{"data":{"id":"us-ky/krs-355.2a-103","jurisdiction":"us-ky","citation":"KRS 355.2A-103","heading":"Definitions and index of definitions.","body":"(1) In this article, unless the context otherwise requires:\n(a) 1. \"Buyer in ordinary course of business\" means a person who, in good\nfaith and without knowledge that the sale to the person is in violation of\nthe ownership rights or security interest or leaseh old interest of a third\nparty in the goods, buys in ordinary course from a person in the business\nof selling goods of that kind but does not include a pawnbroker.\n2. \"Buying\" may be for cash or by exchange of other property or on\nsecured or unsecured credi t and includes receiving goods or documents\nof title under a pre -existing contract for sale but does not include a\ntransfer in bulk or as security for or in total or partial satisfaction of a\nmoney debt;\n(b) \"Cancellation\" occurs when either party puts an end to the lease contract for\ndefault by the other party;\n(c) 1. \"Commercial unit\" means such a unit of goods as by commercial usage\nis a single whole for purposes of lease and division of which materially\nimpairs its character or value on the market or in use.\n2. A commercial unit may be a single article, as a machine, or a set of\narticles, as a suite of furniture or a line of machinery, or a quantity, as a\ngross or carload, or any other unit treated in use or in the relevant\nmarket as a single whole;\n(d) \"Conforming\" goods or performance under a lease contract means goods or\nperformance that are in accordance with the obligations under the lease\ncontract;\n(e) \"Consumer lease\" means a lease that a lessor regularly engaged in the\nbusiness of leasing or selling makes to a lessee who is an individual and who\ntakes under the lease primarily for a personal, family, or household purpose;\n(f) \"Fault\" means wrongful act, omission, breach, or default;\n(g) \"Finance lease\" means a lease with respect to which:\n1. The lessor does not select, manufacture, or supply the goods;\n2. The lessor acquires the goods or the right to possession and use of the\ngoods in connection with the lease; and\n3. One (1) of the following occurs:\na. The lessee receives a copy of the contract by which the lessor\nacquired the goods or the right to possession and use of the goods\nbefore signing the lease contract;\nb. The lessee's approval of the contrac t by which the lessor acquired\nthe goods or the right to possession and use of the goods is a\ncondition to effectiveness of the lease contract;\nc. The lessee, before signing the lease contract, receives an accurate\nand complete statement designating the pr omises and warranties,\nand any disclaimers of warranties, limitations, or modifications of\nremedies, or liquidated damages, including those of a third party,\nsuch as the manufacturer of the goods, provided to the lessor by\nthe person supplying the goods in connection with or as part of the\ncontract by which the lessor acquired the goods or the right to\npossession and use of the goods; or\nd. If the lease is not a consumer lease, the lessor, before the lessee\nsigns the lease contract, informs the lessee in writing:\ni. Of the identity of the person supplying the goods to the\nlessor, unless the lessee has selected that person and directed\nthe lessor to acquire the goods or the right to possession and\nuse of the goods from that person;\nii. That the lessee is enti tled under this article to the promises\nand warranties, including those of any third party, provided\nto the lessor by the person supplying the goods in connection\nwith or as part of the contract by which the lessor acquired\nthe goods or the right to possession and use of the goods; and\niii. That the lessee may communicate with the person supplying\nthe goods to the lessor and receive an accurate and complete\nstatement of those promises and warranties, including any\ndisclaimers and limitations of them or of remedies;\n(h) 1. \"Goods\" means all things that are movable at the time of identification\nto the lease contract, or are fixtures (KRS 355.2A -309), but the term\ndoes not include money, documents, instruments, accounts, chattel\npaper, general intangibles, or m inerals or the like, including oil and gas,\nbefore extraction.\n2. The term also includes the unborn young of animals;\n(i) \"Hybrid lease\" means a single transaction involving a lease of goods and:\n1. The provision of services;\n2. A sale of other goods; or\n3. A sale, lease, or license of property other than goods;\n(j) \"Installment lease contract\" means a lease contract that authorizes or requires\nthe delivery of goods in separate lots to be separately accepted, even though\nthe lease contract contains a clause  \"each delivery is a separate lease\" or its\nequivalent;\n(k) 1. \"Lease\" means a transfer of the right to possession and use of goods for\na term in return for consideration, but a sale, including a sale on\napproval or a sale or return, or retention or creati on of a security interest\nis not a lease.\n2. Unless the context clearly indicates otherwise, the term includes a\nsublease;\n(l) 1. \"Lease agreement\" means the bargain, with respect to the lease, of the\nlessor and the lessee in fact as found in their languag e or by implication\nfrom other circumstances including course of dealing or usage of trade\nor course of performance as provided in this article.\n2. Unless the context clearly indicates otherwise, the term includes a\nsublease agreement;\n(m) 1. \"Lease contra ct\" means the total legal obligation that results from the\nlease agreement as affected by this article and any other applicable rules\nof law.\n2. Unless the context clearly indicates otherwise, the term includes a\nsublease contract;\n(n) \"Leasehold interest\" means the interest of the lessor or the lessee under a lease\ncontract;\n(o) 1. \"Lessee\" means a person who acquires the right to possession and u se of\ngoods under a lease.\n2. Unless the context clearly indicates otherwise, the term includes a\nsublessee;\n(p) 1. \"Lessee in ordinary course of business\" means a person who, in good\nfaith and without knowledge that the lease to the person is in violation\nof the ownership rights or security interest or leasehold interest of a third\nparty in the goods, leases in ordinary course from a person in the\nbusiness of selling or leasing goods of that kind but does not include a\npawnbroker.\n2. \"Leasing\" may be for c ash or by exchange of other property or on\nsecured or unsecured credit and includes receiving goods or documents\nof title under a pre-existing lease contract but does not include a transfer\nin bulk or as security for or in total or partial satisfaction of a money\ndebt;\n(q) 1. \"Lessor\" means a person who transfers the right to possession and use of\ngoods under a lease.\n2. Unless the context clearly indicates otherwise, the term includes a\nsublessor;\n(r) \"Lessor's residual interest\" means the lessor's interes t in the goods after\nexpiration, termination, or cancellation of the lease contract;\n(s) \"Lien\" means a charge against or interest in goods to secure payment of a debt\nor performance of an obligation, but the term does not include a security\ninterest;\n(t) \"Lot\" means a parcel or a single article that is the subject matter of a separate\nlease or delivery, whether or not it is sufficient to perform the lease contract;\n(u) \"Merchant lessee\" means a lessee that is a merchant with respect to goods of\nthe kind subject to the lease;\n(v) 1. \"Present value\" means the amount as of a date certain of one (1) or more\nsums payable in the future, discounted to the date certain.\n2. The discount is determined by the interest rate specified by the parties if\nthe rate was not manifestly unreasonable at the time the transaction was\nentered into; otherwise, the discount is determined by a commercially\nreasonable rate that takes into account the facts and circumstances of\neach case at the time the transaction was entered into;\n(w) \"Purchase\" includes taking by sale, lease, mortgage, security interest, pledge,\ngift, or any other voluntary transaction creating an interest in goods;\n(x) \"Sublease\" means a lease of goods the right to possession and use of which\nwas acquired by the lessor as a lessee under an existing lease;\n(y) \"Supplier\" means a person from whom a lessor buys or leases goods to be\nleased under a finance lease;\n(z) \"Supply contract\" means a contract under which a lessor buys or leases goods\nto be leased; and\n(aa) \"Termination\" occurs when either party pursuant to a power created by\nagreement or law puts an end to the lease contract otherwise than for default.\n(2) The following definitions in this article apply to this article:\n(a) \"Accessions.\" KRS 355.2A-310(1);\n(b) \"Construction mortgage.\" KRS 355.2A-309(1);\n(c) \"Encumbrance.\" KRS 355.2A-309(1);\n(d) \"Fixtures.\" KRS 355.2A-309(1);\n(e) \"Fixture filing.\" KRS 355.2A-309(1); and\n(f) \"Purchase money lease.\" KRS 355.2A-309(1).\n(3) The following definitions in other articles apply to this article:\n(a) \"Account.\" KRS 355.9-102;\n(b) \"Between merchants.\" KRS 355.2-104;\n(c) \"Buyer.\" KRS 355.2-103(1);\n(d) \"Chattel paper.\" KRS 355.9-102;\n(e) \"Consumer goods.\" KRS 355.9-102;\n(f) \"Document.\" KRS 355.9-102;\n(g) \"Entrusting.\" KRS 355.2-403(3);\n(h) \"General intangible.\" KRS 355.9-102;\n(i) \"Instrument.\" KRS 355.9-102;\n(j) \"Merchant.\" KRS 355.2-104;\n(k) \"Mortgage.\" KRS 355.9-102;\n(l) \"Pursuant to commitment.\" KRS 355.9-102;\n(m) \"Receipt.\" KRS 355.2-103;\n(n) \"Sale.\" KRS 355.2-106(1);\n(o) \"Sale on approval.\" KRS 355.2-326;\n(p) \"Sale or return.\" KRS 355.2-326; and\n(q) \"Seller.\" KRS 355.2-103.\n(4) In addition, Article 1 of this chapter contains general definitions and principles of\nconstruction and interpretation applicable throughout this article.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55637","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:42Z","sha256":"aebe30ec2e6a9a6b6e444c0f69c2fe645b3121a87c61d203cac1e98cfdcb16a2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.2a-102","next":"us-ky/krs-355.2a-104"},"notice":"GroundRules: Original legal text. Not legal advice."}