(810 ILCS 5/1‑201) (from Ch. 26, par. 1‑201)
Sec. 1‑201.
General Definitions.
Subject to additional definitions contained
in the subsequent Articles of this Act which are applicable to specific
Articles or Parts thereof, and unless the context otherwise requires, in this
Act:
(1) "Action" in the sense of a judicial proceeding includes recoupment,
counterclaim, set‑off, suit in equity and any other proceedings in which
rights are determined.
(2) "Aggrieved party" means a party entitled to resort to a remedy.
(3) "Agreement" means the bargain of the parties 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
Act (Sections 1‑205, 2‑208, and 2A‑207). Whether an agreement
has legal
consequences is determined by the provisions of this Act, if applicable;
otherwise by the law of contracts (Section 1‑103). (Compare "Contract".)
(4) "Bank" means any person engaged in the business of banking.
(5) "Bearer" means the person in possession of an instrument, document
of title, or certificated security payable to bearer or indorsed in blank.
(6) "Bill of lading" means a document evidencing the receipt of goods
for shipment issued by a person engaged in the business of transporting or
forwarding goods, and includes an airbill. "Airbill" means a document
serving for air transportation as a bill of lading does for marine or rail
transportation, and includes an air consignment note or air waybill.
(7) "Branch" includes a separately incorporated foreign branch of a
bank.
(8) "Burden of establishing" a fact means the burden of persuading the
triers of fact that the existence of the fact is more probable than its
non‑existence.
(9) "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 pre‑existing
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. A person that acquires goods in a transfer in bulk or as security
for or in total or partial satisfaction of a money debt is not a
buyer in ordinary course of business.
(10) "Conspicuous": A term or clause is conspicuous when it is so
written that a reasonable person against whom it is to operate ought to
have noticed it. A printed heading in capitals (as: NON‑NEGOTIABLE BILL OF
LADING) is conspicuous. Language in the body of a form is "conspicuous" if
it is in larger or other contrasting type or color. But in a telegram any
stated term is "conspicuous". Whether a term or clause is "conspicuous" or
not is for decision by the court.
(11) "Contract" means the total legal obligation which results from the
parties' agreement as affected by this Act and any other applicable rules
of law. (Compare "Agreement".)
(12) "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.
(13) "Defendant" includes a person in the position of defendant in a
cross‑action or counterclaim.
(14) "Delivery" with respect to instruments, documents of title, chattel
paper or certificated securities means voluntary transfer of possession.
(15) "Document of title" includes bill of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods, and also any
other document which in the regular course of business or financing is
treated as adequately evidencing that the person in possession of it is
entitled to receive, hold and dispose of the document and the goods it
covers. To be a document of title a document must purport to be issued by
or addressed to a bailee and purport to cover goods in the bailee's
possession which are either identified or are fungible portions of an
identified mass.
(16) "Fault" means wrongful act, omission or breach.
(17) "Fungible" with respect to goods or securities means goods or
securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible shall be
deemed fungible for the purposes of this Act to the extent that under a
particular agreement or document unlike units are treated as equivalents.
(18) "Genuine" means free of forgery or counterfeiting.
(19) "Good faith" means honesty in fact in the conduct or transaction
concerned.
(20) "Holder" with respect to a negotiable instrument means the person
in possession if the instrument is payable to bearer or, in the
case of an instrument payable to an identified person, if the identified
person is in possession. "Holder" with respect to a document of title
means the person in possession if the goods are deliverable to bearer or to
the order of the person in possession.
(21) To "honor" is to pay or accept and pay, or where a credit so
engages to purchase or discount a draft complying with the terms of the
credit.
(22) "Insolvency proceedings" includes any assignment for the benefit of
creditors or other proceedings intended to liquidate or rehabilitate the
estate of the person involved.
(23) A person is "insolvent" who either has ceased to pay his debts in
the ordinary course of business or cannot pay his debts as they become due
or is insolvent within the meaning of the federal bankruptcy law.
(24) "Money" means a medium of exchange authorized or adopted by a
domestic or foreign government and includes a monetary unit of account
established by an intergovernmental organization or by agreement between 2
or more nations.
(25) A person has "notice" of a fact when
(a) he has actual knowledge of it; or
(b) he has received a notice or notification of it; |
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(c) from all the facts and circumstances known to
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him at the time in question he has reason to know that it exists. A person "knows" or has "knowledge" of a fact when he has actual knowledge of it. "Discover" or "learn" or a word or phrase of similar import refers to knowledge rather than to reason to know. The time and circumstances under which a notice or notification may cease to be effective are not determined by this Act.
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(26) A person "notifies" or "gives" a notice or notification to another
by taking such steps as may be reasonably required to inform the other in
ordinary course whether or not such other actually comes to know of it. A
person "receives" a notice or notification when
(a) it comes to his attention; or
(b) it is duly delivered at the place of business
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through which the contract was made or at any other place held out by him as the place for receipt of such communications.
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(27) Notice, knowledge or a notice or notification received by an
organization is effective for a particular transaction from the time when
it is brought to the attention of the individual conducting that
transaction, and in any event from the time when it would have been brought
to his 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 an individual acting for the organization to
communicate information unless such communication is part of his regular
duties or unless he has reason to know of the transaction and that the
transaction would be materially affected by the information.
(28) "Organization" includes a corporation, government or governmental
subdivision or agency, business trust, estate, trust, partnership or
association, two or more persons having a joint or common interest, or any
other legal or commercial entity.
(29) "Party", as distinct from "third party", means a person who has
engaged in a transaction or made an agreement within this Act.
(30) "Person" includes an individual or an organization (see Section
1‑102).
(31) "Presumption" or "presumed" means that the trier of fact must find
the existence of the fact presumed unless and until evidence is introduced
which would support a finding of its non‑existence.
(32) "Purchase" includes taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or reissue, gift or any
other voluntary
transaction creating an interest in property.
(33) "Purchaser" means a person who takes by purchase.
(34) "Remedy" means any remedial right to which an aggrieved party is
entitled with or without resort to a tribunal.
(35) "Representative" includes an agent, an officer of a corporation or
association, and a trustee, executor or administrator of an estate, or any
other person empowered to act for another.
(36) "Rights" includes remedies.
(37) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation. The term also 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. The
special property interest of a buyer of goods on identification of those
goods to a contract for sale under Section 2‑401 is not a "security
interest", but a buyer may also acquire a "security interest", by complying
with Article 9.
Except as otherwise provided in Section 2‑505, 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 (Section 2‑401) is limited in effect to a reservation
of a "security interest".
Whether a transaction creates a lease or security interest is
determined by the facts of each case; however, a transaction creates a
security interest if the consideration 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 not subject to termination by the lessee; and
(a) the original term of the lease is equal to or
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greater than the remaining economic life of the goods;
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(b) the lessee is bound to renew the lease for the
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remaining economic life of the goods or is bound to become the owner of the goods;
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(c) the lessee has an option to renew the lease for
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the remaining economic life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement; or
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(d) the lessee has an option to become the owner of
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the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement.
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A transaction does not create a security interest merely because it provides that:
(a) the present value of the consideration the
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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;
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(b) the lessee assumes risk of loss of the goods, or
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agrees to pay taxes, insurance, filing, recording, or registration fees, or service or maintenance costs with respect to the goods;
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(c) the lessee has an option to renew the lease or
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to become the owner of the goods;
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(d) the lessee has an option to renew the lease for
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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
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(e) the lessee has an option to become the owner of
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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.
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For purposes of this subsection (37):
(x) Additional consideration is not nominal if (i)
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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 (ii) 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. 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;
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(y) "Reasonably predictable" and "remaining economic
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life of the goods" are to be determined with reference to the facts and circumstances at the time the transaction is entered into; and
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(z) "Present value" means the amount as of a date
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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 is not manifestly unreasonable at the time the transaction is entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances as of each case at the time the transaction was entered into.
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(38) "Send" in connection with any writing or notice means 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. The receipt of any writing or notice within the
time at which it would have arrived if properly sent has the effect of a
proper sending.
(39) "Signed" includes any symbol executed or adopted by a party with
present intention to authenticate a writing.
(40) "Surety" includes guarantor.
(41) "Telegram" includes a message transmitted by radio, teletype,
cable, any mechanical method of transmission, or the like.
(42) "Term" means that portion of an agreement which relates to a
particular matter.
(43) "Unauthorized" signature means one made without
actual, implied, or apparent authority and includes a forgery.
(44) "Value". Except as otherwise provided with respect to negotiable
instruments and bank collections (Sections 3‑303, 4‑210, and
4‑211), a
person gives "value" for rights if he acquires them:
(a) in return for a binding commitment to extend
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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; or
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(b) as security for or in total or partial
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satisfaction of a pre‑existing claim; or
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(c) by accepting delivery pursuant to a pre‑existing
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contract for purchase; or
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(d) generally, in return for any consideration
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sufficient to support a simple contract.
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(45) "Warehouse receipt" means a receipt issued by a person engaged in
the business of storing goods for hire.
(46) "Written" or "writing" includes printing, typewriting or any other
intentional reduction to tangible form.
(Source: P.A. 91‑893, eff. 7‑1‑01.)
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