Section 2-A-103. Definitions and Index of Definitions.

(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 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 but 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 preexisting 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 such a unit of goods as 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 goods or performance under a lease contract"

means goods or performance 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 personal, family, or household purposes.

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

(g) "Finance lease" means a lease with respect to which: (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; and (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 any 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; or (D)

if the lease is not a consumer lease, the lessor, before the

lessee signs the lease contract, informs the lessee in

writing (a) of 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, (b) that

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,

and (c) that 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

(Section 2-A-309), 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 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 preexisting 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 one

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 2-A-310(1).

"Construction mortgage". Section 2-A-309(1)(d).

"Encumbrance". Section 2-A-309(1)(e).

"Fixtures". Section 2-A-309(1)(a).

"Fixture filing". Section 2-A-309(1)(b).

"Purchase money lease". Section 2-A-309(1)(c).

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

"Account". Section 9–102(a)(2).

"Between merchants". Section 2–104(3).

"Buyer". Section 2–103(1)(a).

"Chattel paper". Section 9–102(a)(11).

"Consumer goods". Section 9–102(a)(23).

"Document". Section 9–102(a)(30).

"Entrusting". Section 2–403(3).

"General intangible". Section 9–102(a)(42).

"Good faith". Section 2–103(1)(b).

"Instrument". Section 9–102(a)(47).

"Merchant". Section 2–104(1).

"Mortgage". Section 9–102(a)(55).

"Pursuant to commitment". Section 9–102(a)(69).

"Receipt". Section 2–103(1)(c).

"Sale". Section 2–106(1).

"Sale on approval". Section 2–326.

"Sale or return". Section 2–326.

"Seller". Section 2–103(1)(d).

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