{"data":{"id":"us-ky/krs-355.1-201","jurisdiction":"us-ky","citation":"KRS 355.1-201","heading":"General definitions.","body":"(1) Unless the context otherwise requires, words or phrases defined in this section, or in\nthe additional definitions contained in other articles of this chapter that apply to\nparticular articles or parts thereof, have the meanings stated.\n(2) Subject to defin itions contained in other articles of this chapter that apply to\nparticular articles or parts thereof:\n(a) \"Action,\" in the sense of a judicial proceeding, includes recoupment,\ncounterclaim, set-off, suit in equity, and any other proceeding in which rights\nare determined;\n(b) \"Aggrieved party\" means a party entitled to pursue a remedy;\n(c) \"Agreement,\" as distinguished from \"contract,\" means the bargain of the\nparties in fact, as found in their language or inferred from other\ncircumstances, including course  of performance, course of dealing, or usage\nof trade as provided in KRS 355.1-303;\n(d) \"Bank\" means a person engaged in the business of banking and includes a\nsavings bank, savings and loan association, credit union, and trust company;\n(e) \"Bearer\" means a person in control of a negotiable electronic document of\ntitle or a person in possession of a negotiable instrument, a negotiable tangible\ndocument of title, or certificated security that is payable to bearer or indorsed\nin blank;\n(f) 1. \"Bill of lading\"  means a document of title evidencing the receipt of\ngoods for shipment issued by a person engaged in the business of\ndirectly or indirectly transporting or forwarding goods.\n2. The term does not include a warehouse receipt;\n(g) \"Branch\" includes a separately incorporated foreign branch of a bank;\n(h) \"Burden of establishing\" a fact means the burden of persuading the trier of\nfact that the existence of the fact is more probable than its nonexistence;\n(i) 1. \"Buyer in ordinary course of business\" means a person that buys goods\nin good faith, without knowledge that the sale violates the rights of\nanother person in the goods, and in the ordinary course from a person,\nother than a pawnbroker, in the business of selling goods of that kind.\n2. A person buys goods in the ordinary course if the sale to the person\ncomports with the usual or customary practices in the kind of business in\nwhich the seller is engaged or with the seller's own us ual or customary\npractices.\n3. A person that sells oil, gas, or other minerals at the wellhead or\nminehead is a person in the business of selling goods of that kind.\n4. A buyer in ordinary course of business may buy for cash, by exchange\nof other property,  or on secured or unsecured credit, and may acquire\ngoods or documents of title under a preexisting contract for sale.\n5. Only a buyer that takes possession of the goods or has a right to recover\nthe goods from the seller under Article 2 of this chapter ma y be a buyer\nin ordinary course of business.\n6. \"Buyer in ordinary course of business\" does not include a person that\nacquires goods in a transfer in bulk or as security for or in total or partial\nsatisfaction of a money debt;\n(j) 1. \"Conspicuous,\" with reference to a term, means so written, displayed, or\npresented that, based on the totality of the circumstances, a reasonable\nperson against which it is to operate ought to have noticed it.\n2. Whether a term is \"conspicuous\" or not is a decision for the court;\n(k) \"Consumer\" means an individual who enters into a transaction primarily for\npersonal, family, or household purposes;\n(l) \"Contract,\" as distinguished from \"agreement,\" means the total legal\nobligation that results from the parties' agreement as deter mined by this\nchapter as supplemented by any other applicable laws;\n(m) \"Creditor\" includes a general creditor, a secured creditor, a lien creditor, and\nany representative of creditors, including an assignee for the benefit of\ncreditors, a trustee in bankr uptcy, a receiver in equity, and an executor or\nadministrator of an insolvent debtor's or assignor's estate;\n(n) \"Defendant\" includes a person in the position of defendant in a counterclaim,\ncross-claim, or third-party claim;\n(o) \"Delivery\":\n1. With respect to an electronic document of title, means voluntary transfer\nof control; and\n2. With respect to an instrument, a tangible document of title, or an\nauthoritative tangible copy of a record evidencing chattel paper, means\nvoluntary transfer of possession;\n(p) 1. \"Document of title\" means a record that:\na. In the regular course of business or financing is treated as\nadequately evidencing that the person in possession or control of\nthe record is entitled to receive, control, hold, and dispose of the\nrecord and the goods the record covers; and\nb. Purports to be issued by or addressed to a bailee and to cover\ngoods in the bailee's possession which are either identified or are\nfungible portions of an identified mass.\n2. The term includes a bill of lading, transpor t document, dock warrant,\ndock receipt, warehouse receipt, and order for delivery of goods.\n3. An electronic document of title is evidenced by a record consisting of\ninformation stored in an electronic medium.\n4. A tangible document of title is evidenced b y a record consisting of\ninformation that is inscribed on a tangible medium;\n(q) \"Electronic\" means relating to technology having electrical, digital, magnetic,\nwireless, optical, electromagnetic, or similar capabilities;\n(r) \"Fault\" means a default, breach, or wrongful act or omission;\n(s) \"Fungible goods\" means:\n1. Goods of which any unit, by nature or usage of trade, is the equivalent\nof any other like unit; or\n2. Goods that by agreement are treated as equivalent;\n(t) \"Genuine\" means free of forgery or counterfeiting;\n(u) \"Good faith,\" except as otherwise provided i n Article 5 of this chapter, means\nhonesty in fact and the observance of reasonable commercial standards of fair\ndealing;\n(v) \"Holder\" means:\n1. The person in possession of a negotiable instrument that is payable\neither to bearer or to an identified person  that is the person in\npossession;\n2. The person in possession of a negotiable tangible document of title if the\ngoods are deliverable either to bearer or to the order of the person in\npossession; or\n3. The person in control, other than pursuant to KRS 355 .7-106(7), of a\nnegotiable electronic document of title;\n(w) \"Insolvency proceeding\" includes an assignment for the benefit of creditors or\nother proceeding intended to liquidate or rehabilitate the estate of the person\ninvolved;\n(x) \"Insolvent\" means:\n1. Having generally ceased to pay debts in the ordinary course of business\nother than as a result of bona fide dispute;\n2. Being unable to pay debts as they become due; or\n3. Being insolvent within the meaning of federal bankruptcy law;\n(y) 1. \"Money\" means a  medium of exchange that is currently authorized or\nadopted by a domestic or foreign government.\n2. The term includes a monetary unit of account established by an\nintergovernmental organization or by agreement between two (2) or\nmore countries.\n3. The term  does not include an electronic record that is a medium of\nexchange recorded and transferable in a system that existed and operated\nfor the medium of exchange before the medium of exchange was\nauthorized or adopted by the government;\n(z) \"Organization\" means a person other than an individual;\n(aa) \"Party,\" as distinguished from \"third party,\" means a person that has engaged\nin a transaction or made an agreement subject to this chapter;\n(ab) 1. \"Person\" means an individual, corporation, business trust, estat e, trust,\npartnership, limited liability company, association, joint venture,\ngovernment, governmental subdivision, agency, or instrumentality, or\nany other legal or commercial entity.\n2. The term includes a protected series, however denominated, of an ent ity\nif the protected series is established under law other than this chapter\nthat limits, or limits if conditions specified under the law are satisfied,\nthe ability of a creditor of the entity or of any other protected series of\nthe entity to satisfy a claim from assets of the protected series;\n(ac) \"Present value\" means the amount as of a date certain of one (1) or more sums\npayable in the future, discounted to the date certain by use of either an interest\nrate specified by the parties if that rate is not manifestly unreasonable at the\ntime the transaction is entered into or, if an interest rate is not so specified, a\ncommercially reasonable rate that takes into account the facts and\ncircumstances at the time the transaction is entered into;\n(ad) \"Purchase\" means taking by sale, lease, discount, negotiation, mortgage,\npledge, lien, security interest, issue or reissue, gift, or any other voluntary\ntransaction creating an interest in property;\n(ae) \"Purchaser\" means a person that takes by purchase;\n(af) \"Record\" means information that is inscribed on a tangible medium or that is\nstored in an electronic or other medium and is retrievable in perceivable form;\n(ag) \"Remedy\" means any remedial right to which an aggrieved party is entitled\nwith or without resort to a tribunal;\n(ah) \"Representative\" means a person empowered to act for another, including an\nagent, an officer of a corporation or association, and a trustee, executor, or\nadministrator of an estate;\n(ai) \"Right\" includes remedy;\n(aj) 1. \"Security interest\" means an interes t in personal property or fixtures\nwhich secures payment or performance of an obligation.\n2. The term includes any interest of a consignor and a buyer of accounts,\nchattel paper, a payment intangible, or a promissory note in a transaction\nthat is subject to Article 9 of this chapter.\n3. The term does not include the special property interest of a buyer of\ngoods on identification of those goods to a contract for sale under KRS\n355.2-401, but a buyer may also acquire a \"security interest\" by\ncomplying with Article 9 of this chapter.\n4. Except as otherwise provided in KRS 355.2 -505, the right of a seller or\nlessor of goods under Article 2 or 2A of this chapter to retain or acquire\npossession of the goods is not a \"security interest,\" but a seller or lessor\nmay also acquire a \"security interest\" by complying with Article 9 of\nthis chapter.\n5. The retention or reservation of title by a seller of goods notwithstanding\nshipment or delivery to the buyer under KRS 355.2 -401 is limited in\neffect to a reservation of a \"security interest.\"\n6. Whether a transaction in the form of a lease creates a \"security interest\"\nis determined pursuant to KRS 355.1-203;\n(ak) \"Send,\" in connection with a record or notification, means:\n1. To deposit in the mail, deliver for transmission,  or transmit by any other\nusual means of communication, with postage or cost of transmission\nprovided for, addressed to any address reasonable under the\ncircumstances; or\n2. To cause the record or notification to be received within the time it\nwould have been received if properly sent under subparagraph 1. of this\nparagraph;\n(al) 1. \"Sign\" means, with present intent to authenticate or adopt a record:\na. Execute or adopt a tangible symbol; or\nb. Attach to or logically associate with the record an electronic\nsymbol, sound, or process.\n2. \"Signed,\" \"signing,\" and \"signature\" have corresponding meanings;\n(am) \"State\" means a State of the United States, the District of Columbia, Puerto\nRico, the United States Virgin Islands, or any territory or insular possession\nsubject to the jurisdiction of the United States;\n(an) \"Surety\" includes a guarantor or other secondary obligor;\n(ao) \"Term\" means a portion of an agreement that relates to a particular matter;\n(ap) 1. \"Unauthorized signature\" means a signature made witho ut actual,\nimplied, or apparent authority.\n2. The term includes a forgery;\n(aq) \"Warehouse receipt\" means a document of title issued by a person engaged in\nthe business of storing goods for hire; and\n(ar) 1. \"Writing\" includes printing, typewriting, or any  other intentional\nreduction to tangible form.\n2. \"Written\" has a corresponding meaning.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55625","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:41Z","sha256":"d35f4fab55b11d6705a13f2a3a6f345223ce89cae65ac7552bf9946ec5099888","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.1-110","next":"us-ky/krs-355.1-202"},"notice":"GroundRules: Original legal text. Not legal advice."}