(810 ILCS 5/2A-103)
(from Ch. 26, par. 2A-103)
(Text of Section before amendment by P.A. 97-1034
)
Sec. 2A-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 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 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 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 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 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 $40,000. |
|
(f) "Fault" means wrongful act, omission, breach, or |
|
(g) "Finance lease" means a lease with respect to |
|
(i) the lessor does not select, manufacture, or |
|
(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 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; 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 2A-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 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 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 2A-310(1).
"Construction mortgage". Section 2A-309(1)(d).
"Encumbrance". Section 2A-309(1)(e).
"Fixtures". Section 2A-309(1)(a).
"Fixture filing". Section 2A-309(1)(b).
"Purchase money lease". Section 2A-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)(68).
"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.
(Source: P.A. 95-895, eff. 1-1-09.)
(Text of Section after amendment by P.A. 97-1034 )
Sec. 2A-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 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 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 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 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 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 $40,000. |
|
(f) "Fault" means wrongful act, omission, breach, or |
|
(g) "Finance lease" means a lease with respect to |
|
(i) the lessor does not select, manufacture, or |
|
(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 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; 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 2A-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 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 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 2A-310(1).
"Construction mortgage". Section 2A-309(1)(d).
"Encumbrance". Section 2A-309(1)(e).
"Fixtures". Section 2A-309(1)(a).
"Fixture filing". Section 2A-309(1)(b).
"Purchase money lease". Section 2A-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.
(Source: P.A. 97-1034, eff. 7-1-13.) |
(810 ILCS 5/2A-309)
(from Ch. 26, par. 2A-309)
Sec. 2A-309.
Lessor's and lessee's rights when goods become fixtures.
(1) In this Section:
(a) goods are "fixtures" when they become so related
|
| to particular real estate that an interest in them arises under real estate law; |
|
(b) a "fixture filing" is the filing, in the office |
| where a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and conforming to the requirements of Section 9-502(a) and (b); |
|
(c) a lease is a "purchase money lease" unless the |
| lessee has possession or use of the goods or the right to possession or use of the goods before the lease agreement is enforceable; |
|
(d) a mortgage is a "construction mortgage" to the |
| extent it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates; and |
|
(e) "encumbrance" includes real estate mortgages and |
| other liens on real estate and all other rights in real estate that are not ownership interests. |
|
(2) Under this Article a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this Article of ordinary building materials incorporated into an improvement on land.
(3) This Article does not prevent creation of a lease of fixtures pursuant to real estate law.
(4) The perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if:
(a) the lease is a purchase money lease, the |
| conflicting interest of the encumbrancer or owner arises before the goods become fixtures, the interest of the lessor is perfected by a fixture filing before the goods become fixtures or within 10 days thereafter, and the lessee has an interest of record in the real estate or is in possession of the real estate; or |
|
(b) the interest of the lessor is perfected by a |
| fixture filing before the interest of the encumbrancer or owner is of record, the lessor's interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the lessee has an interest of record in the real estate or is in possession of the real estate. |
|
(5) The interest of a lessor of fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate if:
(a) the fixtures are readily removable factory or |
| office machines, readily removable equipment that is not primarily used or leased for use in the operation of the real estate, or readily removable replacements of domestic appliances that are goods subject to a consumer lease, and before the goods become fixtures the lease contract is enforceable; or |
|
(b) the conflicting interest is a lien on the real |
| estate obtained by legal or equitable proceedings after the lease contract is enforceable; or |
|
(c) the encumbrancer or owner has consented in |
| writing to the lease or has disclaimed an interest in the goods as fixtures; or |
|
(d) the lessee has a right to remove the goods as |
| against the encumbrancer or owner. If the lessee's right to remove terminates, the priority of the interest of the lessor continues for a reasonable time. |
|
(6) Notwithstanding subsection (4)(a) but otherwise subject to subsections (4) and (5), the interest of a lessor of fixtures, including the lessor's residual interest, is subordinate to the conflicting interest of an encumbrancer of the real estate under a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent given to refinance a construction mortgage, the conflicting interest of an encumbrancer of the real estate under a mortgage has this priority to the same extent as the encumbrancer of the real estate under the construction mortgage.
(7) In cases not within the preceding subsections, priority between the interest of a lessor of fixtures, including the lessor's residual interest, and the conflicting interest of an encumbrancer or owner of the real estate who is not the lessee is determined by the priority rules governing conflicting interests in real estate.
(8) If the interest of a lessor of fixtures, including the lessor's residual interest, has priority over all conflicting interests of all owners and encumbrancers of the real estate, the lessor or the lessee may (i) on default, expiration, termination, or cancellation of the lease agreement but subject to the lease agreement and this Article, or (ii) if necessary to enforce other rights and remedies of the lessor or lessee under this Article, remove the goods from the real estate, free and clear of all conflicting interests of all owners and encumbrancers of the real estate, but the lessor or lessee must reimburse any encumbrancer or owner of the real estate who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.
(9) Even though the lease agreement does not create a security interest, the interest of a lessor of fixtures, including the lessor's residual interest, is perfected by filing a financing statement as a fixture filing for leased goods that are or are to become fixtures in accordance with the relevant provisions of the Article on Secured Transactions (Article 9).
(Source: P.A. 91-893, eff. 7-1-01.) |