a secured obligation, or assignor or assignee of a securityinterest is a state or a governmental unit of a state.

(71)      "Pursuant tocommitment", with respect to an advance made or other value given by asecured party, means pursuant to the secured party's obligation, whether or nota subsequent event of default or other event not within the secured party'scontrol has relieved or may relieve the secured party from its obligation.

(72)      "Record", exceptas used in "for record", "of record", "record or legaltitle", and "record owner", means information that is inscribedon a tangible medium or that is stored in an electronic or other medium and isretrievable in perceivable form.

(73)      "Registered organization"means an organization organized solely under the law of a single state or theUnited States and as to which the state or the United States must maintain apublic record showing the organization to have been organized.

(74)      "Secondaryobligor" means an obligor to the extent that:

a.         The obligor'sobligation is secondary; or

b.         The obligor has aright of recourse with respect to an obligation secured by collateral againstthe debtor, another obligor, or property of either.

(75)      "Securedparty" means:

a.         A person in whosefavor a security interest is created or provided for under a securityagreement, whether or not any obligation to be secured is outstanding;

b.         A person that holdsan agricultural lien;

c.         A consignor;

d.         A person to whichaccounts, chattel paper, payment intangibles, or promissory notes have beensold;

e.         A trustee, indenturetrustee, agent, collateral agent, or other representative in whose favor asecurity interest or agricultural lien is created or provided for; or

f.          A person that holdsa security interest arising under G.S. 25‑2‑401, 25‑2‑505,25‑2‑711(3), 25‑2A‑508(5), 25‑4‑208, or 25‑5‑118.

(76)      "Securityagreement" means an agreement that creates or provides for a securityinterest.

(77)      "Send", inconnection with a record or notification, means:

a.         To deposit in themail, deliver for transmission, or transmit by any other usual means ofcommunication, with postage or cost of transmission provided for, addressed toany address reasonable under the circumstances; or

b.         To cause the recordor notification to be received within the time that it would have been receivedif properly sent under sub‑subdivision a. of this subdivision.

(78)      "Software"means a computer program and any supporting information provided in connectionwith a transaction relating to the program. The term does not include acomputer program that is included in the definition of goods.

(79)      "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.

(80)      "Supportingobligation" means a letter‑of‑credit right or secondaryobligation that supports the payment or performance of an account, chattelpaper, a document, a general intangible, an instrument, or investment property.

(81)      "Tangiblechattel paper" means chattel paper evidenced by a record or recordsconsisting of information that is inscribed on a tangible medium.

(82)      "Terminationstatement" means an amendment of a financing statement which:

a.         Identifies, by itsfile number, the initial financing statement to which it relates; and

b.         Indicates eitherthat it is a termination statement or that the identified financing statementis no longer effective.

(83)      "Transmittingutility" means a person primarily engaged in the business of:

a.         Operating arailroad, subway, street railway, or trolley bus;

b.         Transmittingcommunications electrically, electromagnetically, or by light;

c.         Transmitting goodsby pipeline or sewer; or

d.         Transmitting orproducing and transmitting electricity, steam, gas, or water.

(b)        Definitions inother articles. – "Control" as provided in G.S. 25‑7‑106and the following definitions in other Articles of this Chapter apply to thisArticle:

"Applicant"                                                                                     G.S.25‑5‑102.

"Beneficiary"                                                                                  G.S.25‑5‑102.

"Broker"                                                                                        G.S.25‑8‑102.

"Certificatedsecurity"                                                                     G.S.25‑8‑102.

"Check"                                                                                         G.S.25‑3‑104.

"Clearingcorporation"                                                                    G.S.25‑8‑102.

"Contractfor sale"                                                                          G.S.25‑2‑106.

"Customer"                                                                                    G.S.25‑4‑104.

"Entitlementholder"                                                                        G.S.25‑8‑102.

"Financialasset"                                                                             G.S.25‑8‑102.

"Holderin due course"                                                                    G.S.25‑3‑302.

"Issuer"(with respect to a letter of credit

or letter‑of‑credit right)                                                              G.S.25‑5‑102.

"Issuer"(with respect to a security)                                                 G.S.25‑8‑201.

"Issuer"(with respect to documents of title)                                     G.S.25‑7‑102.

"Lease"                                                                                          G.S.25‑2A‑103.

"Leaseagreement"                                                                          G.S.25‑2A‑103.

"Leasecontract"                                                                             G.S.25‑2A‑103.

"Leaseholdinterest"                                                                        G.S.25‑2A‑103.

"Lessee"                                                                                         G.S.25‑2A‑103.

"Lesseein ordinary course of business"                                           G.S.25‑2A‑103.

"Lessor"                                                                                         G.S.25‑2A‑103.

"Lessor'sresidual interest"                                                              G.S.25‑2A‑103.

"Letterof credit"                                                                             G.S.25‑5‑102.

"Merchant"                                                                                     G.S.25‑2‑104.

"Negotiableinstrument"                                                                  G.S.25‑3‑104.

"Nominatedperson"                                                                       G.S.25‑5‑102.

"Note"                                                                                           G.S.25‑3‑104.

"Proceedsof a letter of credit"                                                        G.S.25‑5‑114.

"Prove"                                                                                          G.S.25‑3‑103.

"Sale"                                                                                             G.S.25‑2‑106.

"Securitiesaccount"                                                                        G.S.25‑8‑501.

"Securitiesintermediary"                                                                 G.S.25‑8‑102.

"Security"                                                                                       G.S.25‑8‑102.

"Securitycertificate"                                                                       G.S.25‑8‑102.

"Securityentitlement"                                                                      G.S.25‑8‑102.

"Uncertificatedsecurity"                                                                  G.S.25‑8‑102.

(c)        Article 1definitions and principles. – Article 1 of this Chapter contains generaldefinitions and principles of construction and interpretation applicablethroughout this Article. (1965, c. 700, s. 1; 1967, c. 562, s. 1; 1975, c. 862,s. 7; 1989 (Reg. Sess., 1990), c. 1024, s. 8(g); 1997‑181, s. 3; 1997‑456,s. 4; 1999‑73, s. 6; 2000‑169, s. 1; 2001‑218, s. 1; 2006‑112,ss. 21, 44.)