KRS 355.1-201: General definitions.

(1) Unless the context otherwise requires, words or phrases defined in this section, or in

the additional definitions contained in other articles of this chapter that apply to

particular articles or parts thereof, have the meanings stated.

(2) Subject to defin itions contained in other articles of this chapter that apply to

particular articles or parts thereof:

(a) "Action," in the sense of a judicial proceeding, includes recoupment,

counterclaim, set-off, suit in equity, and any other proceeding in which rights

are determined;

(b) "Aggrieved party" means a party entitled to pursue a remedy;

(c) "Agreement," as distinguished from "contract," means the bargain of the

parties in fact, as found in their language or inferred from other

circumstances, including course of performance, course of dealing, or usage

of trade as provided in KRS 355.1-303;

(d) "Bank" means a person engaged in the business of banking and includes a

savings bank, savings and loan association, credit union, and trust company;

(e) "Bearer" means a person in control of a negotiable electronic document of

title or a person in possession of a negotiable instrument, a negotiable tangible

document of title, or certificated security that is payable to bearer or indorsed

in blank;

(f) 1. "Bill of lading" means a document of title evidencing the receipt of

goods for shipment issued by a person engaged in the business of

directly or indirectly transporting or forwarding goods.

2. The term does not include a warehouse receipt;

(g) "Branch" includes a separately incorporated foreign branch of a bank;

(h) "Burden of establishing" a fact means the burden of persuading the trier of

fact that the existence of the fact is more probable than its nonexistence;

(i) 1. "Buyer in ordinary course of business" means a person that buys goods

in good faith, without knowledge that the sale violates the rights of

another person in the goods, and in the ordinary course from a person,

other than a pawnbroker, in the business of selling goods of that kind.

2. A person buys goods in the ordinary course if the sale to the person

comports with the usual or customary practices in the kind of business in

which the seller is engaged or with the seller's own us ual or customary

practices.

3. A person that sells oil, gas, or other minerals at the wellhead or

minehead is a person in the business of selling goods of that kind.

4. A buyer in ordinary course of business may buy for cash, by exchange

of other property, or on secured or unsecured credit, and may acquire

goods or documents of title under a preexisting contract for sale.

5. Only a buyer that takes possession of the goods or has a right to recover

the goods from the seller under Article 2 of this chapter ma y be a buyer

in ordinary course of business.

6. "Buyer in ordinary course of business" does not include a person that

acquires goods in a transfer in bulk or as security for or in total or partial

satisfaction of a money debt;

(j) 1. "Conspicuous," with reference to a term, means so written, displayed, or

presented that, based on the totality of the circumstances, a reasonable

person against which it is to operate ought to have noticed it.

2. Whether a term is "conspicuous" or not is a decision for the court;

(k) "Consumer" means an individual who enters into a transaction primarily for

personal, family, or household purposes;

(l) "Contract," as distinguished from "agreement," means the total legal

obligation that results from the parties' agreement as deter mined by this

chapter as supplemented by any other applicable laws;

(m) "Creditor" includes a general creditor, a secured creditor, a lien creditor, and

any representative of creditors, including an assignee for the benefit of

creditors, a trustee in bankr uptcy, a receiver in equity, and an executor or

administrator of an insolvent debtor's or assignor's estate;

(n) "Defendant" includes a person in the position of defendant in a counterclaim,

cross-claim, or third-party claim;

(o) "Delivery":

1. With respect to an electronic document of title, means voluntary transfer

of control; and

2. With respect to an instrument, a tangible document of title, or an

authoritative tangible copy of a record evidencing chattel paper, means

voluntary transfer of possession;

(p) 1. "Document of title" means a record that:

a. In the regular course of business or financing is treated as

adequately evidencing that the person in possession or control of

the record is entitled to receive, control, hold, and dispose of the

record and the goods the record covers; and

b. Purports to be issued by or addressed to a bailee and to cover

goods in the bailee's possession which are either identified or are

fungible portions of an identified mass.

2. The term includes a bill of lading, transpor t document, dock warrant,

dock receipt, warehouse receipt, and order for delivery of goods.

3. An electronic document of title is evidenced by a record consisting of

information stored in an electronic medium.

4. A tangible document of title is evidenced b y a record consisting of

information that is inscribed on a tangible medium;

(q) "Electronic" means relating to technology having electrical, digital, magnetic,

wireless, optical, electromagnetic, or similar capabilities;

(r) "Fault" means a default, breach, or wrongful act or omission;

(s) "Fungible goods" means:

1. Goods of which any unit, by nature or usage of trade, is the equivalent

of any other like unit; or

2. Goods that by agreement are treated as equivalent;

(t) "Genuine" means free of forgery or counterfeiting;

(u) "Good faith," except as otherwise provided i n Article 5 of this chapter, means

honesty in fact and the observance of reasonable commercial standards of fair

dealing;

(v) "Holder" means:

1. The person in possession of a negotiable instrument that is payable

either to bearer or to an identified person that is the person in

possession;

2. The person in possession of a negotiable tangible document of title if the

goods are deliverable either to bearer or to the order of the person in

possession; or

3. The person in control, other than pursuant to KRS 355 .7-106(7), of a

negotiable electronic document of title;

(w) "Insolvency proceeding" includes an assignment for the benefit of creditors or

other proceeding intended to liquidate or rehabilitate the estate of the person

involved;

(x) "Insolvent" means:

1. Having generally ceased to pay debts in the ordinary course of business

other than as a result of bona fide dispute;

2. Being unable to pay debts as they become due; or

3. Being insolvent within the meaning of federal bankruptcy law;

(y) 1. "Money" means a medium of exchange that is currently authorized or

adopted by a domestic or foreign government.

2. The term includes a monetary unit of account established by an

intergovernmental organization or by agreement between two (2) or

more countries.

3. The term does not include an electronic record that is a medium of

exchange recorded and transferable in a system that existed and operated

for the medium of exchange before the medium of exchange was

authorized or adopted by the government;

(z) "Organization" means a person other than an individual;

(aa) "Party," as distinguished from "third party," means a person that has engaged

in a transaction or made an agreement subject to this chapter;

(ab) 1. "Person" means an individual, corporation, business trust, estat e, trust,

partnership, limited liability company, association, joint venture,

government, governmental subdivision, agency, or instrumentality, or

any other legal or commercial entity.

2. The term includes a protected series, however denominated, of an ent ity

if the protected series is established under law other than this chapter

that limits, or limits if conditions specified under the law are satisfied,

the ability of a creditor of the entity or of any other protected series of

the entity to satisfy a claim from assets of the protected series;

(ac) "Present value" means the amount as of a date certain of one (1) or more sums

payable in the future, discounted to the date certain by use of either an interest

rate specified by the parties if that rate is not manifestly unreasonable at the

time the transaction is entered into or, if an interest rate is not so specified, a

commercially reasonable rate that takes into account the facts and

circumstances at the time the transaction is entered into;

(ad) "Purchase" means taking by sale, lease, discount, negotiation, mortgage,

pledge, lien, security interest, issue or reissue, gift, or any other voluntary

transaction creating an interest in property;

(ae) "Purchaser" means a person that takes by purchase;

(af) "Record" means information that is inscribed on a tangible medium or that is

stored in an electronic or other medium and is retrievable in perceivable form;

(ag) "Remedy" means any remedial right to which an aggrieved party is entitled

with or without resort to a tribunal;

(ah) "Representative" means a person empowered to act for another, including an

agent, an officer of a corporation or association, and a trustee, executor, or

administrator of an estate;

(ai) "Right" includes remedy;

(aj) 1. "Security interest" means an interes t in personal property or fixtures

which secures payment or performance of an obligation.

2. The term includes any interest of a consignor and a buyer of accounts,

chattel paper, a payment intangible, or a promissory note in a transaction

that is subject to Article 9 of this chapter.

3. The term does not include the special property interest of a buyer of

goods on identification of those goods to a contract for sale under KRS

355.2-401, but a buyer may also acquire a "security interest" by

complying with Article 9 of this chapter.

4. Except as otherwise provided in KRS 355.2 -505, the right of a seller or

lessor of goods under Article 2 or 2A of this chapter to retain or acquire

possession of the goods is not a "security interest," but a seller or lessor

may also acquire a "security interest" by complying with Article 9 of

this chapter.

5. The retention or reservation of title by a seller of goods notwithstanding

shipment or delivery to the buyer under KRS 355.2 -401 is limited in

effect to a reservation of a "security interest."

6. Whether a transaction in the form of a lease creates a "security interest"

is determined pursuant to KRS 355.1-203;

(ak) "Send," in connection with a record or notification, means:

1. To deposit in the mail, deliver for transmission, or transmit by any other

usual means of communication, with postage or cost of transmission

provided for, addressed to any address reasonable under the

circumstances; or

2. To cause the record or notification to be received within the time it

would have been received if properly sent under subparagraph 1. of this

paragraph;

(al) 1. "Sign" means, with present intent to authenticate or adopt a record:

a. Execute or adopt a tangible symbol; or

b. Attach to or logically associate with the record an electronic

symbol, sound, or process.

2. "Signed," "signing," and "signature" have corresponding meanings;

(am) "State" means a State of the United States, the District of Columbia, Puerto

Rico, the United States Virgin Islands, or any territory or insular possession

subject to the jurisdiction of the United States;

(an) "Surety" includes a guarantor or other secondary obligor;

(ao) "Term" means a portion of an agreement that relates to a particular matter;

(ap) 1. "Unauthorized signature" means a signature made witho ut actual,

implied, or apparent authority.

2. The term includes a forgery;

(aq) "Warehouse receipt" means a document of title issued by a person engaged in

the business of storing goods for hire; and

(ar) 1. "Writing" includes printing, typewriting, or any other intentional

reduction to tangible form.

2. "Written" has a corresponding meaning.