GA Code § 11-1-201 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 1 - General Provisions|Part 2 - General Definitions and Principles of Interpretation|§ 11-1-201. General Definitions

  Unless the context otherwise requires, words or phrases defined in this Code section, or in the additional definitions contained in other articles of this title that apply to particular articles or parts thereof, have the meanings stated.   Subject to additional definitions contained in the other articles of this title that are applicable to specific articles or parts thereof, in this title:   "Action" in the sense of a judicial proceeding includes recoupment, counterclaim, setoff, suit in equity, and any other proceedings in which rights are determined.   "Aggrieved party" means a party entitled to pursue a remedy.   "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 Code Section 11-1-303.   "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, or trust company.   "Bearer" means a person in control of a negotiable instrument, document of title, or certificated security payable to bearer or indorsed in blank.   "Bill of lading" means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods.   "Branch" includes a separately incorporated foreign branch of a bank.   "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.   "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 the 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 Article 2 of this title may be a buyer in ordinary course of business. A person that acquires goods in a transfer in bulk or as security for or in total or partial satisfaction of a money debt is not a buyer in ordinary course of business.   "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 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   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 the surrounding text of the same size by symbols or other marks that call attention to the language.     "Consumer" means an individual who enters into a transaction primarily for personal, family, or household purposes.   "Contract," as distinguished from "agreement," means the total legal obligation that results from the parties' agreement as determined by this title and any other applicable law.   "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.   "Defendant" includes a person in the position of defendant in a counterclaim, cross-claim, or third-party claim.   "Delivery" with respect to an instrument, document of title, or chattel paper means voluntary transfer of possession.   "Document of title" includes a bill of lading, dock warrant, dock receipt, warehouse receipt, or order for delivery of goods and any other document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers. To be a document of title, a document must purport to be issued by or addressed to a bailee and purport to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass.   "Fault" means a default, breach, or wrongful act or omission.   "Fungible goods" means:   Goods of which any unit is, by nature or usage of trade, the equivalent of any other like unit; or   Goods that by agreement are treated as equivalent.     "Genuine" means free of forgery or counterfeiting.   "Good faith," except as otherwise provided in Article 5 of this title, means honesty in fact and the observance of reasonable commercial standards of fair dealing.   "Holder" means:   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; or   The person in possession of a document of title if the goods are deliverable either to bearer or to the order of the person in possession.     "Insolvency proceeding" includes any assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.   "Insolvent" means:   Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;   Being unable to pay debts as they become due; or   Being insolvent within the meaning of the federal bankruptcy law.     "Money" means a medium of exchange authorized or adopted by a domestic or foreign government and includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries.   "Organization" means a person other than an individual.   "Party," as distinct from "third party," means a person who has engaged in a transaction or made an agreement subject to this title.   "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.   "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.   "Purchase" means taking by sale, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.   "Purchaser" means a person who takes by purchase.   "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.   "Remedy" means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.   "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.   "Rights" includes remedies.   "Security interest" means an interest in personal property or fixtures which secures payment or performance of an obligation. The term also includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Article 9 of this title. The term does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under Code Section 11-2-401, but a buyer may also acquire a "security interest" by complying with Article 9 of this title. Except as otherwise provided in Code Section 11-2-505, the right of a seller or lessor of goods under Article 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 Article 9 of this title. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under Code Section 11-2-401 is limited in effect to a reservation of a "security interest."  Whether a transaction in the form of a lease creates a "security interest" shall be determined pursuant to Code Section 11-1-203.    "Send" in connection with a writing, record, or notice means:   To deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none to any address reasonable under the circumstances; or   In any other way to cause to be received any record or notice within the time it would have arrived if properly sent.     "Signed" includes using any symbol executed or adopted with present intention to adopt or accept a writing.   "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.   "Surety" includes a guarantor or other secondary obligor.   "Term" means that portion of an agreement that relates to a particular matter.   "Unauthorized signature" means a signature made without actual, implied, or apparent authority. The term includes a forgery.   "Warehouse receipt" means a receipt issued by a person engaged in the business of storing goods for hire.   "Written" or "writing" includes printing, typewriting, or any other intentional reduction to tangible form.      (Code 1933, § 109A-1 - 201, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1963, p. 188, § 1; Ga. L. 1978, p. 1081, §§ 3, 4; Ga. L. 1981, p. 634, § 2; Ga. L. 1985, p. 825, § 1; Ga. L. 1992, p. 6, § 11; Ga. L. 1992, p. 2626, § 1; Ga. L. 1993, p. 633, § 3; Ga. L. 1996, p. 1306, § 1; Ga. L. 2000, p. 136, § 11; Ga. L. 2001, p. 362, § 3; Ga. L. 2010, p. 481, § 2-1/HB 451; Ga. L. 2015, p. 996, § 3A-1/SB 65.)    The 2000 amendment,  effective March 16, 2000, part of an Act to revise, modernize, and correct the Code, substituted "mean 'branch office' as that term is" for "mean not only 'branch bank,' but also 'bank office' and 'bank facility' as those terms are" in the last sentence of subsection (4).    The 2001 amendment,  effective July 1, 2001, rewrote subsection (9), inserted "security interest," in subsection (32), and, in the first paragraph of subsection (37), deleted the former second sentence, which read "The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer (Code Section 11-2-401) is limited in effect to a reservation of a 'security interest.'", in the current second sentence, inserted "consignor and a", and substituted "accounts, chattel paper, a payment intangible, or a promissory note in a transaction that" for "accounts or chattel paper which", deleted the former fifth sentence, which read "Unless a consignment is intended as security, reservation of title thereunder is not a 'security interest,' but a consignment in any event is subject to the provisions on consignment sales (Code Section 11-2-326).", and added the last two sentences.    The 2010 amendment,  effective May 27, 2010, in subsection (5), substituted "a person in control of a negotiable electronic document of title or" for "the" near the beginning, inserted "a negotiable tangible", and inserted "a"; substituted the present provisions of subsection (6) for the former provisions, which read: "'Bill of lading' means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods, and includes an airbill. 'Airbill' means a document serving for air transportation as a bill of lading does for marine or rail transportation, and includes an air consignment note or air waybill."; rewrote subsection (10); substituted "to an electronic document of title means voluntary transfer of control and with respect to instruments, tangible" for "to instruments," in the middle of subsection (14); rewrote subsections (15), (20), (25), and (26); in subsection (27), substituted "the individual's" for "his" near the end of the first sentence and added the last two sentences; in subsection (38), substituted "a writing, a record, or notice means:" for "any writing or notice means" at the end of the introductory paragraph, designated the paragraphs, in paragraph (38)(a), inserted commas throughout, substituted "To deposit" for "to deposit" at the beginning and substituted "; or" for a period at the end, and, in paragraph (38)(b), substituted "In any other way to cause to be received any record" for "The receipt of any writing" at the beginning, deleted "at which" following "time" in the middle, and deleted "has the effect of a proper sending" following "properly" at the end; and substituted "document of title" for "receipt" in the middle of subsection (45). See the Editor's notes for applicability.    The 2015 amendment,  effective January 1, 2016, rewrote this Code section.   Editor's notes.   - Ga. L. 1993, p. 633, which amended this Code section, provides, in § 5, not codified by the General Assembly: "This Act shall become effective on July 1, 1993, for all lease contracts that are first made or that first become effective between the parties on or after that date. This Act shall not apply to any lease first made or that first became effective between the parties before July 1, 1993, or to any extension, amendment, modification, renewal, or supplement of or to any such lease contract, unless the parties thereto specifically agree in writing that such lease contract, as extended, amended, modified, renewed, or supplemented, shall be governed by this Act."   Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010.   Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.   U.S. Code.   - The bankruptcy law, referred to in paragraph (23) of this section, is codified as 11 U.S.C.S. § 101 et seq.   Law reviews.   - For article on the 1963 amendment to the Georgia Uniform Commercial Code, see 14 Mercer L. Rev. 378 (1963). For article, "Lease or Security Interest: A Classic Problem of Commercial Law," see 28 Mercer L. Rev. 599 (1977). For article on Georgia cases dealing with commercial law from June 1977 through May 1978, see 30 Mercer L. Rev. 15 (1978). For article, "The Good Faith Purchase Idea and the Uniform Commercial Code," see 15 Ga. L. Rev. 605 (1981). For article surveying developments in Georgia commercial law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 33 (1981). For article discussing judicial activism in cases involving claims and defenses under the Uniform Commercial Code, see 17 Ga. L. Rev. 569 (1983). For article, "Impracticability As Risk Allocation: The Effect of Changed Circumstances upon Contract Obligations for the Sale of Goods," see 22 Ga. L. Rev. 503 (1988). For note, "The Law of Evidence in the Uniform Commercial Code," see 1 Ga. L. Rev. 44 (1966). For note on 1992 amendment of this Code section, see 9 Ga. St. U.L. Rev. 168 (1992). For note on 1993 amendment of this section, see 10 Ga. St. U.L. Rev. 34 (1993). For comment on Sherrock v. Commercial Credit Corp., 290 A.2d 648 (Del. S. Ct. 1972), see 10 Ga. St. B.J. 110 (1973). For comment on Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977), see 27 Emory L.J. 393 (1978). For comment, "Lender Liability for Breach of the Obligation of Good Faith Performance," see 36 Emory L.J. 917 (1987).   JUDICIAL DECISIONS   ANALYSIS    General Consideration   Agreement   Buyer in Ordinary Course of Business   Conspicuous Term or Clause   Good Faith   Holder   Notice   Public Sale   Security Interest   Signature   Unauthorized Signature or Endorsement    OPINIONS OF THE ATTORNEY GENERAL    A contract of guaranty  is a collateral "obligation" which is just as enforceable as any other contract. 1971 Op. Att'y Gen. No. 71-69.   RESEARCH REFERENCES   Am. Jur. 2d.   - 11 Am. Jur. 2d, Bills and Notes, §§ 54, 84 et seq., 186, 236 et seq., 287 et seq., 361 et seq., 387. 12 Am. Jur. 2d, Bills and Notes, §§ 586, 631. 13 Am. Jur. 2d, Business Trusts, § 1. 15A Am. Jur. 2d, Commercial Code, § 1 et seq. 17A Am. Jur. 2d, Contracts, §§ 1-3. 27A Am. Jur. 2d, Equity, §§ 1, 207. 53A Am. Jur. 2d, Money, § 1. 67 Am. Jur. 2d, Sales, §§ 10-27, 31. 68A Am. Jur. 2d, Secured Transactions, § 31 et seq.   Status as "Buyer in Ordinary Course of Business," 2 POF2d 165.   Ratification of Forged or Unauthorized Signature, 7 POF2d 675.   14 Am. Jur. Pleading and Practice Forms, Insolvency, § 2.   C.J.S.   - 82 C.J.S., Statutes, § 309.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 1-201.   ALR.    - Character of bill of lading contemplated by a guaranty of payment of a draft with bill of lading attached, 13 A.L.R. 166.    Right of trustee in bankruptcy as regards property held in trust for bankrupt, 16 A.L.R. 552; 138 A.L.R. 1349.    Right of surety who discharges obligation due to government to be subrogated to priority or preference of latter, 24 A.L.R. 1502; 83 A.L.R. 1131.    Right of receiver, assignee, or trustee in bankruptcy to possession and administration of collateral validly pledged by his insolvent, 28 A.L.R. 409.    What money is legal tender, 31 A.L.R. 246.    Public records as affecting one's character as a holder in due course of negotiable paper, 37 A.L.R. 860.    Branch banks, 50 A.L.R. 1340; 136 A.L.R. 471.    Construction, application, and effect of statute relating to question as to time as essence of contract, 79 A.L.R. 410.    Who must sign and form of signature, in case of partnership, in order to comply with statute of frauds, 114 A.L.R. 1005.    Branch banks, 136 A.L.R. 471.    Right of trustee in bankruptcy as regards property held in trust for bankrupt, 138 A.L.R. 1349.   What constitutes a "public sale,", 4 A.L.R.2d 575.   Right to follow chattel into hands of purchaser who took in payment of pre-existing debt, 11 A.L.R.3d 1028.   Extent of duty of transferee of bulk sale to investigate regarding seller's creditors under Uniform Commercial Code Article 6, 67 A.L.R.3d 1056.   Construction and effect of UCC § 2-316(2) providing that implied warranty disclaimer must be "conspicuous,", 73 A.L.R.3d 248.   Who is "person in business of selling goods of that kind" within provision of UCC § 1-201(9) defining buyer in ordinary course of business for purposes of UCC § 9-307(1), 73 A.L.R.3d 338.   Maintenance of computer terminal in retail store for purpose of effecting transfer of funds between financial institution and its depositors as conduct of banking business by store, 73 A.L.R.3d 1282.   Equipment leases as security interest within Uniform Commercial Code § 1-201(37), 76 A.L.R.3d 11.   Who is "buyer in ordinary course of business" under the Uniform Commercial Code, 87 A.L.R.3d 11.   What constitutes "money" within meaning of Uniform Commercial Code, 40 A.L.R.4th 346.