A.R.S. § 47-3408 — Arizona Code / Title 47 / Chapter 3 / Article 4 / Section 3408
47-3408 Drawee not liable on unaccepted draft
Status: in_force

47-3408. 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 payment, and the drawee is not liable on the instrument until the drawee accepts it.
A.R.S. § 47-2A210 — Arizona Code / Title 47 / Chapter 2A / Article 2 / Section 2A210
47-2A210 Express warranties
Status: in_force

47-2A210. 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 relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods will conform to the affirmation or promise.

2. Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods will conform to the description.

3. Any sample or model that is made part of the basis of the bargain creates an express warranty that the whole of the goods will conform to the sample or model.

B. It is not necessary to the creation of an express warranty that the lessor use formal words, such as "warrant" or "guarantee", or that the lessor have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the lessor's opinion or commendation of the goods does not create a warranty.
A.R.S. § 47-5113 — Arizona Code / Title 47 / Chapter 5 / Section 5113
47-5113 Transfer by operation of law
Status: in_force

47-5113. 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 name of the beneficiary without disclosing its status as a successor.

B. A successor of a beneficiary may consent to amendments, sign and present documents and receive payment or other items of value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection E of this section, an issuer shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard practice referred to in section 47-5108, subsection E or, in the absence of such a practice, compliance with other reasonable procedures sufficient to protect the issuer.

C. An issuer is not obliged to determine whether a purported successor is a successor of a beneficiary or whether the signature of a purported successor is genuine or authorized.

D. Honor of a purported successor's apparently complying presentation under subsection A or B of this section has the consequences specified in section 47-5108, subsection I even if the purported successor is not the successor of a beneficiary. Documents signed in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of the beneficiary are forged documents for the purposes of section 47-5109.

E. An issuer whose rights of reimbursement are not covered by subsection D of this section or substantially similar law and any confirmer or nominated person may decline to recognize a presentation under subsection B of this section.

F. A beneficiary whose name is changed after the issuance of a letter of credit has the same rights and obligations as a successor of a beneficiary under this section.
A.R.S. § 47-4205 — Arizona Code / Title 47 / Chapter 4 / Article 2 / Section 4205
47-4205 Depositary bank holder of unindorsed item
Status: in_force

47-4205. 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 time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the item, and, if the bank satisfies the other requirements of section 47-3302, it is a holder in due course; and

2. The depositary bank warrants to collecting banks, the payor bank or other payor and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.
A.R.S. § 47-8508 — Arizona Code / Title 47 / Chapter 8 / Article 5 / Section 8508
47-8508 Duty of securities intermediary to change entitlement holder's position to other form of security holding
Status: in_force

47-8508. 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 which the entitlement holder is eligible, or to cause the financial asset to be transferred to a securities account of the entitlement holder with another securities intermediary. A securities intermediary satisfies the duty if:

1. The securities intermediary acts as agreed upon by the entitlement holder and the securities intermediary; or

2. In the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.
A.R.S. § 47-7210 — Arizona Code / Title 47 / Chapter 7 / Article 2 / Section 7210
47-7210 Enforcement of warehouse's liens
Status: in_force

47-7210. Enforcement of warehouse's liens

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 or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in the goods.  The notification must include a statement of the amount due, the nature of the proposed sale and the time and place of any public sale.  The fact that a better price could have been obtained by a sale at a different time or in a method different from that selected by the warehouse is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner.  The warehouse sells in a commercially reasonable manner if the warehouse sells the goods in the usual manner in any recognized market therefore, sells at the price current in that market at the time of the sale or otherwise sells in conformity with commercially reasonable practices among dealers in the type of goods sold.  A sale of more goods than apparently necessary to be offered to ensure satisfaction of the obligation is not commercially reasonable, except in cases covered by the preceding sentence.

B. A warehouse may enforce its lien on goods, other than goods stored by a merchant in the course of its business, only if the following requirements are satisfied:

1. All persons known to claim an interest in the goods have been notified.

2. The notification includes an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than ten days after receipt of the notification and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place.

3. The sale conforms to the terms of the notification.

4. The sale is held at the nearest suitable place to where the goods are held or stored.

5. After the expiration of the time given in the notification, an advertisement of the sale is published once a week for two consecutive weeks in a newspaper of general circulation where the sale is to be held. The advertisement must include a description of the goods, the name of the person on whose account the goods are being held and the time and place of the sale. The sale must take place at least fifteen days after the first publication.  If there is no newspaper of general circulation where the sale is to be held, the advertisement must be posted at least ten days before the sale in not fewer than six conspicuous places in the neighborhood of the proposed sale.

C. Before any sale pursuant to this section, any person claiming a right in the goods may pay the amount necessary to satisfy the lien and the reasonable expenses incurred in complying with this section. In that event, the goods may not be sold but must be retained by the warehouse subject to the terms of the receipt and this chapter.

D. A warehouse may buy at any public sale held pursuant to this section.

E. A purchaser in good faith of goods sold to enforce a warehouse's lien takes the goods free of any rights of persons against which the lien was valid despite the warehouse's noncompliance with this section.

F. A warehouse may satisfy its lien from the proceeds of any sale pursuant to this section but shall hold the balance, if any, for delivery on demand to any person to which the warehouse would have been bound to deliver the goods.

G. The rights provided by this section are in addition to all other rights allowed by law to a creditor against a debtor.

H. If a lien is on goods stored by a merchant in the course of its business, the lien may be enforced in accordance with subsection A or B.

I. A warehouse is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of wilful violation, is liable for conversion.
A.R.S. § 47-4105 — Arizona Code / Title 47 / Chapter 4 / Article 1 / Section 4105
47-4105 "Bank"; "depositary bank"; "payor bank"; "intermediary bank"; "collecting bank"; "presenting bank"
Status: in_force

47-4105. "Bank"; "depositary bank"; "payor bank"; "intermediary bank"; "collecting bank"; "presenting bank"

In this chapter:

1. "Bank" means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.

2. "Depositary bank" means the first bank to take an item even though it is also the payor bank unless the item is presented for immediate payment over the counter.

3. "Payor bank" means a bank that is the drawee of a draft.

4. "Intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payor bank.

5. "Collecting bank" means a bank handling the item for collection except the payor bank.

6. "Presenting bank" means any bank presenting an item except a payor bank.
A.R.S. § 47-8114 — Arizona Code / Title 47 / Chapter 8 / Article 1 / Section 8114
47-8114 Evidentiary rules concerning certificated securities
Status: in_force

47-8114. 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 a security certificate or in a necessary indorsement is admitted.

2. If the effectiveness of a signature is put in issue, the burden of establishing effectiveness is on the party claiming under the signature, but the signature is presumed to be genuine or authorized.

3. If signatures on a security certificate are admitted or established, production of the certificate entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security.

4. If it is shown that a defense or defect exists, the plaintiff has the burden of establishing that the plaintiff or some person under whom the plaintiff claims is a person against whom the defense or defect cannot be asserted.
A.R.S. § 47-5102 — Arizona Code / Title 47 / Chapter 5 / Section 5102
47-5102 Definitions
Status: in_force

47-5102. Definitions

A. In this chapter:

1. "Adviser" means a person who, at the request of the issuer, a confirmer or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed or amended.

2. "Applicant" means a person at whose request or for whose account a letter of credit is issued. Applicant includes a person who requests an issuer to issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer.

3. "Beneficiary" means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. Beneficiary includes a person to whom drawing rights have been transferred under a transferable letter of credit.

4. "Confirmer" means a nominated person who undertakes, at the request or with the consent of the issuer, to honor a presentation under a letter of credit issued by another.

5. "Dishonor" of a letter of credit means failure to timely honor or to take an interim action, such as acceptance of a draft, that may be required by the letter of credit.

6. "Document" means a draft or other demand, document of title, investment security, certificate, invoice, or other record, statement, or representation of fact, law, right or opinion:

(a) That is presented in a written or other medium permitted by the letter of credit or, unless prohibited by the letter of credit, by the standard practice referred to in section 47-5108, subsection E; and

(b) That is capable of being examined for compliance with the terms and conditions of the letter of credit. A document may not be oral.

7. "Good faith" means honesty in fact in the conduct or transaction concerned.

8. "Honor" of a letter of credit means performance of the issuer's undertaking in the letter of credit to pay or deliver an item of value. Unless the letter of credit otherwise provides, "honor" occurs:

(a) Upon payment;

(b) If the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment; or

(c) If the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity, its performance.

9. "Issuer" means a bank or any other person that issues a letter of credit but does not include an individual who makes an engagement for personal, family or household purposes.

10. "Letter of credit" means a definite undertaking that satisfies the requirements of section 47-5104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value.

11. "Nominated person" means a person whom the issuer:

(a) Designates or authorizes to pay, accept, negotiate or otherwise give value under a letter of credit; and

(b) Undertakes by agreement or custom and practice to reimburse.

12. "Presentation" means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit.

13. "Presenter" means a person making a presentation as or on behalf of a beneficiary or nominated person.

14. "Record" means information that is inscribed on a tangible medium, or that is stored in an electronic or other medium and is retrievable in perceivable form.

15. "Successor of a beneficiary" means a person who succeeds to substantially all of the rights of a beneficiary by operation of law, including a corporation with or into which the beneficiary has been merged or consolidated, and an administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator and receiver.

B. Definitions in other chapters applying to this chapter and the sections in which they appear are:

1. "Accept" or "acceptance". Section 47-3409.

2. "Value". Sections 47-3303 and 47-4211.

C. In addition, chapter 1 of this title contains certain additional general definitions and principles of construction and interpretation applicable throughout this chapter.
A.R.S. § 47-3102 — Arizona Code / Title 47 / Chapter 3 / Article 1 / Section 3102
47-3102 Subject matter
Status: in_force

47-3102. Subject matter

A. This chapter applies to negotiable instruments. It does not apply to money, to payment orders governed by chapter 4A of this title or to securities governed by chapter 8 of this title.

B. If there is conflict between this chapter and chapter 4 or 9 of this title, chapters 4 and 9 of this title govern.

C. Regulations of the board of governors of the federal reserve system and operating circulars of the federal reserve banks supersede any inconsistent provision of this chapter to the extent of the inconsistency.
A.R.S. § 47-8104 — Arizona Code / Title 47 / Chapter 8 / Article 1 / Section 8104
47-8104 Acquisition of security or financial asset or interest therein
Status: in_force

47-8104. Acquisition of security or financial asset or interest therein

A. A person acquires a security or an interest therein, under this chapter, if:

1. The person is a purchaser to whom a security is delivered pursuant to section 47-8301.

2. The person acquires a security entitlement to the security pursuant to section 47-8501.

B. A person acquires a financial asset, other than a security, or an interest therein, under this chapter, if the person acquires a security entitlement to the financial asset.

C. A person who acquires a security entitlement to a security or other financial asset has the rights specified in article 5 of this chapter, but is a purchaser of any security, security entitlement or other financial asset held by the securities intermediary only to the extent provided in section 47-8503.

D. Unless the context shows that a different meaning is intended, a person who is required by other law, regulation, rule, or agreement to transfer, deliver, present, surrender, exchange or otherwise put in the possession of another person a security or financial asset satisfies that requirement by causing the other person to acquire an interest in the security or financial asset pursuant to subsection A or B of this section.
A.R.S. § 47-3301 — Arizona Code / Title 47 / Chapter 3 / Article 3 / Section 3301
47-3301 Person entitled to enforce instrument
Status: in_force

47-3301. Person entitled to enforce instrument

"Person entitled to enforce" an instrument means the holder of the instrument, a nonholder in possession of the instrument who has the rights of a holder or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 47-3309 or section 47-3418, subsection D. A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.
A.R.S. § 47-3411 — Arizona Code / Title 47 / Chapter 3 / Article 4 / Section 3411
47-3411 Refusal to pay cashier's checks, teller's checks and certified checks
Status: in_force

47-3411. 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 from the issuer.

B. If the obligated bank wrongfully refuses to pay a cashier's check or certified check, stops payment of a teller's check or refuses to pay a dishonored teller's check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages.

C. Expenses or consequential damages under subsection B are not recoverable if the refusal of the obligated bank to pay occurs because:

1. The bank suspends payments;

2. The obligated bank asserts a claim or defense of the bank that it has reasonable grounds to believe is available against the person entitled to enforce the instrument;

3. The obligated bank has a reasonable doubt whether the person demanding payment is the person entitled to enforce the instrument; or

4. Payment is prohibited by law.
A.R.S. § 47-4202 — Arizona Code / Title 47 / Chapter 4 / Article 2 / Section 4202
47-4202 Responsibility for collection or return; when action timely
Status: in_force

47-4202. 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 non-payment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted, as the case may be;

3. Settling for an item when the bank receives final settlement; and

4. Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.

B. A collecting bank exercises ordinary care under subsection A by taking proper action before its midnight deadline following receipt of an item, notice or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.

C. Subject to paragraph 1 of subsection A, a bank is not liable for the insolvency, neglect, misconduct, mistake or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.
A.R.S. § 47-4204 — Arizona Code / Title 47 / Chapter 4 / Article 2 / Section 4204
47-4204 Methods of sending and presenting; sending directly to payor bank
Status: in_force

47-4204. 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 of those items on hand, the cost of collection involved and the method generally used by it or others to present those items.

B. A collecting bank may send:

1. An item directly to the payor bank;

2. An item to a non-bank payor if authorized by its transferor; and

3. An item other than documentary drafts to a non-bank payor, if authorized by federal reserve regulation or operating circular, clearing-house rule or the like.

C. Presentment may be made by a presenting bank at a place where the payor bank or other payor has requested that presentment be made.
A.R.S. § 47-7403 — Arizona Code / Title 47 / Chapter 7 / Article 4 / Section 7403
47-7403 Obligation of bailee to deliver; excuse
Status: in_force

47-7403. 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 of this section, unless and to the extent that the bailee establishes any of the following:

1. Delivery of the goods to a person whose receipt was rightful as against the claimant;

2. Damage to or delay, loss or destruction of the goods for which the bailee is not liable;

3. Previous sale or other disposition of the goods in lawful enforcement of a lien or on a warehouse's lawful termination of storage;

4. The exercise by a seller of its right to stop delivery pursuant to section 47-2705 or by a lessor of its right to stop delivery pursuant to section 47-2A526;

5. A diversion, reconsignment or other disposition pursuant to section 47-7303;

6. Release, satisfaction or any other personal defense against the claimant; or

7. Any other lawful excuse.

B. A person claiming goods covered by a document of title shall satisfy the bailee's lien if the bailee so requests or if the bailee is prohibited by law from delivering the goods until the charges are paid.

C. Unless a person claiming the goods is a person against which the document of title does not confer a right under section 47-7503, subsection A:

1. The person claiming under a document shall surrender possession or control of any outstanding negotiable document covering the goods for cancellation or indication of partial deliveries; and

2. The bailee shall cancel the document or conspicuously indicate in the document the partial delivery or the bailee is liable to any person to which the document is duly negotiated.
A.R.S. § 47-2207 — Arizona Code / Title 47 / Chapter 2 / Article 2 / Section 2207
47-2207 Additional terms in acceptance or confirmation
Status: in_force

47-2207. Additional terms in acceptance or confirmation

A. A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

B. The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

1. The offer expressly limits acceptance to the terms of the offer;

2. They materially alter it; or

3. Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

C. Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this title.
A.R.S. § 47-2A501 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A501
47-2A501 Default; procedure
Status: in_force

47-2A501. Default; procedure

A. Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this chapter.

B. If the lessor or the lessee is in default under the lease contract, the party seeking enforcement has rights and remedies as provided in this chapter and, except as limited by this chapter, as provided in the lease agreement.

C. If the lessor or the lessee is in default under the lease contract, the party seeking enforcement may reduce the party's claim to judgment, or otherwise enforce the lease contract by self-help or any available judicial procedure or nonjudicial procedure, including administrative proceeding, arbitration or the like, in accordance with this article.

D. Except as otherwise provided in section  47-1305, subsection A or this chapter or the lease agreement, the rights and remedies referred to in subsections B and C of this section are cumulative.

E. If the lease agreement covers both real property and goods, the party seeking enforcement may proceed under this article as to the goods, or under other applicable law as to both the real property and the goods in accordance with that party's rights and remedies in respect of the real property, in which case this article does not apply.
A.R.S. § 47-2A526 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A526
47-2A526 Lessor's stoppage of delivery in transit or otherwise
Status: in_force

47-2A526. 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 be insolvent and may stop delivery of carload, truckload, planeload or larger shipments of express or freight if the lessee repudiates or fails to make a payment due before delivery, whether for rent, security or otherwise under the lease contract, or for any other reason the lessor has a right to withhold or take possession of the goods.

B. In pursuing its remedies under subsection A, the lessor may stop delivery until:

1. Receipt of the goods by the lessee;

2. Acknowledgment to the lessee by any bailee of the goods, except a carrier, that the bailee holds the goods for the lessee; or

3. Such an acknowledgment to the lessee by a carrier via reshipment or as a warehouse.

C. To stop delivery, a lessor shall so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.

D. After notification, the bailee shall hold and deliver the goods according to the directions of the lessor, but the lessor is liable to the bailee for any ensuing charges or damages.

E. A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.
A.R.S. § 47-5115 — Arizona Code / Title 47 / Chapter 5 / Section 5115
47-5115 Statute of limitations
Status: in_force

47-5115. 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 relevant letter of credit or one year after the cause of action accrues, whichever occurs later. A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach.
A.R.S. § 47-2A104 — Arizona Code / Title 47 / Chapter 2A / Article 1 / Section 2A104
47-2A104 Leases subject to other law
Status: in_force

47-2A104. Leases subject to other law

A. A lease, although subject to this chapter, is also subject to any applicable:

1. Certificate of title statute of this state;

2. Certificate of title statute of another jurisdiction (Section 47-2A105); or

3. Consumer protection statute of this state, or final consumer protection decision of a court of this state existing on the effective date of this chapter.

B. In case of conflict between this chapter, other than section 47-2A105, section 47-2A304, subsection C and section 47-2A305, subsection C, and a statute or decision referred to in subsection A of this section, the statute or decision controls.

C. Failure to comply with an applicable law has only the effect specified therein.
A.R.S. § 47-2A109 — Arizona Code / Title 47 / Chapter 2A / Article 1 / Section 2A109
47-2A109 Option to accelerate at will
Status: in_force

47-2A109. Option to accelerate at will

A. A term providing that one party or his successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or "when he deems himself insecure" or in words of similar import must be construed to mean that he has power to do so only if he in good faith believes that the prospect of payment or performance is impaired.

B. With respect to a consumer lease, the burden of establishing good faith under subsection A is on the party who exercised the power. Otherwise the burden of establishing lack of good faith is on the party against whom the power has been exercised.
A.R.S. § 47-2A214 — Arizona Code / Title 47 / Chapter 2A / Article 2 / Section 2A214
47-2A214 Exclusion or modification of warranties
Status: in_force

47-2A214. 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 construed wherever reasonable as consistent with each other, but, subject to the provisions of section 47-2A202 on parol or extrinsic evidence, negation or limitation is inoperative to the extent that the construction is unreasonable.

B. Subject to subsection C of this section, to exclude or modify the implied warranty of merchantability or any part of it the language must mention "merchantability", be by a writing and be conspicuous. Subject to subsection C of this section, to exclude or modify any implied warranty of fitness the exclusion must be by a writing and be conspicuous. Language to exclude all implied warranties of fitness is sufficient if it is in writing, is conspicuous and states, for example, "There is no warranty that the goods will be fit for a particular purpose".

C. Notwithstanding subsection B of this section, but subject to subsection D of this section:

1. Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is", or "with all faults", or by other language that in common understanding calls the lessee's attention to the exclusion of warranties and makes plain that there is no implied warranty, if in writing and conspicuous;

2. If the lessee before entering into the lease contract has examined the goods or the sample or model as fully as desired or has refused to examine the goods, there is no implied warranty with regard to defects that an examination ought in the circumstances to have revealed; and

3. An implied warranty may also be excluded or modified by course of dealing, course of performance or usage of trade.

D. To exclude or modify a warranty against interference or against infringement (section 47-2A211) or any part of it, the language must be specific, be by a writing and be conspicuous, unless the circumstances, including course of performance, course of dealing or usage of trade, give the lessee reason to know that the goods are being leased subject to a claim or interest of any person.
A.R.S. § 47-1305 — Arizona Code / Title 47 / Chapter 1 / Article 3 / Section 1305
47-1305 Remedies to be liberally administered
Status: in_force

47-1305. Remedies to be liberally administered

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

B. Any right or obligation declared by this title is enforceable by action unless the provision declaring it specifies a different and limited effect.
A.R.S. § 47-8306 — Arizona Code / Title 47 / Chapter 8 / Article 3 / Section 8306
47-8306 Effect of guaranteeing signature, indorsement or instruction
Status: in_force

47-8306. 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 was genuine;

2. The signer was an appropriate person to indorse, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and

3. The signer had legal capacity to sign.

B. A person who guarantees a signature of the originator of an instruction warrants that at the time of signing:

1. The signature was genuine;

2. The signer was an appropriate person to originate the instruction, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, if the person specified in the instruction as the registered owner was, in fact, the registered owner, as to which fact the signature guarantor does not make a warranty; and

3. The signer had legal capacity to sign.

C. A person who specially guarantees the signature of an originator of an instruction makes the warranties of a signature guarantor under subsection B and also warrants that at the time the instruction is presented to the issuer:

1. The person specified in the instruction as the registered owner of the uncertificated security will be the registered owner; and

2. The transfer of the uncertificated security requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction.

D. A guarantor under subsections A and B or a special guarantor under subsection C does not otherwise warrant the rightfulness of the transfer.

E. A person who guarantees an indorsement of a security certificate makes the warranties of a signature guarantor under subsection A and also warrants the rightfulness of the transfer in all respects.

F. A person who guarantees an instruction requesting the transfer of an uncertificated security makes the warranties of a special signature guarantor under subsection C and also warrants the rightfulness of the transfer in all respects.

G. An issuer may not require a special guaranty of signature, a guaranty of indorsement, or a guaranty of instruction as a condition to registration of transfer.

H. The warranties under this section are made to a person taking or dealing with the security in reliance on the guaranty, and the guarantor is liable to the person for loss resulting from their breach. An indorser or originator of an instruction whose signature, indorsement or instruction has been guaranteed is liable to a guarantor for any loss suffered by the guarantor as a result of breach of the warranties of the guarantor.
A.R.S. § 47-7103 — Arizona Code / Title 47 / Chapter 7 / Article 1 / Section 7103
47-7103 Relation of chapter to treaty or statute
Status: in_force

47-7103. Relation of chapter to treaty or statute

A. This chapter is subject to any treaty or statute of the United States or regulatory statute of this state to the extent the treaty, statute or regulatory statute is applicable.

B. This chapter does not modify or repeal any law prescribing the form or content of a document of title or the services or facilities to be afforded by a bailee or otherwise regulating a bailee's business in respects not specifically treated in this chapter.  However, violation of such a law does not affect the status of a document of title that otherwise is within the definition of a document of title.

C. This chapter modifies, limits and supersedes the federal electronic signatures in global and national commerce act (P.L. 106-229; 114 Stat. 464; 15 United States Code sections 7001 through 7006, section 7021 and section 7031) but does not modify, limit or supersede section 101(c) of that act (P.L. 106-229; 114 stat. 464; 15 United States Code section 7001(c)) or authorize electronic delivery of any of the notices described in section 103(b) of that act (P.L. 106-229; 114 Stat. 464; 15 United States Code section 103(b)).

D. To the extent there is a conflict between title 44, chapter 26 and this chapter, this chapter governs.
A.R.S. § 47-2304 — Arizona Code / Title 47 / Chapter 2 / Article 3 / Section 2304
47-2304 Price payable in money, goods, realty, or otherwise
Status: in_force

47-2304. Price payable in money, goods, realty, or otherwise

A. The price can be made payable in money or otherwise. If it is payable in whole or in part in goods each party is a seller of the goods which he is to transfer.

B. Even though all or part of the price is payable in an interest in realty the transfer of the goods and the seller's obligations with reference to them are subject to this chapter, but not the transfer of the interest in realty or the transferor's obligations in connection therewith.
A.R.S. § 47-8404 — Arizona Code / Title 47 / Chapter 8 / Article 4 / Section 8404
47-8404 Wrongful registration
Status: in_force

47-8404. Wrongful registration

A. Except as otherwise provided in section 47-8406, an issuer is liable for wrongful registration of transfer if the issuer has registered a transfer of a security to a person not entitled to it, and the transfer was registered:

1. Pursuant to an ineffective indorsement or instruction;

2. After a demand that the issuer not register transfer became effective under section 47-8403, subsection A and the issuer did not comply with section 47-8403, subsection B;

3. After the issuer had been served with an injunction, restraining order or other legal process enjoining it from registering the transfer, issued by a court of competent jurisdiction, and the issuer had a reasonable opportunity to act on the injunction, restraining order or other legal process; or

4. By an issuer acting in collusion with the wrongdoer.

B. An issuer that is liable for wrongful registration of transfer under subsection A of this section on demand shall provide the person entitled to the security with a like certificated or uncertificated security, and any payments or distributions that the person did not receive as a result of the wrongful registration. If an overissue would result, the issuer's liability to provide the person with a like security is governed by section 47-8210.

C. Except as otherwise provided in subsection A of this section or in a law relating to the collection of taxes, an issuer is not liable to an owner or other person suffering loss as a result of the registration of a transfer of a security if registration was made pursuant to an effective indorsement or instruction.
A.R.S. § 47-2718 — Arizona Code / Title 47 / Chapter 2 / Article 7 / Section 2718
47-2718 Liquidation or limitation of damages; deposits
Status: in_force

47-2718. Liquidation or limitation of damages; deposits

A. Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or non-feasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.

B. Where the seller justifiably withholds delivery of goods because of the buyer's breach, the buyer is entitled to restitution of any amount by which the sum of his payments exceeds:

1. The amount to which the seller is entitled by virtue of terms liquidating the seller's damages in accordance with subsection A of this section, or

2. In the absence of such terms, twenty per cent of the value of the total performance for which the buyer is obligated under the contract or five hundred dollars, whichever is smaller.

C. The buyer's right to restitution under subsection B of this section is subject to offset to the extent that the seller establishes:

1. A right to recover damages under the provisions of this chapter other than subsection A of this section, and

2. The amount or value of any benefits received by the buyer directly or indirectly by reason of the contract.

D. Where a seller has received payment in goods their reasonable value or the proceeds of their resale shall be treated as payments for the purposes of subsection B of this section; but if the seller has notice of the buyer's breach before reselling goods received in part performance, his resale is subject to the conditions laid down in this chapter on resale by an aggrieved seller (section 47-2706).
A.R.S. § 47-2616 — Arizona Code / Title 47 / Chapter 2 / Article 6 / Section 2616
47-2616 Procedure on notice claiming excuse
Status: in_force

47-2616. Procedure on notice claiming excuse

A. Where the buyer receives notification of a material or indefinite delay or an allocation justified under section 47-2615 he may by written notification to the seller as to any delivery concerned, and where the prospective deficiency substantially impairs the value of the whole contract under the provisions of this chapter relating to breach of installment contracts (section 47-2612), then also as to the whole:

1. Terminate and thereby discharge any unexecuted portion of the contract; or

2. Modify the contract by agreeing to take his available quota in substitution.

B. If after receipt of such notification from the seller the buyer fails so to modify the contract within a reasonable time not exceeding thirty days the contract lapses with respect to any deliveries affected.

C. The provisions of this section may not be negated by agreement except in so far as the seller has assumed a greater obligation under section 47-2615.
A.R.S. § 47-2A305 — Arizona Code / Title 47 / Chapter 2A / Article 3 / Section 2A305
47-2A305 Sale or sublease of goods by lessee
Status: in_force

47-2A305. Sale or sublease of goods by lessee

A. Subject to the provisions of section 47-2A303, a buyer or sublessee from the lessee of goods under an existing lease contract obtains, to the extent of the interest transferred, the leasehold interest in the goods that the lessee had or had power to transfer, and except as provided in subsection B of this section and section 47-2A511, subsection D, takes subject to the existing lease contract. A lessee with a voidable leasehold interest has power to transfer a good leasehold interest to a good faith buyer for value or a good faith sublessee for value, but only to the extent set forth in the preceding sentence. When goods have been delivered under a transaction of lease the lessee has that power even though:

1. The lessor was deceived as to the identity of the lessee;

2. The delivery was in exchange for a check which is later dishonored; or

3. The delivery was procured through fraud punishable as larcenous under the criminal law.

B. A buyer in the ordinary course of business or a sublessee in the ordinary course of business from a lessee who is a merchant dealing in goods of that kind to whom the goods were entrusted by the lessor obtains, to the extent of the interest transferred, all of the lessor's and lessee's rights to the goods, and takes free of the existing lease contract.

C. A buyer or sublessee from the lessee of goods that are subject to an existing lease contract and are covered by a certificate of title issued under a statute of this State or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.
A.R.S. § 47-5111 — Arizona Code / Title 47 / Chapter 5 / Section 5111
47-5111 Remedies
Status: in_force

47-5111. 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 nominated person presenting on its own behalf may recover from the issuer the amount that is the subject of the dishonor or repudiation. If the issuer's obligation under the letter of credit is not for the payment of money, the claimant may obtain specific performance or, at the claimant's election, may recover an amount equal to the value of performance from the issuer. In either case, the claimant may also recover incidental but not consequential damages. The claimant is not obligated to take action to avoid damages that might be due from the issuer under this subsection. If, although not obligated to do so, the claimant avoids damages, the claimant's recovery from the issuer must be reduced by the amount of damages avoided. The issuer has the burden of proving the amount of damages avoided. In the case of repudiation the claimant need not present any document.

B. If an issuer wrongfully dishonors a draft or demand presented under a letter of credit or honors a draft or demand in breach of its obligation to the applicant, the applicant may recover damages resulting from the breach, including incidental but not consequential damages, minus any amount saved as a result of the breach.

C. If an adviser or nominated person other than a confirmer breaches an obligation under this chapter or an issuer breaches an obligation not covered in subsection A or B, a person to whom the obligation is owed may recover damages resulting from the breach, including incidental but not consequential damages, minus any amount saved as a result of the breach. To the extent of the confirmation, a confirmer has the liability of an issuer specified in this subsection and subsections A and B.

D. An issuer, nominated person or adviser who is found liable under subsection A, B or C shall pay interest on the amount owed thereunder from the date of wrongful dishonor or other appropriate date.

E. Reasonable attorney fees and other expenses of litigation must be awarded to the prevailing party in an action in which a remedy is sought under this chapter.

F. Damages that would otherwise be payable by a party for breach of an obligation under this chapter may be liquidated by agreement or undertaking, but only in an amount or by a formula that is reasonable in light of the harm anticipated.
A.R.S. § 47-2303 — Arizona Code / Title 47 / Chapter 2 / Article 3 / Section 2303
47-2303 Allocation or division of risks
Status: in_force

47-2303. Allocation or division of risks

Where this chapter allocates a risk or a burden as between the parties "unless otherwise agreed", the agreement may not only shift the allocation but may also divide the risk or burden.
A.R.S. § 47-5105 — Arizona Code / Title 47 / Chapter 5 / Section 5105
47-5105 Consideration
Status: in_force

47-5105. Consideration

Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or confirmation.
A.R.S. § 47-4406 — Arizona Code / Title 47 / Chapter 4 / Article 4 / Section 4406
47-4406 Customer's duty to discover and report unauthorized signature or alteration
Status: in_force

47-4406. 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 or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount and date of payment.

B. If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of seven years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.

C. If a bank sends or makes available a statement of account or items pursuant to subsection A of this section, the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.

D. If the bank proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by subsection C of this section, the customer is precluded from asserting against the bank:

1. The customer's unauthorized signature or any alteration on the item, if the bank also proves that it suffered a loss by reason of the failure; and

2. The customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding thirty days, in which to examine the item or statement of account and notify the bank.

E. If subsection D of this section applies and the customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to loss, the loss is allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with subsection C of this section and the failure of the bank to exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the preclusion under subsection D of this section does not apply.

F. Without regard to care or lack of care of either the customer or the bank, a customer who does not within one year after the statement or items are made available to the customer (subsection A of this section) discover and report the customer's unauthorized signature on or any alteration on the item is precluded from asserting against the bank the unauthorized signature or alteration. If there is a preclusion under this subsection, the payor bank may not recover for breach of warranty under section 47-4208 with respect to the unauthorized signature or alteration to which the preclusion applies.
A.R.S. § 47-7102 — Arizona Code / Title 47 / Chapter 7 / Article 1 / Section 7102
47-7102 Definitions and index of definitions
Status: in_force

47-7102. Definitions and index of definitions

A. In this chapter, unless the context otherwise requires:

1. "Bailee" means a person that by a warehouse receipt, bill of lading or other document of title acknowledges possession of goods and contracts to deliver them.

2. "Carrier" means a person that issues a bill of lading.

3. "Consignee" means a person named in a bill of lading to which or to whose order the bill promises delivery.

4. "Consignor" means a person named in a bill of lading as the person from which the goods have been received for shipment.

5. "Delivery order" means a record that contains an order to deliver goods directed to a warehouse, carrier or other person that in the ordinary course of business issues warehouse receipts or bills of lading.

6. "Goods" means all things that are treated as movable for the purposes of a contract for storage or transportation.

7. "Issuer" means a bailee that issues a document of title or, in the case of an unaccepted delivery order, the person that orders the possessor of goods to deliver.  Issuer includes a person for which an agent or employee purports to act in issuing a document if the agent or employee has real or apparent authority to issue documents, even if the issuer did not receive any goods, the goods were misdescribed or in any other respect the agent or employee violated the issuer’s instructions.

8. "Person entitled under the document" means the holder, in the case of a negotiable document of title, or the person to which delivery of the goods is to be made by the terms of, or pursuant to instructions in a record under, a nonnegotiable document of title.

9. "Shipper" means a person that enters into a contract of transportation with a carrier.

10. "Sign" means, with present intent to authenticate or adopt a record:

(a) to execute or adopt a tangible symbol; or

(b) to attach to or logically associate with the record an electronic sound, symbol or process.

11. "Warehouse" means a person engaged in the business of storing goods for hire.

B. Definitions in other chapters applying to this chapter and the sections in which they appear are:

1. "Contract for sale".  Section 47-2106.

2. "Lessee in ordinary course of business".  Section 47-2A103.

3. "Receipt of goods".  Section 47-2103.

C. In addition, chapter 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this chapter.
A.R.S. § 47-4A506 — Arizona Code / Title 47 / Chapter 4A / Article 5 / Section 4A506
47-4A506 Rate of interest
Status: in_force

47-4A506. Rate of interest

A. If, under this chapter, a receiving bank is obliged to pay interest with respect to a payment order issued to the bank, the amount payable may be determined:

1. By agreement of the sender and receiving bank; or

2. By a funds-transfer system rule if the payment order is transmitted through a funds-transfer system.

B. If the amount of interest is not determined by an agreement or rule as stated in subsection A, the amount is calculated by multiplying the applicable federal funds rate by the amount on which interest is payable, and then multiplying the product by the number of days for which interest is payable. The applicable federal funds rate is the average of the federal funds rates published by the federal reserve bank of New York for each of the days for which interest is payable divided by three hundred sixty. The federal funds rate for any day on which a published rate is not available is the same as the published rate for the next preceding day for which there is a published rate. If a receiving bank that accepted a payment order is required to refund payment to the sender of the order because the funds transfer was not completed, but the failure to complete was not due to any fault by the bank, the interest payable is reduced by a percentage equal to the reserve requirement on deposits of the receiving bank.
A.R.S. § 47-8505 — Arizona Code / Title 47 / Chapter 8 / Article 5 / Section 8505
47-8505 Duty of securities intermediary with respect to payments and distributions
Status: in_force

47-8505. 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 satisfies the duty if:

1. The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or

2. In the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to attempt to obtain the payment or distribution.

B. A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary.
A.R.S. § 47-2104 — Arizona Code / Title 47 / Chapter 2 / Article 1 / Section 2104
47-2104 Definitions: "merchant"; "between merchants"; "financing agency"
Status: in_force

47-2104. Definitions: "merchant"; "between merchants"; "financing agency"

A. "Merchant" means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.

B. "Financing agency" means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller's draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or are associated with the draft. "Financing agency" includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods (section 47-2707).

C. "Between merchants" means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.
A.R.S. § 47-8209 — Arizona Code / Title 47 / Chapter 8 / Article 2 / Section 8209
47-8209 Issuer's lien
Status: in_force

47-8209. 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 the lien is noted conspicuously on the security certificate.
A.R.S. § 47-2314 — Arizona Code / Title 47 / Chapter 2 / Article 3 / Section 2314
47-2314 Implied warranty: merchantability; usage of trade
Status: in_force

47-2314. Implied warranty: merchantability; usage of trade

A. Unless excluded or modified (section 47-2316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the service for value of food or drink to be consumed either on the premises or elsewhere is a sale.

B. Goods to be merchantable must be at least such as:

1. Pass without objection in the trade under the contract description; and

2. In the case of fungible goods, are of fair average quality within the description; and

3. Are fit for the ordinary purposes for which such goods are used; and

4. Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and

5. Are adequately contained, packaged, and labeled as the agreement may require; and

6. Conform to the promises or affirmations of fact made on the container or label if any.

C. Unless excluded or modified (section 47-2316), other implied warranties may arise from course of dealing or usage of trade.
A.R.S. § 47-3303 — Arizona Code / Title 47 / Chapter 3 / Article 3 / Section 3303
47-3303 Value and consideration
Status: in_force

47-3303. 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 extent the promise has been performed;

2. The transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding;

3. The instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due;

4. The instrument is issued or transferred in exchange for a negotiable instrument; or

5. The instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument.

B. "Consideration" means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection A, the instrument is also issued for consideration.
A.R.S. § 47-7201 — Arizona Code / Title 47 / Chapter 7 / Article 2 / Section 7201
47-7201 Person that may issue a warehouse receipt; storage under bond
Status: in_force

47-7201. 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 requiring a bond against withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt issued for the goods is deemed to be a warehouse receipt even if issued by a person that is the owner of the goods and that is not a warehouse.
A.R.S. § 47-8107 — Arizona Code / Title 47 / Chapter 8 / Article 1 / Section 8107
47-8107 Whether indorsement, instruction or entitlement order is effective
Status: in_force

47-8107. 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 be entitled to the security;

2. With respect to an instruction, the registered owner of an uncertificated security;

3. With respect to an entitlement order, the entitlement holder;

4. If the person designated in paragraph 1, 2 or 3 of this subsection is deceased, the designated person's successor taking under other law or the designated person's personal representative acting for the estate of the decedent; or

5. If the person designated in paragraph 1, 2 or 3 of this subsection lacks capacity, the designated person's guardian, conservator or other similar representative who has power under other law to transfer the security or financial asset.

B. An indorsement, instruction or entitlement order is effective if:

1. It is made by the appropriate person;

2. It is made by a person who has power under the law of agency to transfer the security or financial asset on behalf of the appropriate person, including, in the case of an instruction or entitlement order, a person who has control under section 47-8106, subsection C, paragraph 2 or subsection D, paragraph 2; or

3. The appropriate person has ratified it or is otherwise precluded from asserting its ineffectiveness.

C. An indorsement, instruction or entitlement order made by a representative is effective even if:

1. The representative has failed to comply with a controlling instrument or with the law of the state having jurisdiction of the representative relationship, including any law requiring the representative to obtain court approval of the transaction; or

2. The representative's action in making the indorsement, instruction or entitlement order or using the proceeds of the transaction is otherwise a breach of duty.

D. If a security is registered in the name of or specially indorsed to a person described as a representative, or if a securities account is maintained in the name of a person described as a representative, an indorsement, instruction or entitlement order made by the person is effective even though the person is no longer serving in the described capacity.

E. Effectiveness of an indorsement, instruction or entitlement order is determined as of the date the indorsement, instruction or entitlement order is made, and an indorsement, instruction or entitlement order does not become ineffective by reason of any later change of circumstances.
A.R.S. § 47-4208 — Arizona Code / Title 47 / Chapter 4 / Article 2 / Section 4208
47-4208 Presentment warranties
Status: in_force

47-4208. Presentment warranties

A. If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, the person obtaining payment or acceptance, at the time of presentment, and a previous transferor of the draft, at the time of transfer, warrant to the drawee that pays or accepts the draft in good faith that:

1. The warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft;

2. The draft has not been altered; and

3. The warrantor has no knowledge that the signature of the purported drawer of the draft is unauthorized.

B. A drawee making payment may recover from a warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach. The right of the drawee to recover damages under this subsection is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft:

1. Breach of warranty is a defense to the obligation of the acceptor; and

2. If the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from a warrantor for breach of warranty the amounts stated in this subsection.

C. If a drawee asserts a claim for breach of warranty under subsection A of this section based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is effective under section 47-3404 or 47-3405 or the drawer is precluded under section 47-3406 or 47-4406 from asserting against the drawee the unauthorized indorsement or alteration.

D. If a dishonored draft is presented for payment to the drawer or an indorser or if any other item is presented for payment to a party obliged to pay the item, and the item is paid, the person obtaining payment and a prior transferor of the item warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the item, a person entitled to enforce the item or authorized to obtain payment on behalf of a person entitled to enforce the item. The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach.

E. The warranties stated in subsections A and D of this section cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within thirty days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.

F. A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
A.R.S. § 47-2A105 — Arizona Code / Title 47 / Chapter 2A / Article 1 / Section 2A105
47-2A105 Territorial application of chapter to goods covered by certificate of title
Status: in_force

47-2A105. Territorial application of chapter to goods covered by certificate of title

Subject to the provisions of section 47-2A304, subsection C and section 47-2A305, subsection C, with respect to goods covered by a certificate of title issued under a statute of this state or of another jurisdiction, compliance and the effect of compliance or noncompliance with a certificate of title statute are governed by the law, including the conflict of laws rules, of the jurisdiction issuing the certificate until the earlier of surrender of the certificate or four months after the goods are removed from that jurisdiction and thereafter until a new certificate of title is issued by another jurisdiction.
A.R.S. § 47-4103 — Arizona Code / Title 47 / Chapter 4 / Article 1 / Section 4103
47-4103 Variation by agreement; measure of damages; action constituting ordinary care
Status: in_force

47-4103. Variation by agreement; measure of damages; action constituting ordinary care

A. The effect of the provisions of this chapter may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.

B. Federal reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements under subsection A, whether or not specifically assented to by all parties interested in items handled.

C. Action or non-action approved by this chapter or pursuant to federal reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special instructions, action or non-action consistent with clearing-house rules and the like or with a general banking usage not disapproved by this chapter, is prima facie the exercise of ordinary care.

D. The specification or approval of certain procedures by this chapter is not disapproval of other procedures that may be reasonable under the circumstances.

E. The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care. If there is also bad faith it includes any other damages the party suffered as a proximate consequence.
A.R.S. § 47-2203 — Arizona Code / Title 47 / Chapter 2 / Article 2 / Section 2203
47-2203 Seals inoperative
Status: in_force

47-2203. 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 the writing a sealed instrument and the law with respect to sealed instruments does not apply to such a contract or offer.
A.R.S. § 47-7104 — Arizona Code / Title 47 / Chapter 7 / Article 1 / Section 7104
47-7104 Negotiable and nonnegotiable document of title
Status: in_force

47-7104. 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 to bearer or to the order of a named person.

B. A document of title other than one described in subsection A is nonnegotiable.  A bill of lading that states that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against an order in a record signed by the same or another named person.

C. A document of title is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.
A.R.S. § 47-2A308 — Arizona Code / Title 47 / Chapter 2A / Article 3 / Section 2A308
47-2A308 Special rights of creditors
Status: in_force

47-2A308. 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 the creditor retention of possession by the lessor is fraudulent under any statute or rule of law, but retention of possession in good faith and current course of trade by the lessor for a commercially reasonable time after the lease contract becomes enforceable is not fraudulent.

B. Nothing in this chapter impairs the rights of creditors of a lessor if the lease contract becomes enforceable, not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security or the like, and is made under circumstances which under any statute or rule of law apart from this chapter would constitute the transaction a fraudulent transfer or voidable preference.

C. A creditor of a seller may treat a sale or an identification of goods to a contract for sale as void if as against the creditor retention of possession by the seller is fraudulent under any statute or rule of law, but retention of possession of the goods pursuant to a lease contract entered into by the seller as lessee and the buyer as lessor in connection with the sale or identification of the goods is not fraudulent if the buyer bought for value and in good faith.
A.R.S. § 47-2A103 — Arizona Code / Title 47 / Chapter 2A / Article 1 / Section 2A103
47-2A103 Definitions and index of definitions
Status: in_force

47-2A103. Definitions and index of definitions

A. In this chapter, unless the context otherwise requires:

1. "Buyer in ordinary course of business" means a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind but does not include a pawnbroker. "Buying" may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

2. "Cancellation" occurs when either party puts an end to the lease contract for default by the other party.

3. "Commercial unit" means such a unit of goods as by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, as a machine, or a set of articles, as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit treated in use or in the relevant market as a single whole.

4. "Conforming" goods or performance under a lease contract means goods or performance that is in accordance with the obligations under the lease contract.

5. "Consumer lease" means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed twenty-five thousand dollars.

6. "Fault" means wrongful act, omission, breach or default.

7. "Finance lease" means a lease with respect to which:

(a) The lessor does not select, manufacture or supply the goods;

(b) The lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and

(c) One of the following occurs:

(i) The lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;

(ii) The lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract;

(iii) The lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; or

(iv) If the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person, that the lessee is entitled under this chapter to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods, and that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies.

8. "Goods" means all things that are movable at the time of identification to the lease contract, or are fixtures (section 47-2A309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles or minerals or the like, including oil and gas, before extraction. The term also includes the unborn young of animals.

9. "Installment lease contract" means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause "each delivery is a separate lease" or its equivalent.

10. "Lease" means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease.

11. "Lease agreement" means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this article. Unless the context clearly indicates otherwise, the term includes a sublease agreement.

12. "Lease contract" means the total legal obligation that results from the lease agreement as affected by this chapter and any other applicable rules of law. Unless the context clearly indicates otherwise, the term includes a sublease contract.

13. "Leasehold interest" means the interest of the lessor or the lessee under a lease contract.

14. "Lessee" means a person who acquires the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.

15. "Lessee in ordinary course of business" means a person who in good faith and without knowledge that the lease to him is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods leases in ordinary course from a person in the business of selling or leasing goods of that kind but does not include a pawnbroker. "Leasing" may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting lease contract but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

16. "Lessor" means a person who transfers the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.

17. "Lessor's residual interest" means the lessor's interest in the goods after expiration, termination or cancellation of the lease contract.

18. "Lien" means a charge against or interest in goods to secure payment of a debt or performance of an obligation, but the term does not include a security interest.

19. "Lot" means a parcel or a single article that is the subject matter of a separate lease or delivery, whether or not it is sufficient to perform the lease contract.

20. "Merchant lessee" means a lessee that is a merchant with respect to goods of the kind subject to the lease.

21. "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into. Otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into.

22. "Purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift or any other voluntary transaction creating an interest in goods.

23. "Sublease" means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease.

24. "Supplier" means a person from whom a lessor buys or leases goods to be leased under a finance lease.

25. "Supply contract" means a contract under which a lessor buys or leases goods to be leased.

26. "Termination" occurs when either party pursuant to a power created by agreement or law puts an end to the lease contract otherwise than for default.

B. Other definitions applying to this chapter and the sections in which they appear are:

1. "Accessions". Section 47-2A310.

2. "Construction mortgage". Section 47-2A309.

3. "Encumbrance". Section 47-2A309.

4. "Fixture filing". Section 47-2A309.

5. "Fixtures". Section 47-2A309.

6. "Purchase money lease". Section 47-2A309.

C. The following definitions in other chapters apply to this chapter:

1. "Account". Section 47-9102.

2. "Between merchants". Section 47-2104.

3. "Buyer". Section 47-2103.

4. "Chattel paper". Section 47-9102.

5. "Consumer goods". Section 47-9102.

6. "Document". Section 47-9102.

7. "Entrusting". Section 47-2403.

8. "General intangible". Section 47-9102.

9. "Good faith". Section 47-2103.

10. "Instrument". Section 47-9102.

11. "Merchant". Section 47-2104.

12. "Mortgage". Section 47-9102.

13. "Pursuant to commitment". Section 47-9102.

14. "Receipt". Section 47-2103.

15. "Sale". Section 47-2106.

16. "Sale on approval". Section 47-2326.

17. "Sale or return". Section 47-2326.

18. "Seller". Section 47-2103.

D. In addition, chapter 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this chapter.
A.R.S. § 47-1201 — Arizona Code / Title 47 / Chapter 1 / Article 2 / Section 1201
47-1201 General definitions
Status: in_force

47-1201. General definitions

A. Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other chapters of this title that apply to particular chapters or parts thereof, have the meanings stated.

B. Subject to definitions contained in other chapters of this title that apply to particular chapters or parts thereof:

1. "Action", in the sense of a judicial proceeding, includes recoupment, counterclaim, set-off, suit in equity and any other proceeding in which rights are determined.

2. "Aggrieved party" means a party entitled to pursue a remedy.

3. "Agreement", as distinguished from "contract", means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing or usage of trade as provided in section 47-1303.

4. "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union and trust company.

5. "Bearer" means a person in control of a negotiable electronic document of title or a person in possession of a negotiable instrument, negotiable tangible document of title or certificated security that is payable to bearer or indorsed in blank.

6. "Bill of lading" means a document of title evidencing the receipt of goods for shipment issued by a person engaged in the business of directly or indirectly transporting or forwarding goods. The term does not include a warehouse receipt.

7. "Branch" includes a separately incorporated foreign branch of a bank.

8. "Burden of establishing" a fact means the burden of persuading the trier of fact that the existence of the fact is more probable than its nonexistence.

9. "Buyer in ordinary course of business" means a person that buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind.  A person buys goods in the ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller's own usual or customary practices.  A person that sells oil, gas or other minerals at the wellhead or minehead is a person in the business of selling goods of that kind.  A buyer in ordinary course of business may buy for cash, by exchange of other property or on secured or unsecured credit, and may acquire goods or documents of title under a preexisting contract for sale.  Only a buyer that takes possession of the goods or has a right to recover the goods from the seller under chapter 2 of this title may be a buyer in ordinary course of business. Buyer in ordinary course of business does not include a person that acquires goods in a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

10. "Conspicuous", with reference to a term, means so written, displayed or presented that a reasonable person against which it is to operate ought to have noticed it.  Whether a term is conspicuous or not is a decision for the court.  Conspicuous terms include the following:

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

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

11. "Consumer" means an individual who enters into a transaction primarily for personal, family or household purposes.

12. "Contract", as distinguished from "agreement", means the total legal obligation that results from the parties' agreement as determined by this title as supplemented by any other applicable laws.

13. "Creditor" includes a general creditor, a secured creditor, a lien creditor and any representative of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity and an executor or administrator of an insolvent debtor's or assignor's estate.

14. "Defendant" includes a person in the position of defendant in a counterclaim, cross-claim or third-party claim.

15. "Delivery", with respect to an electronic document of title, means voluntary transfer of control, and with respect to an instrument, a tangible document of title or chattel paper means voluntary transfer of possession.

16. "Document of title" means a record:

(a) That in the regular course of business or financing is treated as adequately evidencing that the person in possession or control of the record is entitled to receive, control, hold and dispose of the record and the goods the record covers; and

(b) That purports to be issued by or addressed to a bailee and to cover goods in the bailee's possession that are either identified or are fungible portions of an identified mass.  The term includes a bill of lading, transport document, dock warrant, dock receipt, warehouse receipt and order for delivery of goods.  An electronic document of title means a document of title evidenced by a record consisting of information stored in an electronic medium.  A tangible document of title means a document of title evidenced by a record consisting of information that is inscribed on a tangible medium.

17. "Fault" means a default, breach or wrongful act or omission.

18. "Fungible goods" means:

(a) Goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit; or

(b) Goods that by agreement are treated as equivalent.

19. "Genuine" means free of forgery or counterfeiting.

20. "Good faith" means honesty in fact in the conduct or transaction concerned.

21. "Holder" means:

(a) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession;

(b) The person in possession of a negotiable tangible document of title if the goods are deliverable either to bearer or to the order of the person in possession; or

(c) The person in control of a negotiable electronic document of title.

22. "Insolvency proceeding" includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.

23. "Insolvent" means:

(a) Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;

(b) Being unable to pay debts as they become due; or

(c) Being insolvent within the meaning of federal bankruptcy law.

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

25. "Organization" means a person other than an individual.

26. "Party", as distinguished from "third party", means a person that has engaged in a transaction or made an agreement subject to this title.

27. "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or any other legal or commercial entity.

28. "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the facts and circumstances at the time the transaction is entered into.

29. "Purchase" means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift or any other voluntary transaction creating an interest in property.

30. "Purchaser" means a person that takes by purchase.

31. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

32. "Remedy" means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.

33. "Representative" means a person empowered to act for another, including an agent, an officer of a corporation or association and a trustee, executor or administrator of an estate.

34. "Right" includes remedy.

35. "Security interest" means an interest in personal property or fixtures that secures payment or performance of an obligation.  Security interest includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible or a promissory note in a transaction that is subject to chapter 9 of this title.  Security interest does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under section 47-2401, but a buyer may also acquire a security interest by complying with chapter 9 of this title. Except as otherwise provided in section 47-2505, the right of a seller or lessor of goods under chapter 2 or 2A of this title to retain or acquire possession of the goods is not a security interest, but a seller or lessor may also acquire a security interest by complying with chapter 9 of this title.  The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under section 47-2401 is limited in effect to a reservation of a security interest.  Whether a transaction in the form of a lease creates a security interest is determined pursuant to section 47-1203.

36. "Send" in connection with a writing, record or notice means:

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

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

37. "Signed" includes using any symbol executed or adopted with present intention to adopt or accept a writing.

38. "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States.

39. "Surety" includes a guarantor or other secondary obligor.

40. "Term" means a portion of an agreement that relates to a particular matter.

41. "Unauthorized signature" means a signature made without actual, implied or apparent authority.  The term includes a forgery.

42. "Warehouse receipt" means a document of title issued by a person engaged in the business of storing goods for hire.

43. "Writing" includes printing, typewriting or any other intentional reduction to tangible form. "Written" has a corresponding meaning.
A.R.S. § 47-4A402 — Arizona Code / Title 47 / Chapter 4A / Article 4 / Section 4A402
47-4A402 Obligation of sender to pay receiving bank
Status: in_force

47-4A402. Obligation of sender to pay receiving bank

A. This section is subject to sections 47-4A205 and 47-4A207.

B. With respect to a payment order issued to the beneficiary's bank, acceptance of the order by the bank obliges the sender to pay the bank the amount of the order, but payment is not due until the payment date of the order.

C. This subsection is subject to subsection E of this section and to section 47-4A303. With respect to a payment order issued to a receiving bank other than the beneficiary's bank, acceptance of the order by the receiving bank obliges the sender to pay the bank the amount of the sender's order. Payment by the sender is not due until the execution date of the sender's order. The obligation of that sender to pay its payment order is excused if the funds transfer is not completed by acceptance by the beneficiary's bank of a payment order instructing payment to the beneficiary of that sender's payment order.

D. If the sender of a payment order pays the order and was not obliged to pay all or part of the amount paid, the bank receiving payment is obliged to refund payment to the extent the sender was not obliged to pay. Except as provided in sections 47-4A204 and 47-4A304, interest is payable on the refundable amount from the date of payment.

E. If a funds transfer is not completed as stated in subsection C of this section and an intermediary bank is obliged to refund payment as stated in subsection D of this section but is unable to do so because not permitted by applicable law or because the bank suspends payments, a sender in the funds transfer that executed a payment order in compliance with an instruction, as stated in section 47-4A302, subsection A, paragraph 1, to route the funds transfer through that intermediary bank is entitled to receive or retain payment from the sender of the payment order that it accepted. The first sender in the funds transfer that issued an instruction requiring routing through that intermediary bank is subrogated to the right of the bank that paid the intermediary bank to refund as stated in subsection D of this section.

F. The right of the sender of a payment order to be excused from the obligation to pay the order as stated in subsection C of this section or to receive refund under subsection D of this section may not be varied by agreement.
A.R.S. § 47-1303 — Arizona Code / Title 47 / Chapter 1 / Article 3 / Section 1303
47-1303 Course of performance; course of dealing and usage of trade
Status: in_force

47-1303. 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 parties with respect to the transaction involves repeated occasions for performance by a party; and

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

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

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

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

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

1. Express terms prevail over course of performance, course of dealing and usage of trade;

2. Course of performance prevails over course of dealing and usage of trade; and

3. Course of dealing prevails over usage of trade.

F. Subject to section 47-2209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.

G. Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.
A.R.S. § 47-3419 — Arizona Code / Title 47 / Chapter 3 / Article 4 / Section 3419
47-3419 Instruments signed for accommodation
Status: in_force

47-3419. 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 the instrument ("accommodation party") signs the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party "for accommodation".

B. An accommodation party may sign the instrument as maker, drawer, acceptor or indorser and, subject to subsection D of this section, is obliged to pay the instrument in the capacity in which the accommodation party signs. The obligation of an accommodation party may be enforced notwithstanding any statute of frauds and whether or not the accommodation party receives consideration for the accommodation.

C. A person signing an instrument is presumed to be an accommodation party and there is notice that the instrument is signed for accommodation if the signature is an anomalous indorsement or is accompanied by words indicating that the signer is acting as surety or guarantor with respect to the obligation of another party to the instrument. Except as provided in section 47-3605, the obligation of an accommodation party to pay the instrument is not affected by the fact that the person enforcing the obligation had notice when the instrument was taken by that person that the accommodation party signed the instrument for accommodation.

D. If the signature of a party to an instrument is accompanied by words indicating unambiguously that the party is guaranteeing collection rather than payment of the obligation of another party to the instrument, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument only if:

1. Execution of judgment against the other party has been returned unsatisfied;

2. The other party is insolvent or in an insolvency proceeding;

3. The other party cannot be served with process; or

4. It is otherwise apparent that payment cannot be obtained from the other party.

E. An accommodation party who pays the instrument is entitled to reimbursement from the accommodated party and is entitled to enforce the instrument against the accommodated party. An accommodated party who pays the instrument has no right of recourse against, and is not entitled to contribution from, an accommodation party.
A.R.S. § 47-8101 — Arizona Code / Title 47 / Chapter 8 / Article 1 / Section 8101
47-8101 Short title
Status: in_force

47-8101. Short title

This chapter may be cited as the uniform commercial code--investment securities.
A.R.S. § 47-2723 — Arizona Code / Title 47 / Chapter 2 / Article 7 / Section 2723
47-2723 Proof of market price: time and place
Status: in_force

47-2723. Proof of market price: time and place

A. If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the goods, any damages based on market price (section 47-2708 or 47-2713) shall be determined according to the price of such goods prevailing at the time when the aggrieved party learned of the repudiation.

B. If evidence of a price prevailing at the times or places described in this chapter is not readily available the price prevailing within any reasonable time before or after the time described or at any other place which in commercial judgment or under usage of trade would serve as a reasonable substitute for the one described may be used, making any proper allowance for the cost of transporting the goods to or from such other place.

C. Evidence of a relevant price prevailing at a time or place other than the one described in this chapter offered by one party is not admissible unless and until he has given the other party such notice as the court finds sufficient to prevent unfair surprise.
A.R.S. § 47-1104 — Arizona Code / Title 47 / Chapter 1 / Article 1 / Section 1104
47-1104 Construction against implied repeal
Status: repealed

47-1104. Construction against implied repeal

This title being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided.
A.R.S. § 47-3501 — Arizona Code / Title 47 / Chapter 3 / Article 5 / Section 3501
47-3501 Presentment
Status: in_force

47-3501. Presentment

A. "Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument:

1. To pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank; or

2. To accept a draft made to the drawee.

B. The following rules are subject to chapter 4 of this title, agreement of the parties, and clearing house rules and the like:

1. Presentment:

(a) May be made at the place of payment of the instrument and must be made at the place of payment if the instrument is payable at a bank in the United States;

(b) May be made by any commercially reasonable means, including an oral, written or electronic communication;

(c) Is effective when the demand for payment or acceptance is received by the person to whom presentment is made; and

(d) Is effective if made to any one of two or more makers, acceptors, drawees or other payors.

2. Upon demand of the person to whom presentment is made, the person making presentment must:

(a) Exhibit the instrument;

(b) Give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so; and

(c) Sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.

3. Without dishonoring the instrument, the party to whom presentment is made may:

(a) Return the instrument for lack of a necessary indorsement; or

(b) Refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties or other applicable law or rule.

4. The party to whom presentment is made may treat presentment as occurring on the next business day after the day of presentment if the party to whom presentment is made has established a cutoff hour not earlier than 2:00 p.m. for the receipt and processing of instruments presented for payment or acceptance and presentment is made after the cutoff hour.
A.R.S. § 47-3503 — Arizona Code / Title 47 / Chapter 3 / Article 5 / Section 3503
47-3503 Notice of dishonor
Status: in_force

47-3503. Notice of dishonor

A. The obligation of an indorser stated in section 47-3415, subsection A and the obligation of a drawer stated in section 47-3414, subsection D may not be enforced unless:

1. The indorser or drawer is given notice of dishonor of the instrument complying with this section; or

2. Notice of dishonor is excused under section 47-3504, subsection B.

B. Notice of dishonor may be given by any person, may be given by any commercially reasonable means, including an oral, written or electronic communication, and is sufficient if it reasonably identifies the instrument and indicates that the instrument has been dishonored or has not been paid or accepted. Return of an instrument given to a bank for collection is sufficient notice of dishonor.

C. Subject to section 47-3504, subsection C, with respect to an instrument taken for collection by a collecting bank, notice of dishonor must be given by the bank before midnight of the next banking day following the banking day on which the bank receives notice of dishonor of the instrument or by any other person within thirty days following the day on which the person receives notice of dishonor. With respect to any other instrument, notice of dishonor must be given within thirty days following the day on which dishonor occurs.
A.R.S. § 47-8201 — Arizona Code / Title 47 / Chapter 8 / Article 2 / Section 8201
47-8201 Issuer
Status: in_force

47-8201. 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 placing of its name on a security certificate, other than as authenticating trustee, registrar, transfer agent, or the like, to evidence a share, participation or other interest in its property or in an enterprise or to evidence its duty to perform an obligation represented by the certificate;

2. Creates a share, participation or other interest in its property or in an enterprise, or undertakes an obligation, that is an uncertificated security;

3. Directly or indirectly creates a fractional interest in its rights or property, if the fractional interest is represented by a security certificate; or

4. Becomes responsible for, or in place of, another person described as an issuer in this section.

B. With respect to an obligation on or defense to a security, a guarantor is an issuer to the extent of its guaranty, whether or not its obligation is noted on a security certificate.

C. With respect to a registration of a transfer, issuer means a person on whose behalf transfer books are maintained.
A.R.S. § 47-3311 — Arizona Code / Title 47 / Chapter 3 / Article 3 / Section 3311
47-3311 Accord and satisfaction by use of instrument
Status: in_force

47-3311. Accord and satisfaction by use of instrument

A. If a person against whom a claim is asserted proves that the person in good faith tendered an instrument to the claimant as full satisfaction of the claim, the amount of the claim was unliquidated or subject to a bona fide dispute and the claimant obtained payment of the instrument, subsections B and C apply.

B. Unless subsection C applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

C. Subject to subsection D, a claim is not discharged under subsection B if either of the following applies:

1. The claimant, if an organization, proves that:

(a) Within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office or place; and

(b) The instrument or accompanying communication was not received by that designated person, office or place.

2. The claimant, whether or not an organization, proves that within ninety days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with paragraph 1, subdivision (a).

D. A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.
A.R.S. § 47-8301 — Arizona Code / Title 47 / Chapter 8 / Article 3 / Section 8301
47-8301 Delivery
Status: in_force

47-8301. 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 than a securities intermediary, either acquires possession of the security certificate on behalf of the purchaser or, having previously acquired possession of the certificate, acknowledges that it holds for the purchaser; or

3. A securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, only if the certificate is in registered form and is registered in the name of the purchaser, payable to the order of the purchaser or specially indorsed to the purchaser by an effective indorsement and has not been indorsed to the securities intermediary or in blank.

B. Delivery of an uncertificated security to a purchaser occurs when:

1. The issuer registers the purchaser as the registered owner, upon original issue or registration of transfer; or

2. Another person, other than a securities intermediary, either becomes the registered owner of the uncertificated security on behalf of the purchaser or, having previously become the registered owner, acknowledges that it holds for the purchaser.
A.R.S. § 47-4102 — Arizona Code / Title 47 / Chapter 4 / Article 1 / Section 4102
47-4102 Applicability
Status: in_force

47-4102. Applicability

A. To the extent that items within this chapter are also within chapters 3 and 8 of this title, they are subject to those chapters. If there is conflict, this chapter governs chapter 3 of this title, but chapter 8 of this title governs this chapter.

B. The liability of a bank for action or non-action with respect to an item handled by it for purposes of presentment, payment or collection is governed by the law of the place where the bank is located. In the case of action or non-action by or at a branch or separate office of a bank, its liability is governed by the law of the place where the branch or separate office is located.
A.R.S. § 47-4A107 — Arizona Code / Title 47 / Chapter 4A / Article 1 / Section 4A107
47-4A107 Federal reserve regulations and operating circulars
Status: in_force

47-4A107. 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 this chapter to the extent of the inconsistency.
A.R.S. § 47-2A525 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A525
47-2A525 Lessor's right to possession of goods
Status: in_force

47-2A525. 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 lessee under the lease contract of the type described in section 47-2A523, subsection A or section 47-2A523, subsection C, paragraph 1 or, if agreed, after other default by the lessee, the lessor has the right to take possession of the goods. If the lease contract so provides, the lessor may require the lessee to assemble the goods and make them available to the lessor at a place to be designated by the lessor which is reasonably convenient to both parties. Without removal, the lessor may render unusable any goods employed in trade or business, and may dispose of goods on the lessee's premises (section 47-2A527).

C. The lessor may proceed under subsection B of this section without judicial process if it can be done without breach of the peace or the lessor may proceed by action.
A.R.S. § 47-2302 — Arizona Code / Title 47 / Chapter 2 / Article 3 / Section 2302
47-2302 Unconscionable contract or clause
Status: in_force

47-2302. Unconscionable contract or clause

A. If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

B. When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.
A.R.S. § 47-2502 — Arizona Code / Title 47 / Chapter 2 / Article 5 / Section 2502
47-2502 Buyer's right to goods on seller's insolvency
Status: in_force

47-2502. Buyer's right to goods on seller's insolvency

A. Subject to subsections B and C of this section and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which he has a special property under the provisions of section 47-2501 may on making and keeping good a tender of any unpaid portion of their price recover them from the seller if:

1. In the case of goods bought for personal, family or household purposes, the seller repudiates or fails to deliver as required by the contract; or

2. In all cases, the seller becomes insolvent within ten days after receipt of the first installment on their price.

B. The buyer's right to recover the goods under subsection A, paragraph 1 of this section vests on acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

C. If the identification creating his special property has been made by the buyer he acquires the right to recover the goods only if they conform to the contract for sale.
A.R.S. § 47-2719 — Arizona Code / Title 47 / Chapter 2 / Article 7 / Section 2719
47-2719 Contractual modification or limitation of remedy
Status: in_force

47-2719. Contractual modification or limitation of remedy

A. Subject to the provisions of subsections B and C of this section and of section 47-2718 on liquidation and limitation of damages:

1. The agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and

2. Resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.

B. Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this title.

C. Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
A.R.S. § 47-3406 — Arizona Code / Title 47 / Chapter 3 / Article 4 / Section 3406
47-3406 Negligence contributing to forged signature or alteration of instrument
Status: in_force

47-3406. 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 signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.

B. Under subsection A, if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.

C. Under subsection A, the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection B, the burden of proving failure to exercise ordinary care is on the person precluded.
A.R.S. § 47-2A528 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A528
47-2A528 Lessor's damages for nonacceptance, failure to pay, repudiation or other default
Status: in_force

47-2A528. 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 47-2A504) or otherwise determined pursuant to agreement of the parties (sections 47-1302 and 47-2A503), if a lessor elects to retain the goods or a lessor elects to dispose of the goods and the disposition is by lease agreement that for any reason does not qualify for treatment under section 47-2A527, subsection B, or is by sale or otherwise, the lessor may recover from the lessee as damages for a default of the type described in section 47-2A523, subsection A or subsection C, paragraph 1, or, if agreed, for other default of the lessee:

1. Accrued and unpaid rent as of the date of default if the lessee has never taken possession of the goods, or, if the lessee has taken possession of the goods, as of the date the lessor repossesses the goods or an earlier date on which the lessee makes a tender of the goods to the lessor;

2. The present value as of the date determined under paragraph 1 of the total rent for the then remaining lease term of the original lease agreement minus the present value as of the same date of the market rent at the place where the goods are located computed for the same lease term; and

3. Any incidental damages allowed under section 47-2A530, less expenses saved in consequence of the lessee's default.

B. If the measure of damages provided in subsection A of this section is inadequate to put a lessor in as good a position as performance would have, the measure of damages is the present value of the profit, including reasonable overhead, the lessor would have made from full performance by the lessee, together with any incidental damages allowed under section 47-2A530, due allowance for costs reasonably incurred and due credit for payments or proceeds of disposition.
A.R.S. § 47-7202 — Arizona Code / Title 47 / Chapter 7 / Article 2 / Section 7202
47-7202 Form of warehouse receipt; effect of omission
Status: in_force

47-7202. 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 is liable for damages caused to a person injured by its omission:

1. A statement of the location of the warehouse facility where the goods are stored;

2. The date of issue of the receipt;

3. The unique identification code of the receipt;

4. A statement whether the goods received will be delivered to the bearer, to a named person or to a named person or its order;

5. The rate of storage and handling charges, unless goods are stored under a field warehousing arrangement, in which case a statement of that fact is sufficient on a nonnegotiable receipt;

6. A description of the goods or the packages containing them;

7. The signature of the warehouse or its agent;

8. If the receipt is issued for goods that the warehouse owns, either solely, jointly or in common with others, a statement of the fact of that ownership; and

9. A statement of the amount of advances made and of liabilities incurred for which the warehouse claims a lien or security interest, unless the precise amount of advances made or liabilities incurred, at the time of the issue of the receipt, is unknown to the warehouse or to its agent that issued the receipt, in which case a statement of the fact that advances have been made or liabilities incurred and the purpose of the advances or liabilities is sufficient.

C. A warehouse may insert in its receipt any terms that are not contrary to this title and that do not impair its obligation of delivery under section 47-7403 or its duty of care under section 47-7204. Any contrary provision is ineffective.
A.R.S. § 47-9102 — Arizona Code / Title 47 / Chapter 9 / Article 1 / Section 9102
47-9102 Definitions and index of definitions
Status: in_force

47-9102. Definitions and index of definitions

A. In this chapter, unless the context otherwise requires:

1. "Accession" means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

2. "Account", except as used in "account for", means a right to payment of a monetary obligation, whether or not earned by performance, for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, for services rendered or to be rendered, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit or charge card or information contained on or for use with the card or as winnings in a lottery or other game of chance operated or sponsored by a state, a governmental unit of a state or a person licensed or authorized to operate the game by a state or governmental unit of a state.  Account includes health-care-insurance receivables. Account does not include rights to payment evidenced by chattel paper or an instrument, commercial tort claims, deposit accounts, investment property, letter-of-credit rights or letters of credit or rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card.

3. "Account debtor" means a person obligated on an account, chattel paper or general intangible but does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.

4. "Accounting", except as used in "accounting for", means a record:

(a) Authenticated by a secured party;

(b) Indicating the aggregate unpaid secured obligations as of a date not more than thirty-five days earlier or thirty-five days later than the date of the record; and

(c) Identifying the components of the obligations in reasonable detail.

5. "Agricultural lien" means an interest, other than a security interest, in farm products:

(a) That secures payment or performance of an obligation for:

(i) Goods or services furnished in connection with a debtor's farming operation; or

(ii) Rent on real property leased by a debtor in connection with its farming operation;

(b) That is created by statute in favor of a person that:

(i) In the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or

(ii) Leased real property to a debtor in connection with the debtor's farming operation; and

(c) Whose effectiveness does not depend on the person's possession of the personal property.

6. "As-extracted collateral" means:

(a) Oil, gas or other minerals that are subject to a security interest that:

(i) Is created by a debtor having an interest in the minerals before extraction; and

(ii) Attaches to the minerals as extracted; or

(b) Accounts arising out of the sale at the wellhead or minehead of oil, gas or other minerals in which the debtor had an interest before extraction.

7. "Authenticate" means:

(a) To sign; or

(b) With present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol or process.

8. "Bank" means an organization that is engaged in the business of banking.  Bank includes savings banks, savings and loan associations, credit unions and trust companies.

9. "Cash proceeds" means proceeds that are money, checks, deposit accounts or the like.

10. "Certificate of title" means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral.  Certificate of title includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral.

11. "Chattel paper" means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods or a lease of specific goods and license of software used in the goods. In this paragraph, "monetary obligation" means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. Chattel paper does not include charters or other contracts involving the use or hire of a vessel or records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.  If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.

12. "Collateral" means the property subject to a security interest or agricultural lien.  Collateral includes:

(a) Proceeds to which a security interest attaches;

(b) Accounts, chattel paper, payment intangibles and promissory notes that have been sold; and

(c) Goods that are the subject of a consignment.

13. "Commercial tort claim" means a claim arising in tort with respect to which:

(a) The claimant is an organization; or

(b) The claimant is an individual and the claim:

(i) Arose in the course of the claimant's business or profession; and

(ii) Does not include damages arising out of personal injury to or the death of an individual.

14. "Commodity account" means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.

15. "Commodity contract" means a commodity futures contract, an option on a commodity futures contract, a commodity option or another contract if the contract or option is:

(a) Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or

(b) Traded on a foreign commodity board of trade, exchange or market, and is carried on the books of a commodity intermediary for a commodity customer.

16. "Commodity customer" means a person for which a commodity intermediary carries a commodity contract on its books.

17. "Commodity intermediary" means a person that:

(a) Is registered as a futures commission merchant under federal commodities law; or

(b) In the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law.

18. "Communicate" means:

(a) To send a written or other tangible record;

(b) To transmit a record by any means agreed on by the persons sending and receiving the record; or

(c) In the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing office rule.

19. "Consignee" means a merchant to which goods are delivered in a consignment.

20. "Consignment" means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:

(a) The merchant:

(i) Deals in goods of that kind under a name other than the name of the person making delivery;

(ii) Is not an auctioneer; and

(iii) Is not generally known by its creditors to be substantially engaged in selling the goods of others;

(b) With respect to each delivery, the aggregate value of the goods is one thousand dollars or more at the time of delivery;

(c) The goods are not consumer goods immediately before delivery; and

(d) The transaction does not create a security interest that secures an obligation.

21. "Consignor" means a person that delivers goods to a consignee in a consignment.

22. "Consumer debtor" means a debtor in a consumer transaction.

23. "Consumer goods" means goods that are used or bought for use primarily for personal, family or household purposes.

24. "Consumer goods transaction" means a consumer transaction in which:

(a) An individual incurs an obligation primarily for personal, family or household purposes; and

(b) A security interest in consumer goods secures the obligation.

25. "Consumer obligor" means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family or household purposes.

26. "Consumer transaction" means a transaction in which an individual incurs an obligation primarily for personal, family or household purposes, a security interest secures the obligation and the collateral is held or acquired primarily for personal, family or household purposes.  Consumer transaction includes consumer goods transactions.

27. "Continuation statement" means an amendment of a financing statement that:

(a) Identifies, by its file number, the initial financing statement to which it relates; and

(b) Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

28. "Debtor" means:

(a) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;

(b) A seller of accounts, chattel paper, payment intangibles or promissory notes; or

(c) A consignee.

29. "Deposit account" means a demand, time, savings, passbook or similar account maintained with a bank.  Deposit account does not include investment property or accounts evidenced by an instrument.

30. "Document" means a document of title or a receipt of the type described in section 47-7201, subsection B.

31. "Electronic chattel paper" means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.

32. "Encumbrance" means a right, other than an ownership interest, in real property. Encumbrance includes mortgages and other liens on real property.

33. "Equipment" means goods other than inventory, farm products or consumer goods.

34. "Farm products" means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and that are:

(a) Crops grown, growing or to be grown, including:

(i) Crops produced on trees, vines and bushes; and

(ii) Aquatic goods produced in aquacultural operations;

(b) Livestock, born or unborn, including aquatic goods produced in aquacultural operations;

(c) Supplies used or produced in a farming operation; or

(d) Products of crops or livestock in their unmanufactured states.

35. "Farming operation" means raising, cultivating, propagating, fattening, grazing or any other farming, livestock or aquacultural operation.

36. "File number" means the number assigned to an initial financing statement pursuant to section 47-9519, subsection A.

37. "Filing office" means an office designated in section 47-9501 as the place to file a financing statement.

38. "Filing office rule" means a rule adopted pursuant to section 47-9526.

39. "Financing statement" means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement.

40. "Fixture filing" means the filing of a financing statement covering goods that are or are to become fixtures and satisfying section 47-9502, subsections A and B.  Fixture filing includes the filing of a financing statement covering goods of a transmitting utility that are or are to become fixtures.

41. "Fixtures" means goods that have become so related to particular real property that an interest in them arises under real property law.

42. "General intangible" means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money and oil, gas or other minerals before extraction.  General intangible includes payment intangibles and software.

43. "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.

44. "Goods" means all things that are movable when a security interest attaches.

(a) Goods includes:

(i) Fixtures;

(ii) Standing timber that is to be cut and removed under a conveyance or contract for sale;

(iii) The unborn young of animals;

(iv) Crops grown, growing or to be grown, even if the crops are produced on trees, vines or bushes; and

(v) Manufactured homes.

(b) Goods also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if:

(i) The program is associated with the goods in such a manner that it customarily is considered part of the goods; or

(ii) By becoming the owner of the goods, a person acquires a right to use the program in connection with the goods.

(c) Goods does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded.

(d) Goods also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas or other minerals before extraction.

45. "Governmental unit" means a subdivision, agency, department, county, parish, municipality or other unit of the government of the United States, a state or a foreign country. Governmental unit includes an organization having a separate corporate or legal existence if the organization is eligible to issue or incur obligations the interest on which is excluded from gross income for federal income tax purposes.

46. "Health-care-insurance receivable" means an interest in or claim under a policy of insurance that is a right to payment of a monetary obligation for health care goods or services provided.

47. "Instrument" means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease and is of a type that in the ordinary course of business is transferred by delivery with any necessary indorsement or assignment. Instrument does not include:

(a) Investment property;

(b) Letters of credit; or

(c) Writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

48. "Inventory" means goods, other than farm products, that:

(a) Are leased by a person as lessor;

(b) Are held by a person for sale or lease or to be furnished under a contract of service;

(c) Are furnished by a person under a contract of service; or

(d) Consist of raw materials, work in process or materials used or consumed in a business.

49. "Investment property" means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account.

50. "Jurisdiction of organization", with respect to a registered organization, means the jurisdiction under whose law the organization is organized.

51. "Letter-of-credit right" means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance.  Letter-of-credit right does not include the right of a beneficiary to demand payment or performance under a letter of credit.

52. "Lien creditor" means:

(a) A creditor that has acquired a lien on the property involved by attachment, levy or the like;

(b) An assignee for benefit of creditors from the time of assignment;

(c) A trustee in bankruptcy from the date of the filing of the petition; or

(d) A receiver in equity from the time of appointment.

53. "Manufactured home" means a structure that is transportable in one or more sections and that, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when erected on site, is three hundred twenty or more square feet, and that is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning and electrical systems contained therein. Manufactured home includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States secretary of housing and urban development and complies with the standards established under title 42 of the United States Code.

54. "Manufactured home transaction" means a secured transaction:

(a) That creates a purchase money security interest in a manufactured home, other than a manufactured home held as inventory; or

(b) In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.

55. "Mortgage" means a consensual interest in real property, including fixtures, that secures payment or performance of an obligation.

56. "New debtor" means a person that becomes bound as debtor under section 47-9203, subsection D by a security agreement previously entered into by another person.

57. "New value" means money, money's worth in property, services or new credit or release by a transferee of an interest in property previously transferred to the transferee. New value does not include an obligation substituted for another obligation.

58. "Noncash proceeds" means proceeds other than cash proceeds.

59. "Obligor" means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral, owes payment or other performance of the obligation, has provided property other than the collateral to secure payment or other performance of the obligation or is otherwise accountable in whole or in part for payment or other performance of the obligation.  Obligor does not include issuers or nominated persons under a letter of credit.

60. "Original debtor", except as used in section 47-9310, subsection C, means a person that, as debtor, entered into a security agreement to which a new debtor has become bound under section 47-9203, subsection D.

61. "Payment intangible" means a general intangible under which the account debtor's principal obligation is a monetary obligation.

62. "Person related to", with respect to an individual, means:

(a) The spouse of the individual;

(b) A brother, brother-in-law, sister or sister-in-law of the individual;

(c) An ancestor or lineal descendant of the individual or the individual's spouse; or

(d) Any other relative, by blood or marriage, of the individual or the individual's spouse who shares the same home with the individual.

63. "Person related to", with respect to an organization, means:

(a) A person directly or indirectly controlling, controlled by or under common control with the organization;

(b) An officer or director of, or a person performing similar functions with respect to, the organization;

(c) An officer or director of, or a person performing similar functions with respect to, a person described in subdivision (a) of this paragraph;

(d) The spouse of an individual described in subdivision (a), (b) or (c) of this paragraph; or

(e) An individual who is related by blood or marriage to an individual described in subdivision (a), (b), (c) or (d) of this paragraph and who shares the same home with the individual.

64. "Proceeds", except as used in section 47-9609, subsection B, means the following property:

(a) Whatever is acquired on the sale, lease, license, exchange or other disposition of collateral;

(b) Whatever is collected on, or distributed on account of, collateral;

(c) Rights arising out of collateral;

(d) To the extent of the value of collateral, claims arising out of the loss, nonconformity or interference with the use of, defects or infringement of rights in, or damage to the collateral; or

(e) To the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to the collateral.

65. "Promissory note" means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.

66. "Proposal" means a record authenticated by a secured party that includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to sections 47-9620, 47-9621 and 47-9622.

67. "Public organic record" means a record that is available to the public for inspection and that is:

(a) A record consisting of the record initially filed with or issued by a state or the United States to form or organize an organization and any record filed with or issued by the state or the United States that amends or restates the initial record;

(b) An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state that amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or

(c) A record consisting of legislation enacted by the legislature of a state or the Congress of the United States that forms or organizes an organization, any record amending the legislation and any record filed with or issued by the state or the United States that amends or restates the name of the organization.

68. "Pursuant to commitment", with respect to an advance made or other value given by a secured party, means pursuant to the secured party's obligation, whether or not a subsequent event of default or other event not within the secured party's control has relieved or may relieve the secured party from its obligation.

69. "Record", except as used in "for record", "of record", "record or legal title", and "record owner", means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

70. "Registered organization" means an organization formed or organized solely under the law of a single state or the United States by the filing of a public organic record with, the issuance of a public organic record by or the enactment of legislation by the state or the United States. Registered organization includes a business trust that is formed or organized under the law of a single state if a statute of the state governing business trusts requires that the business trust's organic record be filed with the state.

71. "Secondary obligor" means an obligor to the extent that:

(a) The obligor's obligation is secondary; or

(b) The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor or property of either.

72. "Secured party" means:

(a) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;

(b) A person that holds an agricultural lien;

(c) A consignor;

(d) A person to which accounts, chattel paper, payment intangibles or promissory notes have been sold;

(e) A trustee, indenture trustee, agent, collateral agent or other representative in whose favor a security interest or agricultural lien is created or provided for; or

(f) A person that holds a security interest arising under section 47-2401, 47-2505, 47-2711, 47-2A508, 47-4210 or 47-5118.

73. "Security agreement" means an agreement that creates or provides for a security interest.

74. "Send", in connection with a record or notification, means:

(a) To deposit in the mail, deliver for transmission or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances; or

(b) To cause the record or notification to be received within the time that it would have been received if properly sent under subdivision (a) of this paragraph.

75. "Software" means a computer program and any supporting information provided in connection with a transaction relating to the program.  Software does not include a computer program that is included in the definition of goods.

76. "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States.

77. "Supporting obligation" means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument or investment property.

78. "Tangible chattel paper" means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium.

79. "Termination statement" means an amendment of a financing statement that:

(a) Identifies, by its file number, the initial financing statement to which it relates; and

(b) Indicates either that it is a termination statement or that the identified financing statement is no longer effective.

80. "Transmitting utility" means a person primarily engaged in the business of:

(a) Operating a railroad, subway, street railway or trolley bus;

(b) Transmitting communications electrically, electromagnetically or by light;

(c) Transmitting goods by pipeline or sewer; or

(d) Transmitting or producing and transmitting electricity, steam, gas or water.

B. "Control" as provided in section 47-7106 and the following definitions in other sections apply to this chapter:

1. "Applicant"   Section 47-5102

2. "Beneficiary" Section 47-5102

3. "Broker"      Section 47-8102

4. "Certificated security"   Section 47-8102

5. "Check" Section 47-3104

6. "Clearing corporation"    Section 47-8102

7. "Contract for sale" Section 47-2106

8. "Customer"    Section 47-4104

9. "Entitlement holder"      Section 47-8102

10. "Financial asset"  Section 47-8102

11. "Holder in due course"   Section 47-3302

12. "Issuer" (with respect to a letter of

credit or letter-of-credit right)   Section 47-5102

13. "Issuer" (with respect to a security)      Section 47-8201

14. "Issuer" (with respect to documents

of title)   Section 47-7102

15. "Lease"      Section 47-2A103

16. "Lease agreement"  Section 47-2A103

17. "Lease contract"   Section 47-2A103

18. "Leasehold interest"     Section 47-2A103

19. "Lessee"     Section 47-2A103

20. "Lessee in ordinary course

of business"      Section 47-2A103

21. "Lessor"     Section 47-2A103

22. "Lessor's residual interest"   Section 47-2A103

23. "Letter of credit" Section 47-5102

24. "Merchant"   Section 47-2104

25. "Negotiable instrument"  Section 47-3104

26. "Nominated person" Section 47-5102

27. "Note" Section 47-3104

28. "Proceeds of a letter of credit"     Section 47-5114

29. "Prove"      Section 47-3103

30. "Sale" Section 47-2106

31. "Securities account"     Section 47-8501

32. "Securities intermediary"      Section 47-8102

33. "Security"   Section 47-8102

34. "Security certificate"   Section 47-8102

35. "Security entitlement"   Section 47-8102

36. "Uncertificated security"      Section 47-8102

C. In addition, chapter 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this chapter.
A.R.S. § 47-4A204 — Arizona Code / Title 47 / Chapter 4A / Article 2 / Section 4A204
47-4A204 Refund of payment and duty of customer to report with respect to unauthorized payment order
Status: in_force

47-4A204. 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 not authorized and not effective as the order of the customer under section 47-4A202 or not enforceable, in whole or in part, against the customer under section 47-4A203, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. However, the customer is not entitled to interest from the bank on the amount to be refunded if the customer fails to exercise ordinary care to determine that the order was not authorized by the customer and to notify the bank of the relevant facts within a reasonable time not exceeding ninety days after the date the customer received notification from the bank that the order was accepted or that the customer's account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section.

B. Reasonable time under subsection A of this section may be fixed by agreement as stated in section 47-1302, subsection B, but the obligation of a receiving bank to refund payment as stated in subsection A of this section may not otherwise be varied by agreement.
A.R.S. § 47-2A514 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A514
47-2A514 Waiver of lessee's objections
Status: in_force

47-2A514. 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 the defect to justify rejection or to establish default:

1. If, stated seasonably, the lessor or the supplier could have cured it (section 47-2A513); or

2. Between merchants if the lessor or the supplier after rejection has made a request in writing for a full and final written statement of all defects on which the lessee proposes to rely.

B. A lessee's failure to reserve rights when paying rent or other consideration against documents precludes recovery of the payment for defects apparent in the documents.
A.R.S. § 47-8510 — Arizona Code / Title 47 / Chapter 8 / Article 5 / Section 8510
47-8510 Rights of purchaser of security entitlement from entitlement holder
Status: in_force

47-8510. Rights of purchaser of security entitlement from entitlement holder

A. In a case not covered by the priority rules in chapter 9 of this title or the rules stated in subsection C of this section, an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim and obtains control.

B. If an adverse claim could not have been asserted against an entitlement holder under section 47-8502, the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest therein, from the entitlement holder.

C. In a case not covered by the priority rules in chapter 9 of this title, a purchaser for value of a security entitlement or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Except as otherwise provided in subsection D of this section, purchasers who have control rank according to priority in time of:

1. The purchaser's becoming the person for whom the securities account, in which the security entitlement is carried, is maintained, if the purchaser obtained control under section 47-8106, subsection D, paragraph 1;

2. The securities intermediary's agreement to comply with the purchaser's entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under section 47-8106, subsection D, paragraph 2; or

3. If the purchaser obtained control through another person under section 47-8106, subsection D, paragraph 3, the time on which priority would be based under this subsection if the other person were the secured party.

D. A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.
A.R.S. § 47-4107 — Arizona Code / Title 47 / Chapter 4 / Article 1 / Section 4107
47-4107 Separate office of bank
Status: in_force

47-4107. Separate office of 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 place at or to which action may be taken or notices or orders must be given under this chapter and chapter 3 of this title, except that service on the bank as garnishee shall be made pursuant to section 12-1577. The receipt of any notice or order by, or the knowledge of, one branch or separate office of a bank is not actual or constructive notice to or knowledge of any other branch or separate office of the same bank and does not impair the right of such other branch or separate office to be a holder in due course of an item.
A.R.S. § 47-3105 — Arizona Code / Title 47 / Chapter 3 / Article 1 / Section 3105
47-3105 Issue of instrument
Status: in_force

47-3105. 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 giving rights on the instrument to any person.

B. An unissued instrument, or an unissued incomplete instrument that is completed, is binding on the maker or drawer, but nonissuance is a defense. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer, but failure of the condition or special purpose to be fulfilled is a defense.

C. "Issuer" applies to issued and unissued instruments and means a maker or drawer of an instrument.
A.R.S. § 47-8108 — Arizona Code / Title 47 / Chapter 8 / Article 1 / Section 8108
47-8108 Warranties in direct holding
Status: in_force

47-8108. 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 by indorsement, warrants to any subsequent purchaser, that:

1. The certificate is genuine and has not been materially altered;

2. The transferor or indorser does not know of any fact that might impair the validity of the security;

3. There is no adverse claim to the security;

4. The transfer does not violate any restriction on transfer;

5. If the transfer is by indorsement, the indorsement is made by an appropriate person, or if the indorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and

6. The transfer is otherwise effective and rightful.

B. A person who originates an instruction for registration of transfer of an uncertificated security to a purchaser for value warrants to the purchaser that:

1. The instruction is made by an appropriate person, or if the instruction is by an agent, the agent has actual authority to act on behalf of the appropriate person;

2. The security is valid;

3. There is no adverse claim to the security; and

4. At the time the instruction is presented to the issuer:

(a) The purchaser will be entitled to the registration of transfer;

(b) The transfer will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction;

(c) The transfer will not violate any restriction on transfer; and

(d) The requested transfer will otherwise be effective and rightful.

C. A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants that:

1. The uncertificated security is valid;

2. There is no adverse claim to the security;

3. The transfer does not violate any restriction on transfer; and

4. The transfer is otherwise effective and rightful.

D. A person who indorses a security certificate warrants to the issuer that:

1. There is no adverse claim to the security; and

2. The indorsement is effective.

E. A person who originates an instruction for registration of transfer of an uncertificated security warrants to the issuer that:

1. The instruction is effective; and

2. At the time the instruction is presented to the issuer the purchaser will be entitled to the registration of transfer.

F. A person who presents a certificated security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, but a purchaser for value and without notice of adverse claims to whom transfer is registered warrants only that the person has no knowledge of any unauthorized signature in a necessary indorsement.

G. If a person acts as agent of another in delivering a certificated security to a purchaser, the identity of the principal was known to the person to whom the certificate was delivered, and the certificate delivered by the agent was received by the agent from the principal or received by the agent from another person at the direction of the principal, the person delivering the security certificate warrants only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security.

H. A secured party who redelivers a security certificate received, or after payment and on order of the debtor delivers the security certificate to another person, makes only the warranties of an agent under subsection G.

I. Except as otherwise provided in subsection G, a broker acting for a customer makes to the issuer and a purchaser the warranties provided in subsections A through F. A broker that delivers a security certificate to its customer, or causes its customer to be registered as the owner of an uncertificated security, makes to the customer the warranties provided in subsection A or B, and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of the customer.
A.R.S. § 47-2306 — Arizona Code / Title 47 / Chapter 2 / Article 3 / Section 2306
47-2306 Output, requirements and exclusive dealings
Status: in_force

47-2306. Output, requirements and exclusive dealings

A. A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.

B. A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.
A.R.S. § 47-4209 — Arizona Code / Title 47 / Chapter 4 / Article 2 / Section 4209
47-4209 Encoding and retention warranties
Status: in_force

47-4209. 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 payor bank or other payor that the information is correctly encoded. If the customer of a depositary bank encodes, that bank also makes the warranty.

B. A person who undertakes to retain an item pursuant to an agreement for electronic presentment warrants to any subsequent collecting bank and to the payor bank or other payor that retention and presentment of the item comply with the agreement. If a customer of a depositary bank undertakes to retain an item, that bank also makes this warranty.

C. A person to whom warranties are made under this section and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, plus expenses and loss of interest incurred as a result of the breach.
A.R.S. § 47-8302 — Arizona Code / Title 47 / Chapter 8 / Article 3 / Section 8302
47-8302 Rights of purchaser
Status: in_force

47-8302. 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 that the transferor had or had power to transfer.

B. A purchaser of a limited interest acquires rights only to the extent of the interest purchased.

C. A purchaser of a certificated security who as a previous holder had notice of an adverse claim does not improve its position by taking from a protected purchaser.
A.R.S. § 47-4216 — Arizona Code / Title 47 / Chapter 4 / Article 2 / Section 4216
47-4216 Insolvency and preference
Status: in_force

47-4216. 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 been finally paid, the item must be returned by the receiver, trustee or agent in charge of the closed bank to the presenting bank or the closed bank's customer.

B. If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor bank.

C. If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement's becoming final if the finality occurs automatically upon the lapse of certain time or the happening of certain events.

D. If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer which settlement is or becomes final, the owner of the item has a preferred claim against the collecting bank.
A.R.S. § 47-2A512 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A512
47-2A512 Lessee's duties as to rightfully rejected goods
Status: in_force

47-2A512. 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 47-2A511) and subject to any security interest of a lessee (section 47-2A508, subsection E):

1. The lessee, after rejection of goods in the lessee's possession, shall hold them with reasonable care at the lessor's or the supplier's disposition for a reasonable time after the lessee's seasonable notification of rejection;

2. If the lessor or the supplier gives no instructions within a reasonable time after notification of rejection, the lessee may store the rejected goods for the lessor's or the supplier's account or ship them to the lessor or the supplier or dispose of them for the lessor's or the supplier's account with reimbursement in the manner provided in section 47-2A511; but

3. The lessee has no further obligations with regard to goods rightfully rejected.

B. Action by the lessee pursuant to subsection A of this section is not acceptance or conversion.
A.R.S. § 47-2609 — Arizona Code / Title 47 / Chapter 2 / Article 6 / Section 2609
47-2609 Right to adequate assurance of performance
Status: in_force

47-2609. Right to adequate assurance of performance

A. A contract for sale imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.

B. Between merchants the reasonableness of grounds for insecurity and the adequacy of any assurance offered shall be determined according to commercial standards.

C. Acceptance of any improper delivery or payment does not prejudice the aggrieved party's right to demand adequate assurance of future performance.

D. After receipt of a justified demand failure to provide within a reasonable time not exceeding thirty days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.
A.R.S. § 47-3307 — Arizona Code / Title 47 / Chapter 3 / Article 3 / Section 3307
47-3307 Notice of breach of fiduciary duty
Status: in_force

47-3307. 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 to an instrument.

2. "Represented person" means the principal, beneficiary, partnership, corporation or other person to whom the duty stated in paragraph 1 of this subsection is owed.

B. If an instrument is taken from a fiduciary for payment or collection or for value, the taker has knowledge of the fiduciary status of the fiduciary and the represented person makes a claim to the instrument or its proceeds on the basis that the transaction of the fiduciary is a breach of fiduciary duty, the following rules apply:

1. Notice of breach of fiduciary duty by the fiduciary is notice of the claim of the represented person.

2. In the case of an instrument payable to the represented person or the fiduciary as such, the taker has notice of the breach of fiduciary duty if the instrument is:

(a) Taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary;

(b) Taken in a transaction known by the taker to be for the personal benefit of the fiduciary; or

(c) Deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.

3. If an instrument is issued by the represented person or the fiduciary as such, and made payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty.

4. If an instrument is issued by the represented person or the fiduciary as such, to the taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is:

(a) Taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary;

(b) Taken in a transaction known by the taker to be for the personal benefit of the fiduciary; or

(c) Deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
A.R.S. § 47-4407 — Arizona Code / Title 47 / Chapter 4 / Article 4 / Section 4407
47-4407 Payor bank's right to subrogation on improper payment
Status: in_force

47-4407. 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 closed or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its payment of the item, the payor bank is subrogated to the rights:

1. Of any holder in due course on the item against the drawer or maker;

2. Of the payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of which the item arose; and

3. Of the drawer or maker against the payee or any other holder of the item with respect to the transaction out of which the item arose.
A.R.S. § 47-3107 — Arizona Code / Title 47 / Chapter 3 / Article 1 / Section 3107
47-3107 Instrument payable in foreign money
Status: in_force

47-3107. 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 an equivalent amount in dollars calculated by using the current bank-offered spot rate at the place of payment for the purchase of dollars on the day on which the instrument is paid.
A.R.S. § 47-2A205 — Arizona Code / Title 47 / Chapter 2A / Article 2 / Section 2A205
47-2A205 Firm offers
Status: in_force

47-2A205. 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 be held open is not revocable, for lack of consideration, during the time stated or, if no time is stated, for a reasonable time, but in no event may the period of irrevocability exceed three months. Any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.
A.R.S. § 47-2A203 — Arizona Code / Title 47 / Chapter 2A / Article 2 / Section 2A203
47-2A203 Seals inoperative
Status: in_force

47-2A203. 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 writing a sealed instrument and the law with respect to sealed instruments does not apply to the lease contract or offer.
A.R.S. § 47-4110 — Arizona Code / Title 47 / Chapter 4 / Article 1 / Section 4110
47-4110 Electronic presentment
Status: in_force

47-4110. 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 be made by transmission of an image of an item or information describing the item ("presentment notice") rather than delivery of the item itself. The agreement may provide for procedures governing retention, presentment, payment, dishonor and other matters concerning items subject to the agreement.

B. Presentment of an item pursuant to an agreement for presentment is made when the presentment notice is received.

C. If presentment is made by presentment notice, a reference to "item" or "check" in this chapter means the presentment notice unless the context otherwise indicates.
A.R.S. § 47-2107 — Arizona Code / Title 47 / Chapter 2 / Article 1 / Section 2107
47-2107 Goods to be severed from realty; recording
Status: in_force

47-2107. Goods to be severed from realty; recording

A. A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this chapter if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.

B. A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in subsection A or of timber to be cut is a contract for the sale of goods within this chapter whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

C. The provisions of this section are subject to any third party rights provided by the law relating to realty records, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to third parties of the buyer's rights under the contract for sale.
A.R.S. § 47-4301 — Arizona Code / Title 47 / Chapter 4 / Article 3 / Section 4301
47-4301 Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank
Status: in_force

47-4301. 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 before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made final payment and before its midnight deadline, it:

1. Returns the item; or

2. Sends written notice of dishonor or nonpayment if the item is unavailable for return.

B. If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection A.

C. Unless previous notice of dishonor has been sent an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section.

D. An item is returned:

1. As to an item presented through a clearing house, when it is delivered to the presenting or last collecting bank or to the clearing house or is sent or delivered in accordance with clearing-house rules; or

2. In all other cases, when it is sent or delivered to the bank's customer or transferor or pursuant to instructions.
A.R.S. § 47-3115 — Arizona Code / Title 47 / Chapter 3 / Article 1 / Section 3115
47-3115 Incomplete instrument
Status: in_force

47-3115. 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 that it is incomplete but that the signer intended it to be completed by the addition of words or numbers.

B. Subject to subsection C of this section, if an incomplete instrument is an instrument under section 47-3104, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion. If an incomplete instrument is not an instrument under section 47-3104, but, after completion, the requirements of section 47-3104 are met, the instrument may be enforced according to its terms as augmented by completion.

C. If words or numbers are added to an incomplete instrument without authority of the signer, there is an alteration of the incomplete instrument under section 47-3407.

D. The burden of establishing that words or numbers were added to an incomplete instrument without authority of the signer is on the person asserting the lack of authority.
A.R.S. § 47-7509 — Arizona Code / Title 47 / Chapter 7 / Article 5 / Section 7509
47-7509 Adequate compliance with commercial contract
Status: in_force

47-7509. 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 a letter of credit is determined by chapter 2, 2A or 5 of this title.
A.R.S. § 47-2A506 — Arizona Code / Title 47 / Chapter 2A / Article 5 / Section 2A506
47-2A506 Statute of limitations
Status: in_force

47-2A506. 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 action accrued. By the original lease contract the parties may reduce the period of limitation to not less than one year.

B. A cause of action for default accrues when the act or omission on which the default or breach of warranty is based is or should have been discovered by the aggrieved party, or when the default occurs, whichever is later. A cause of action for indemnity accrues when the act or omission on which the claim for indemnity is based is or should have been discovered by the indemnified party, whichever is later.

C. If an action commenced within the time limited by subsection A is so terminated as to leave available a remedy by another action for the same default or breach of warranty or indemnity, the other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.

D. This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action that have accrued before this chapter becomes effective.
A.R.S. § 47-8110 — Arizona Code / Title 47 / Chapter 8 / Article 1 / Section 8110
47-8110 Applicability; choice of law
Status: in_force

47-8110. 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 duties of the issuer with respect to registration of transfer;

3. The effectiveness of registration of transfer by the issuer;

4. Whether the issuer owes any duties to an adverse claimant to a security; and

5. Whether an adverse claim can be asserted against a person to whom transfer of a certificated or uncertificated security is registered or a person who obtains control of an uncertificated security.

B. The local law of the securities intermediary's jurisdiction, as specified in subsection F, governs:

1. Acquisition of a security entitlement from the securities intermediary;

2. The rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement;

3. Whether the securities intermediary owes any duties to an adverse claimant to a security entitlement; and

4. Whether an adverse claim can be asserted against a person who acquires a security entitlement from the securities intermediary or a person who purchases a security entitlement or interest therein from an entitlement holder.

C. The local law of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim can be asserted against a person to whom the security certificate is delivered.

D. "Issuer's jurisdiction" means the jurisdiction under which the issuer of the security is organized or, if permitted by the law of that jurisdiction, the law of another jurisdiction specified by the issuer. An issuer organized under the law of this state may specify the law of another jurisdiction as the law governing the matters specified in subsection A, paragraphs 2 through 5.

E. The following rules determine a "securities intermediary's jurisdiction" for purposes of this section:

1. If an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that a particular jurisdiction is the securities intermediary's jurisdiction for purposes of this article or this chapter, that jurisdiction is the securities intermediary's jurisdiction.

2. If paragraph 1 of this subsection does not apply and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.

3. If neither paragraph 1 nor paragraph 2 of this subsection applies and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.

4. If none of the preceding paragraphs in this subsection applies, the securities intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the entitlement holder's account is located.

5. If none of the preceding paragraphs in this subsection applies, the securities intermediary's jurisdiction is the jurisdiction in which the chief executive office of the securities intermediary is located.

F. A securities intermediary's jurisdiction is not determined by the physical location of certificates representing financial assets, or by the jurisdiction in which is organized the issuer of the financial asset with respect to which an entitlement holder has a security entitlement, or by the location of facilities for data processing or other record keeping concerning the account.
A.R.S. § 47-2319 — Arizona Code / Title 47 / Chapter 2 / Article 3 / Section 2319
47-2319 F.O.B. and F.A.S. terms
Status: in_force

47-2319. F.O.B. and F.A.S. terms

A. Unless otherwise agreed the term F.O.B. (which means "free on board") at a named place, even though used only in connection with the stated price, is a delivery term under which:

1. When the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this chapter (section 47-2504) and bear the expense and risk of putting them into the possession of the carrier; or

2. When the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and there tender delivery of them in the manner provided in this chapter (section 47-2503);

3. When under either paragraph 1 or 2 the term is also F.O.B. vessel, car or other vehicle, the seller must in addition at his own expense and risk load the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with the provisions of this chapter on the form of bill of lading (section 47-2323).

B. Unless otherwise agreed the term F.A.S. vessel (which means "free alongside") at a named port, even though used only in connection with the stated price, is a delivery term under which the seller must:

1. At his own expense and risk deliver the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer; and

2. Obtain and tender a receipt for the goods in exchange for which the carrier is under a duty to issue a bill of lading.

C. Unless otherwise agreed in any case falling within paragraph 1 or 3 of subsection A of this section or within subsection B of this section the buyer must seasonably give any needed instructions for making delivery, including when the term is F.A.S. or F.O.B. the loading berth of the vessel and in an appropriate case its name and sailing date. The seller may treat the failure of needed instructions as a failure of cooperation under this chapter (section 47-2311). He may also at his option move the goods in any reasonable manner preparatory to delivery or shipment.

D. Under the term F.O.B. vessel or F.A.S. unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand delivery of the goods in substitution for the documents.
A.R.S. § 47-8208 — Arizona Code / Title 47 / Chapter 8 / Article 2 / Section 8208
47-8208 Effect of signature of authenticating trustee, registrar or transfer agent
Status: in_force

47-8208. 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 certificated security, if the purchaser is without notice of a particular defect, that:

1. The certificate is genuine;

2. The person's own participation in the issue of the security is within the person's capacity and within the scope of the authority received by the person from the issuer; and

3. The person has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue.

B. Unless otherwise agreed, a person signing under subsection A does not assume responsibility for the validity of the security in other respects.
A.R.S. § 47-4A303 — Arizona Code / Title 47 / Chapter 4A / Article 3 / Section 4A303
47-4A303 Erroneous execution of payment order
Status: in_force

47-4A303. Erroneous execution of payment order

A. A receiving bank that executes the payment order of the sender by issuing a payment order in an amount greater than the amount of the sender's order, or issues a payment order in execution of the sender's order and then issues a duplicate order, is entitled to payment of the amount of the sender's order under section 47-4A402, subsection C if that subsection is otherwise satisfied. The bank is entitled to recover from the beneficiary of the erroneous order the excess payment received to the extent allowed by the law governing mistake and restitution.

B. A receiving bank that executes the payment order of the sender by issuing a payment order in an amount less than the amount of the sender's order is entitled to payment of the amount of the sender's order under section 47-4A402, subsection C if that subsection is otherwise satisfied and the bank corrects its mistake by issuing an additional payment order for the benefit of the beneficiary of the sender's order. If the error is not corrected, the issuer of the erroneous order is entitled to receive or retain payment from the sender of the order it accepted only to the extent of the amount of the erroneous order. This subsection does not apply if the receiving bank executes the sender's payment order by issuing a payment order in an amount less than the amount of the sender's order for the purpose of obtaining payment of its charges for services and expenses pursuant to instruction of the sender.

C. If a receiving bank executes the payment order of the sender by issuing a payment order to a beneficiary different from the beneficiary of the sender's order and the funds transfer is completed on the basis of that error, the sender of the payment order that was erroneously executed and all previous senders in the funds transfer are not obliged to pay the payment orders they issued. The issuer of the erroneous order is entitled to recover from the beneficiary of the order the payment received to the extent allowed by the law governing mistake and restitution.
A.R.S. § 47-5112 — Arizona Code / Title 47 / Chapter 5 / Section 5112
47-5112 Transfer of letter of credit
Status: in_force

47-5112. Transfer of letter of credit

A. Except as otherwise provided in section 47-5113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred.

B. Even if a letter of credit provides that it is transferable, the issuer may refuse to recognize or carry out a transfer if:

1. The transfer would violate applicable law; or

2. The transferor or transferee has failed to comply with any requirement stated in the letter of credit or any other requirement relating to transfer imposed by the issuer that is within the standard practice referred to in section 47-5108, subsection E or that is otherwise reasonable under the circumstances.
A.R.S. § 47-5117 — Arizona Code / Title 47 / Chapter 5 / Section 5117
47-5117 Subrogation of issuer, applicant and nominated person
Status: in_force

47-5117. 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 were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were the secondary obligor of the underlying obligation owed to the applicant.

B. An applicant that reimburses an issuer is subrogated to the rights of the issuer against any beneficiary, presenter or nominated person to the same extent as if the applicant were the secondary obligor of the obligations owed to the issuer and has the rights of subrogation of the issuer to the rights of the beneficiary stated in subsection A.

C. A nominated person who pays or gives value against a draft or demand presented under a letter of credit is subrogated to the rights of:

1. The issuer against the applicant to the same extent as if the nominated person were a secondary obligor of the obligation owed to the issuer by the applicant;

2. The beneficiary to the same extent as if the nominated person were a secondary obligor of the underlying obligation owed to the beneficiary; and

3. The applicant to same extent as if the nominated person were a secondary obligor of the underlying obligation owed to the applicant.

D. Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in subsections A and B do not arise until the issuer honors the letter of credit or otherwise pays and the rights in subsection C do not arise until the nominated person pays or otherwise gives value. Until then, the issuer, nominated person and applicant do not derive under this section present or prospective rights forming the basis of a claim, defense or excuse.
A.R.S. § 47-2512 — Arizona Code / Title 47 / Chapter 2 / Article 5 / Section 2512
47-2512 Payment by buyer before inspection
Status: in_force

47-2512. Payment by buyer before inspection

A. Where the contract requires payment before inspection non-conformity of the goods does not excuse the buyer from so making payment unless:

1. The non-conformity appears without inspection; or

2. Despite tender of the required documents the circumstances would justify injunction against honor under this title (section 47-5109, subsection B).

B. Payment pursuant to subsection A of this section does not constitute an acceptance of goods or impair the buyer's right to inspect or any of his remedies.
A.R.S. § 47-2711 — Arizona Code / Title 47 / Chapter 2 / Article 7 / Section 2711
47-2711 Buyer's remedies in general; buyer's security interest in rejected goods
Status: in_force

47-2711. Buyer's remedies in general; buyer's security interest in rejected goods

A. Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (section 47-2612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid:

1. "Cover" and have damages under section 47-2712 as to all the goods affected whether or not they have been identified to the contract; or

2. Recover damages for non-delivery as provided in this chapter (section 47-2713).

B. Where the seller fails to deliver or repudiates the buyer may also:

1. If the goods have been identified recover them as provided in this chapter (section 47-2502); or

2. In a proper case obtain specific performance or replevy the goods as provided in this chapter (section 47-2716).

C. On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in his possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (section 47-2706).
A.R.S. § 47-3420 — Arizona Code / Title 47 / Chapter 3 / Article 4 / Section 3420
47-3420 Conversion of instrument
Status: in_force

47-3420. 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 than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. An action for conversion of an instrument may not be brought by:

1. The issuer or acceptor of the instrument; or

2. A payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee.

B. In an action under subsection A, the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiff's interest in the instrument.

C. A representative, other than a depositary bank, who has in good faith dealt with an instrument or its proceeds on behalf of one who was not the person entitled to enforce the instrument is not liable in conversion to that person beyond the amount of any proceeds that it has not paid out.
A.R.S. § 47-2709 — Arizona Code / Title 47 / Chapter 2 / Article 7 / Section 2709
47-2709 Action for the price
Status: in_force

47-2709. Action for the price

A. When the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damages under the next section, the price:

1. Of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss has passed to the buyer; and

2. Of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing.

B. Where the seller sues for the price he must hold for the buyer any goods which have been identified to the contract and are still in his control except that if resale becomes possible he may resell them at any time prior to the collection of the judgment. The net proceeds of any such resale must be credited to the buyer and payment of the judgment entitles him to any goods not resold.

C. After the buyer has wrongfully rejected or revoked acceptance of the goods or has failed to make a payment due or has repudiated (section 47-2610), a seller who is held not entitled to the price under this section shall nevertheless be awarded damages for non-acceptance under section 47-2708.