2010 Pennsylvania Code
Title 13 - COMMERCIAL CODE
Chapter 12 - General Definitions and Principles of Interpretation
1201 - General definitions.

                                CHAPTER 12
                    GENERAL DEFINITIONS AND PRINCIPLES
                            OF INTERPRETATION

     Sec.
     1201.  General definitions.
     1202.  Notice; knowledge.
     1203.  Lease distinguished from security interest.
     1204.  Value.
     1205.  Reasonable time; seasonableness.
     1206.  Presumptions.

        Enactment.  Chapter 12 was added April 16, 2008, P.L.57,
     No.13, effective in 60 days.
        Prior Provisions.  Former Chapter 12, which related to the
     same subject matter, was added November 1, 1979, P.L.255, No.86,
     and repealed April 16, 2008, P.L.57, No.13, effective in 60
     days.
     § 1201.  General definitions.
        (a)  Definition provisions.--Unless the context otherwise
     requires, words or phrases defined in this section, or in the
     additional definitions contained in other divisions of this
     title that apply to particular divisions or chapters of this
     title, have the meanings stated.
        (b)  Definitions.--Subject to additional definitions
     contained in subsequent provisions of this title which are
     applicable to specific provisions of this title, the following
     words and phrases when used in this title shall have, unless the
     context clearly indicates otherwise, the meanings given to them
     in this subsection:
            (1)  "Action."  In the sense of a judicial proceeding,
        the term includes recoupment, counterclaim, set-off, suit in
        equity and any other proceeding in which rights are
        determined.
            (2)  "Aggrieved party."  A party entitled to pursue a
        remedy.
            (3)  "Agreement."  As distinguished from "contract" under
        paragraph (12), the term 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 section 1303
        (relating to course of performance, course of dealing and
        usage of trade).
            (4)  "Bank."  A person engaged in the business of
        banking. The term includes a savings bank, savings and loan
        association, credit union and trust company.
            (5)  "Bearer."  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
        indorsed in blank.
            (6)  "Bill of lading."  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.
            (7)  "Branch."  The term includes a separately
        incorporated foreign branch of a bank.
            (8)  "Burden of establishing."  As to a fact, the burden
        of persuading the trier of fact that the existence of the
        fact is more probable than its nonexistence.
            (9)  "Buyer in ordinary course of business."  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.
                (i)  A person buys goods in the ordinary course of
            business 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.
                (ii)  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.
                (iii)  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.
                (iv)  Only a buyer that takes possession of the goods
            or has a right to recover the goods from the seller under
            Division 2 (relating to sales) may be a buyer in ordinary
            course of business.
        The term 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.
            (10)  "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:
                (i)  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.
                (ii)  Language in the body of a record or display in
            larger type than the surrounding text, 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.
            (11)  "Consumer."  An individual who enters into a
        transaction primarily for personal, family or household
        purposes.
            (12)  "Contract."  As distinguished from "agreement" in
        paragraph (3), the total legal obligation that results from
        the parties' agreement as determined by this title as
        supplemented by any other applicable laws.
            (13)  "Creditor."  The term includes a general creditor;
        a secured creditor; a lien creditor; a 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.
            (14)  "Defendant."  Includes a person in the position of
        defendant in a counterclaim, cross-claim or third-party
        claim.
            (15)  "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.
            (16)  "Document of title."  A record that:
                (i)  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; or
                (ii)  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.
        The term includes a bill of lading, transport document, dock
        warrant, dock receipt, warehouse receipt and order for
        delivery of goods.
            (16.1)  "Electronic document of title."  A document of
        title evidenced by a record consisting of information stored
        in an electronic medium.
            (17)  "Fault."  A default, breach or wrongful act or
        omission.
            (18)  "Fungible goods."  As follows:
                (i)  goods of which any unit, by nature or usage of
            trade, is the equivalent of any other like unit; or
                (ii)  goods that by agreement are treated as
            equivalent.
            (19)  "Genuine."  Free of forgery or counterfeiting.
            (20)  "Good faith."  Except as otherwise provided in
        Division 5 (relating to letters of credit), honesty in fact
        and the observance of reasonable commercial standards of fair
        dealing.
            (21)  "Holder."  As follows:
                (i)  the person in possession of a negotiable
            instrument that is payable either to the bearer or to an
            identified person that is the person in possession;
                (ii)  the person in possession of a negotiable
            tangible document of title if the goods are deliverable
            either to the bearer or to the order of the person in
            possession; or
                (iii)  the person in control of a negotiable
            electronic document of title.
            (22)  "Insolvency proceeding."  Includes an assignment
        for the benefit of creditors or other proceeding intended to
        liquidate or rehabilitate the estate of the person involved.
            (23)  "Insolvent."  As follows:
                (i)  having generally ceased to pay debts in the
            ordinary course of business other than as a result of
            bona fide dispute;
                (ii)  being unable to pay debts as they become due;
            or
                (iii)  being insolvent within the meaning of Federal
            bankruptcy law.
            (24)  "Money."  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.
            (25)  "Organization."  A person other than an individual.
            (26)  "Party."  As distinguished from "third party," a
        person that has engaged in a transaction or made an agreement
        subject to this title.
            (27)  "Person."  Any individual; corporation; business
        trust; estate; trust; partnership; limited liability company;
        association; joint venture; government; governmental
        subdivision, agency or instrumentality, public corporation;
        or other legal or commercial entity.
            (28)  "Present value."  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:
                (i)  an interest rate specified by the parties if
            that rate is not manifestly unreasonable at the time the
            transaction is entered into; or
                (ii)  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.
            (29)  "Purchase."  Taking by sale, lease, discount,
        negotiation, mortgage, pledge, lien, security interest, issue
        or reissue, gift or other voluntary transaction creating an
        interest in property.
            (30)  "Purchaser."  A person that takes by purchase.
            (31)  "Record."  Information that is inscribed on a
        tangible medium or that is stored in an electronic or other
        medium and is retrievable in perceivable form.
            (32)  "Remedy."  Any remedial right to which an aggrieved
        party is entitled with or without resort to a tribunal.
            (33)  "Representative."  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.
            (34)  "Right."  Includes remedy.
            (35)  "Security interest."  An interest in personal
        property or fixtures which secures payment or performance of
        an obligation.
                (i)  The term 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 Division 9 (relating to secured transactions).
                (ii)  The term does not include the special property
            interest of a buyer of goods on identification of those
            goods to a contract for sale under section 2401 (relating
            to passing of title; reservation for security; limited
            application of section), but a buyer may also acquire a
            "security interest" by complying with Division 9
            (relating to secured transactions).
                (iii)  Except as otherwise provided in section 2505
            (relating to shipment by seller under reservation), the
            right of a seller or lessor of goods under Division 2
            (relating to sales) or 2A (relating to leases) 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 Division 9. The
            retention or reservation of title by a seller of goods
            notwithstanding shipment or delivery to the buyer under
            section 2401 is limited in effect to a reservation of a
            "security interest."
                (iv)  Whether a transaction in the form of a lease
            creates a "security interest" is determined pursuant to
            section 1203 (relating to lease distinguished from
            security interest).
            (36)  "Send."  In connection with a writing, record or
        notice:
                (i)  to deposit in the mail or deliver for
            transmission by any other usual means of communication:
                    (A)  with postage or cost of transmission
                provided for;
                    (B)  properly addressed; and
                    (C)  in the case of an instrument:
                        (I)  to an address specified thereon or
                    otherwise agreed upon; or
                        (II)  if no address is specified or agreed
                    upon, to any address reasonable under the
                    circumstances; or
                (ii)  in any other way to cause to be received any
            record or notice within the time it would have arrived if
            properly sent.
            (37)  "Signed."  Includes using any symbol executed or
        adopted with present intention to adopt or accept a writing.
            (38)  "State."  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.
            (39)  "Surety."  Includes a guarantor or other secondary
        obligor.
            (39.1)  "Tangible document of title."  A document of
        title evidenced by a record consisting of information that is
        inscribed on a tangible medium.
            (40)  "Term."  A portion of an agreement that relates to
        a particular matter.
            (41)  "Unauthorized signature."  A signature made without
        actual, implied or apparent authority. The term includes a
        forgery.
            (42)  "Warehouse receipt."  A document of title issued by
        a person engaged in the business of storing goods for hire.
            (43)  "Writing."  Includes printing, typewriting or any
        other intentional reduction to tangible form.
            (44)  "Written."  Includes printing, typewriting or any
        other intentional reduction to tangible form.

        Cross References.  Section 1201 is referred to in sections
     3103, 4A105, 8103 of this title; section 6902 of Title 42
     (Judiciary and Judicial Procedure); section 7315 of Title 51
     (Military Affairs).