2010 Pennsylvania Code
Title 13 - COMMERCIAL CODE
Chapter 2A1 - General Provisions
2A103 - Definitions and index of definitions.

     § 2A103.  Definitions and index of definitions.
        (a)  Definitions.--The following words and phrases when used
     in this division shall have, unless the context clearly
     indicates otherwise, the meanings given to them in this
     subsection:
        "Buyer in ordinary course of business."  A person who, in
     good faith and without knowledge that the sale to him is in
     violation of the ownership rights or security interest or
     leasehold interest of a third party in the goods, buys in
     ordinary course from a person in the business of selling goods
     of that kind but does not include a pawnbroker. "Buying" may be
     for cash or by exchange of other property or on secured or
     unsecured credit and includes acquiring goods or documents of
     title under a preexisting contract for sale but does not include
     a transfer in bulk or as security for or in total or partial
     satisfaction of a money debt.
        "Cancellation."  Occurs when either party puts an end to the
     lease contract for default by the other party.
        "Commercial unit."  Such a unit of goods as by commercial
     usage is a single whole for purposes of lease and division of
     which materially impairs its character or value on the market or
     in use. A commercial unit may be a single article, as a machine,
     or a set of articles, as a suite of furniture or a line of
     machinery, or a quantity, as a gross or carload, or any other
     unit treated in use or in the relevant market as a single whole.
        "Conforming."  Conforming goods or performance under a lease
     contract means goods or performance that are in accordance with
     the obligations under the lease contract.
        "Consumer lease."  A lease that a lessor regularly engaged in
     the business of leasing or selling makes to a lessee who is an
     individual and who takes under the lease primarily for a
     personal, family or household purpose, if the total payments to
     be made under the lease contract, excluding payments for options
     to renew or buy, do not exceed $25,000.
        "Fault."  Wrongful act, omission, breach or default.
        "Finance lease."  A lease with respect to which:
            (1)  the lessor does not select, manufacture or supply
        the goods;
            (2)  the lessor acquires the goods or the right to
        possession and use of the goods in connection with the lease;
        and
            (3)  one of the following occurs:
                (i)  the lessee receives a copy of the contract by
            which the lessor acquired the goods or the right to
            possession and use of the goods before signing the lease
            contract;
                (ii)  the lessee's approval of the contract by which
            the lessor acquired the goods or the right to possession
            and use of the goods is a condition to effectiveness of
            the lease contract;
                (iii)  the lessee, before signing the lease contract,
            receives an accurate and complete statement designating
            the promises and warranties, and any disclaimers of
            warranties, limitations or modifications of remedies, or
            liquidated damages, including those of a third party,
            such as the manufacturer of the goods, provided to the
            lessor by the person supplying the goods in connection
            with or as part of the contract by which the lessor
            acquired the goods or the right to possession and use of
            the goods; or
                (iv)  if the lease is not a consumer lease, the
            lessor, before the lessee signs the lease contract,
            informs the lessee, in writing:
                    (A)  of the identity of the person supplying the
                goods to the lessor, unless the lessee has selected
                that person and directed the lessor to acquire the
                goods or the right to possession and use of the goods
                from that person;
                    (B)  that the lessee is entitled under this
                division to the promises and warranties, including
                those of any third party, provided to the lessor by
                the person supplying the goods in connection with or
                as part of the contract by which the lessor acquired
                the goods or the right to possession and use of the
                goods; and
                    (C)  that the lessee may communicate with the
                person supplying the goods to the lessor and receive
                an accurate and complete statement of those promises
                and warranties, including any disclaimers and
                limitations of them or of remedies.
        "Goods."  All things that are movable at the time of
     identification to the lease contract, or are fixtures (section
     2A309), but the term does not include money, documents,
     instruments, accounts, chattel paper, general intangibles, or
     minerals or the like, including oil and gas, before extraction.
     The term also includes the unborn young of animals.
        "Installment lease contract."  A lease contract that
     authorizes or requires the delivery of goods in separate lots to
     be separately accepted, even though the lease contract contains
     a clause "each delivery is a separate lease" or its equivalent.
        "Lease."  A transfer of the right to possession and use of
     goods for a term in return for consideration, but a sale,
     including a sale on approval or a sale or return, or retention
     or creation of a security interest is not a lease. Unless the
     context clearly indicates otherwise, the term includes a
     sublease.
        "Lease agreement."  The bargain, with respect to the lease,
     of the lessor and the lessee in fact as found in their language
     or by implication from other circumstances including course of
     dealing or usage of trade or course of performance as provided
     in this division. Unless the context clearly indicates
     otherwise, the term includes a sublease agreement.
        "Lease contract."  The total legal obligation that results
     from the lease agreement as affected by this division and any
     other applicable rules of law. Unless the context clearly
     indicates otherwise, the term includes a sublease contract.
        "Leasehold interest."  The interest of the lessor or the
     lessee under a lease contract.
        "Lessee."  A person who acquires the right to possession and
     use of goods under a lease. Unless the context clearly indicates
     otherwise, the term includes a sublessee.
        "Lessee in ordinary course of business."  A person who, in
     good faith and without knowledge that the lease to him is in
     violation of the ownership rights or security interest or
     leasehold interest of a third party in the goods, leases in
     ordinary course from a person in the business of selling or
     leasing goods of that kind but does not include a pawnbroker.
     "Leasing" may be for cash or by exchange of other property or on
     secured or unsecured credit and includes acquiring goods or
     documents of title under a preexisting lease contract but does
     not include a transfer in bulk or as security for or in total or
     partial satisfaction of a money debt.
        "Lessor."  A person who transfers the right to possession and
     use of goods under a lease. Unless the context clearly indicates
     otherwise, the term includes a sublessor.
        "Lessor's residual interest."  The lessor's interest in the
     goods after expiration, termination or cancellation of the lease
     contract.
        "Lien."  A charge against or interest in goods to secure
     payment of a debt or performance of an obligation, but the term
     does not include a security interest.
        "Lot."  A parcel or a single article that is the subject
     matter of a separate lease or delivery, whether or not it is
     sufficient to perform the lease contract.
        "Merchant lessee."  A lessee that is a merchant with respect
     to goods of the kind subject to the lease.
        "Present value."  The amount as of a date certain of one or
     more sums payable in the future, discounted to the date certain.
     The discount is determined by the interest rate specified by the
     parties if the rate was not manifestly unreasonable at the time
     the transaction was entered into; otherwise, the discount is
     determined by a commercially reasonable rate that takes into
     account the facts and circumstances of each case at the time the
     transaction was entered into.
        "Purchase."  Includes taking by sale, lease, mortgage,
     security interest, pledge, gift or any other voluntary
     transaction creating an interest in goods.
        "Sublease."  A lease of goods the right to possession and use
     of which was acquired by the lessor as a lessee under an
     existing lease.
        "Supplier."  A person from whom a lessor buys or leases goods
     to be leased under a finance lease.
        "Supply contract."  A contract under which a lessor buys or
     leases goods to be leased.
        "Termination."  Occurs when either party pursuant to a power
     created by agreement or law puts an end to the lease contract
     otherwise than for default.
        (b)  Index of other definitions in division.--Other
     definitions applying to this division and the sections in which
     they appear are:
        "Accessions."  Section 2A310(a).
        "Construction mortgage."  Section 2A309(a).
        "Encumbrance."  Section 2A309(a).
        "Fixture filing."  Section 2A309(a).
        "Fixtures."  Section 2A309(a).
        "Purchase money lease."  Section 2A309(a).
        (c)  Index of definitions in other divisions.--The following
     definitions in other divisions apply to this division:
        "Account."  Section 9102(a).
        "Between merchants."  Section 2104.
        "Buyer."  Section 2103(a).
        "Chattel paper."  Section 9102(a).
        "Consumer goods."  Section 9102(a).
        "Document."  Section 9102(a).
        "Entrusting."  Section 2403(c).
        "General intangible."  Section 9102(a).
        "Good faith."  (Deleted by amendment).
        "Instrument."  Section 9102(a).
        "Merchant."  Section 2104.
        "Mortgage."  Section 9102(a).
        "Pursuant to commitment."  Section 9102(a).
        "Receipt."  Section 2103(a).
        "Sale."  Section 2106(a).
        "Sale on approval."  Section 2326.
        "Sale or return."  Section 2326.
        "Seller."  Section 2103(a).
        (d)  Applicability of general definitions and principles.--In
     addition, Division 1 (relating to general provisions) contains
     general definitions and principles of construction and
     interpretation applicable throughout this division.
     (June 8, 2001, P.L.123, No.18, eff. July 1, 2001; Apr. 16, 2008,
     P.L.57, No.13, eff. 60 days)

        2008 Amendment.  Act 13 amended the defs. of "buyer in
     ordinary course of business" and "lessee in ordinary course of
     business" in subsec. (a) and deleted the def. of "good faith" in
     subsec (c).
        2001 Amendment.  Act 18 amended subsec. (c).
        Cross References.  Section 2A103 is referred to in sections
     7102, 9102 of this title.