Terms Used In Michigan Laws 440.2803

  • Commercial unit: means a unit of goods that by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. See Michigan Laws 440.2803
  • Consumer lease: means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed $25,000. See Michigan Laws 440.2803
  • Contract: A legal written agreement that becomes binding when signed.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Delivery: means either of the following:
  (i) With respect to an electronic document of title, a voluntary transfer of control. See Michigan Laws 440.1201
  • Finance lease: means a lease with respect to which all of the following apply:
    •   (i) The lessor does not select, manufacture, or supply the goods. See Michigan Laws 440.2803
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Good faith: except as otherwise provided in article 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Michigan Laws 440.1201
  • Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures under section 2A309, but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. See Michigan Laws 440.2803
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Michigan Laws 440.2803
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lease agreement: means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this article. See Michigan Laws 440.2803
  • Lease contract: means the total legal obligation that results from the lease agreement as affected by this article and any other applicable rules of law. See Michigan Laws 440.2803
  • Leasehold interest: means the interest of the lessor or the lessee under a lease contract. See Michigan Laws 440.2803
  • Lessee: means a person who acquires the right to possession and use of goods under a lease. See Michigan Laws 440.2803
  • Lessor: means a person who transfers the right to possession and use of goods under a lease. See Michigan Laws 440.2803
  • Money: means a medium of exchange authorized or adopted by a domestic or foreign government. See Michigan Laws 440.1201
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity. See Michigan Laws 440.1201
  • Right: includes remedy. See Michigan Laws 440.1201
  • Security interest: means an interest in personal property or fixtures which secures payment or performance of an obligation. See Michigan Laws 440.1201
  • Sublease: means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease. See Michigan Laws 440.2803
  • Term: means a portion of an agreement that relates to a particular matter. See Michigan Laws 440.1201
  • third party: means a person that has engaged in a transaction or made an agreement subject to this act. See Michigan Laws 440.1201
  • writing: includes printing, typewriting, or any other intentional reduction to tangible form. See Michigan Laws 440.1201
    •   (1) In this article unless the context otherwise requires:
      (a) “Buyer in ordinary course of business” means a person who in good faith and without knowledge that the sale to him or her is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind. The term does not include a pawnbroker. “Buying” may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a pre-existing contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.
      (b) “Cancellation” occurs when either party puts an end to the lease contract for default by the other party.
      (c) “Commercial unit” means a unit of goods that by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, as a machine, or a set of articles, as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit treated in use or in the relevant market as a single whole.
      (d) “Conforming” means goods or performance under a lease contract that are in accordance with the obligations under the lease contract.
      (e) “Consumer lease” means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed $25,000.00.
      (f) “Fault” means wrongful act, omission, breach, or default.
      (g) “Finance lease” means a lease with respect to which all of the following apply:
      (i) The lessor does not select, manufacture, or supply the goods.
      (ii) The lessor acquires the goods or the right to possession and use of the goods in connection with the lease.
      (iii) One of the following occurs:
      (A) The lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract.
      (B) The lessee’s approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract.
      (C) The lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods.
      (D) If the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing of the following:
      (I) The identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person.
      (II) The lessee is entitled under this article to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods.
      (III) The lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies.
      (h) “Goods” means all things that are movable at the time of identification to the lease contract, or are fixtures under section 2A309, but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. The term also includes the unborn young of animals.
      (i) “Installment lease contract” means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause “each delivery is a separate lease” or its equivalent.
      (j) “Lease” means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease.
      (k) “Lease agreement” means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this article. Unless the context clearly indicates otherwise, the term includes a sublease agreement.
      (l) “Lease contract” means the total legal obligation that results from the lease agreement as affected by this article and any other applicable rules of law. Unless the context clearly indicates otherwise, the term includes a sublease contract.
      (m) “Leasehold interest” means the interest of the lessor or the lessee under a lease contract.
      (n) “Lessee” means a person who acquires the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.
      (o) “Lessee in ordinary course of business” means a person who in good faith and without knowledge that the lease to him or her is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods leases in ordinary course from a person in the business of selling or leasing goods of that kind but does not include a pawnbroker. “Leasing” may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a pre-existing lease contract but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.
      (p) “Lessor” means a person who transfers the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.
      (q) “Lessor’s residual interest” means the lessor’s interest in the goods after expiration, termination, or cancellation of the lease contract.
      (r) “Lien” means a charge against or interest in goods to secure payment of a debt or performance of an obligation, but the term does not include a security interest.
      (s) “Lot” means a parcel or a single article that is the subject matter of a separate lease or delivery, whether or not it is sufficient to perform the lease contract.
      (t) “Merchant lessee” means a lessee that is a merchant with respect to goods of the kind subject to the lease.
      (u) “Present value” means the amount as of a date certain of 1 or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into.
      (v) “Purchase” includes taking by sale, lease, mortgage, security interest, pledge, gift, or any other voluntary transaction creating an interest in goods.
      (w) “Sublease” means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease.
      (x) “Supplier” means a person from whom a lessor buys or leases goods to be leased under a finance lease.
      (y) “Supply contract” means a contract under which a lessor buys or leases goods to be leased.
      (z) “Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the lease contract otherwise than for default.
      (2) Other definitions applying to this article and the sections in which they appear are:

    “Accessions”. Section 2A310.
    “Construction mortgage”. Section 2A309.
    “Encumbrance”. Section 2A309.
    “Fixtures”. Section 2A309.
    “Fixture filing”. Section 2A309.
    “Purchase money lease”. Section 2A309.

    (3) The following definitions in other articles apply to this article:

    “Account”. Section 9102.
    “Between merchants”. Section 2104.
    “Buyer”. Section 2103.
    “Chattel paper”. Section 9102.
    “Consumer goods”. Section 9102.
    “Document”. Section 9102.
    “Entrusting”. Section 2403.
    “General intangible”. Section 9102.
    “Good faith”. Section 2103.
    “Instrument”. Section 9102.
    “Merchant”. Section 2104.
    “Mortgage”. Section 9102.
    “Pursuant to commitment”. Section 9102.
    “Receipt”. Section 2103.
    “Sale”. Section 2106.
    “Sale on approval”. Section 2326.
    “Sale or return”. Section 2326.
    “Seller”. Section 2103.

    (4) In addition, article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.

      

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