Hawaii Revised Statutes 490. Uniform Commercial Code

ARTICLE 1. OLD
GENERAL PROVISIONS

• 490:1-101 to 490:1-208 Repealed.
  L 2004, c 162, §18. ARTICLE 1. GENERAL PROVISIONS PART 1. GENERAL PROVISIONS §490:1-101 Short title. (a) This chapter may be cited as the...
• 490:1-102 Scope of Article.
  This article applies to a transaction to the extent that it is governed by another article of this chapter. [L 2004, c 162, pt...
• 490:1-103 Construction of Chapter to Promote Its Purposes and Policies; Applicability of Supplemental Principles of Law.
  (a) This chapter shall be liberally construed and applied to promote its underlying purposes and policies, which are: (1) To simplify, clarify, and modernize...
• 490:1-104 Construction Against Implied Repeal.
  This chapter being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be...
• 490:1-105 Severability.
  If any provision or clause of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect...
• 490:1-106 Use of Singular and Plural; Gender.
  In this chapter, unless the statutory context otherwise requires: (1) Words in the singular number include the plural, and those in the plural include...
• 490:1-107 Section Captions.
  Section captions are part of this chapter. [L 2004, c 162, pt of §1]
• 490:1-108 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, Title 15 United States Code section 7001 et...

PART 2. GENERAL DEFINITIONS AND
PRINCIPLES OF INTERPRETATION

• 490:1-201 General Definitions.
  (a) Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other articles of this chapter...
• 490:1-202 Notice; Knowledge.
  (a) Subject to subsection (f), a person has "notice" of a fact if the person: (1) Has actual knowledge of it; (2) Has received a...
• 490:1-203 Lease Distinguished From Security Interest.
  (a) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case....
• 490:1-204 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...
• 490:1-205 Reasonable Time; Seasonableness.
  (a) Whether a time for taking an action required by this chapter is reasonable depends on the nature, purpose, and circumstances of the action. (b)...
• 490:1-206 Presumptions.
  Whenever this chapter creates a "presumption" with respect to a fact, or provides that a fact is "presumed", the trier of fact shall find the...

PART 3. TERRITORIAL APPLICABILITY AND GENERAL RULES

• 490:1-301 Territorial Applicability; Parties' Power to Choose Applicable Law.
  (a) Except as otherwise provided in this section, when a transaction bears a reasonable relation to this State and also to another state or...
• 490:1-302 Variation by Agreement.
  (a) Except as otherwise provided in subsection (b) or elsewhere in this chapter, the effect of provisions of this chapter may be varied by agreement....
• 490:1-303 Course of Performance, Course of Dealing, and Usage of Trade.
  (a) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if: (1) The agreement of the...
• 490:1-304 Obligation of Good Faith.
  Every contract or duty within this chapter imposes an obligation of good faith in its performance and enforcement. [L 2004, c 162, pt of...
• 490:1-305 Remedies to Be Liberally Administered.
  (a) The remedies provided by this chapter shall be liberally administered so that the aggrieved party is put in as good a position as if...
• 490:1-306 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...
• 490:1-307 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,...
• 490:1-308 Performance or Acceptance Under Reservation of Rights.
  (a) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the...
• 490:1-309 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...
• 490:1-310 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...

ARTICLE 2.
SALES

• 490:2-101 Short Title.
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-101 Short title. This article shall...
• 490:2-102 Scope; Certain Security and Other Transactions Excluded From This Article.
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-102 Scope; certain security and other...
• 490:2-103 Definitions and Index of Definitions.
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-103 Definitions and index of definitions....
• 490:2-104 Definitions: "Merchant"; "Between Merchants"; "Financing Agency".
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-104 Definitions: "merchant"; "between merchants"; "financing...
• 490:2-105 Definitions: Transferability; "Goods"; "Future" Goods; "Lot"; "Commercial Unit".
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-105 Definitions: transferability; "goods"; "future" goods;...
• 490:2-106 Definitions
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-106 Definitions: "contract"; "agreement"; "contract for...
• 490:2-107 Goods to Be Severed From Realty: Recording.
  Contracts and Commercial Law. 2 UH L. Rev. 247. PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER §490:2-107 Goods to be severed from...

PART 2. FORM, FORMATION AND READJUSTMENT OF CONTRACT

• 490:2-201 Formal Requirements; Statute of Frauds.
  (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not...
• 490:2-202 Final Written Expression: Parol or Extrinsic Evidence.
  Terms with respect to which the confirmatory memoranda of the parties agree or that are otherwise set forth in a writing intended by the...
• 490:2-203 Seals Inoperative.
  The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell goods does not constitute...
• 490:2-204 Formation in General.
  (1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes...
• 490:2-205 Firm Offers.
  An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be...
• 490:2-206 Offer and Acceptance in Formation of Contract.
  (1) Unless otherwise unambiguously indicated by the language or circumstances: (a) An offer to make a contract shall be construed as inviting acceptance in...
• 490:2-207 Additional Terms in Acceptance or Confirmation.
  (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even...
• 490:2-208 Repealed.
  L 2004, c 162, §16.
• 490:2-209 Modification, Rescission and Waiver.
  (1) An agreement modifying a contract within this article needs no consideration to be binding. (2) A signed agreement which excludes modification or rescission...
• 490:2-210 Delegation of Performance; Assignment of Rights.
  (1) A party may perform the party's duty through a delegate unless otherwise agreed or unless the other party has a substantial interest in...

PART 3. GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT

• 490:2-301 General Obligation of Parties.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-301 General obligation of parties. The obligation of the seller is to transfer and deliver and that...
• 490:2-302 Unconscionable Contract or Clause.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-302 Unconscionable contract or clause. (1) If the court as a matter of law finds the contract...
• 490:2-303 Allocation or Division of Risks.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-303 Allocation or division of risks. Where this article allocates a risk or a burden as between...
• 490:2-304 Price Payable in Money, Goods, Realty or Otherwise.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-304 Price payable in money, goods, realty or otherwise. (1) The price can be made payable in...
• 490:2-305 Open Price Term.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-305 Open price term. (1) The parties if they so intend can conclude a contract for sale...
• 490:2-306 Output, Requirements and Exclusive Dealings.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-306 Output, requirements and exclusive dealings. (1) A term which measures the quantity by the output of...
• 490:2-307 Delivery in Single Lot or Several Lots.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-307 Delivery in single lot or several lots. Unless otherwise agreed all goods called for by a...
• 490:2-308 Absence of Specified Place for Delivery.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-308 Absence of specified place for delivery. Unless otherwise agreed: (a) The place for delivery of goods...
• 490:2-309 Absence of Specific Time Provisions; Notice of Termination.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-309 Absence of specific time provisions; notice of termination. (1) The time for shipment or delivery or...
• 490:2-310 Open Time for Payment or Running of Credit; Authority to Ship Under Reservation.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-310 Open time for payment or running of credit; authority to ship under reservation. Unless otherwise agreed:...
• 490:2-311 Options and Cooperation Respecting Performance.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-311 Options and cooperation respecting performance. (1) An agreement for sale which is otherwise sufficiently definite (subsection...
• 490:2-312 Warranty of Title and Against Infringement; Buyer's Obligation Against Infringement.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-312 Warranty of title and against infringement; buyer's obligation against infringement. (1) Subject to subsection (2) there...
• 490:2-313 Express Warranties by Affirmation, Promise, Description, Sample.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-313 Express warranties by affirmation, promise, description, sample. (1) Express warranties by the seller are created as...
• 490:2-313.1, 313.2 Repealed.
  Products Liability in Hawaii. 14 HBJ 127. §§490:2-313.1, 313.2 REPEALED. L 1992, c 314, §§2, 3. Cross References Motor vehicle express warranty enforcement (lemon...
• 490:2-314 Implied Warranty: Merchantability; Usage of Trade.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-314 Implied warranty: merchantability; usage of trade. (1) Unless excluded or modified (section 490:2-316), a warranty that...
• 490:2-315 Implied Warranty: Fitness for Particular Purpose.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-315 Implied warranty: fitness for particular purpose. Where the seller at the time of contracting has reason...
• 490:2-316 Exclusion or Modification of Warranties.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-316 Exclusion or modification of warranties. (1) Words or conduct relevant to the creation of an express...
• 490:2-317 Cumulation and Conflict of Warranties Express or Implied.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-317 Cumulation and conflict of warranties express or implied. Warranties whether express or implied shall be construed...
• 490:2-318 Third Party Beneficiaries of Warranties Express or Implied.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-318 Third party beneficiaries of warranties express or implied. A seller's warranty whether express or implied extends...
• 490:2-319 F. O. B. and F. A. S. Terms.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-319 F.O.B. and F.A.S. terms. (1) Unless otherwise agreed the term F.O.B. (which means "free on board")...
• 490:2-320 C. I. F. and C. & F. Terms.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-320 C.I.F. and C. & F. terms. (1) The term C.I.F. means that the price includes in...
• 490:2-321 C. I. F. or C. & F.: "Net Landed Weights"; "Payment on Arrival"; Warranty of Condition on Arrival.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-321 C.I.F. or C. & F.: "net landed weights"; "payment on arrival"; warranty of condition on arrival....
• 490:2-322 Delivery "Ex-Ship".
  Products Liability in Hawaii. 14 HBJ 127. §490:2-322 Delivery "ex-ship". (1) Unless otherwise agreed a term for delivery of goods "ex-ship" (which means from...
• 490:2-323 Form of Bill of Lading Required in Overseas Shipment; "Overseas".
  Products Liability in Hawaii. 14 HBJ 127. §490:2-323 Form of bill of lading required in overseas shipment; "overseas". (1) Where the contract contemplates overseas...
• 490:2-324 "No Arrival, No Sale" Term.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-324 "No arrival, no sale" term. Under a term "no arrival, no sale" or terms of like...
• 490:2-325 "Letter of Credit" Term; "Confirmed Credit".
  Products Liability in Hawaii. 14 HBJ 127. §490:2-325 "Letter of credit" term; "confirmed credit". (1) Failure of the buyer seasonably to furnish an agreed...
• 490:2-326 Sale on Approval and Sale or Return; Rights of Creditors.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-326 Sale on approval and sale or return; rights of creditors. (1) Unless otherwise agreed, if delivered...
• 490:2-327 Special Incidents of Sale on Approval and Sale or Return.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-327 Special incidents of sale on approval and sale or return. (1) Under a sale on approval...
• 490:2-328 Sale by Auction.
  Products Liability in Hawaii. 14 HBJ 127. §490:2-328 Sale by auction. (1) In a sale by auction if goods are put up in lots...

PART 4. TITLE, CREDITORS AND GOOD FAITH PURCHASERS

• 490:2-401 Passing of Title; Reservation for Security; Limited Application of This Section.
  Each provision of this article with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies...
• 490:2-402 Rights of Seller's Creditors Against Sold Goods.
  (1) Except as provided in subsections (2) and (3), rights of unsecured creditors of the seller with respect to goods which have been identified...
• 490:2-403 Power to Transfer; Good Faith Purchase of Goods; "Entrusting".
  (1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited...

PART 5. PERFORMANCE

• 490:2-501 Insurable Interest in Goods; Manner of Identification of Goods.
  (1) The buyer obtains a special property and an insurable interest in goods by identification of existing goods as goods to which the contract...
• 490:2-502 Buyer's Right to Goods on Seller's Repudiation, Failure to Deliver, or Insolvency.
  (1) Subject to subsections (2) and (3), and even though the goods have not been shipped, a buyer who has paid a part or...
• 490:2-503 Manner of Seller's Tender of Delivery.
  (1) Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably...
• 490:2-504 Shipment by Seller.
  Where the seller is required or authorized to send the goods to the buyer and the contract does not require him to deliver them...
• 490:2-505 Seller's Shipment Under Reservation.
  (1) Where the seller has identified goods to the contract by or before shipment: (a) The seller's procurement of a negotiable bill of lading...
• 490:2-506 Rights of Financing Agency.
  (1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of...
• 490:2-507 Effect of Seller's Tender; Delivery on Condition.
  (1) Tender of delivery is a condition to the buyer's duty to accept the goods and, unless otherwise agreed, to his duty to pay...
• 490:2-508 Cure by Seller of Improper Tender or Delivery; Replacement.
  (1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller...
• 490:2-509 Risk of Loss in the Absence of Breach.
  (1) Where the contract requires or authorizes the seller to ship the goods by carrier: (a) If it does not require him to deliver...
• 490:2-510 Effect of Breach on Risk of Loss.
  (1) Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk...
• 490:2-511 Tender of Payment by Buyer; Payment by Check.
  (1) Unless otherwise agreed tender of payment is a condition to the seller's duty to tender and complete any delivery. (2) Tender of payment...
• 490:2-512 Payment by Buyer Before Inspection.
  (1) Where the contract requires payment before inspection nonconformity of the goods does not excuse the buyer from so making payment unless: (a) The...
• 490:2-513 Buyer's Right to Inspection of Goods.
  (1) Unless otherwise agreed and subject to subsection (3), where goods are tendered or delivered or identified to the contract for sale, the buyer...
• 490:2-514 When Documents Deliverable on Acceptance; When on Payment.
  Unless otherwise agreed documents against which a draft is drawn are to be delivered to the drawee on acceptance of the draft if it...
• 490:2-515 Preserving Evidence of Goods in Dispute.
  In furtherance of the adjustment of any claim or dispute: (a) Either party on reasonable notification to the other and for the purpose of...

PART 6. BREACH, REPUDIATION AND EXCUSE

• 490:2-601 Buyer's Rights on Improper Delivery.
  Subject to the provisions of this article on breach in installment contracts (section 490:2-612) and unless otherwise agreed under the sections on contractual limitations...
• 490:2-602 Manner and Effect of Rightful Rejection.
  (1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the...
• 490:2-603 Merchant Buyer's Duties As to Rightfully Rejected Goods.
  (1) Subject to any security interest in the buyer (subsection (3) of section 490:2-711), when the seller has no agent or place of business...
• 490:2-604 Buyer's Options As to Salvage of Rightfully Rejected Goods.
  Subject to the provisions of the immediately preceding section on perishables if the seller gives no instructions within a reasonable time after notification of...
• 490:2-605 Waiver of Buyer's Objections by Failure to Particularize.
  (1) The buyer's failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on...
• 490:2-606 What Constitutes Acceptance of Goods.
  (1) Acceptance of goods occurs when the buyer: (a) After a reasonable opportunity to inspect the goods signifies to the seller that the goods...
• 490:2-607 Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
  (1) The buyer must pay at the contract rate for any goods accepted. (2) Acceptance of goods by the buyer precludes rejection of the...
• 490:2-608 Revocation of Acceptance in Whole or in Part.
  (1) The buyer may revoke his acceptance of a lot or commercial units whose nonconformity substantially impairs its value to him if he has...
• 490:2-609 Right to Adequate Assurance of Performance.
  (1) A contract for sale imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. When...
• 490:2-610 Anticipatory Repudiation.
  When either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of...
• 490:2-611 Retraction of Anticipatory Repudiation.
  (1) Until the repudiating party's next performance is due he can retract his repudiation unless the aggrieved party has since the repudiation canceled or...
• 490:2-612 "Installment Contract"; Breach.
  (1) An "installment contract" is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the...
• 490:2-613 Casualty to Identified Goods.
  Where the contract requires for its performance goods identified when the contract is made, and the goods suffer casualty without fault of either party...
• 490:2-614 Substituted Performance.
  (1) Where without fault of either party the agreed berthing, loading, or unloading facilities fail or an agreed type of carrier becomes unavailable or...
• 490:2-615 Excuse by Failure of Presupposed Conditions.
  Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (a) Delay in...
• 490:2-616 Procedure on Notice Claiming Excuse.
  (1) Where the buyer receives notification of a material or indefinite delay or an allocation justified under the preceding section he may by written...

PART 7. REMEDIES

• 490:2-701 Remedies for Breach of Collateral Contracts Not Impaired.
  Remedies for breach of any obligation or promise collateral or ancillary to a contract for sale are not impaired by the provisions of this...
• 490:2-702 Seller's Remedies on Discovery of Buyer's Insolvency.
  (1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered...
• 490:2-703 Seller's Remedies in General.
  Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with...
• 490:2-704 Seller's Right to Identify Goods to the Contract Notwithstanding Breach or to Salvage Unfinished Goods.
  (1) An aggrieved seller under the preceding section may: (a) Identify to the contract conforming goods not already identified if at the time he...
• 490:2-705 Seller's Stoppage of Delivery in Transit or Otherwise.
  (1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he discovers the buyer to be...
• 490:2-706 Seller's Resale Including Contract for Resale.
  (1) Under the conditions stated in section 490:2-703 on seller's remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where...
• 490:2-707 "Person in the Position of a Seller".
  (1) A "person in the position of a seller" includes as against a principal an agent who has paid or become responsible for the...
• 490:2-708 Seller's Damages for Nonacceptance or Repudiation.
  (1) Subject to subsection (2) and to the provisions of this article with respect to proof of market price (section 490:2-723), the measure of...
• 490:2-709 Action for the Price.
  (1) When the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damages under the...
• 490:2-710 Seller's Incidental Damages.
  Incidental damages to an aggrieved seller include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody...
• 490:2-711 Buyer's Remedies in General; Buyer's Security Interest in Rejected Goods.
  (1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any...
• 490:2-712 "Cover"; Buyer's Procurement of Substitute Goods.
  (1) After a breach within the preceding section the buyer may "cover" by making in good faith and without unreasonable delay any reasonable purchase...
• 490:2-713 Buyer's Damages for Nondelivery or Repudiation.
  (1) Subject to the provisions of this article with respect to proof of market price (section 490:2-723), the measure of damages for nondelivery or...
• 490:2-714 Buyer's Damages for Breach in Regard to Accepted Goods.
  (1) Where the buyer has accepted goods and given notification (subsection (3) of section 490:2-607) he may recover as damages for any nonconformity of...
• 490:2-715 Buyer's Incidental and Consequential Damages.
  (1) Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected,...
• 490:2-716 Buyer's Right to Specific Performance or Replevin.
  (1) Specific performance may be decreed where the goods are unique or in other proper circumstances. (2) The decree for specific performance may include...
• 490:2-717 Deduction of Damages From the Price.
  The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any...
• 490:2-718 Liquidation or Limitation of Damages; Deposits.
  (1) Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light...
• 490:2-719 Contractual Modification or Limitation of Remedy.
  (1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages,...
• 490:2-720 Effect of "Cancellation" or "Rescission" on Claims for Antecedent Breach.
  Unless the contrary intention clearly appears, expressions of "cancellation" or "rescission" of the contract or the like shall not be construed as a renunciation...
• 490:2-721 Remedies for Fraud.
  Remedies for material misrepresentation or fraud include all remedies available under this article for nonfraudulent breach. Neither rescission or a claim for rescission of...
• 490:2-722 Who Can Sue Third Parties for Injury to Goods.
  Where a third party so deals with goods which have been identified to a contract for sale as to cause actionable injury to a...
• 490:2-723 Proof of Market Price; Time and Place.
  (1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the...
• 490:2-724 Admissibility of Market Quotations.
  Whenever the prevailing price or value of any goods regularly bought and sold in any established commodity market is in issue, reports in official...
• 490:2-725 Statute of Limitations in Contracts for Sale.
  (1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By...

ARTICLE 2A.
LEASES

• 490:2a-101 Short Title.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-101 Short title. This article shall be known and may be cited...
• 490:2a-102 Scope.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-102 Scope. This article applies to any transaction, regardless of form, that...
• 490:2a-103 Definitions and Index of Definitions.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-103 Definitions and index of definitions. (a) In this article unless the...
• 490:2a-104 Leases Subject to Other Law.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-104 Leases subject to other law. (a) A lease, although subject to...
• 490:2a-105 Territorial Application of Article to Goods Covered by Certificate of Title.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-105 Territorial application of article to goods covered by certificate of title....
• 490:2a-106 Limitation on Power of Parties to Consumer Lease to Choose Applicable Law and Judicial Forum.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-106 Limitation on power of parties to consumer lease to choose applicable...
• 490:2a-107 Waiver or Renunciation of Claim or Right After Default.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-107 Waiver or renunciation of claim or right after default. Any claim...
• 490:2a-108 Unconscionability.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-108 Unconscionability. (a) If the court as a matter of law finds...
• 490:2a-109 Option to Accelerate At Will.
  Lease-purchase agreements for personal property, see chapter 481M. [PART 1. GENERAL PROVISIONS] §490:2A-109 Option to accelerate at will. (a) A term providing that one...

PART 2. FORMATION AND CONSTRUCTION OF LEASE CONTRACT

• 490:2a-201 Statute of Frauds.
  (a) A lease contract is not enforceable by way of action or defense unless: (1) The total payments to be made under the lease...
• 490:2a-202 Final Written Expression: Parol or Extrinsic Evidence.
  Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the...
• 490:2a-203 Seals Inoperative.
  The affixing of a seal to a writing evidencing a lease contract or an offer to enter into a lease contract does not render the...
• 490:2a-204 Formation in General.
  (a) A lease contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of a...
• 490:2a-205 Firm Offers.
  An offer by a merchant to lease goods to or from another person in a signed writing that by its terms gives assurance it will...
• 490:2a-206 Offer and Acceptance in Formation of Lease Contract.
  (a) Unless otherwise unambiguously indicated by the language or circumstances, an offer to make a lease contract must be construed as inviting acceptance in any...
• 490:2a-207 Repealed.
  L 2004, c 162, §17.
• 490:2a-208 Modification, Rescission and Waiver.
  (a) An agreement modifying a lease contract needs no consideration to be binding. (b) A signed lease agreement that excludes modification or rescission except by...
• 490:2a-209 Lessee Under Finance Lease As Beneficiary of Supply Contract.
  (a) The benefit of a supplier's promises to the lessor under the supply contract and of all warranties, whether express or implied, including those...
• 490:2a-210 Express Warranties.
  (a) Express warranties by the lessor are created as follows: (1) Any affirmation of fact or promise made by the lessor to the lessee which...
• 490:2a-211 Warranties Against Interference and Against Infringement; Lessee's Obligation Against Infringement.
  (a) There is in a lease contract a warranty that for the lease term no person holds a claim to or interest in the...
• 490:2a-212 Implied Warranty of Merchantability.
  (a) Except in a finance lease, a warranty that the goods will be merchantable is implied in a lease contract if the lessor is...
• 490:2a-213 Implied Warranty of Fitness for Particular Purpose.
  Except in a finance lease, if the lessor at the time the lease contract is made has reason to know of any particular purpose...
• 490:2a-214 Exclusion or Modification of Warranties.
  (a) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit a warranty must be...
• 490:2a-215 Cumulation and Conflict of Warranties Express or Implied.
  Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention...
• 490:2a-216 Third-Party Beneficiaries of Express and Implied Warranties.
  A warranty to or for the benefit of a lessee under this article, whether express or implied, extends to any person who may reasonably...
• 490:2a-217 Identification.
  Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to...
• 490:2a-218 Insurance and Proceeds.
  (a) A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the...
• 490:2a-219 Risk of Loss.
  (a) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In...
• 490:2a-220 Effect of Default on Risk of Loss.
  (a) Where risk of loss is to pass to the lessee and the time of passage is not stated: (1) If a tender or...
• 490:2a-221 Casualty to Identified Goods.
  If a lease contract requires goods identified when the lease contract is made, and the goods suffer casualty without fault of the lessee, the...

PART 3. EFFECT OF LEASE CONTRACT

• 490:2a-301 Enforceability of Lease Contract.
  Except as otherwise provided in this article, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of...
• 490:2a-302 Title to and Possession of Goods.
  Except as otherwise provided in this article, each provision of this article applies whether the lessor or a third party has title to the...
• 490:2a-303 Alienability of Party's Interest Under Lease Contract or of Lessor's Residual Interest in Goods; Delegation of Performance; Transfer of Rights.
  (a) As used in this section, "creation of a security interest" includes the sale of a lease contract that is subject to article 9,...
• 490:2a-304 Subsequent Lease of Goods by Lessor.
  (a) Subject to section 490:2A-303, a subsequent lessee from a lessor of goods under an existing lease contract obtains, to the extent of the...
• 490:2a-305 Sale or Sublease of Goods by Lessee.
  (a) Subject to the provisions of section 490:2A-303, a buyer or sublessee from the lessee of goods under an existing lease contract obtains, to...
• 490:2a-306 Priority of Certain Liens Arising by Operation of Law.
  If a person in the ordinary course of the person's business furnishes services or materials with respect to goods subject to a lease contract, a...
• 490:2a-307 Priority of Liens Arising by Attachment or Levy On, Security Interests In, and Other Claims to Goods.
  (a) Except as otherwise provided in section 490:2A-306, a creditor of a lessee takes subject to the lease contract. (b) Except as otherwise provided...
• 490:2a-308 Special Rights of Creditors.
  (a) A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against...
• 490:2a-309 Lessor's and Lessee's Rights When Goods Become Fixtures.
  (a) In this section: (1) Goods are "fixtures" when they become so related to particular real estate that an interest in them arises under...
• 490:2a-310 Lessor's and Lessee's Rights When Goods Become Accessions.
  (a) Goods are "accessions" when they are installed in or affixed to other goods. (b) The interest of a lessor or a lessee under...
• 490:2a-311 Priority Subject to Subordination.
  Nothing in this article prevents subordination by agreement by any person entitled to priority. [L 1991, c 40, pt of §1]

PART 4. PERFORMANCE OF LEASE CONTRACT:
REPUDIATED, SUBSTITUTED, AND EXCUSED

• 490:2a-401 Insecurity: Adequate Assurance of Performance.
  (a) A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. (b) If...
• 490:2a-402 Anticipatory Repudiation.
  If either party repudiates a lease contract with respect to a performance not yet due under the lease contract, the loss of which performance...
• 490:2a-403 Retraction of Anticipatory Repudiation.
  (a) Until the repudiating party's next performance is due, the repudiating party can retract the repudiation unless, since the repudiation, the aggrieved party has...
• 490:2a-404 Substituted Performance.
  (a) If without fault of the lessee, the lessor, and the supplier, the agreed berthing, loading, or unloading facilities fail or the agreed type of...
• 490:2a-405 Excused Performance.
  Subject to section 490:2A-404 on substituted performance, the following rules apply: (1) Delay in delivery or nondelivery in whole or in part by a lessor...
• 490:2a-406 Procedure on Excused Performance.
  (a) If the lessee receives notification of a material or indefinite delay or an allocation justified under section 490:2A-405, the lessee may by written notification...
• 490:2a-407 Irrevocable Promises: Finance Leases.
  (a) In the case of a finance lease that is not a consumer lease the lessee's promises under the lease contract become irrevocable and independent...

PART 5. DEFAULT
Subpart A. In General

• 490:2a-501 Default: Procedure.
  (a) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this article. (b)...
• 490:2a-502 Notice After Default.
  Except as otherwise provided in this article or the lease agreement, the lessor or lessee in default under the lease contract is not entitled...
• 490:2a-503 Modification or Impairment of Rights and Remedies.
  (a) Except as otherwise provided in this article, the lease agreement may include rights and remedies for default in addition to or in substitution...
• 490:2a-504 Liquidation of Damages.
  (a) Damages payable by either party for default, or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits...
• 490:2a-505 Cancellation and Termination and Effect of Cancellation, Termination, Rescission, or Fraud on Rights and Remedies.
  (a) On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior...
• 490:2a-506 Statute of Limitations.
  (a) An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four years after the cause of...
• 490:2a-507 Proof of Market Rent: Time and Place.
  (a) Damages based on market rent (section 490:2A-519 or 490:2A-528) are determined according to the rent for the use of the goods concerned for...

Subpart B. Default by Lessor

• 490:2a-508 Lessee's Remedies.
  (a) If a lessor fails to deliver the goods in conformity to the lease contract (section 490:2A-509) or repudiates the lease contract (section 490:2A-402), or...
• 490:2a-509 Lessee's Rights on Improper Delivery; Rightful Rejection.
  (a) Subject to the provisions of section 490:2A-510 on default in installment lease contracts, if the goods or the tender or delivery fail in...
• 490:2a-510 Installment Lease Contracts: Rejection and Default.
  (a) Under an installment lease contract a lessee may reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that...
• 490:2a-511 Merchant Lessee's Duties As to Rightfully Rejected Goods.
  (a) Subject to any security interest of a lessee (section 490:2A-508(e)), if a lessor or a supplier has no agent or place of business...
• 490:2a-512 Lessee's Duties As to Rightfully Rejected Goods.
  (a) Except as otherwise provided with respect to goods that threaten to decline in value speedily (section 490:2A-511) and subject to any security interest...
• 490:2a-513 Cure by Lessor of Improper Tender or Delivery; Replacement.
  (a) If any tender or delivery by the lessor or the supplier is rejected because nonconforming and the time for performance has not yet...
• 490:2a-514 Waiver of Lessee's Objections.
  (a) In rejecting goods, a lessee's failure to state a particular defect that is ascertainable by reasonable inspection precludes the lessee from relying on...
• 490:2a-515 Acceptance of Goods.
  (a) Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and: (1) The lessee signifies or acts with...
• 490:2a-516 Effect of Acceptance of Goods; Notice of Default; Burden of Establishing Default After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
  (a) A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for goods rightfully rejected or...
• 490:2a-517 Revocation of Acceptance of Goods.
  (a) A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee...
• 490:2a-518 Cover; Substitute Goods.
  (a) After a default by a lessor under the lease contract of the type described in section 490:2A-508(a), or, if agreed, after other default by...
• 490:2a-519 Lessee's Damages for Nondelivery, Repudiation, Default, and Breach of Warranty in Regard to Accepted Goods.
  (a) Except as otherwise provided with respect to damages liquidated in the lease agreement (section 490:2A-504) or otherwise determined pursuant to agreement of the...
• 490:2a-520 Lessee's Incidental and Consequential Damages.
  (a) Incidental damages resulting from a lessor's default include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected...
• 490:2a-521 Lessee's Right to Specific Performance or Replevin.
  (a) Specific performance may be decreed if the goods are unique or in other proper circumstances. (b) A decree for specific performance may include...
• 490:2a-522 Lessee's Right to Goods on Lessor's Insolvency.
  (a) Subject to subsection (b) and even though the goods have not been shipped, a lessee who has paid a part or all of...

Subpart C. Default by Lessee

• 490:2a-523 Lessor's Remedies.
  (a) If a lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a...
• 490:2a-524 Lessor's Right to Identify Goods to Lease Contract.
  (a) After default by the lessee under the lease contract of the type described in section 490:2A-523(a) or 490:2A-523(c)(1) or, if agreed, after other...
• 490:2a-525 Lessor's Right to Possession of Goods.
  (a) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods. (b) After a default by the...
• 490:2a-526 Lessor's Stoppage of Delivery in Transit or Otherwise.
  (a) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee to...
• 490:2a-527 Lessor's Rights to Dispose of Goods.
  (a) After a default by a lessee under the lease contract of the type described in section 490:2A-523(a) or 490:2A-523(c)(1) or after the lessor...
• 490:2a-528 Lessor's Damages for Nonacceptance, Failure to Pay, Repudiation, or Other Default.
  (a) Except as otherwise provided with respect to damages liquidated in the lease agreement (section 490:2A-504) or otherwise determined pursuant to agreement of the...
• 490:2a-529 Lessor's Action for the Rent.
  (a) After default by the lessee under the lease contract of the type described in section 490:2A-523(a) or 490:2A-523(c)(1) or, if agreed, after other default...
• 490:2a-530 Lessor's Incidental Damages.
  Incidental damages to an aggrieved lessor include any commercially reasonable charges, expenses, or commissions incurred in stopping delivery, in the transportation, care, and custody of...
• 490:2a-531 Standing to Sue Third Parties for Injury to Goods.
  (a) If a third party so deals with goods that have been identified to a lease contract as to cause actionable injury to a...
• 490:2a-532 Lessor's Rights to Residual Interest.
  In addition to any other recovery permitted by this article or other law, the lessor may recover from the lessee an amount that will...

ARTICLE 3. OLD
COMMERCIAL PAPER
REPEALED. L 1991, c 118, §5.
ARTICLE 3.
NEGOTIABLE INSTRUMENTS
PART 1. GENERAL PROVISIONS AND DEFINITIONS

• 490:3-101 Short Title.
  This article may be cited as Uniform Commercial Code--Negotiable Instruments. [L 1991, c 118, pt of §1]
• 490:3-102 Subject Matter.
  (a) This article applies to negotiable instruments. It does not apply to money, to payment orders governed by article 4A, or to securities governed...
• 490:3-103 Definitions.
  (a) In this article: (1) "Acceptor" means a drawee that has accepted a draft. (2) "Drawee" means a person ordered in a draft to...
• 490:3-104 Negotiable Instrument.
  (a) Except as provided in subsections (c) and (d), "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with...
• 490:3-105 Issue of Instrument.
  (a) "Issue" means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of...
• 490:3-106 Unconditional Promise or Order.
  (a) Except as provided in this section, for the purposes of section 490:3-104(a), a promise or order is unconditional unless it states (i) an...
• 490:3-107 Instrument Payable in Foreign Money.
  Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in...
• 490:3-108 Payable on Demand or At Definite Time.
  (a) A promise or order is "payable on demand" if it (i) states that it is payable on demand or at sight, or otherwise...
• 490:3-109 Payable to Bearer or to Order.
  (a) A promise or order is "payable to bearer" if it: (1) States that it is payable to bearer or to the order of...
• 490:3-110 Identification of Person to Whom Instrument is Payable.
  (a) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as,...
• 490:3-111 Place of Payment.
  Except as otherwise provided for items in article 4, an instrument is payable at the place of payment stated in the instrument. If no...
• 490:3-112 Interest.
  (a) Unless otherwise provided in the instrument, (i) an instrument is not payable with interest, and (ii) interest on an interest-bearing instrument is payable from...
• 490:3-113 Date of Instrument.
  (a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed...
• 490:3-114 Contradictory Terms of Instrument.
  If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers. [L 1991,...
• 490:3-115 Incomplete Instrument.
  (a) "Incomplete instrument" means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing...
• 490:3-116 Joint and Several Liability; Contribution.
  (a) Except as otherwise provided in the instrument, two or more persons who have the same liability on an instrument as makers, drawers, acceptors,...
• 490:3-117 Other Agreements Affecting Instrument.
  Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the...
• 490:3-118 Statute of Limitations.
  (a) Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time...
• 490:3-119 Notice of Right to Defend Action.
  In an action for breach of an obligation for which a third person is answerable over pursuant to this article or article 4, the defendant...

PART 2. NEGOTIATION, TRANSFER, AND INDORSEMENT

• 490:3-201 Negotiation.
  (a) "Negotiation" means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person...
• 490:3-202 Negotiation Subject to Rescission.
  (a) Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, or a person without capacity, (ii) by fraud,...
• 490:3-203 Transfer of Instrument; Rights Acquired by Transfer.
  (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person...
• 490:3-204 Indorsement.
  (a) "Indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is...
• 490:3-205 Special Indorsement; Blank Indorsement; Anomalous Indorsement.
  (a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the...
• 490:3-206 Restrictive Indorsement.
  (a) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent...
• 490:3-207 Reacquisition.
  Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or otherwise. A former holder who reacquires the instrument...

PART 3. ENFORCEMENT OF INSTRUMENTS

• 490:3-301 Person Entitled to Enforce Instrument.
  "Person entitled to enforce" an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the...
• 490:3-302 Holder in Due Course.
  (a) Subject to subsection (c) and section 490:3-106(d), "holder in due course" means the holder of an instrument if: (1) The instrument when issued...
• 490:3-303 Value and Consideration.
  (a) An instrument is issued or transferred for value if: (1) The instrument is issued or transferred for a promise of performance, to the...
• 490:3-304 Overdue Instrument.
  (a) An instrument payable on demand becomes overdue at the earliest of the following times: (1) On the day after the day demand for...
• 490:3-305 Defenses and Claims in Recoupment.
  (a) Except as stated in subsection (b), the right to enforce the obligation of a party to pay the instrument is subject to the...
• 490:3-306 Claims to an Instrument.
  A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a...
• 490:3-307 Notice of Breach of Fiduciary Duty.
  (a) In this section: (1) "Fiduciary" means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect...
• 490:3-308 Proof of Signatures and Status As Holder in Due Course.
  (a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless...
• 490:3-309 Enforcement of Lost, Destroyed, or Stolen Instrument.
  (a) A person not in possession of an instrument is entitled to enforce the instrument if (i) the person was in rightful possession of...
• 490:3-310 Effect of Instrument on Obligation for Which Taken.
  (a) Unless otherwise agreed, if a certified check, cashier's check, or teller's check is taken for an obligation, the obligation is discharged to the...
• 490:3-311 Accord and Satisfaction by Use of Instrument.
  (a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant...
• 490:3-312 Lost, Destroyed, or Stolen Cashier's Check, Teller's Check, or Certified Check.
  (a) In this section: (1) "Check" means a cashier's check, teller's check, or certified check. (2) "Claimant" means a person who claims the right...

PART 4. LIABILITY OF PARTIES

• 490:3-401 Signature.
  (a) A person is not liable on an instrument unless (i) the person signed the instrument, or (ii) the person is represented by an...
• 490:3-402 Signature by Representative.
  (a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person...
• 490:3-403 Unauthorized Signature.
  (a) Unless otherwise provided in this article or article 4, an unauthorized signature is ineffective except as the signature of the unauthorized signer in...
• 490:3-404 Impostors; Fictitious Payees.
  (a) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor,...
• 490:3-405 Employer Responsibility for Fraudulent Indorsement by Employee.
  (a) In this section: (1) "Employee" includes an independent contractor and employee of an independent contractor retained by the employer. (2) "Fraudulent indorsement" means...
• 490:3-406 Negligence Contributing to Forged Signature or Alteration of Instrument.
  (a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged...
• 490:3-407 Alteration.
  (a) "Alteration" means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii)...
• 490:3-408 Drawee Not Liable on Unaccepted Draft.
  A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its...
• 490:3-409 Acceptance of Draft; Certified Check.
  (a) "Acceptance" means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of...
• 490:3-410 Acceptance Varying Draft.
  (a) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and...
• 490:3-411 Refusal to Pay Cashier's Checks, Teller's Checks, and Certified Checks.
  (a) In this section, "obligated bank" means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought...
• 490:3-412 Obligation of Issuer of Note or Cashier's Check.
  The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to...
• 490:3-413 Obligation of Acceptor.
  (a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even...
• 490:3-414 Obligation of Drawer.
  (a) This section does not apply to cashier's checks or other drafts drawn on the drawer. (b) If an unaccepted draft is dishonored, the drawer...
• 490:3-415 Obligation of Indorser.
  (a) Subject to subsections (b), (c), and (d) and to section 490:3-419(d), if an instrument is dishonored, an indorser is obliged to pay the...
• 490:3-416 Transfer Warranties.
  (a) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee...
• 490:3-417 Presentment Warranties.
  (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft: (1) The person...
• 490:3-418 Payment or Acceptance by Mistake.
  (a) Except as provided in subsection (c), if the drawee of a draft pays or accepts the draft and the drawee acted on the...
• 490:3-419 Instruments Signed for Accommodation.
  (a) If an instrument is issued for value given for the benefit of a party to the instrument ("accommodated party") and another party to...
• 490:3-420 Conversion of Instrument.
  (a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other...

PART 5. DISHONOR

• 490:3-501 Presentment.
  (a) "Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made...
• 490:3-502 Dishonor.
  (a) Dishonor of a note is governed by the following rules: (1) If the note is payable on demand, the note is dishonored if...
• 490:3-503 Notice of Dishonor.
  (a) The obligation of an indorser stated in section 490:3-415(a) and the obligation of a drawer stated in section 490:3-414(d) may not be enforced...
• 490:3-504 Excused Presentment and Notice of Dishonor.
  (a) Presentment for payment or acceptance of an instrument is excused if (i) the person entitled to present the instrument cannot with reasonable diligence...
• 490:3-505 Evidence of Dishonor.
  (a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated: (1) A document regular...
• 490:3-506 Dishonored Check; Action for Treble Damages; Procedures.
  (a) In any action against a person who makes any check, draft, or order for the payment of money that has been dishonored for...
• 490:3-506.5 Charges for Dishonored Checks.
  The payee or a holder in due course of any check, draft, or order for the payment of money that has been dishonored for...

PART 6. DISCHARGE AND PAYMENT

• 490:3-601 Discharge and Effect of Discharge.
  (a) The obligation of a party to pay the instrument is discharged as stated in this article or by an act or agreement with...
• 490:3-602 Payment.
  (a) Subject to subsection (b), an instrument is paid to the extent payment is made (i) by or on behalf of a party obliged...
• 490:3-603 Tender of Payment.
  (a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect...
• 490:3-604 Discharge by Cancellation or Renunciation.
  (a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument (i)...
• 490:3-605 Discharge of Indorsers and Accommodation Parties.
  (a) In this section, the term "indorser" includes a drawer having the obligation described in section 490:3-414(d). (b) Discharge, under section 490:3-604, of the...

ARTICLE 4.
BANK DEPOSITS AND COLLECTIONS
PART 1. GENERAL PROVISIONS AND DEFINITIONS

• 490:4-101 Short Title.
  This article may be cited as Uniform Commercial Code--Bank Deposits and Collections. [L 1965, c 208, §4-101; HRS §490:4-101; am L 1991, c 118,...
• 490:4-102 Applicability.
  (a) To the extent that items within this article are also within articles 3 and 8, they are subject to those articles. If there...
• 490:4-103 Variation by Agreement; Measure of Damages; Action Constituting Ordinary Care.
  (a) The effect of the provisions of this article may be varied by agreement, but the parties to the agreement cannot disclaim a bank's...
• 490:4-104 Definitions and Index of Definitions.
  (a) In this article, unless the context otherwise requires: (1) "Account" means any deposit or credit account with a bank, including a demand, time,...
• 490:4-105 "Bank"; "Depositary Bank"; "Payor Bank"; "Intermediary Bank"; "Collecting Bank"; "Presenting Bank".
  In this article: (1) "Bank" means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union,...
• 490:4-106 Payable Through or Payable At Bank; Collecting Bank.
  (a) If an item states that it is "payable through" a bank identified in the item, (i) the item designates the bank as a...
• 490:4-107 Separate Office of a Bank.
  A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the...
• 490:4-108 Time of Receipt of Items.
  (a) For the purpose of allowing time to process items, prove balances, and make the necessary entries on its books to determine its position...
• 490:4-109 [Old] Repealed.
  L 1991, c 118, pt of §4. §490:4-109 Delays. (a) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment...
• 490:4-110 Electronic Presentment.
  (a) "Agreement for electronic presentment" means an agreement, clearing-house rule, or Federal Reserve regulation or operating circular, providing that presentment of an item may...
• 490:4-111 Statute of Limitations.
  An action to enforce an obligation, duty, or right arising under this article must be commenced within three years after the cause of action...

PART 2. COLLECTION OF ITEMS:
DEPOSITARY AND COLLECTING BANKS

• 490:4-201 Status of Collecting Bank As Agent and Provisional Status of Credits; Applicability of Article; Item Indorsed "Pay Any Bank".
  (a) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or...
• 490:4-202 Responsibility for Collection or Return; When Action Timely.
  (a) A collecting bank must exercise ordinary care in: (1) Presenting an item or sending it for presentment; (2) Sending notice of dishonor or...
• 490:4-203 Effect of Instructions.
  Subject to article 3 concerning conversion of instruments (section 490:3-420) and restrictive indorsements (section 490:3-206), only a collecting bank's transferor can give instructions that affect...
• 490:4-204 Methods of Sending and Presenting; Sending Directly to Payor Bank.
  (a) A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number...
• 490:4-205 Depositary Bank Holder of Unindorsed Item.
  If a customer delivers an item to a depositary bank for collection: (1) The depositary bank becomes a holder of the item at the...
• 490:4-206 Transfer Between Banks.
  Any agreed method that identifies the transferor bank is sufficient for the item's further transfer to another bank. [L 1965, c 208, §4-206; HRS...
• 490:4-207 Transfer Warranties.
  (a) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any...
• 490:4-208 Presentment Warranties.
  (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft: (1) The...
• 490:4-209 Encoding and Retention Warranties.
  (a) A person who encodes information on or with respect to an item after issue warrants to any subsequent collecting bank and to the...
• 490:4-210 Security Interest of Collecting Bank in Items, Accompanying Documents and Proceeds.
  (a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either: (1) In case of...
• 490:4-211 [Old] Repealed.
  L 1991, c 118, pt of §4. §490:4-211 When bank gives value for purposes of holder in due course. For purposes of determining its...
• 490:4-212 Presentment by Notice of Item Not Payable By, Through, or At a Bank; Liability of Drawer or Indorser.
  (a) Unless otherwise instructed, a collecting bank may present an item not payable by, through, or at a bank by sending to the party...
• 490:4-213 Medium and Time of Settlement by Bank.
  (a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearing-house...
• 490:4-214 Right of Charge Back or Refund; Liability of Collecting Bank; Return of Item.
  (a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by...
• 490:4-215 Final Payment of Item by Payor Bank; When Provisional Debits and Credits Become Final; When Certain Credits Become Available for Withdrawal.
  (a) An item is finally paid by a payor bank when the bank has first done any of the following: (1) Paid the item...
• 490:4-216 Insolvency and Preference.
  (a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not...

PART 3. COLLECTION OF ITEMS; PAYOR BANKS

• 490:4-301 Deferred Posting; Recovery of Payment by Return of Items; Time of Dishonor; Return of Items by Payor Bank.
  (a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter...
• 490:4-302 Payor Bank's Responsibility for Late Return of Item.
  (a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of: (1) A demand item,...
• 490:4-303 When Items Subject to Notice, Stop-Payment Order, Legal Process, or Setoff; Order in Which Items May Be Charged or Certified.
  (a) Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to...

PART 4. RELATIONSHIP BETWEEN PAYOR
BANK AND ITS CUSTOMER

• 490:4-401 When Bank May Charge Customer's Account.
  (a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge...
• 490:4-402 Bank's Liability to Customer for Wrongful Dishonor; Time of Determining Insufficiency of Account.
  (a) Except as otherwise provided in this article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but...
• 490:4-403 Customer's Right to Stop Payment; Burden of Proof of Loss.
  (a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item...
• 490:4-404 Bank Not Obligated to Pay Check More Than Six Months Old.
  A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented...
• 490:4-405 Death or Incompetence of Customer.
  (a) A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective,...
• 490:4-406 Customer's Duty to Discover and Report Unauthorized Signature or Alteration.
  (a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return...
• 490:4-407 Payor Bank's Right to Subrogation on Improper Payment.
  If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been...

PART 5. COLLECTION OF DOCUMENTARY DRAFTS

• 490:4-501 Handling of Documentary Drafts; Duty to Send for Presentment and to Notify Customer of Dishonor.
  A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that...
• 490:4-502 Presentment of "on Arrival" Drafts.
  If a draft or the relevant instructions require presentment "on arrival", "when goods arrive" or the like, the collecting bank need not present until in...
• 490:4-503 Responsibility of Presenting Bank for Documents and Goods; Report of Reasons for Dishonor; Referee in Case of Need.
  Unless otherwise instructed and except as provided in article 5, a bank presenting a documentary draft: (1) Must deliver the documents to the drawee...
• 490:4-504 Privilege of Presenting Bank to Deal With Goods; Security Interest for Expenses.
  (a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time...

ARTICLE 4A.
FUNDS TRANSFERS
PART 1. SUBJECT MATTER AND DEFINITIONS

• 490:4a-101 Short Title.
  This article may be cited as Uniform Commercial Code -- Funds Transfers. [L 1991, c 41, pt of §1]
• 490:4a-102 Subject Matter.
  Except as otherwise provided in section 490:4A-108, this article applies to funds transfers defined in section 490:4A-104. [L 1991, c 41, pt of §1]
• 490:4a-103 Payment Order--Definitions.
  (a) In this article: (1) "Payment order" means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to...
• 490:4a-104 Funds Transfer--Definitions.
  In this article: (1) "Funds transfer" means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment...
• 490:4a-105 Other Definitions.
  (a) In this article: (1) "Authorized account" means a deposit account of a customer in a bank designated by the customer as a source...
• 490:4a-106 Time Payment Order is Received.
  (a) The time of receipt of a payment order or communication canceling or amending a payment order is determined by the rules applicable to...
• 490:4a-107 Federal Reserve Regulations and Operating Circulars.
  Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of...
• 490:4a-108 Relationship to Electronic Fund Transfer Act.
  (a) Except as provided in subsection (b), this article does not apply to a funds transfer any part of which is governed by the...

PART 2. ISSUE AND ACCEPTANCE OF PAYMENT ORDER

• 490:4a-201 Security Procedure.
  "Security procedure" means a procedure established by agreement of a customer and a receiving bank for the purpose of (i) verifying that a payment...
• 490:4a-202 Authorized and Verified Payment Orders.
  (a) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the...
• 490:4a-203 Unenforceability of Certain Verified Payment Orders.
  (a) If an accepted payment order is not, under section 490:4A-202(a), an authorized order of a customer identified as sender, but is effective as...
• 490:4a-204 Refund of Payment and Duty of Customer to Report With Respect to Unauthorized Payment Order.
  (a) If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and...
• 490:4a-205 Erroneous Payment Orders.
  (a) If an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order (i) erroneously...
• 490:4a-206 Transmission of Payment Order Through Funds-Transfer or Other Communication System.
  (a) If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other third-party communication system for transmittal to...
• 490:4a-207 Misdescription of Beneficiary.
  (a) Subject to subsection (b), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of...
• 490:4a-208 Misdescription of Intermediary Bank or Beneficiary's Bank.
  (a) This subsection applies to a payment order identifying an intermediary bank or the beneficiary's bank only by an identifying number. (1) The receiving...
• 490:4a-209 Acceptance of Payment Order.
  (a) Subject to subsection (d), a receiving bank other than the beneficiary's bank accepts a payment order when it executes the order. (b) Subject...
• 490:4a-210 Rejection of Payment Order.
  (a) A payment order is rejected by the receiving bank by a notice of rejection transmitted to the sender orally, electronically, or in writing....
• 490:4a-211 Cancellation and Amendment of Payment Order.
  (a) A communication of the sender of a payment order canceling or amending the order may be transmitted to the receiving bank orally, electronically,...
• 490:4a-212 Liability and Duty of Receiving Bank Regarding Unaccepted Payment Order.
  If a receiving bank fails to accept a payment order that it is obliged by express agreement to accept, the bank is liable for...

PART 3. EXECUTION OF SENDER'S
PAYMENT ORDER BY RECEIVING BANK

• 490:4a-301 Execution and Execution Date.
  (a) A payment order is "executed" by the receiving bank when it issues a payment order intended to carry out the payment order received...
• 490:4a-302 Obligations of Receiving Bank in Execution of Payment Order.
  (a) Except as provided in subsections (b) through (d), if the receiving bank accepts a payment order pursuant to section 490:4A-209(a), the bank has...
• 490:4a-303 Erroneous Execution of Payment Order.
  (a) A receiving bank that (i) executes the payment order of the sender by issuing a payment order in an amount greater than the...
• 490:4a-304 Duty of Sender to Report Erroneously Executed Payment Order.
  If the sender of a payment order that is erroneously executed as stated in section 490:4A-303 receives notification from the receiving bank that the...
• 490:4a-305 Liability for Late or Improper Execution or Failure to Execute Payment Order.
  (a) If a funds transfer is completed, but execution of a payment order by the receiving bank in breach of section 490:4A-302 results in...

PART 4. PAYMENT

• 490:4a-401 Payment Date.
  "Payment date" of a payment order means the day on which the amount of the order is payable to the beneficiary by the beneficiary's...
• 490:4a-402 Obligation of Sender to Pay Receiving Bank.
  (a) This section is subject to sections 490:4A-205 and 490:4A-207. (b) With respect to a payment order issued to the beneficiary's bank, acceptance of...
• 490:4a-403 Payment by Sender to Receiving Bank.
  (a) Payment of the sender's obligation under section 490:4A-402 to pay the receiving bank occurs as follows: (1) If the sender is a bank,...
• 490:4a-404 Obligation of Beneficiary's Bank to Pay and Give Notice to Beneficiary.
  (a) Subject to sections 490:4A-211(e), 490:4A-405(d), and 490:4A-405(e), if a beneficiary's bank accepts a payment order, the bank is obliged to pay the amount...
• 490:4a-405 Payment by Beneficiary's Bank to Beneficiary.
  (a) If the beneficiary's bank credits an account of the beneficiary of a payment order, payment of the bank's obligation under section 490:4A-404(a) occurs...
• 490:4a-406 Payment by Originator to Beneficiary; Discharge of Underlying Obligation.
  (a) Subject to sections 490:4A-211(e), 490:4A-405(d), and 490:4A-405(e), the originator of a funds transfer pays the beneficiary of the originator's payment order (i) at...

PART 5. MISCELLANEOUS PROVISIONS

• 490:4a-501 Variation by Agreement and Effect of Funds-Transfer System Rule.
  (a) Except as otherwise provided in this article, rights and obligations of a party to a funds transfer may be varied by agreement of...
• 490:4a-502 Creditor Process Served on Receiving Bank; Setoff by Beneficiary's Bank.
  (a) As used in this section, "creditor process" means levy, attachment, garnishment, notice of lien, sequestration, or similar process issued by or on behalf...
• 490:4a-503 Injunction or Restraining Order With Respect to Funds Transfer.
  For proper cause and in compliance with applicable law, a court may restrain (i) a person from issuing a payment order to initiate a...
• 490:4a-504 Order in Which Items and Payment Orders May Be Charged to Account; Order of Withdrawals From Account.
  (a) If a receiving bank has received more than one payment order of the sender or one or more payment orders and other items...
• 490:4a-505 Preclusion of Objection to Debit of Customer's Account.
  If a receiving bank has received payment from its customer with respect to a payment order issued in the name of the customer as...
• 490:4a-506 Rate of Interest.
  (a) If, under this article, a receiving bank is obliged to pay interest with respect to a payment order issued to the bank, the...
• 490:4a-507 Choice of Law.
  (a) The following rules apply unless the affected parties otherwise agree or subsection (c) applies: (1) The rights and obligations between the sender of...

ARTICLE 5. OLD
LETTERS OF CREDIT

• 490:5-101 to 490:5-117 Repealed.
  L 1996, c 39, §10. ARTICLE 5. LETTERS OF CREDIT §490:5-101 Short title. This article may be cited as Uniform Commercial Code--Letters of Credit....
• 490:5-102 Definitions.
  (a) As used in this article: (1) "Adviser" means a person who, at the request of the issuer, a confirmer, or another adviser, notifies...
• 490:5-103 Scope.
  (a) This article applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. (b) The...
• 490:5-104 Formal Requirements.
  A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a record and is authenticated (i)...
• 490:5-105 Consideration.
  Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation. [L 1996, c 39, pt of §1]
• 490:5-106 Issuance, Amendment, Cancellation, and Duration.
  (a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it...
• 490:5-107 Confirmer, Nominated Person, and Advisor.
  (a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its...
• 490:5-108 Issuer's Rights and Obligations.
  (a) Except as otherwise provided in section 490:5-109, an issuer shall honor a presentation that, as determined by the standard practice referred to in...
• 490:5-109 Fraud and Forgery.
  (a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit,...
• 490:5-110 Warranties.
  (a) If its presentation is honored, the beneficiary warrants: (1) To the issuer, any other person to whom presentation is made, and the applicant,...
• 490:5-111 Remedies.
  (a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor, or...
• 490:5-112 Transfer of Letter of Credit.
  (a) Except as otherwise provided in section 490:5-113, unless a letter of credit provides that it is transferable, the right of a beneficiary to...
• 490:5-113 Transfer by Operation of Law.
  (a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the...
• 490:5-114 Assignment of Proceeds.
  (a) In this section, "proceeds of a letter of credit" means the cash, check, accepted draft, or other item of value paid or delivered...
• 490:5-115 Statute of Limitations.
  An action to enforce a right or obligation arising under this article must be commenced within one year after the expiration date of the...
• 490:5-116 Choice of Law and Forum.
  (a) The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by...
• 490:5-117 Subrogation of Issuer, Applicant, and Nominated Person.
  (a) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer...
• 490:5-118 Security Interest of Issuer or Nominated Person.
  (a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the...

ARTICLE 6. OLD
BULK TRANSFERS
REPEALED. L 1991, c 119, §4.
ARTICLE 6.
BULK SALES--REPEALED

• 490:6-101 to 490:6-110 Repealed.
  L 1998, c 209, §3.

ARTICLE 7. OLD
WAREHOUSE RECEIPTS, BILLS OF LADING
AND OTHER DOCUMENTS OF TITLE

• 490:7-101 to 490:7-603 Repealed.
  L 2004, c 163, §34. ARTICLE 7. DOCUMENTS OF TITLE PART 1. GENERAL §490:7-101 Short title. This article shall be known and may be...
• 490:7-102 Definitions and Index of Definitions.
  (a) In this article, unless the context otherwise requires: (1) "Bailee" means a person that by a warehouse receipt, bill of lading, or other document...
• 490:7-103 Relation of Article to Treaty or Statute.
  (a) This article is subject to any treaty or statute of the United States or regulatory statute of this State to the extent the...
• 490:7-104 Negotiable and Nonnegotiable Document of Title.
  (a) Except as otherwise provided in subsection (c), a document of title is negotiable if by its terms the goods are to be delivered...
• 490:7-105 Reissuance in Alternative Medium.
  (a) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document...
• 490:7-106 Control of Electronic Document of Title.
  (a) A person has control of an electronic document of title if a system employed for evidencing the transfer of interests in the electronic...

PART 2. WAREHOUSE RECEIPTS: SPECIAL PROVISIONS

• 490:7-201 Person that May Issue a Warehouse Receipt; Storage Under Bond.
  (a) A warehouse receipt may be issued by any warehouse. (b) If goods, including distilled spirits and agricultural commodities, are stored under a statute...
• 490:7-202 Form of Warehouse Receipt; Effect of Omission.
  (a) A warehouse receipt need not be in any particular form. (b) Unless a warehouse receipt provides for each of the following, the warehouse...
• 490:7-203 Liability for Nonreceipt or Misdescription.
  A party to or purchaser for value in good faith of a document of title, other than a bill of lading, that relies upon...
• 490:7-204 Duty of Care; Contractual Limitation of Warehouse's Liability.
  (a) A warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard...
• 490:7-205 Title Under Warehouse Receipt Defeated in Certain Cases.
  A buyer in ordinary course of business of fungible goods sold and delivered by a warehouse that is also in the business of buying...
• 490:7-206 Termination of Storage At Warehouse's Option.
  (a) A warehouse, by giving notice to the person on whose account the goods are held and any other person known to claim an interest...
• 490:7-207 Goods Must Be Kept Separate; Fungible Goods.
  (a) Unless the warehouse receipt provides otherwise, a warehouse shall keep separate the goods covered by each receipt so as to permit at all times...
• 490:7-208 Altered Warehouse Receipts.
  If a blank in a negotiable tangible warehouse receipt has been filled in without authority, a good-faith purchaser for value and without notice of...
• 490:7-209 Lien of Warehouse.
  (a) A warehouse has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds...
• 490:7-210 Enforcement of Warehouse's Lien.
  (a) Except as otherwise provided in subsection (b), a warehouse's lien may be enforced by public or private sale of the goods, in bulk...

PART 3. BILLS OF LADING: SPECIAL PROVISIONS

• 490:7-301 Liability for Nonreceipt or Misdescription; "Said to Contain"; "Shipper's Weight, Load, and Count"; Improper Handling.
  (a) A consignee of a nonnegotiable bill of lading which has given value in good faith, or a holder to which a negotiable bill...
• 490:7-302 Through Bills of Lading and Similar Documents of Title.
  (a) The issuer of a through bill of lading, or other document of title embodying an undertaking to be performed in part by a...
• 490:7-303 Diversion; Reconsignment; Change of Instructions.
  (a) Unless the bill of lading otherwise provides, a carrier may deliver the goods to a person or destination other than that stated in the...
• 490:7-304 Tangible Bills of Lading in a Set.
  (a) Except as customary in international transportation, a tangible bill of lading may not be issued in a set of parts. The issuer is...
• 490:7-305 Destination Bills.
  (a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at the request of the consignor,...
• 490:7-306 Altered Bills of Lading.
  An unauthorized alteration or filling in of a blank in a bill of lading leaves the bill enforceable according to its original tenor. [L...
• 490:7-307 Lien of Carrier.
  (a) A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof in its possession for...
• 490:7-308 Enforcement of Carrier's Lien.
  (a) A carrier's lien on goods may be enforced by public or private sale of the goods, in bulk or in packages, at any...
• 490:7-309 Duty of Care; Contractual Limitation of Carrier's Liability.
  (a) A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall exercise the degree of care in relation to the goods...

PART 4. WAREHOUSE RECEIPTS AND BILLS OF LADING:
GENERAL OBLIGATIONS

• 490:7-401 Irregularities in Issue of Receipt or Bill or Conduct of Issuer.
  The obligations imposed by this article on an issuer apply to a document of title even if: (1) The document does not comply with...
• 490:7-402 Duplicate Document of Title; Overissue.
  A duplicate or any other document of title purporting to cover goods already represented by an outstanding document of the same issuer does not...
• 490:7-403 Obligation of Bailee to Deliver; Excuse.
  (a) A bailee shall deliver the goods to a person entitled under a document of title if the person complies with subsections (b) and (c),...
• 490:7-404 No Liability for Good-Faith Delivery Pursuant to Document of Title.
  A bailee that in good faith has received goods and delivered or otherwise disposed of the goods according to the terms of a document...

PART 5. WAREHOUSE RECEIPTS AND BILLS OF LADING:
NEGOTIATION AND TRANSFER

• 490:7-501 Form of Negotiation and Requirements of Due Negotiation.
  (a) The following rules apply to a negotiable tangible document of title: (1) If the document's original terms run to the order of a...
• 490:7-502 Rights Acquired by Due Negotiation.
  (a) Subject to sections 490:7-205 and 490:7-503, a holder to which a negotiable document of title has been duly negotiated acquires thereby: (1) Title to...
• 490:7-503 Document of Title to Goods Defeated in Certain Cases.
  (a) A document of title confers no right in goods against a person that before issuance of the document had a legal interest or...
• 490:7-504 Rights Acquired in Absence of Due Negotiation; Effect of Diversion; Stoppage of Delivery.
  (a) A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires...
• 490:7-505 Indorser Not Guarantor for Other Parties.
  The indorsement of a tangible document of title issued by a bailee does not make the indorser liable for any default by the bailee...
• 490:7-506 Delivery Without Indorsement: Right to Compel Indorsement.
  The transferee of a negotiable tangible document of title has a specifically enforceable right to have its transferor supply any necessary indorsement, but the...
• 490:7-507 Warranties on Negotiation or Delivery of Document of Title.
  If a person negotiates or delivers a document of title for value, otherwise than as a mere intermediary under section 490:7-508, unless otherwise agreed,...
• 490:7-508 Warranties of Collecting Bank As to Documents of Title.
  A collecting bank or other intermediary known to be entrusted with documents of title on behalf of another or with collection of a draft or...
• 490:7-509 Adequate Compliance With Commercial Contract.
  Whether a document of title is adequate to fulfill the obligations of a contract for sale, a contract for lease, or the conditions of...

PART 6. WAREHOUSE RECEIPTS AND BILLS OF LADING:
MISCELLANEOUS PROVISIONS

• 490:7-601 Lost, Stolen, or Destroyed Documents of Title.
  (a) If a document of title is lost, stolen, or destroyed, a court may order delivery of the goods or issuance of a substitute document...
• 490:7-602 Judicial Process Against Goods Covered by Negotiable Document of Title.
  Unless a document of title was originally issued upon delivery of the goods by a person that did not have power to dispose of...
• 490:7-603 Conflicting Claims; Interpleader.
  If more than one person claims title to or possession of the goods, the bailee is excused from delivery until the bailee has a...

PART 7. MISCELLANEOUS PROVISIONS

• 490:7-701 Applicability.
  This article applies to a document of title that is issued or a bailment that arises on or after July 2, 2004. This article...
• 490:7-702 Savings Clause.
  A document of title issued or a bailment that arises before July 2, 2004 and the rights, obligations, and interests flowing from that document...

ARTICLE 8. OLD
INVESTMENT SECURITIES

• 490:8-101 to 490:8-408 Repealed.
  L 1997, c 33, §1. ARTICLE 8. INVESTMENT SECURITIES PART 1. SHORT TITLE AND GENERAL MATTERS §490:8-101 Short title. This article may be cited...
• 490:8-102 Definitions.
  (a) In this article: "Adverse claim" means a claim that a claimant has a property interest in a financial asset and that it is...
• 490:8-103 Rules for Determining Whether Certain Obligations and Interests are Securities or Financial Assets.
  (a) A share or similar equity interest issued by a corporation, business trust, joint stock company, or similar entity is a security. (b) An...
• 490:8-104 Acquisition of Security or Financial Asset or Interest Therein.
  (a) A person acquires a security or an interest therein, under this article, if: (1) The person is a purchaser to whom a security...
• 490:8-105 Notice of Adverse Claim.
  (a) A person has notice of an adverse claim if: (1) The person knows of the adverse claim; (2) The person is aware of...
• 490:8-106 Control.
  (a) A purchaser has "control" of a certificated security in bearer form if the certificated security is delivered to the purchaser. (b) A purchaser...
• 490:8-107 Whether Indorsement, Instruction, or Entitlement Order is Effective.
  (a) "Appropriate person" means: (1) With respect to an indorsement, the person specified by a security certificate or by an effective special indorsement to...
• 490:8-108 Warranties in Direct Holding.
  (a) A person who transfers a certificated security to a purchaser for value warrants to the purchaser, and an indorser, if the transfer is...
• 490:8-109 Warranties in Indirect Holding.
  (a) A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary that: (1) The entitlement order is made...
• 490:8-110 Applicability; Choice of Law.
  (a) The local law of the issuer's jurisdiction, as specified in subsection (d), governs: (1) The validity of a security; (2) The rights and...
• 490:8-111 Clearing Corporation Rules.
  A rule adopted by a clearing corporation governing rights and obligations among the clearing corporation and its participants in the clearing corporation is effective...
• 490:8-112 Creditor's Legal Process.
  (a) The interest of a debtor in a certificated security may be reached by a creditor only by actual seizure of the security certificate...
• 490:8-113 Statute of Frauds Inapplicable.
  A contract or modification of a contract for the sale or purchase of a security is enforceable whether or not there is a writing...
• 490:8-114 Evidentiary Rules Concerning Certificated Securities.
  The following rules apply in an action on a certificated security against the issuer: (1) Unless specifically denied in the pleadings, each signature on...
• 490:8-115 Securities Intermediary and Others Not Liable to Adverse Claimant.
  A securities intermediary that has transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that...
• 490:8-116 Securities Intermediary As Purchaser for Value.
  A securities intermediary that receives a financial asset and establishes a security entitlement to the financial asset in favor of an entitlement holder is...

PART 2. ISSUE AND ISSUER

• 490:8-201 Issuer.
  (a) With respect to an obligation on or a defense to a security, an "issuer" includes a person that: (1) Places or authorizes the...
• 490:8-202 Issuer's Responsibility and Defenses; Notice of Defect or Defense.
  (a) Even against a purchaser for value and without notice, the terms of a certificated security include terms stated on the certificate and terms...
• 490:8-203 Staleness As Notice of Defect or Defense.
  After an act or event, other than a call that has been revoked, creating a right to immediate performance of the principal obligation represented...
• 490:8-204 Effect of Issuer's Restriction on Transfer.
  A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the...
• 490:8-205 Effect of Unauthorized Signature on Security Certificate.
  An unauthorized signature placed on a security certificate before or in the course of issue is ineffective, but the signature is effective in favor...
• 490:8-206 Completion or Alteration of Security Certificate.
  (a) If a security certificate contains the signatures necessary to its issue or transfer but is incomplete in any other respect: (1) Any person...
• 490:8-207 Rights and Duties of Issuer With Respect to Registered Owners.
  (a) Before due presentment for registration of transfer of a certificated security in registered form or of an instruction requesting registration of transfer of...
• 490:8-208 Effect of Signature of Authenticating Trustee, Registrar, or Transfer Agent.
  (a) A person signing a security certificate as authenticating trustee, registrar, transfer agent, or the like, warrants to a purchaser for value of the...
• 490:8-209 Issuer's Lien.
  A lien in favor of an issuer upon a certificated security is valid against a purchaser only if the right of the issuer to...
• 490:8-210 Overissue.
  (a) In this section, "overissue" means the issue of securities in excess of the amount the issuer has corporate power to issue, but an...

PART 3. TRANSFER OF CERTIFICATED
AND UNCERTIFICATED SECURITIES

• 490:8-301 Delivery.
  (a) Delivery of a certificated security to a purchaser occurs when: (1) The purchaser acquires possession of the security certificate; (2) Another person, other...
• 490:8-302 Rights of Purchaser.
  (a) Except as otherwise provided in subsections (b) and (c), a purchaser of a certificated or uncertificated security acquires all rights in the security...
• 490:8-303 Protected Purchaser.
  (a) "Protected purchaser" means a purchaser of a certificated or uncertificated security, or of an interest therein, who: (1) Gives value; (2) Does not...
• 490:8-304 Indorsement.
  (a) An indorsement may be in blank or special. An indorsement in blank includes an indorsement to bearer. A special indorsement specifies to whom...
• 490:8-305 Instruction.
  (a) If an instruction has been originated by an appropriate person but is incomplete in any other respect, any person may complete it as...
• 490:8-306 Effect of Guaranteeing Signature, Indorsement, or Instruction.
  (a) A person who guarantees a signature of an indorser of a security certificate warrants that at the time of signing: (1) The signature...
• 490:8-307 Purchaser's Right to Requisites for Registration of Transfer.
  Unless otherwise agreed, the transferor of a security on due demand shall supply the purchaser with proof of authority to transfer or with any...

PART 4. REGISTRATION

• 490:8-401 Duty of Issuer to Register Transfer.
  (a) If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented...
• 490:8-402 Assurance that Indorsement or Instruction is Effective.
  (a) An issuer may require the following assurance that each necessary indorsement or each instruction is genuine and authorized: (1) In all cases, a...
• 490:8-403 Demand that Issuer Not Register Transfer.
  (a) A person who is an appropriate person to make an indorsement or originate an instruction may demand that the issuer not register transfer...
• 490:8-404 Wrongful Registration.
  (a) Except as otherwise provided in section 490:8-406, an issuer is liable for wrongful registration of transfer if the issuer has registered a transfer...
• 490:8-405 Replacement of Lost, Destroyed, or Wrongfully Taken Security Certificate.
  (a) If an owner of a certificated security, whether in registered or bearer form, claims that the certificate has been lost, destroyed, or wrongfully...
• 490:8-406 Obligation to Notify Issuer of Lost, Destroyed, or Wrongfully Taken Security Certificate.
  If a security certificate has been lost, apparently destroyed, or wrongfully taken, and the owner fails to notify the issuer of that fact within...
• 490:8-407 Authenticating Trustee, Transfer Agent, and Registrar.
  A person acting as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of a transfer of its securities,...

PART 5. SECURITY ENTITLEMENTS

• 490:8-501 Securities Account; Acquisition of Security Entitlement From Securities Intermediary.
  (a) "Securities account" means an account to which a financial asset is or may be credited in accordance with an agreement under which the...
• 490:8-502 Assertion of Adverse Claim Against Entitlement Holder.
  An action based on an adverse claim to a financial asset, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may...
• 490:8-503 Property Interest of Entitlement Holder in Financial Asset Held by Securities Intermediary.
  (a) To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular financial asset, all interests in...
• 490:8-504 Duty of Securities Intermediary to Maintain Financial Asset.
  (a) A securities intermediary shall promptly obtain and thereafter maintain a financial asset in a quantity corresponding to the aggregate of all security entitlements...
• 490:8-505 Duty of Securities Intermediary With Respect to Payments and Distributions.
  (a) A securities intermediary shall take action to obtain a payment or distribution made by the issuer of a financial asset. A securities intermediary...
• 490:8-506 Duty of Securities Intermediary to Exercise Rights As Directed by Entitlement Holder.
  A securities intermediary shall exercise rights with respect to a financial asset if directed to do so by an entitlement holder. A securities intermediary...
• 490:8-507 Duty of Securities Intermediary to Comply With Entitlement Order.
  (a) A securities intermediary shall comply with an entitlement order if the entitlement order is originated by the appropriate person, the securities intermediary has...
• 490:8-508 Duty of Securities Intermediary to Change Entitlement Holder's Position to Other Form of Security Holding.
  A securities intermediary shall act at the direction of an entitlement holder to change a security entitlement into another available form of holding for...
• 490:8-509 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.
  (a) If the substance of a duty imposed upon a securities intermediary by sections 490:8-504 to 490:8-508 is the subject of other statute, regulation,...
• 490:8-510 Rights of Purchaser of Security Entitlement From Entitlement Holder.
  (a) In a case not covered by the priority rules in article 9 or the rules stated in subsection (c), an action based on...
• 490:8-511 Priority Among Security Interests and Entitlement Holders.
  (a) Except as otherwise provided in subsections (b) and (c), if a securities intermediary does not have sufficient interests in a particular financial asset...

ARTICLE 9. OLD
SECURED TRANSACTIONS; SALES OF ACCOUNTS,
CONTRACT RIGHTS AND CHATTEL PAPER

• 490:9-101 to 490:9-507 Repealed.
  L 2000, c 241, §30. ARTICLE 9. SECURED TRANSACTIONS PART 1. GENERAL PROVISIONS Subpart 1. Short Title, Definitions, and General Concepts §490:9-101 Short title....
• 490:9-102 Definitions and Index of Definitions.
  (a) In this [article]: "Accession" means goods that are physically united with other goods in such a manner that the identity of the original...
• 490:9-103 Purchase-Money Security Interest; Application of Payments; Burden of Establishing.
  (a) In this section: (1) "Purchase-money collateral" means goods or software that secures a purchase-money obligation incurred with respect to that collateral; and (2)...
• 490:9-104 Control of Deposit Account.
  (a) A secured party has control of a deposit account if: (1) The secured party is the bank with which the deposit account is maintained;...
• 490:9-105 Control of Electronic Chattel Paper.
  (a) A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interests in the chattel paper reliably...
• 490:9-106 Control of Investment Property.
  (a) A person has control of a certificated security, uncertificated security, or security entitlement as provided in section 490:8-106. (b) A secured party has...
• 490:9-107 Control of Letter-Of-credit Right.
  A secured party has control of a letter-of-credit right to the extent of any right to payment or performance by the issuer or any nominated...
• 490:9-108 Sufficiency of Description.
  (a) Except as otherwise provided in subsections (c), (d), and (e), a description of personal or real property is sufficient, whether or not it...

Subpart 2. Applicability of Article

• 490:9-109 Scope.
  (a) Except as otherwise provided in subsections (c) and (d), this article applies to: (1) A transaction, regardless of its form, that creates a...
• 490:9-110 Security Interests Arising Under Article 2 or 2a.
  A security interest arising under section 490:2-401, 490:2-505, 490:2-711(3), or 490:2A-508(e) is subject to this article. However, until the debtor obtains possession of the goods:...

PART 2. EFFECTIVENESS OF SECURITY AGREEMENT; ATTACHMENT
OF SECURITY INTEREST; RIGHTS OF PARTIES TO SECURITY AGREEMENT
Subpart 1. Effectiveness and Attachment

• 490:9-201 General Effectiveness of Security Agreement.
  (a) Except as otherwise provided in this chapter, a security agreement is effective according to its terms between the parties, against purchasers of the...
• 490:9-202 Title to Collateral Immaterial.
  Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles, or promissory notes, the provisions of this article with...
• 490:9-203 Attachment and Enforceability of Security Interest; Proceeds; Supporting Obligations; Formal Requisites.
  (a) A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones...
• 490:9-204 After-Acquired Property; Future Advances.
  (a) Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral. (b) A...
• 490:9-205 Use or Disposition of Collateral Permissible.
  (a) A security interest is not invalid or fraudulent against creditors solely because: (1) The debtor has the right or ability to: (A) Use,...
• 490:9-206 Security Interest Arising in Purchase or Delivery of Financial Asset.
  (a) A security interest in favor of a securities intermediary attaches to a person's security entitlement if: (1) The person buys a financial asset...

Subpart 2. Rights and Duties

• 490:9-207 Rights and Duties of Secured Party Having Possession or Control of Collateral.
  (a) Except as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the...
• 490:9-208 Additional Duties of Secured Party Having Control of Collateral.
  (a) This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur...
• 490:9-209 Duties of Secured Party If Account Debtor Has Been Notified of Assignment.
  (a) Except as otherwise provided in subsection (c), this section applies if: (1) There is no outstanding secured obligation; and (2) The secured party...
• 490:9-210 Request for Accounting; Request Regarding List of Collateral or Statement of Account.
  (a) In this section: (1) "Request" means a record of a type described in paragraph (2), (3), or (4). (2) "Request for an accounting"...

PART 3. PERFECTION AND PRIORITY
Subpart 1. Law Governing Perfection and Priority

• 490:9-301 Law Governing Perfection and Priority of Security Interests.
  Except as otherwise provided in sections 490:9-303 through 490:9-306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the...
• 490:9-302 Law Governing Perfection and Priority of Agricultural Liens.
  While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority...
• 490:9-303 Law Governing Perfection and Priority of Security Interests in Goods Covered by a Certificate of Title.
  (a) This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate...
• 490:9-304 Law Governing Perfection and Priority of Security Interests in Deposit Accounts.
  (a) The local law of a bank's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in...
• 490:9-305 Law Governing Perfection and Priority of Security Interests in Investment Property.
  (a) Except as otherwise provided in subsection (c), the following rules apply: (1) While a security certificate is located in a jurisdiction, the local...
• 490:9-306 Law Governing Perfection and Priority of Security Interests in Letter-Of-credit Rights.
  (a) Subject to subsection (c), the local law of the issuer's jurisdiction or a nominated person's jurisdiction governs perfection, the effect of perfection or nonperfection,...
• 490:9-307 Location of Debtor.
  (a) In this section, "place of business" means a place where a debtor conducts its affairs. (b) Except as otherwise provided in this section, the...

Subpart 2. Perfection

• 490:9-308 When Security Interest or Agricultural Lien is Perfected; Continuity of Perfection.
  (a) Except as otherwise provided in this section and section 490:9-309, a security interest is perfected if it has attached and all of the applicable...
• 490:9-309 Security Interest Perfected Upon Attachment.
  The following security interests are perfected when they attach: (1) A purchase-money security interest in consumer goods, except as otherwise provided in section 490:9-311(b) with...
• 490:9-310 When Filing Required to Perfect Security Interest or Agricultural Lien; Security Interests and Agricultural Liens to Which Filing Provisions Do Not Apply.
  (a) Except as otherwise provided in subsection (b) and section 490:9-312(b), a financing statement must be filed to perfect all security interests and agricultural...
• 490:9-311 Perfection of Security Interests in Property Subject to Certain Statutes, Regulations, and Treaties.
  (a) Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in...
• 490:9-312 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.
  (a) A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing. (b) Except as otherwise provided in...
• 490:9-313 When Possession by or Delivery to Secured Party Perfects Security Interest Without Filing.
  (a) Except as otherwise provided in subsection (b), a secured party may perfect a security interest in tangible negotiable documents, goods, instruments, money, or...
• 490:9-314 Perfection by Control.
  (a) A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the...
• 490:9-315 Secured Party's Rights on Disposition of Collateral and in Proceeds.
  (a) Except as otherwise provided in this article and in section 490:2-403(2): (1) A security interest or agricultural lien continues in collateral notwithstanding sale,...
• 490:9-316 Effect of Change in Governing Law.
  (a) A security interest perfected pursuant to the law of the jurisdiction designated in section 490:9-301(1) or 490:9-305(c) remains perfected until the earliest of: (1)...

Subpart 3. Priority

• 490:9-317 Interests that Take Priority Over or Take Free of Security Interest or Agricultural Lien.
  (a) A security interest or agricultural lien is subordinate to the rights of: (1) A person entitled to priority under section 490:9-322; and (2) Except...
• 490:9-318 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.
  (a) A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in...
• 490:9-319 Rights and Title of Consignee With Respect to Creditors and Purchasers.
  (a) Except as otherwise provided in subsection (b), for purposes of determining the rights of creditors of, and purchasers for value of goods from,...
• 490:9-320 Buyer of Goods.
  (a) Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a...
• 490:9-321 Licensee of General Intangible and Lessee of Goods in Ordinary Course of Business.
  (a) In this section, "licensee in ordinary course of business" means a person that becomes a licensee of a general intangible in good faith,...
• 490:9-322 Priorities Among Conflicting Security Interests in and Agricultural Liens on Same Collateral.
  (a) Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to...
• 490:9-323 Future Advances.
  (a) Except as otherwise provided in subsection (c), for purposes of determining the priority of a perfected security interest under section 490:9-322(a)(1), perfection of...
• 490:9-324 Priority of Purchase-Money Security Interests.
  (a) Except as otherwise provided in subsection (g), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a...
• 490:9-325 Priority of Security Interests in Transferred Collateral.
  (a) Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same...
• 490:9-326 Priority of Security Interests Created by New Debtor.
  (a) Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or...
• 490:9-327 Priority of Security Interests in Deposit Account.
  The following rules govern priority among conflicting security interests in the same deposit account: (1) A security interest held by a secured party having...
• 490:9-328 Priority of Security Interests in Investment Property.
  The following rules govern priority among conflicting security interests in the same investment property: (1) A security interest held by a secured party having...
• 490:9-329 Priority of Security Interests in Letter-Of-credit Right.
  The following rules govern priority among conflicting security interests in the same letter-of-credit right: (1) A security interest held by a secured party having...
• 490:9-330 Priority of Purchaser of Chattel Paper or Instrument.
  (a) A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory...
• 490:9-331 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.
  (a) This article does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable...
• 490:9-332 Transfer of Money; Transfer of Funds From Deposit Account.
  (a) A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in violating...
• 490:9-333 Priority of Certain Liens Arising by Operation of Law.
  (a) In this section, "possessory lien" means an interest, other than a security interest or an agricultural lien: (1) Which secures payment or performance of...
• 490:9-334 Priority of Security Interests in Fixtures and Crops.
  (a) A security interest under this article may be created in goods that are fixtures or may continue in goods that become fixtures. A...
• 490:9-335 Accessions.
  (a) A security interest may be created in an accession and continues in collateral that becomes an accession. (b) If a security interest is...
• 490:9-336 Commingled Goods.
  (a) In this section, "commingled goods" means goods that are physically united with other goods in such a manner that their identity is lost...
• 490:9-337 Priority of Security Interests in Goods Covered by Certificate of Title.
  If, while a security interest in goods is perfected by any method under the law of another jurisdiction, this State issues a certificate of...
• 490:9-338 Priority of Security Interest or Agricultural Lien Perfected by Filed Financing Statement Providing Certain Incorrect Information.
  If a security interest or agricultural lien is perfected by a filed financing statement providing information described in section 490:9-516(b)(5) which is incorrect at...
• 490:9-339 Priority Subject to Subordination.
  This article does not preclude subordination by agreement by a person entitled to priority. [L 2000, c 241, pt of §1]

Subpart 4. Rights of Bank

• 490:9-340 Effectiveness of Right of Recoupment or Set-Off Against Deposit Account.
  (a) Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or...
• 490:9-341 Bank's Rights and Duties With Respect to Deposit Account.
  Except as otherwise provided in section 490:9-340(c), and unless the bank otherwise agrees in an authenticated record, a bank's rights and duties with respect...
• 490:9-342 Bank's Right to Refuse to Enter Into or Disclose Existence of Control Agreement.
  This article does not require a bank to enter into an agreement of the kind described in section 490:9-104(a)(2), even if its customer so...

PART 4. RIGHTS OF THIRD PARTIES

• 490:9-401 Alienability of Debtor's Rights.
  (a) Except as otherwise provided in subsection (b) and sections 490:9-406, 490:9-407, 490:9-408, and 490:9-409, whether a debtor's rights in collateral may be voluntarily...
• 490:9-402 Secured Party Not Obligated on Contract of Debtor or in Tort.
  The existence of a security interest, agricultural lien, or authority given to a debtor to dispose of or use collateral, without more, does not...
• 490:9-403 Agreement Not to Assert Defenses Against Assignee.
  (a) In this section, "value" has the meaning provided in section 490:3-303(a). (b) Except as otherwise provided in this section, an agreement between an...
• 490:9-404 Rights Acquired by Assignee; Claims and Defenses Against Assignee.
  (a) Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the...
• 490:9-405 Modification of Assigned Contract.
  (a) A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding...
• 490:9-406 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.
  (a) Subject to subsections (b) through (i), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by...
• 490:9-407 Restrictions on Creation or Enforcement of Security Interest in Leasehold Interest or in Lessor's Residual Interest.
  (a) Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it: (1) Prohibits, restricts,...
• 490:9-408 Restrictions on Assignment of Promissory Notes, Health-Care-Insurance Receivables, and Certain General Intangibles Ineffective.
  (a) Except as otherwise provided in subsection (b), a term in a promissory note or in an agreement between an account debtor and a...
• 490:9-409 Restrictions on Assignment of Letter-Of-credit Rights Ineffective.
  (a) A term in a letter of credit or a rule of law, statute, regulation, custom, or practice applicable to the letter of credit...

PART 5. FILING
Subpart 1. Filing Office; Contents and
Effectiveness of Financing Statement

• 490:9-501 Filing Office.
  (a) Except as otherwise provided in subsection (b), if the local law of this State governs perfection of a security interest or agricultural lien,...
• 490:9-502 Contents of Financing Statement; Record of Mortgage As Financing Statement; Time of Filing Financing Statement.
  (a) Subject to subsection (b), a financing statement is sufficient only if it: (1) Provides the name of the debtor; (2) Provides the name...
• 490:9-503 Name of Debtor and Secured Party.
  (a) A financing statement sufficiently provides the name of the debtor: (1) Except as otherwise provided in paragraph (3), if the debtor is a...
• 490:9-504 Indication of Collateral.
  A financing statement sufficiently indicates the collateral that it covers only if the financing statement provides: (1) A description of the collateral pursuant to...
• 490:9-505 Filing and Compliance With Other Statutes and Treaties for Consignments, Leases, Other Bailments, and Other Transactions.
  (a) A consignor, lessor, or other bailor of goods, a licensor, or a buyer of a payment intangible or promissory note may file a...
• 490:9-506 Effect of Errors or Omissions.
  (a) A financing statement substantially satisfying the requirements of this part is effective, even if it has minor errors or omissions, unless the errors...
• 490:9-507 Effect of Certain Events on Effectiveness of Financing Statement.
  (a) A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which...
• 490:9-508 Effectiveness of Financing Statement If New Debtor Becomes Bound by Security Agreement.
  (a) Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a security interest in...
• 490:9-509 Persons Entitled to File a Record.
  (a) A person may file an initial financing statement, amendment that adds collateral covered by a financing statement, or amendment that adds a debtor...
• 490:9-510 Effectiveness of Filed Record.
  (a) A filed record is effective only to the extent that it was filed by a person that may file it under section 490:9-509....
• 490:9-511 Secured Party of Record.
  (a) A secured party of record with respect to a financing statement is a person whose name is provided as the name of the...
• 490:9-512 Amendment of Financing Statement.
  (a) Subject to section 490:9-509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to subsection...
• 490:9-513 Termination Statement.
  (a) A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement...
• 490:9-514 Assignment of Powers of Secured Party of Record.
  (a) Except as otherwise provided in subsection (c), an initial financing statement may reflect an assignment of all of the secured party's power to...
• 490:9-515 Duration and Effectiveness of Financing Statement; Effect of Lapsed Financing Statement.
  (a) Except as otherwise provided in subsections (b), (e), (f), and (g), a filed financing statement is effective for a period of five years...
• 490:9-516 What Constitutes Filing; Effectiveness of Filing.
  (a) Except as otherwise provided in subsection (b), communication of a record to a filing office and tender of the filing fee or acceptance...
• 490:9-517 Effect of Indexing Errors.
  The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record. [L 2000, c 241,...
• 490:9-518 Claim Concerning Inaccurate or Wrongfully Filed Record.
  (a) A person may file in the filing office an information statement with respect to a record indexed there under the person's name if...

Subpart 2. Duties and Operation of Filing Office

• 490:9-519 Numbering, Maintaining, and Indexing Records; Communicating Information Provided in Records.
  (a) For each record filed in a filing office, the filing office shall: (1) Assign a unique number to the filed record; (2) Create...
• 490:9-520 Acceptance and Refusal to Accept Record.
  (a) A filing office shall refuse to accept a record for filing for a reason set forth in section 490:9-516(b) and may refuse to...
• 490:9-521 Uniform Form of Written Financing Statement and Amendment.
  (a) A filing office that accepts written records for filing may not refuse to accept a written initial financing statement in the following form,...
• 490:9-522 Maintenance and Destruction of Records.
  (a) The filing office shall maintain a record of the information provided in a filed financing statement for at least one year after the...
• 490:9-523 Information From Filing Office; Sale or License of Records.
  (a) If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an...
• 490:9-524 Delay by Filing Office.
  Delay by the filing office beyond a time limit prescribed by this part is excused if: (1) The delay is caused by interruption of...
• 490:9-525 Fees.
  (a) Except as otherwise provided in subsection (e), the fee for filing and indexing a record under this part, other than an initial financing...
• 490:9-526 Filing-Office Rules.
  (a) The department of land and natural resources shall adopt and publish rules to implement this article. The filing-office rules must be: (1) Consistent...
• 490:9-527 Duty to Report.
  The department of land and natural resources shall report annually, twenty days before the convening of each regular session of the legislature, to the...

PART 6. DEFAULT
Subpart 1. Default and Enforcement of Security Interest

• 490:9-601 Rights After Default; Judicial Enforcement; Consignor or Buyer of Accounts, Chattel Paper, Payment Intangibles, or Promissory Notes.
  (a) After default, a secured party has the rights provided in this part and, except as otherwise provided in section 490:9-602, those provided by...
• 490:9-602 Waiver and Variance of Rights and Duties.
  Except as otherwise provided in section 490:9-624, to the extent that they give rights to a debtor or obligor and impose duties on a...
• 490:9-603 Agreement on Standards Concerning Rights and Duties.
  (a) The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of...
• 490:9-604 Procedure If Security Agreement Covers Real Property or Fixtures.
  (a) If a security agreement covers both personal and real property, a secured party may proceed: (1) Under this part as to the personal...
• 490:9-605 Unknown Debtor or Secondary Obligor.
  A secured party does not owe a duty based on its status as secured party: (1) To a person that is a debtor or...
• 490:9-606 Time of Default for Agricultural Lien.
  For purposes of this part, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce...
• 490:9-607 Collection and Enforcement by Secured Party.
  (a) If so agreed, and in any event after default, a secured party: (1) May notify an account debtor or other person obligated on...
• 490:9-608 Application of Proceeds of Collection or Enforcement; Liability for Deficiency and Right to Surplus.
  (a) If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply: (1) A secured party shall...
• 490:9-609 Secured Party's Right to Take Possession After Default.
  (a) After default, a secured party: (1) May take possession of the collateral; and (2) Without removal, may render equipment unusable and dispose of...
• 490:9-610 Disposition of Collateral After Default.
  (a) After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition...
• 490:9-611 Notification Before Disposition of Collateral.
  (a) In this section, "notification date" means the earlier of the date on which: (1) A secured party sends to the debtor and any...
• 490:9-612 Timeliness of Notification Before Disposition of Collateral.
  (a) Except as otherwise provided in subsection (b), whether a notification is sent within a reasonable time is a question of fact. (b) In...
• 490:9-613 Contents and Form of Notification Before Disposition of Collateral: General.
  Except in a consumer-goods transaction, the following rules apply: (1) The contents of a notification of disposition are sufficient if the notification: (A) Describes...
• 490:9-614 Contents and Form of Notification Before Disposition of Collateral: Consumer-Goods Transaction.
  In a consumer-goods transaction, the following rules apply: (1) A notification of disposition must provide the following information: (A) The information specified in section...
• 490:9-615 Application of Proceeds of Disposition; Liability for Deficiency and Right to Surplus.
  (a) A secured party shall apply or pay over for application the cash proceeds of disposition under section 490:9-610 in the following order to:...
• 490:9-616 Explanation of Calculation of Surplus or Deficiency.
  (a) In this section: (1) "Explanation" means a writing that: (A) States the amount of the surplus or deficiency; (B) Provides an explanation in...
• 490:9-617 Rights of Transferee of Collateral.
  (a) A secured party's disposition of collateral after default: (1) Transfers to a transferee for value all of the debtor's rights in the collateral; (2)...
• 490:9-618 Rights and Duties of Certain Secondary Obligors.
  (a) A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor: (1) Receives...
• 490:9-619 Transfer of Record or Legal Title.
  (a) In this section, "transfer statement" means a record authenticated by a secured party stating: (1) That the debtor has defaulted in connection with...
• 490:9-620 Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral.
  (a) Except as otherwise provided in subsection (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures...
• 490:9-621 Notification of Proposal to Accept Collateral.
  (a) A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:...
• 490:9-622 Effect of Acceptance of Collateral.
  (a) A secured party's acceptance of collateral in full or partial satisfaction of the obligation it secures: (1) Discharges the obligation to the extent...
• 490:9-623 Right to Redeem Collateral.
  (a) A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral. (b) To redeem collateral, a person shall tender:...
• 490:9-624 Waiver.
  (a) A debtor or secondary obligor may waive the right to notification of disposition of collateral under section 490:9-611 only by an agreement to...

Subpart 2. Noncompliance with Article

• 490:9-625 Remedies for Secured Party's Failure to Comply With Article.
  (a) If it is established that a secured party is not proceeding in accordance with this article, a court may order or restrain collection,...
• 490:9-626 Action in Which Deficiency or Surplus is in Issue.
  (a) In an action arising from a transaction, other than a consumer transaction, in which the amount of a deficiency or surplus is in...
• 490:9-627 Determination of Whether Conduct Was Commercially Reasonable.
  (a) The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in...
• 490:9-628 Nonliability and Limitation on Liability of Secured Party; Liability of Secondary Obligor.
  (a) Unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to...

PART 7. TRANSITION

• 490:9-701 Effective Date.
  This article takes effect on July 1, 2001. [L 2000, c 241, pt of §1]
• 490:9-702 Savings Clause.
  (a) Except as otherwise provided in this part, this article applies to a transaction or lien within its scope, even if the transaction or...
• 490:9-703 Security Interest Perfected Before Effective Date.
  (a) A security interest that is enforceable immediately before this article takes effect and would have priority over the rights of a person that...
• 490:9-704 Security Interest Unperfected Before Effective Date.
  A security interest that is enforceable immediately before this article takes effect but which would be subordinate to the rights of a person that...
• 490:9-705 Effectiveness of Action Taken Before Effective Date.
  (a) If action, other than the filing of a financing statement, is taken before this article takes effect and the action would have resulted...
• 490:9-706 When Initial Financing Statement Suffices to Continue Effectiveness of Financing Statement.
  (a) The filing of an initial financing statement in the office specified in section 490:9-501 continues the effectiveness of a financing statement filed before...
• 490:9-707 Amendment of Pre-Effective-Date Financing Statement.
  (a) In this section, "pre-effective-date financing statement" means a financing statement filed before this article takes effect. (b) After this article takes effect, a...
• 490:9-708 Persons Entitled to File Initial Financing Statement or Continuation Statement.
  A person may file an initial financing statement or a continuation statement under this part if: (1) The secured party of record authorizes the...
• 490:9-709 Priority.
  (a) This article determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before this article...

PART 8. TRANSITION PROVISIONS FOR 2010 AMENDMENTS

• 490:9-801 Effective Date.
  This part shall take effect on July 1, 2013. [L 2012, c 33, pt of §1]
• 490:9-802 Savings Clause.
  (a) Except as otherwise provided in this part, this part applies to a transaction or lien within its scope, even if the transaction or...
• 490:9-803 Security Interest Perfected Prior to July 1, 2013.
  (a) A security interest that is a perfected security interest prior to July 1, 2013, shall be a perfected security interest under this article...
• 490:9-804 Security Interest Unperfected Before July 1, 2013.
  A security interest that is an unperfected security interest prior to July 1, 2013, shall be a perfected security interest: (1) Without further action, if,...
• 490:9-805 Effectiveness of Action Taken Before July 1, 2013.
  (a) If a financing statement is filed prior to July 1, 2013, to perfect a security interest, that filing shall be effective to the...
• 490:9-806 When Initial Financing Statement Suffices to Continue Effectiveness of Financing Statement.
  (a) The filing of an initial financing statement in the office specified in section 490:9-501 continues the effectiveness of a financing statement filed prior to...
• 490:9-807 Amendment of Pre-Effective-Date Financing Statement.
  (a) For purposes of this section, "pre-effective-date financing statement" means a financing statement filed before July 1, 2013. (b) On or after July 1,...
• 490:9-808 Person Entitled to File Initial Financing Statement or Continuation Statement.
  A person may file an initial financing statement or a continuation statement under this part if: (1) The secured party of record authorizes the filing;...
• 490:9-809 Priority.
  This article determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2013,...

ARTICLE 10.
EFFECTIVE DATE AND REPEALER

• 490:10-101 Effective Date.
  This chapter shall take effect on January 1, 1967. It applies to transactions entered into and events occurring on or after that date. [L...
• 490:10-102 Specific Repealer; Provision for Transition.
  (1) The following acts and all other acts and parts of acts inconsistent herewith are hereby repealed: Chapter 172, Part IV, Revised Laws of...
• 490:10-103 General Repealer.
  Except as provided in the following section, all acts and parts of acts inconsistent with this chapter are hereby repealed. [L 1965, c 208,...
• 490:10-103.1 Inconsistent Laws.
  If any other provision of law is inconsistent with this chapter, this chapter shall govern unless this chapter or such inconsistent provision of law...
• 490:10-104 Laws Not Repealed.
  The article on documents of title (article 7) does not repeal or modify any laws prescribing the form or contents of documents of title...

ARTICLE 11.
EFFECTIVE DATE AND TRANSITION PROVISIONS--1978
AMENDATORY ACT

• 490:11-101 Effective Date.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-101 Effective date. This Act shall become effective at 12:01 A.M. on July 1, 1979. [L...
• 490:11-102 Preservation of Old Transition Provision.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-102 Preservation of old transition provision. The provisions of chapter 490, effective on January 1, 1967,...
• 490:11-103 Transition to New U. C. C.--general Rule.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-103 Transition to new U.C.C.--General Rule. Transactions validly entered into after January 1, 1967 and before...
• 490:11-104 Transition Provision on Change of Requirement of Filing.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-104 Transition provision on change of requirement of filing. A security interest for the perfection of...
• 490:11-105 Transition Provision on Change of Place of Filing.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-105 Transition provision on change of place of filing. (1) A financing statement or continuation statement...
• 490:11-106 Required Refilings.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-106 Required refilings. (1) If a security interest is perfected or has priority when this Act...
• 490:11-107 Transition Provisions As to Priorities.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-107 Transition provisions as to priorities. Except as otherwise provided in Article 11, old U.C.C. shall...
• 490:11-108 Presumption that Rule of Law Continues Unchanged.
  "1978 Amendatory Act" was added for clarification purposes. §490:11-108 Presumption that rule of law continues unchanged. Unless a change in law has clearly been...

Last modified: October 27, 2016