US Laws, Codes, Statutes & Cases

CHAPTER 104 - UNIFORM COMMERCIAL CODE—ORIGINAL ARTICLES

ARTICLE 1

GENERAL PROVISIONS

Part 1

Short Titles, Scope, Construction, Severability and Electronic Signatures and Delivery

NRS 104.1101          Short titles.

NRS 104.1102          Scope of Article 1.

NRS 104.1103          Construction of Uniform Commercial Code to promote underlying purposes and policies; applicability of supplemental principles of law.

NRS 104.1104          Construction against implied repeal.

NRS 104.1105          Severability.

NRS 104.1106          Use of singular and plural; gender.

NRS 104.1107          Waiver or renunciation of claim or right after breach. [Repealed.]

NRS 104.1108          Relation to Electronic Signatures in Global and National Commerce Act.

NRS 104.1110          Provisions for transition. [Repealed.]

Part 2

General Definitions and Principles of Interpretation

NRS 104.1201          General definitions.

NRS 104.1202          Notice; knowledge.

NRS 104.1203          Lease distinguished from security interest.

NRS 104.1204          Value.

NRS 104.1205          Reasonable time; seasonableness.

NRS 104.1206          Presumptions.

NRS 104.1207          Performance or acceptance under reservation of rights. [Repealed.]

NRS 104.1208          Option to accelerate at will. [Repealed.]

Part 3

Territorial Applicability and General Rules

NRS 104.1301          Territorial applicability; parties’ power to choose applicable law.

NRS 104.1302          Variation by agreement.

NRS 104.1303          Course of performance, course of dealing and usage of trade.

NRS 104.1304          Obligation of good faith.

NRS 104.1305          Remedies to be liberally administered.

NRS 104.1306          Waiver or renunciation of claim or right after breach.

NRS 104.1307          Prima facie evidence by third-party documents.

NRS 104.1308          Performance or acceptance under reservation of rights.

NRS 104.1309          Option to accelerate at will.

NRS 104.1310          Subordinated obligations.

ARTICLE 2

SALES

Part 1

Short Title, General Construction and Subject Matter

NRS 104.2101          Short title.

NRS 104.2102          Scope; certain security and other transactions excluded from this article.

NRS 104.2103          Definitions and index of definitions.

NRS 104.2104          Definitions: “Merchant”; “between merchants”; “financing agency.”

NRS 104.2105          Definitions: Transferability; “goods”; “future” goods; “lot”; “commercial unit.”

NRS 104.2106          Definitions: “Contract”; “agreement”; “contract for sale”; “sale”; “present sale”; “conforming” to contract; “termination”; “cancellation.”

NRS 104.2107          Goods to be severed from realty: Recording.

Part 2

Form, Formation and Readjustment of Contract

NRS 104.2201          Formal requirements; statute of frauds.

NRS 104.2202          Final written expression: Parol or extrinsic evidence.

NRS 104.2203          Seals inoperative.

NRS 104.2204          Formation in general.

NRS 104.2205          Firm offers.

NRS 104.2206          Offer and acceptance in formation of contract.

NRS 104.2207          Additional terms in acceptance or confirmation.

NRS 104.2208          Course of performance or practical construction. [Repealed.]

NRS 104.2209          Modification, rescission and waiver.

NRS 104.2210          Delegation of performance; assignment of rights.

Part 3

General Obligation and Construction of Contract

NRS 104.2301          General obligations of parties.

NRS 104.2302          Unconscionable contract or clause.

NRS 104.2303          Allocation or division of risks.

NRS 104.2304          Price payable in money, goods, realty or otherwise.

NRS 104.2305          Open price term.

NRS 104.2306          Output, requirements and exclusive dealings.

NRS 104.2307          Delivery in single lot or several lots.

NRS 104.2308          Absence of specified place for delivery.

NRS 104.2309          Absence of specific time for action or duration of contract; notice of termination.

NRS 104.2310          Open time for payment or running of credit; authority to ship under reservation.

NRS 104.2311          Options and cooperation respecting performance.

NRS 104.2312          Warranty of title and against infringement; buyer’s obligation against infringement.

NRS 104.2313          Express warranties by affirmation, promise, description or sample.

NRS 104.2314          Implied warranty: Merchantability; usage of trade.

NRS 104.2315          Implied warranty: Fitness for particular purpose.

NRS 104.2316          Exclusion or modification of warranties.

NRS 104.2317          Cumulation and conflict of warranties express or implied.

NRS 104.2318          Third-party beneficiaries of warranties express or implied.

NRS 104.2319          F.O.B. and F.A.S. terms.

NRS 104.2320          C.I.F. and C. & F. terms.

NRS 104.2321          C.I.F. or C. & F.: “Net landed weights”; “payment on arrival”; warranty of condition on arrival.

NRS 104.2322          Delivery “ex-ship.”

NRS 104.2323          Form of bill of lading required in overseas shipment; “overseas.”

NRS 104.2324          “No arrival, no sale” term.

NRS 104.2325          “Letter of credit” term; “confirmed credit.”

NRS 104.2326          Sale on approval and sale or return; rights of creditors.

NRS 104.2327          Special incidents of sale on approval and sale or return.

NRS 104.2328          Sale by auction.

Part 4

Title, Creditors and Good Faith Purchasers

NRS 104.2401          Passing of title; reservation for security; limited application of this section.

NRS 104.2402          Rights of seller’s creditors against sold goods.

NRS 104.2403          Power to transfer; good faith purchase of goods; “entrusting.”

Part 5

Performance

NRS 104.2501          Insurable interest in goods; manner of identification of goods.

NRS 104.2502          Buyer’s right to goods on seller’s repudiation, failure to deliver or insolvency.

NRS 104.2503          Manner of seller’s tender of delivery.

NRS 104.2504          Shipment by seller.

NRS 104.2505          Seller’s shipment under reservation.

NRS 104.2506          Rights of financing agency.

NRS 104.2507          Effect of seller’s tender; delivery on condition.

NRS 104.2508          Cure by seller of improper tender or delivery; replacement.

NRS 104.2509          Risk of loss in the absence of breach.

NRS 104.2510          Effect of breach on risk of loss.

NRS 104.2511          Tender of payment by buyer; payment by check.

NRS 104.2512          Payment by buyer before inspection.

NRS 104.2513          Buyer’s right to inspection of goods.

NRS 104.2514          When documents deliverable on acceptance; when on payment.

NRS 104.2515          Preserving evidence of goods in dispute.

Part 6

Breach, Repudiation and Excuse

NRS 104.2601          Buyer’s rights on improper delivery.

NRS 104.2602          Manner and effect of rightful rejection.

NRS 104.2603          Merchant buyer’s duties as to rightfully rejected goods.

NRS 104.2604          Buyer’s options as to salvage of rightfully rejected goods.

NRS 104.2605          Waiver of buyer’s objections by failure to particularize.

NRS 104.2606          What constitutes acceptance of goods.

NRS 104.2607          Effect of acceptance; notice of breach; burden of establishing breach after acceptance; notice of claim or litigation to person answerable over.

NRS 104.2608          Revocation of acceptance in whole or in part.

NRS 104.2609          Right to adequate assurance of performance.

NRS 104.2610          Anticipatory repudiation.

NRS 104.2611          Retraction of anticipatory repudiation.

NRS 104.2612          “Installment contract”; breach.

NRS 104.2613          Casualty to identified goods.

NRS 104.2614          Substituted performance.

NRS 104.2615          Excuse by failure of presupposed conditions.

NRS 104.2616          Procedure on notice claiming excuse.

Part 7

Remedies

NRS 104.2701          Remedies for breach of collateral contracts not impaired.

NRS 104.2702          Seller’s remedies on discovery of buyer’s insolvency.

NRS 104.2703          Seller’s remedies in general.

NRS 104.2704          Seller’s right to identify goods to contract notwithstanding breach or to salvage unfinished goods.

NRS 104.2705          Seller’s stoppage of delivery in transit or otherwise.

NRS 104.2706          Seller’s resale including contract for resale.

NRS 104.2707          “Person in the position of a seller.”

NRS 104.2708          Seller’s damages for nonacceptance or repudiation.

NRS 104.2709          Action for price.

NRS 104.2710          Seller’s incidental damages.

NRS 104.2711          Buyer’s remedies in general; buyer’s security interest in rejected goods.

NRS 104.2712          “Cover”; buyer’s procurement of substitute goods.

NRS 104.2713          Buyer’s damages for nondelivery or repudiation.

NRS 104.2714          Buyer’s damages for breach in regard to accepted goods.

NRS 104.2715          Buyer’s incidental and consequential damages.

NRS 104.2716          Buyer’s right to specific performance or replevin.

NRS 104.2717          Deduction of damages from the price.

NRS 104.2718          Liquidation or limitation of damages; deposits.

NRS 104.2719          Contractual modification or limitation of remedy.

NRS 104.2720          Effect of “cancellation” or “rescission” on claims for antecedent breach.

NRS 104.2721          Remedies for fraud.

NRS 104.2722          Who can sue third parties for injury to goods.

NRS 104.2723          Proof of market price: Time and place.

NRS 104.2724          Admissibility of market quotations.

NRS 104.2725          Statute of limitations in contracts for sale.

ARTICLE 3

NEGOTIABLE INSTRUMENTS

Part 1

General Provisions and Definitions

NRS 104.3101          Short title.

NRS 104.3102          Subject matter.

NRS 104.3103          Definitions.

NRS 104.3104          Negotiable instrument.

NRS 104.3105          Issue of instrument.

NRS 104.3106          Unconditional promise or order.

NRS 104.3107          Instrument payable in foreign money.

NRS 104.3108          Payable on demand or at definite time.

NRS 104.3109          Payable to bearer or to order.

NRS 104.3110          Identification of person to whom instrument is payable.

NRS 104.3111          Place of payment.

NRS 104.3112          Interest.

NRS 104.3113          Date of instrument.

NRS 104.3114          Contradictory terms of instrument.

NRS 104.3115          Incomplete instruments.

NRS 104.3116          Joint and several liability; contribution.

NRS 104.3117          Other agreements affecting instrument.

NRS 104.3118          Statute of limitations.

NRS 104.3119          Notice of right to defend action.

Part 2

Negotiation, Transfer and Endorsement

NRS 104.3201          Negotiation.

NRS 104.3202          Negotiation subject to rescission.

NRS 104.3203          Transfer of instrument; rights acquired by transfer.

NRS 104.3204          Endorsement.

NRS 104.3205          Special endorsement; blank endorsement; anomalous endorsement.

NRS 104.3206          Restrictive endorsement.

NRS 104.3207          Reacquisition.

Part 3

Enforcement of Instruments

NRS 104.3301          Person entitled to enforce instrument.

NRS 104.3302          Holder in due course.

NRS 104.3303          Value and consideration.

NRS 104.3304          Overdue instrument.

NRS 104.3305          Defenses and claims in recoupment.

NRS 104.3306          Claims to an instrument.

NRS 104.3307          Notice of breach of fiduciary duty.

NRS 104.3308          Proof of signatures and status as holder in due course.

NRS 104.3309          Enforcement of lost, destroyed or stolen instrument.

NRS 104.3310          Effect of instrument on obligation for which taken.

NRS 104.3311          Accord and satisfaction by use of instrument.

NRS 104.3312          Lost, destroyed or stolen cashier’s check, teller’s check or certified check.

Part 4

Liability of Parties

NRS 104.3401          Signature.

NRS 104.3402          Signature by representative.

NRS 104.3403          Unauthorized signature.

NRS 104.3404          Impostors; fictitious payees.

NRS 104.3405          Employer’s responsibility for fraudulent endorsement by employee.

NRS 104.3406          Negligence contributing to forged signature or alteration of instrument.

NRS 104.3407          Alteration.

NRS 104.3408          Drawee not liable on unaccepted draft.

NRS 104.3409          Acceptance of draft; certified check.

NRS 104.3410          Acceptance varying draft.

NRS 104.3411          Refusal to pay cashier’s checks, teller’s checks and certified checks.

NRS 104.3412          Obligation of issuer of note or cashier’s check.

NRS 104.3413          Obligation of acceptor.

NRS 104.3414          Obligation of drawer.

NRS 104.3415          Obligation of endorser.

NRS 104.3416          Transfer warranties.

NRS 104.3417          Presentment warranties.

NRS 104.3418          Payment or acceptance by mistake.

NRS 104.3419          Instruments signed for accommodation.

NRS 104.3420          Conversion of instrument.

Part 5

Dishonor

NRS 104.3501          Presentment.

NRS 104.3502          Dishonor.

NRS 104.3503          Notice of dishonor.

NRS 104.3504          Excused presentment and notice of dishonor.

NRS 104.3505          Evidence of dishonor.

Part 6

Discharge and Payment

NRS 104.3601          Discharge and effect of discharge.

NRS 104.3602          Payment.

NRS 104.3603          Tender of payment.

NRS 104.3604          Discharge by cancellation or renunciation.

NRS 104.3605          Discharge of endorsers and accommodation parties.

ARTICLE 4

BANK DEPOSITS AND COLLECTIONS

Part 1

General Provisions and Definitions

NRS 104.4101          Short title.

NRS 104.4102          Applicability.

NRS 104.4103          Variation by agreement; measure of damages; action constituting ordinary care.

NRS 104.4104          Definitions and index of definitions.

NRS 104.4105          “Depositary bank”; “payor bank”; “intermediary bank”; “collecting bank”; “presenting bank.”

NRS 104.4106          Payable through or payable at bank.

NRS 104.4107          Separate office of bank.

NRS 104.4108          Time of receipt of items.

NRS 104.4109          Delays.

NRS 104.4110          Electronic presentment.

NRS 104.4111          Statute of limitations.

Part 2

Collection of Items: Depositary and Collecting Banks

NRS 104.4201          Status of collecting bank as agent and provisional status of credits; item endorsed “pay any bank.”

NRS 104.4202          Responsibility for collection or return; when action timely.

NRS 104.4203          Effect of instructions.

NRS 104.4204          Methods of sending and presenting; sending directly to payor bank.

NRS 104.4205          Depository bank holder of unendorsed item.

NRS 104.4206          Transfer between banks.

NRS 104.4207          Transfer warranties.

NRS 104.4208          Presentment warranties.

NRS 104.4209          Encoding and retention warranties.

NRS 104.4210          Security interest of collecting bank in items, accompanying documents and proceeds.

NRS 104.4211          When bank gives value for purposes of holder in due course.

NRS 104.4212          Presentment by notice of item not payable by, through or at bank; liability of drawer or endorser.

NRS 104.4213          Medium and time of settlement by bank.

NRS 104.4214          Right of charge-back or refund; liability of collecting bank; return of item.

NRS 104.4215          Final payment of item by payor bank; when provisional debits and credits become final; when certain credits become available for withdrawal.

NRS 104.4216          Insolvency and preference.

Part 3

Collection of Items: Payor Banks

NRS 104.4301          Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank.

NRS 104.4302          Payor bank’s responsibility for late return of item.

NRS 104.4303          When items subject to notice, stop-payment order, legal process or setoff; order in which items may be charged or certified.

Part 4

Relationship Between Payor Bank and its Customer

NRS 104.4401          When bank may charge customer’s account.

NRS 104.4402          Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account.

NRS 104.4403          Customer’s right to stop payment; burden of proof of loss.

NRS 104.4404          Bank not obligated to pay check more than 6 months old.

NRS 104.4405          Death or incompetence of customer.

NRS 104.4406          Customer’s duty to discover or report unauthorized signature or alteration.

NRS 104.4407          Payor bank’s right to subrogation on improper payment.

Part 5

Collection of Documentary Drafts

NRS 104.4501          Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor.

NRS 104.4502          Presentment of “on arrival” drafts.

NRS 104.4503          Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need.

NRS 104.4504          Privilege of presenting bank to deal with goods; security interest for expenses.

ARTICLE 5

LETTERS OF CREDIT

NRS 104.5101          Short title.

NRS 104.5102          Definitions.

NRS 104.5103          Scope.

NRS 104.5104          Formal requirements.

NRS 104.5105          Consideration.

NRS 104.5106          Issuance, amendment, cancellation and duration.

NRS 104.5107          Confirmer, nominated person and adviser.

NRS 104.5108          Issuer’s rights and obligations.

NRS 104.5109          Fraud and forgery.

NRS 104.5110          Warranties.

NRS 104.5111          Remedies.

NRS 104.5112          Transfer of letter of credit.

NRS 104.5113          Transfer by operation of law.

NRS 104.5114          Assignment of proceeds.

NRS 104.5115          Statute of limitations.

NRS 104.5116          Choice of law and forum.

NRS 104.5117          Subrogation of issuer, applicant and nominated person.

NRS 104.5118          Security interest of issuer or nominated person.

ARTICLE 7

WAREHOUSE RECEIPTS, BILLS OF LADING AND OTHER DOCUMENTS OF TITLE

Part 1

General

NRS 104.7101          Short title.

NRS 104.7102          Definitions and index of definitions.

NRS 104.7103          Relation of Article to treaty or statute.

NRS 104.7104          Negotiable and nonnegotiable document of title.

NRS 104.7105          Reissuance in alternative medium.

NRS 104.7106          Control of electronic document of title.

Part 2

Warehouse Receipts: Special Provisions

NRS 104.7201          Person that may issue warehouse receipt; storage under bond.

NRS 104.7202          Form of warehouse receipt; effect of omission.

NRS 104.7203          Liability for nonreceipt or misdescription.

NRS 104.7204          Duty of care; contractual limitation of warehouse’s liability.

NRS 104.7205          Title under warehouse receipt defeated in certain cases.

NRS 104.7206          Termination of storage at warehouse’s option.

NRS 104.7207          Goods must be kept separate; fungible goods.

NRS 104.7208          Altered warehouse receipts.

NRS 104.7209          Lien of warehouse.

NRS 104.7210          Enforcement of warehouse’s lien.

Part 3

Bills of Lading: Special Provisions

NRS 104.7301          Liability for nonreceipt or misdescription; “said to contain”; “shipper’s weight, load and count”; improper handling.

NRS 104.7302          Through bills of lading and similar documents of title.

NRS 104.7303          Diversion; reconsignment; change of instructions.

NRS 104.7304          Tangible bills of lading in set.

NRS 104.7305          Destination bills.

NRS 104.7306          Altered bills of lading.

NRS 104.7307          Lien of carrier.

NRS 104.7308          Enforcement of carrier’s lien.

NRS 104.7309          Duty of care; contractual limitation of carrier’s liability.

Part 4

Warehouse Receipts and Bills of Lading: General Obligations

NRS 104.7401          Irregularities in issue of receipt or bill or conduct of issuer.

NRS 104.7402          Duplicate document of title; overissue.

NRS 104.7403          Obligation of bailee to deliver; excuse.

NRS 104.7404          No liability for good-faith delivery pursuant to document of title.

Part 5

Warehouse Receipts and Bills of Lading: Negotiation and Transfers

NRS 104.7501          Form of negotiation and requirements of due negotiation.

NRS 104.7502          Rights acquired by due negotiation.

NRS 104.7503          Document of title to goods defeated in certain cases.

NRS 104.7504          Rights acquired in absence of due negotiation; effect of diversion; stoppage of delivery.

NRS 104.7505          Endorser not guarantor for other parties.

NRS 104.7506          Delivery without endorsement; right to compel endorsement.

NRS 104.7507          Warranties on negotiation or delivery of document of title.

NRS 104.7508          Warranties of collecting bank as to documents of title.

NRS 104.7509          Adequate compliance with commercial contract.

Part 6

Warehouse Receipts and Bills of Lading: Miscellaneous Provisions

NRS 104.7601          Lost, stolen or destroyed documents of title.

NRS 104.7602          Judicial process against goods covered by negotiable document of title.

NRS 104.7603          Conflicting claims; interpleader.

ARTICLE 8

INVESTMENT SECURITIES

Part 1

Short Title and General Matters

NRS 104.8101          Short title.

NRS 104.8102          Definitions.

NRS 104.8103          Rules for determining whether certain obligations and interests are securities or financial assets.

NRS 104.8104          Acquisition of security or financial asset or interest therein.

NRS 104.8105          Notice of adverse claim.

NRS 104.8106          Control.

NRS 104.8107          Whether endorsement, instruction or entitlement order is effective.

NRS 104.8108          Warranties in direct holding.

NRS 104.8109          Warranties in indirect holding.

NRS 104.8110          Applicability; choice of law.

NRS 104.8111          Rules of clearing corporation.

NRS 104.8112          Creditor’s legal process.

NRS 104.8113          Statute of frauds inapplicable.

NRS 104.8114          Evidentiary rules concerning certificated securities.

NRS 104.8115          Securities intermediary and others not liable to adverse claimant.

NRS 104.8116          Securities intermediary as purchaser for value.

Part 2

Issue and Issuer

NRS 104.8201          “Issuer.”

NRS 104.8202          Issuer’s responsibility and defenses; notice of defect or defense.

NRS 104.8203          Staleness as notice of defect or defense.

NRS 104.8204          Effect of issuer’s restriction on transfer.

NRS 104.8205          Effect of unauthorized signature on security certificate.

NRS 104.8206          Completion or alteration of security certificate.

NRS 104.8207          Rights and duties of issuer with respect to registered owners.

NRS 104.8208          Effect of signature of authenticating trustee, registrar or transfer agent.

NRS 104.8209          Issuer’s lien.

NRS 104.8210          Overissue.

Part 3

Transfer of Certificated and Uncertificated Securities

NRS 104.8301          Delivery.

NRS 104.8302          Rights of purchaser.

NRS 104.8303          Protected purchaser.

NRS 104.8304          Endorsement.

NRS 104.8305          Instruction.

NRS 104.8306          Effect of guaranteeing signature, endorsement or instruction.

NRS 104.8307          Purchaser’s right to requisites for registration of transfer.

Part 4

Registration

NRS 104.8401          Duty of issuer to register transfer.

NRS 104.8402          Assurance that endorsement or instruction is effective.

NRS 104.8403          Demand that issuer not register transfer.

NRS 104.8404          Wrongful registration.

NRS 104.8405          Replacement of lost, destroyed or wrongfully taken security certificate.

NRS 104.8406          Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate.

NRS 104.8407          Authenticating trustee, transfer agent and registrar.

Part 5

Security Entitlements

NRS 104.8501          Securities account; acquisition of security entitlement from securities intermediary.

NRS 104.8502          Assertion of adverse claim against entitlement holder.

NRS 104.8503          Property interest of entitlement holder in financial asset held by securities intermediary.

NRS 104.8504          Duty of securities intermediary to maintain financial asset.

NRS 104.8505          Duty of securities intermediary with respect to payments and distributions.

NRS 104.8506          Duty of securities intermediary to exercise rights as directed by entitlement holder.

NRS 104.8507          Duty of securities intermediary to comply with entitlement order.

NRS 104.8508          Duty of securities intermediary to change entitlement holder’s position to other form of security holding.

NRS 104.8509          Specification of duties of securities intermediary by other statute or regulation; manner of performance of duties of securities intermediary and exercise of rights of entitlement holder.

NRS 104.8510          Rights of purchaser of security entitlement from entitlement holder.

NRS 104.8511          Priority among security interests and entitlement holders.

ARTICLE 9

SECURED TRANSACTIONS

Part 1

General Provisions

NRS 104.9101          Short title.

NRS 104.9102          Definitions and index of definitions.

NRS 104.9103          Purchase-money security interest: Circumstances of existence; applicability of payments; burden of establishing.

NRS 104.9104          Control of deposit account.

NRS 104.9105          Control of electronic chattel paper.

NRS 104.9106          Control of investment property.

NRS 104.9107          Control of letter-of-credit right.

NRS 104.9108          Sufficiency of descriptions.

NRS 104.9109          Scope of applicability.

NRS 104.9110          Applicability to security interests arising under Article 2 or 2A.

Part 2

Effectiveness of Security Agreement; Attachment of Security Interest; Rights of Parties to Security Agreement

NRS 104.9201          General effectiveness of security agreement.

NRS 104.9202          Title to collateral immaterial.

NRS 104.9203          Attachment and enforceability of security interest; proceeds; formal requisites; supporting obligations.

NRS 104.9204          After-acquired property; future advances.

NRS 104.9205          Use or disposition of collateral permissible.

NRS 104.9206          Security interest arising in purchase or delivery of financial asset.

NRS 104.9207          Rights and duties of secured party having possession or control of collateral.

NRS 104.9208          Additional duties of secured party having control of collateral.

NRS 104.9209          Duties of secured party if account debtor has been notified of assignment.

NRS 104.9210          Request for accounting; request regarding list of collateral or statement of account.

Part 3

Perfection and Priority

NRS 104.9301          Determination of law governing perfection and priority of security interests.

NRS 104.9302          Determination of law governing perfection and priority of agricultural liens.

NRS 104.9303          Determination of law governing perfection and priority of security interests in goods covered by certificate of title.

NRS 104.9304          Determination of law governing perfection and priority of security interests in deposit accounts.

NRS 104.9305          Determination of law governing perfection and priority of security interests in investment property.

NRS 104.9306          Determination of law governing perfection and priority of security interests in letter-of-credit rights.

NRS 104.9307          Location of debtor.

NRS 104.9308          When security interest or agricultural lien is perfected; continuity of perfection.

NRS 104.9309          Security interest perfected upon attachment.

NRS 104.9310          When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply.

NRS 104.9311          Perfection of security interests in property subject to certain statutes, regulations and treaties.

NRS 104.9312          Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights and money; perfection by permissive filing; temporary perfection without filing or transfer of possession.

NRS 104.9313          When possession by or delivery to secured party perfects security interest without filing.

NRS 104.9314          Perfection by control.

NRS 104.9315          Secured party’s rights on disposition of collateral and in proceeds.

NRS 104.9316          Continued perfection of security interest following change in governing law.

NRS 104.9317          Interests that take priority over or take free of unperfected security interest or agricultural lien.

NRS 104.9318          No interest retained in right to payment that is sold; rights and title of seller of account or chattel paper with respect to creditors and purchasers.

NRS 104.9319          Rights and title of consignee with respect to creditors and purchasers.

NRS 104.9320          Protection of certain buyers of goods.

NRS 104.9321          Protection of licensee of general intangible and lessee of goods in ordinary course of business.

NRS 104.9322          Priorities among conflicting security interests in and agricultural liens on same collateral.

NRS 104.9323          Future advances.

NRS 104.9324          Priority of purchase-money security interests.

NRS 104.9325          Priority of security interests in transferred collateral.

NRS 104.9326          Priority of security interests created by new debtor.

NRS 104.9327          Priority among conflicting security interests in same deposit account.

NRS 104.9328          Priority among conflicting security interests in same investment property.

NRS 104.9329          Priority among conflicting security interests in same letter-of-credit right.

NRS 104.9330          Priority of purchaser of chattel paper or instrument.

NRS 104.9331          Priority of rights of purchasers of instruments, documents and securities under other articles; priority of interests in financial assets and security entitlements under article 8.

NRS 104.9332          Effect of transfer of money; effect of transfer of funds from deposit account.

NRS 104.9333          Priority of certain possessory liens arising by operation of law.

NRS 104.9334          Priority of security interests in fixtures and crops.

NRS 104.9335          Accessions.

NRS 104.9336          Commingled goods.

NRS 104.9337          Priority of security interests in goods covered by certificate of title.

NRS 104.9338          Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect information.

NRS 104.9339          Priority subject to subordination by agreement.

NRS 104.9340          Effectiveness of right of recoupment or setoff against deposit account.

NRS 104.9341          Bank’s rights and duties with respect to deposit account.

NRS 104.9342          Bank’s right to refuse to enter into or disclose existence of control agreement.

Part 4

Rights of Third Parties

NRS 104.9401          Alienability of debtor’s rights.

NRS 104.9402          Secured party not obligated in contract of debtor or in tort.

NRS 104.9403          Agreement not to assert defenses against assignee.

NRS 104.9404          Rights acquired by assignee; claims and defenses against assignee.

NRS 104.9405          Modification of or substitution for assigned contract.

NRS 104.9406          Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective.

NRS 104.9407          Restrictions on assignment, transfer, creation or enforcement of security interest in leasehold interest or in lessor’s residual interest.

NRS 104.9408          Restrictions on assignment or transfer of promissory notes, health-care insurance receivables and certain general intangibles ineffective.

NRS 104.9409          Restrictions on assignment of letter-of-credit rights ineffective.

Part 5

Filing

NRS 104.9501          Filing office.

NRS 104.9502          Contents of financing statement; record of mortgage as financing statement; time of filing financing statement.

NRS 104.9503          Name of debtor and secured party provided in financing statement.

NRS 104.9504          Indication of collateral in financing statement.

NRS 104.9505          Filing of financing statement in compliance with other statutes and treaties for consignments, leases, other bailments and other transactions.

NRS 104.9506          Effect of errors or omissions in financing statement.

NRS 104.9507          Effect of certain events on effectiveness of financing statement.

NRS 104.9508          Effectiveness of financing statement if new debtor becomes bound by security agreement.

NRS 104.9509          Persons entitled to file record.

NRS 104.9510          Effectiveness of filed record.

NRS 104.9511          Secured party of record.

NRS 104.9512          Amendment of financing statement.

NRS 104.9513          Termination statement.

NRS 104.9514          Assignment of certain powers of secured party of record.

NRS 104.9515          Duration and effectiveness of financing statement; effect of lapsed financing statement.

NRS 104.9516          What constitutes filing; effectiveness of filing.

NRS 104.9517          Effect of indexing errors.

NRS 104.9518          Claim concerning inaccurate or wrongfully filed record: Filing of correction statement.

NRS 104.9519          Numbering, maintaining and indexing records; communicating information provided in records.

NRS 104.9520          Acceptance and refusal to accept record.

NRS 104.9521          Acceptance of certain written records including initial financing statements by filing office; format of written records.

NRS 104.9522          Maintenance and destruction of records.

NRS 104.9523          Information from filing office; sale or license of records.

NRS 104.9524          Excused delay by filing office.

NRS 104.9525          Fees.

NRS 104.9526          Filing-office rules.

NRS 104.9527          Duty of Secretary of State to report.

Part 6

Default

NRS 104.9601          Rights after default; judicial enforcement; effect on consignor or buyer of accounts, chattel paper, payment intangibles or promissory notes.

NRS 104.9602          Waiver and variance of rights and duties of debtor and obligor.

NRS 104.9603          Agreement on standards concerning rights and duties of parties.

NRS 104.9604          Procedure if security agreement covers real property or fixtures.

NRS 104.9605          Duty to unknown debtor or secondary obligor.

NRS 104.9606          Time of default for agricultural lien.

NRS 104.9607          Collection and enforcement by secured party.

NRS 104.9608          Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.

NRS 104.9609          Secured party’s right to take possession or dispose of collateral after default.

NRS 104.9610          Disposition of collateral after default.

NRS 104.9611          Notification before disposition of collateral.

NRS 104.9612          Timeliness of notification before disposition of collateral.

NRS 104.9613          Contents and form of notification before disposition of collateral: General.

NRS 104.9614          Contents and form of notification before disposition of collateral: Consumer-goods transaction.

NRS 104.9615          Application of proceeds of disposition; liability for deficiency and right to surplus.

NRS 104.9616          Explanation of calculation of surplus or deficiency.

NRS 104.9617          Effect of disposition of collateral by secured party after default; rights of transferee regarding collateral.

NRS 104.9618          Rights and duties of certain secondary obligors.

NRS 104.9619          Transfer of record or legal title.

NRS 104.9620          Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.

NRS 104.9621          Notification of proposal to accept collateral in satisfaction of obligation.

NRS 104.9622          Effect of acceptance of collateral in satisfaction of obligation.

NRS 104.9623          Redemption of collateral.

NRS 104.9624          Waiver of right to notification of disposition of collateral; waiver of right to redeem collateral.

NRS 104.9625          Remedies for secured party’s failure to comply with article.

NRS 104.9626          Action in which deficiency or surplus is in issue.

NRS 104.9627          Determination of whether conduct was commercially reasonable.

NRS 104.9628          Nonliability and limitation on liability of secured party; liability of secondary obligor.

Part 7

Transitional Provisions Regarding 2001 Amendments

NRS 104.9702          Applicability of amendatory provisions to preexisting transactions, liens, actions, cases and proceedings.

NRS 104.9703          Security interest perfected before July 1, 2001.

NRS 104.9704          Security interest unperfected before July 1, 2001.

NRS 104.9705          Effectiveness of action taken before July 1, 2001.

NRS 104.9706          When initial financing statement suffices to continue effectiveness of financing statement filed before July 1, 2001.

NRS 104.9707          Persons entitled to file initial financing statement or continuation statement.

NRS 104.9708          Determination of priority of conflicting claims to collateral.

NRS 104.9709          Effectiveness, amendment and termination of financing statement filed before July 1, 2001.

_________

ARTICLE 1

GENERAL PROVISIONS

Part 1

Short Titles, Scope, Construction, Severability and Electronic Signatures and Delivery

      NRS 104.1101  Short titles.

      1.  This chapter, together with chapter 104A of NRS, may be cited as the Uniform Commercial Code.

      2.  This Article may be cited as the Uniform Commercial Code—General Provisions.

      (Added to NRS by 2005, 824)

      NRS 104.1102  Scope of Article 1.  This Article applies to a transaction to the extent that it is governed by another Article of the Uniform Commercial Code.

      (Added to NRS by 2005, 824)

      NRS 104.1103  Construction of Uniform Commercial Code to promote underlying purposes and policies; applicability of supplemental principles of law.

      1.  The Uniform Commercial Code must be liberally construed and applied to promote its underlying purposes and policies, which are:

      (a) To simplify, clarify and modernize the law governing commercial transactions;

      (b) To permit the continued expansion of commercial practices through custom, usage and agreement of the parties; and

      (c) To make uniform the law among the various jurisdictions.

      2.  Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement its provisions.

      (Added to NRS by 2005, 824)

      NRS 104.1104  Construction against implied repeal.  The Uniform Commercial Code being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided.

      (Added to NRS by 2005, 825)

      NRS 104.1105  Severability.  If any provision or clause of the Uniform Commercial Code or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Uniform Commercial Code which can be given effect without the invalid provision or application, and to this end the provisions of the Uniform Commercial Code are severable.

      (Added to NRS by 2005, 825)

      NRS 104.1106  Use of singular and plural; gender.  In the Uniform Commercial Code, unless the statutory context otherwise requires:

      1.  Words in the singular number include the plural, and those in the plural include the singular; and

      2.  Words of any gender also refer to any other gender.

      (Added to NRS by 2005, 825)

      NRS 104.1107  Waiver or renunciation of claim or right after breach.  Repealed. (See chapter 233, Statutes of Nevada 2005, at page 887.)

 

      NRS 104.1108  Relation to Electronic Signatures in Global and National Commerce Act.  This Article modifies, limits and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 et. seq., but does not modify, limit or supersede Section 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. § 7003(b).

      (Added to NRS by 2005, 825)

      NRS 104.1110  Provisions for transition.  Repealed. (See chapter 233, Statutes of Nevada 2005, at page 887.)

 

Part 2

General Definitions and Principles of Interpretation

      NRS 104.1201  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 the Uniform Commercial Code that apply to particular Articles or parts thereof, have the meanings stated.

      2.  Subject to definitions contained in other Articles of the Uniform Commercial Code 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 NRS 104.1303.

      (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, negotiable tangible document of title or certificated security that is payable to bearer or endorsed in blank.

      (f) “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. 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) “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. 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 usual or customary practices. 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. 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. Only a buyer that takes possession of the goods or has a right to recover the goods from the seller under Article 2 may be a buyer in ordinary course of business. “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) “Conspicuous,” with reference to a term, means so written, displayed or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court. Conspicuous terms include the following:

             (1) A heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font or color to the surrounding text of the same or lesser size; and

             (2) Language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

      (k) “Consumer” means a natural person 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 determined by the Uniform Commercial Code 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 bankruptcy, 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,” with respect to an electronic document of title means voluntary transfer of control and with respect to an instrument, a tangible document of title or chattel paper, means voluntary transfer of possession.

      (p) “Document of title” means a record:

             (1) That 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

             (2) That 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.

Ê The term includes a bill of lading, transport document, dock warrant, dock receipt, warehouse receipt and order for delivery of goods. An electronic document of title means a document of title evidenced by a record consisting of information stored in an electronic medium. A tangible document of title means a document of title evidenced by a record consisting of information that is inscribed on a tangible medium.

      (q) “Fault” means a default, breach or wrongful act or omission.

      (r) “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.

      (s) “Genuine” means free of forgery or counterfeiting.

      (t) “Good faith,” except as otherwise provided in Article 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing.

      (u) “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 of a negotiable electronic document of title.

      (v) “Insolvency proceeding” includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.

      (w) “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.

      (x) “Money” means a medium of exchange currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries.

      (y) “Organization” means a person other than a natural person.

      (z) “Party,” as distinguished from “third party,” means a person that has engaged in a transaction or made an agreement subject to the Uniform Commercial Code.

      (aa) “Person” means a natural person, corporation, business trust, estate, trust, partnership, limited-liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation, or any other legal or commercial entity.

      (bb) “Present value” means the amount as of a date certain of one 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.

      (cc) “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.

      (dd) “Purchaser” means a person that takes by purchase.

      (ee) “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.

      (ff) “Remedy” means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.

      (gg) “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.

      (hh) “Right” includes remedy.

      (ii) “Security interest” means an interest in personal property or fixtures which secures payment or performance of an obligation. “Security interest” 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. “Security interest” does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under NRS 104.2401, but a buyer may also acquire a “security interest” by complying with Article 9. Except as otherwise provided in NRS 104.2505, the right of a seller or lessor of goods under Article 2 or 2A 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. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under NRS 104.2401 is limited in effect to a reservation of a “security interest.” Whether a transaction in the form of a lease creates a “security interest” is determined pursuant to NRS 104.1203.

      (jj) “Send” in connection with a writing, record or notice means:

             (1) To deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none to any address reasonable under the circumstances; or

             (2) In any other way to cause to be received any record or notice within the time it would have arrived if properly sent.

      (kk) “Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing.

      (ll) “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.

      (mm) “Surety” includes a guarantor or other secondary obligor.

      (nn) “Term” means a portion of an agreement that relates to a particular matter.

      (oo) “Unauthorized signature” means a signature made without actual, implied or apparent authority. The term includes a forgery.

      (pp) “Warehouse receipt” means a document of title issued by a person engaged in the business of storing goods for hire.

      (qq) “Writing” includes printing, typewriting or any other intentional reduction to tangible form. “Written” has a corresponding meaning.

      (Added to NRS by 2005, 825)

      NRS 104.1202  Notice; knowledge.

      1.  Subject to subsection 6, a person has “notice” of a fact if the person:

      (a) Has actual knowledge of it;

      (b) Has received a notice or notification of it; or

      (c) From all the facts and circumstances known to the person at the time in question, has reason to know that it exists.

      2.  “Knowledge” means actual knowledge. “Knows” has a corresponding meaning.

      3.  “Discover,” “learn” or words of similar import refer to knowledge rather than to reason to know.

      4.  A person “notifies” or “gives” a notice or notification to another person by taking such steps as may be reasonably required to inform the other person in ordinary course, whether or not the other person actually comes to know of it.

      5.  Subject to subsection 6, a person “receives” a notice or notification when:

      (a) It comes to that person’s attention; or

      (b) It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.

      6.  Notice, knowledge, or a notice or notification received by an organization is effective for a particular transaction from the time it is brought to the attention of the natural person conducting that transaction and, in any event, from the time it would have been brought to the natural person’s attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require a natural person acting for the organization to communicate information unless the communication is part of the natural person’s regular duties or the natural person has reason to know of the transaction and that the transaction would be materially affected by the information.

      (Added to NRS by 2005, 829)

      NRS 104.1203  Lease distinguished from security interest.

      1.  Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.

      2.  A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and:

      (a) The original term of the lease is equal to or greater than the remaining economic life of the goods;

      (b) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;

      (c) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or

      (d) The lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

      3.  A transaction in the form of a lease does not create a security interest merely because:

      (a) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into;

      (b) The lessee assumes risk of loss of the goods;

      (c) The lessee agrees to pay, with respect to the goods, taxes, insurance, filing, recording or registration fees, or service or maintenance costs;

      (d) The lessee has an option to renew the lease or to become the owner of the goods;

      (e) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed; or

      (f) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.

      4.  Additional consideration is nominal if it is less than the lessee’s reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if:

      (a) When the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed; or

      (b) When the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed.

      5.  The “remaining economic life of the goods” and “reasonably predictable” fair market rent, fair market value or cost of performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction is entered into.

      (Added to NRS by 2005, 829)

      NRS 104.1204  Value.  Except as otherwise provided in Articles 3, 4, and 5, a person gives value for rights if the person acquires them:

      1.  In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection;

      2.  As security for, or in total or partial satisfaction of, a preexisting claim;

      3.  By accepting delivery under a preexisting contract for purchase; or

      4.  In return for any consideration sufficient to support a simple contract.

      (Added to NRS by 2005, 830)

      NRS 104.1205  Reasonable time; seasonableness.

      1.  Whether a time for taking an action required by the Uniform Commercial Code is reasonable depends on the nature, purpose and circumstances of the action.

      2.  An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.

      (Added to NRS by 2005, 830)

      NRS 104.1206  Presumptions.  Whenever the Uniform Commercial Code creates a “presumption” with respect to a fact, or provides that a fact is “presumed,” the trier of fact must find the existence of the fact unless and until evidence is introduced that supports a finding of its nonexistence.

      (Added to NRS by 2005, 830)

      NRS 104.1207  Performance or acceptance under reservation of rights.  Repealed. (See chapter 233, Statutes of Nevada 2005, at page 887.)

 

      NRS 104.1208  Option to accelerate at will.  Repealed. (See chapter 233, Statutes of Nevada 2005, at page 887.)

 

Part 3

Territorial Applicability and General Rules

      NRS 104.1301  Territorial applicability; parties’ power to choose applicable law.

      1.  Except as otherwise provided in this section, when a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties.

      2.  In the absence of an agreement effective under subsection 1, and except as otherwise provided in subsection 3, the Uniform Commercial Code applies to transactions bearing an appropriate relation to this State.

      3.  If one of the following provisions of the Uniform Commercial Code specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law so specified:

      (a) NRS 104.2402;

      (b) NRS 104.4102;

      (c) NRS 104.5116;

      (d) NRS 104.8110;

      (e) NRS 104.9301 to 104.9307, inclusive;

      (f) NRS 104A.2105 and 104A.2106; and

      (g) NRS 104A.4507.

      (Added to NRS by 2005, 831)

      NRS 104.1302  Variation by agreement.

      1.  Except as otherwise provided in subsection 2 or elsewhere in the Uniform Commercial Code, the effect of provisions of the Uniform Commercial Code may be varied by agreement.

      2.  The obligations of good faith, diligence, reasonableness and care prescribed by the Uniform Commercial Code may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever the Uniform Commercial Code requires an action to be taken within a reasonable time, a time that is not manifestly unreasonable may be fixed by agreement.

      3.  The presence in certain provisions of the Uniform Commercial Code of the phrase “unless otherwise agreed,” or words of similar import, does not imply that the effect of other provisions may not be varied by agreement under this section.

      (Added to NRS by 2005, 831)

      NRS 104.1303  Course of performance, course of dealing and usage of trade.

      1.  A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if:

      (a) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and

      (b) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

      2.  A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

      3.  A “usage of trade” is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.

      4.  A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties’ agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.

      5.  Except as otherwise provided in subsection 6, the express terms of an agreement and any applicable course of performance, course of dealing or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable:

      (a) Express terms prevail over course of performance, course of dealing and usage of trade;

      (b) Course of performance prevails over course of dealing and usage of trade; and

      (c) Course of dealing prevails over usage of trade.

      6.  Subject to NRS 104.2209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.

      7.  Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.

      (Added to NRS by 2005, 831)

      NRS 104.1304  Obligation of good faith.  Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement.

      (Added to NRS by 2005, 832)

      NRS 104.1305  Remedies to be liberally administered.

      1.  The remedies provided by the Uniform Commercial Code must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in the Uniform Commercial Code or by other rule of law.

      2.  Any right or obligation declared by the Uniform Commercial Code is enforceable by action unless the provision declaring it specifies a different and limited effect.

      (Added to NRS by 2005, 832)

      NRS 104.1306  Waiver or renunciation of claim or right after breach.  A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record.

      (Added to NRS by 2005, 832)

      NRS 104.1307  Prima facie evidence by third-party documents.  A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher’s or inspector’s certificate, consular invoice, or any other document authorized or required by the contract to be issued by a third party is prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the third party.

      (Added to NRS by 2005, 832)

      NRS 104.1308  Performance or acceptance under reservation of rights.

      1.  A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as “without prejudice,” “under protest,” or the like are sufficient.

      2.  Subsection 1 does not apply to an accord and satisfaction.

      (Added to NRS by 2005, 832)

      NRS 104.1309  Option to accelerate at will.  A term providing that one party or that party’s successor in interest may accelerate payment or performance or require collateral or additional collateral “at will” or when the party “deems itself insecure,” or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.

      (Added to NRS by 2005, 832)

      NRS 104.1310  Subordinated obligations.  An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against either the common debtor or a subordinated creditor.

      (Added to NRS by 2005, 833)

ARTICLE 2

SALES

Part 1

Short Title, General Construction and Subject Matter

      NRS 104.2101  Short title.  This article shall be known and may be cited as Uniform Commercial Code—Sales.

      (Added to NRS by 1965, 784)

      NRS 104.2102  Scope; certain security and other transactions excluded from this article.  Unless the context otherwise requires, this article applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sales is intended to operate only as a security transaction nor does