House File 875 - Introduced
HOUSE FILE
BY COMMITTEE ON JUDICIARY
(SUCCESSOR TO HSB 264)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to general provisions of the uniform commercial
2 code relating to the construction and application of its
3 subject matter, and providing for a contingent effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1072HV 82
6 da/je/5
PAG LIN
1 1 DIVISION I
1 2 REVISION TO ARTICLE 1
1 3 ARTICLE 1
1 4 GENERAL PROVISIONS
1 5 PART 1
1 6 SHORT TITLE, CONSTRUCTION, APPLICATION,
1 7 AND SUBJECT MATTER OF THE CHAPTER
1 8 GENERAL PROVISIONS
1 9 Section 1. Section 554.1101, Code 2007, is amended to read
1 10 as follows:
1 11 554.1101 SHORT TITLE TITLES.
1 12 1. This chapter shall be known and may be cited as the
1 13 Uniform Commercial Code.
1 14 2. This Article may be cited as Uniform Commercial Code ==
1 15 General Provisions.
1 16 Sec. 2. NEW SECTION. 554.1102A SCOPE OF ARTICLE.
1 17 This Article applies to a transaction to the extent that it
1 18 is governed by another Article of this chapter.
1 19 Sec. 3. Section 554.1103, Code 2007, is amended to read as
1 20 follows:
1 21 554.1103 SUPPLEMENTARY GENERAL PRINCIPLES OF LAW
1 22 APPLICABLE CONSTRUCTION OF THIS CHAPTER TO PROMOTE ITS
1 23 PURPOSES AND POLICIES == APPLICABILITY OF SUPPLEMENTAL
1 24 PRINCIPLES OF LAW.
1 25 1. This chapter must be liberally construed and applied to
1 26 promote its underlying purposes and policies, which are:
1 27 a. to simplify, clarify, and modernize the law governing
1 28 commercial transactions;
1 29 b. to permit the continued expansion of commercial
1 30 practices through custom, usage, and agreement of the parties;
1 31 and
1 32 c. to make uniform the law among the various
1 33 jurisdictions.
1 34 2. Unless displaced by the particular provisions of this
1 35 chapter, the principles of law and equity, including the law
2 1 merchant and the law relative to capacity to contract,
2 2 principal and agent, estoppel, fraud, misrepresentation,
2 3 duress, coercion, mistake, bankruptcy, or and other validating
2 4 or invalidating cause shall supplement its provisions.
2 5 Sec. 4. Section 554.1104, Code 2007, is amended to read as
2 6 follows:
2 7 554.1104 CONSTRUCTION AGAINST IMPLICIT IMPLIED REPEAL.
2 8 This chapter being a general act Act intended as a unified
2 9 coverage of its subject matter, no part of it shall be deemed
2 10 to be impliedly repealed by subsequent legislation if such
2 11 construction can reasonably be avoided.
2 12 Sec. 5. Section 554.1105, Code 2007, is amended by
2 13 striking the section and inserting in lieu thereof the
2 14 following:
2 15 554.1105 TERRITORIAL APPLICABILITY == PARTIES' POWER TO
2 16 CHOOSE APPLICABLE LAW.
2 17 1. Except as otherwise provided in this section, when a
2 18 transaction bears a reasonable relation to this state and also
2 19 to another state or nation the parties may agree that the law
2 20 either of this state or of such other state or nation shall
2 21 govern their rights and duties.
2 22 2. In the absence of an agreement effective under
2 23 subsection 1, and except as provided in subsection 3, this
2 24 chapter applies to transactions bearing an appropriate
2 25 relation to this state.
2 26 3. If one of the following provisions of this chapter
2 27 specifies the applicable law, that provision governs and a
2 28 contrary agreement is effective only to the extent permitted
2 29 by the law so specified:
2 30 a. Section 554.2402;
2 31 b. Section 554.4102;
2 32 c. Section 554.5116;
2 33 d. Section 554.8110;
2 34 e. Sections 554.9301 through 554.9307;
2 35 f. Section 554.12507;
3 1 g. Sections 554.13105 and 554.13106.
3 2 Sec. 6. Section 554.1106, subsection 1, Code 2007, is
3 3 amended to read as follows:
3 4 1. The remedies provided by this chapter shall must be
3 5 liberally administered to the end that the aggrieved party may
3 6 be put in as good a position as if the other party had fully
3 7 performed but neither consequential or special damages nor
3 8 penal damages may be had except as specifically provided in
3 9 this chapter or by other rule of law.
3 10 Sec. 7. NEW SECTION. 554.1106A USE OF SINGULAR AND
3 11 PLURAL == GENDER.
3 12 In this chapter, unless the statutory context otherwise
3 13 requires:
3 14 1. words in the singular number include the plural, and
3 15 those in the plural include the singular; and
3 16 2. words of any gender also refer to any other gender.
3 17 Sec. 8. Section 554.1107, Code 2007, is amended to read as
3 18 follows:
3 19 554.1107 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER
3 20 BREACH.
3 21 Any A claim or right arising out of an alleged breach can
3 22 may be discharged in whole or in part without consideration by
3 23 a written waiver or renunciation signed and delivered by
3 24 agreement of the aggrieved party in an authenticated record.
3 25 Sec. 9. Section 554.1108, Code 2007, is amended to read as
3 26 follows:
3 27 554.1108 SEVERABILITY.
3 28 If any provision or clause of this chapter or its
3 29 application thereof to any person or circumstances
3 30 circumstance is held invalid, such the invalidity shall does
3 31 not affect other provisions or applications of the this
3 32 chapter which can be given effect without the invalid
3 33 provision or application, and to this end the provisions of
3 34 this chapter are declared to be severable.
3 35 Sec. 10. NEW SECTION. 554.1108A RELATION TO ELECTRONIC
4 1 SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.
4 2 This Article modifies, limits, and supersedes the federal
4 3 Electronic Signatures in Global and National Commerce Act, 15
4 4 U.S.C. } 7001 et seq., except that nothing in this Article
4 5 modifies, limits, or supersedes } 7001(c) of that Act or
4 6 authorizes electronic delivery of any of the notices described
4 7 in } 7003(b) of that Act.
4 8 PART 2
4 9 GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
4 10 Sec. 11. Section 554.1201, Code 2007, is amended to read
4 11 as follows:
4 12 554.1201 GENERAL DEFINITIONS.
4 13 1. Unless the context otherwise requires, words or phrases
4 14 defined in this section, or in the additional definitions
4 15 contained in other Articles of this chapter that apply to
4 16 particular Articles or Parts thereof, have the meanings
4 17 stated.
4 18 2. Subject to additional definitions contained in the
4 19 subsequent other Articles of this chapter which are applicable
4 20 that apply to specific particular Articles or Parts thereof,
4 21 and unless the context otherwise requires, in this chapter:
4 22 1. a. "Action" in the sense of a judicial proceeding,
4 23 includes recoupment, counterclaim, setoff, suit in equity, and
4 24 any other proceedings in which rights are determined.
4 25 2. b. "Aggrieved party" means a party entitled to resort
4 26 to pursue a remedy.
4 27 3. c. "Agreement", as distinguished from "contract",
4 28 means the bargain of the parties in fact, as found in their
4 29 language or by implication inferred from other circumstances,
4 30 including course of performance, course of dealing, or usage
4 31 of trade or course of performance as provided in this chapter
4 32 (sections 554.1205 and 554.2208) section 554.1303. Whether an
4 33 agreement has legal consequences is determined by the
4 34 provisions of this chapter, if applicable; otherwise by the
4 35 law of contracts (section 554.1103). (Compare "Contract".)
5 1 4. d. "Bank" means any a person engaged in the business
5 2 of banking and includes a savings bank, savings and loan
5 3 association, credit union, and trust company.
5 4 5. e. "Bearer" means the a person in possession of an a
5 5 negotiable instrument, document of title, or certificated
5 6 security that is payable to bearer or endorsed indorsed in
5 7 blank.
5 8 6. f. "Bill of lading" means a document evidencing the
5 9 receipt of goods for shipment issued by a person engaged in
5 10 the business of transporting or forwarding goods, and includes
5 11 an airbill. "Airbill" means a document serving for air
5 12 transportation as a bill of lading does for marine or rail
5 13 transportation, and includes an air consignment note or air
5 14 waybill.
5 15 7. g. "Branch" includes a separately incorporated foreign
5 16 branch of a bank.
5 17 8. h. "Burden of establishing" a fact means the burden of
5 18 persuading the triers trier of fact that the existence of the
5 19 fact is more probable than its nonexistence.
5 20 9. i. "Buyer in ordinary course of business" means a
5 21 person that buys goods in good faith, without knowledge that
5 22 the sale violates the rights of another person in the goods,
5 23 and in the ordinary course from a person, other than a
5 24 pawnbroker, in the business of selling goods of that kind. A
5 25 person buys goods in the ordinary course if the sale to the
5 26 person comports with the usual or customary practices in the
5 27 kind of business in which the seller is engaged or with the
5 28 seller's own usual or customary practices. A person that
5 29 sells oil, gas, or other minerals at the wellhead or minehead
5 30 is a person in the business of selling goods of that kind. A
5 31 buyer in ordinary course of business may buy for cash, by
5 32 exchange of other property, or on secured or unsecured credit,
5 33 and may acquire goods or documents of title under a
5 34 pre=existing preexisting contract for sale. Only a buyer that
5 35 takes possession of the goods or has a right to recover the
6 1 goods from the seller under Article 2 may be a buyer in
6 2 ordinary course of business. A "Buyer in ordinary course of
6 3 business" does not include a person that acquires goods in a
6 4 transfer in bulk or as security for or in total or partial
6 5 satisfaction of a money debt is not a buyer in ordinary course
6 6 of business.
6 7 10. j. "Conspicuous": A, with reference to a term, or
6 8 clause is conspicuous when it is means so written, displayed,
6 9 or presented that a reasonable person against whom which it is
6 10 to operate ought to have noticed it. A printed heading in
6 11 capitals (as: "Nonnegotiable Bill of Lading") is conspicuous.
6 12 Language in the body of a form is "conspicuous" if it is in
6 13 larger or other contrasting type or color. But in a telegram
6 14 any stated term is "conspicuous". Whether a term or clause is
6 15 "conspicuous" or not is for a decision by for the court.
6 16 Conspicuous terms include the following:
6 17 (1) a heading in capitals equal to or greater in size than
6 18 the surrounding text, or in contrasting type, font, or color
6 19 to the surrounding text of the same or lesser size; and
6 20 (2) language in the body of a record or display in larger
6 21 type than the surrounding text, or in contrasting type, font,
6 22 or color to the surrounding text of the same size, or set off
6 23 from surrounding text of the same size by symbols or other
6 24 marks that call attention to the language.
6 25 k. "Consumer" means an individual who enters into a
6 26 transaction primarily for personal, family, or household
6 27 purposes.
6 28 11. l. "Contract", as distinguished from "agreement",
6 29 means the total legal obligation which that results from the
6 30 parties' agreement as affected determined by this chapter and
6 31 as supplemented by any other applicable rules of law laws.
6 32 (Compare "Agreement".)
6 33 12. m. "Creditor" includes a general creditor, a secured
6 34 creditor, a lien creditor, and any representative of
6 35 creditors, including an assignee for the benefit of creditors,
7 1 a trustee in bankruptcy, a receiver in equity, and an executor
7 2 or administrator of an insolvent debtor's or assignor's
7 3 estate.
7 4 13. n. "Defendant" includes a person in the position of
7 5 defendant in a cross=action or counterclaim, cross=claim, or
7 6 third=party claim.
7 7 14. o. "Delivery", with respect to instruments an
7 8 instrument, documents document of title, or chattel paper, or
7 9 certificated securities means voluntary transfer of
7 10 possession.
7 11 15. p. "Document of title" includes bill of lading, dock
7 12 warrant, dock receipt, warehouse receipt or order for the
7 13 delivery of goods, and also any other document which in the
7 14 regular course of business or financing is treated as
7 15 adequately evidencing that the person in possession of it is
7 16 entitled to receive, hold, and dispose of the document and the
7 17 goods it covers. To be a document of title, a document must
7 18 purport to be issued by or addressed to a bailee and purport
7 19 to cover goods in the bailee's possession which are either
7 20 identified or are fungible portions of an identified mass.
7 21 16. q. "Fault" means a default, breach, or wrongful act,
7 22 or omission or breach.
7 23 17. r. "Fungible" with respect to goods or securities
7 24 "Fungible goods" means:
7 25 (1) goods or securities of which any unit is, by nature or
7 26 usage of trade, is the equivalent of any other like unit.; or
7 27 (2) Goods which goods that by agreement are not fungible
7 28 shall be deemed fungible for the purposes of this chapter to
7 29 the extent that under a particular agreement or document
7 30 unlike units are treated as equivalents equivalent.
7 31 18. s. "Genuine" means free of forgery or counterfeiting.
7 32 19. t. "Good faith", except as otherwise provided in
7 33 Article 5, means honesty in fact in the conduct or transaction
7 34 concerned and the observance of reasonable commercial
7 35 standards of fair dealing.
8 1 20. u. "Holder", with respect to a negotiable instrument,
8 2 means:
8 3 (1) the person in possession if the of a negotiable
8 4 instrument that is payable either to bearer or, in the case of
8 5 an instrument payable to an identified person, if the
8 6 identified that is the person is in possession.; or
8 7 (2) "Holder" with respect to a document of title means the
8 8 person in possession of a document of title if the goods are
8 9 deliverable either to bearer or to the order of the person in
8 10 possession.
8 11 21. To "honor" is to pay or to accept and pay, or where a
8 12 credit so engages to purchase or discount a draft complying
8 13 with the terms of the credit.
8 14 22. v. "Insolvency proceedings" proceeding" includes any
8 15 assignment for the benefit of creditors or other proceedings
8 16 proceeding intended to liquidate or rehabilitate the estate of
8 17 the person involved.
8 18 23. w. A person is "insolvent" who either has "Insolvent"
8 19 means:
8 20 (1) having generally ceased to pay that person's debts in
8 21 the ordinary course of business or cannot pay that person's
8 22 debts other than as a result of a bona fide dispute;
8 23 (2) being unable to pay debts as they become due; or
8 24 (3) is being insolvent within the meaning of the federal
8 25 bankruptcy law.
8 26 24. x. "Money" means a medium of exchange currently
8 27 authorized or adopted by a domestic or foreign government and.
8 28 The term includes a monetary unit of account established by an
8 29 intergovernmental organization or by agreement between two or
8 30 more nations countries.
8 31 25. A person has "notice" of a fact when
8 32 a. the person has actual knowledge of it; or
8 33 b. the person has received a notice or notification of it;
8 34 or
8 35 c. from all the facts and circumstances known to the
9 1 person at the time in question the person has reason to know
9 2 that it exists. A person "knows" or has "knowledge" of a fact
9 3 when that person has actual knowledge of it. "Discover" or
9 4 "learn" or a word or phrase of similar import refers to
9 5 knowledge rather than to reason to know. The time and
9 6 circumstances under which a notice or notification may cease
9 7 to be effective are not determined by this chapter.
9 8 26. A person "notifies" or "gives" a notice or
9 9 notification to another by taking such steps as may be
9 10 reasonably required to inform the other in ordinary course
9 11 whether or not such other actually comes to know of it. A
9 12 person "receives" a notice or notification when
9 13 a. it comes to that person's attention; or
9 14 b. it is duly delivered at the place of business through
9 15 which the contract was made or at any other place held out by
9 16 that person as the place for receipt of such communications.
9 17 27. Notice, knowledge or a notice or notification received
9 18 by an organization is effective for a particular transaction
9 19 from the time when it is brought to the attention of the
9 20 individual conducting that transaction, and in any event from
9 21 the time when it would have been brought to that individual's
9 22 attention if the organization had exercised due diligence. An
9 23 organization exercises due diligence if it maintains
9 24 reasonable routines for communicating significant information
9 25 to the person conducting the transaction and there is
9 26 reasonable compliance with the routines. Due diligence does
9 27 not require an individual acting for the organization to
9 28 communicate information unless such communication is part of
9 29 that individual's regular duties or unless the individual has
9 30 reason to know of the transaction and that the transaction
9 31 would be materially affected by the information.
9 32 28. y. "Organization" includes means a corporation,
9 33 government or governmental subdivision or agency, business
9 34 trust, estate, trust, partnership or association, two or more
9 35 persons having a joint or common interest, or any person other
10 1 legal or commercial entity than an individual.
10 2 29. z. "Party", as distinct distinguished from "third
10 3 party", means a person who that has engaged in a transaction
10 4 or made an agreement within subject to this chapter.
10 5 30. aa. "Person" includes means an individual, or an
10 6 organization (See section 554.1102) corporation, business
10 7 trust, estate, trust, partnership, limited liability company,
10 8 association, joint venture, government, governmental
10 9 subdivision, agency, or instrumentality, public corporation,
10 10 or any other legal or commercial entity.
10 11 31. "Presumption" or "presumed" means that the trier of
10 12 fact must find the existence of the fact presumed unless and
10 13 until evidence is introduced which would support a finding of
10 14 its nonexistence.
10 15 ab. "Present value" means the amount as of a date certain
10 16 of one or more sums payable in the future, discounted to the
10 17 date certain by use of either an interest rate specified by
10 18 the parties if that rate is not manifestly unreasonable at the
10 19 time the transaction is entered into or, if an interest rate
10 20 is not so specified, a commercially reasonable rate that takes
10 21 into account the facts and circumstances at the time the
10 22 transaction is entered into.
10 23 32. ac. "Purchase" means any voluntary transaction
10 24 creating an interest in property, including taking by sale,
10 25 lease, discount, negotiation, mortgage, pledge, voluntary
10 26 lien, security interest, issue, or reissue, or gift, or any
10 27 other voluntary transaction creating an interest in property.
10 28 33. ad. "Purchaser" means a person who takes by purchase.
10 29 ae. "Record" means information that is inscribed on a
10 30 tangible medium or that is stored in an electronic or other
10 31 medium and is retrievable in perceivable form.
10 32 34. af. "Remedy" means any remedial right to which an
10 33 aggrieved party is entitled with or without resort to a
10 34 tribunal.
10 35 35. ag. "Representative" includes means a person
11 1 empowered to act for another, including an agent, an officer
11 2 of a corporation or association, and a trustee, executor, or
11 3 administrator of an estate, or any other person empowered to
11 4 act for another.
11 5 36. ah. "Rights" "Right" includes remedies remedy.
11 6 37. a. ai. "Security interest" means an interest in
11 7 personal property or fixtures which secures payment or
11 8 performance of an obligation. The term also "Security
11 9 interest" includes any interest of a consignor and a buyer of
11 10 accounts, chattel paper, a payment intangible, or a promissory
11 11 note in a transaction that is subject to Article 9. The
11 12 "Security interest" does not include the special property
11 13 interest of a buyer of goods on identification of those goods
11 14 to a contract for sale under section 554.2401 is not a
11 15 "security interest", but a buyer may also acquire a "security
11 16 interest" by complying with Article 9. Except as otherwise
11 17 provided in section 554.2505, the right of a seller or lessor
11 18 of goods under Article 2 or 13 to retain or acquire possession
11 19 of the goods is not a "security interest", but a seller or
11 20 lessor may also acquire a "security interest" by complying
11 21 with Article 9. The retention or reservation of title by a
11 22 seller of goods notwithstanding shipment or delivery to the
11 23 buyer (section 554.2401) under section 554.2401 is limited in
11 24 effect to a reservation of a "security interest". Whether
11 25 b. Whether a transaction in the form of a lease creates a
11 26 lease or security interest "security interest" is determined
11 27 by the facts of each case; however, a transaction creates a
11 28 security interest if the consideration the lessee is to pay
11 29 the lessor for the right to possession and use of the goods is
11 30 an obligation for the term of the lease not subject to
11 31 termination by the lessee, and
11 32 (1) the original term of the lease is equal to or greater
11 33 than the remaining economic life of the goods,
11 34 (2) the lessee is bound to renew the lease for the
11 35 remaining economic life of the goods or is bound to become the
12 1 owner of the goods,
12 2 (3) the lessee has an option to renew the lease for the
12 3 remaining economic life of the goods for no additional
12 4 consideration or nominal additional consideration upon
12 5 compliance with the lease agreement, or
12 6 (4) the lessee has an option to become the owner of the
12 7 goods for no additional consideration or nominal additional
12 8 consideration upon compliance with the lease agreement
12 9 pursuant to section 554.1203.
12 10 c. A transaction does not create a security interest
12 11 merely because it provides that
12 12 (1) the present value of the consideration the lessee is
12 13 obligated to pay the lessor for the right to possession and
12 14 use of the goods is substantially equal to or is greater than
12 15 the fair market value of the goods at the time the lease is
12 16 entered into,
12 17 (2) the lessee assumes risk of loss of the goods, or
12 18 agrees to pay taxes, insurance, filing, recording, or
12 19 registration fees, or service or maintenance costs with
12 20 respect to the goods,
12 21 (3) the lessee has an option to renew the lease or to
12 22 become the owner of the goods,
12 23 (4) the lessee has an option to renew the lease for a
12 24 fixed rent that is equal to or greater than the reasonably
12 25 predictable fair market rent for the use of the goods for the
12 26 term of the renewal at the time the option is to be performed,
12 27 or
12 28 (5) the lessee has an option to become the owner of the
12 29 goods for a fixed price that is equal to or greater than the
12 30 reasonably predictable fair market value of the goods at the
12 31 time the option is to be performed.
12 32 d. For purposes of this subsection:
12 33 (1) Additional consideration is not nominal if (i) when
12 34 the option to renew the lease is granted to the lessee the
12 35 rent is stated to be the fair market rent for the use of the
13 1 goods for the term of the renewal determined at the time the
13 2 option is to be performed, or (ii) when the option to become
13 3 the owner of the goods is granted to the lessee the price is
13 4 stated to be the fair market value of the goods determined at
13 5 the time the option is to be performed. Additional
13 6 consideration is nominal if it is less than the lessee's
13 7 reasonably predictable cost of performing under the lease
13 8 agreement if the option is not exercised;
13 9 (2) "Reasonably predictable" and "remaining economic life
13 10 of the goods" are to be determined with reference to the facts
13 11 and circumstances at the time the transaction is entered into;
13 12 and
13 13 (3) "Present value" means the amount as of a date certain
13 14 of one or more sums payable in the future, discounted to the
13 15 date certain. The discount is determined by the interest rate
13 16 specified by the parties if the rate is not manifestly
13 17 unreasonable at the time the transaction is entered into;
13 18 otherwise, the discount is determined by a commercially
13 19 reasonable rate that takes into account the facts and
13 20 circumstances of each case at the time the transaction was
13 21 entered into.
13 22 38. aj. "Send" in connection with any a writing, record,
13 23 or notice means:
13 24 (1) to deposit in the mail or deliver for transmission by
13 25 any other usual means of communication with postage or cost of
13 26 transmission provided for and properly addressed and, in the
13 27 case of an instrument, to an address specified thereon or
13 28 otherwise agreed, or if there be none to any address
13 29 reasonable under the circumstances.; or
13 30 (2) The receipt of in any writing other way to cause to be
13 31 received any record or notice within the time at which it
13 32 would have arrived if properly sent has the effect of a proper
13 33 sending.
13 34 39. ak. "Signed" includes using any symbol executed or
13 35 adopted by a party with present intention to authenticate
14 1 adopt or accept a writing.
14 2 al. "State" means a state of the United States, the
14 3 District of Columbia, Puerto Rico, the United States Virgin
14 4 Islands, or any territory or insular possession subject to the
14 5 jurisdiction of the United States.
14 6 40. am. "Surety" includes a guarantor or other secondary
14 7 obligor.
14 8 41. "Telegram" includes a message transmitted by radio,
14 9 teletype, cable, any mechanical method of transmission, or the
14 10 like.
14 11 42. an. "Term" means that portion of an agreement which
14 12 that relates to a particular matter.
14 13 43. ao. "Unauthorized" signature "Unauthorized signature"
14 14 means one a signature made without actual, implied, or
14 15 apparent authority and. The term includes a forgery.
14 16 44. "Value". Except as otherwise provided with respect to
14 17 negotiable instruments and bank collections (sections
14 18 554.3303, 554.4210, and 554.4211) a person gives "value" for
14 19 rights if the person acquires them
14 20 a. in return for a binding commitment to extend credit or
14 21 for the extension of immediately available credit whether or
14 22 not drawn upon and whether or not a charge=back is provided
14 23 for in the event of difficulties in collection; or
14 24 b. as security for or in total or partial satisfaction of
14 25 a pre=existing claim; or
14 26 c. by accepting delivery pursuant to a pre=existing
14 27 contract for purchase; or
14 28 d. generally, in return for any consideration sufficient
14 29 to support a simple contract.
14 30 45. ap. "Warehouse receipt" means a receipt issued by a
14 31 person engaged in the business of storing goods for hire.
14 32 46. aq. "Written" or "writing" "Writing" includes
14 33 printing, typewriting, or any other intentional reduction to
14 34 tangible form. "Written" has a corresponding meaning.
14 35 Sec. 12. Section 554.1202, Code 2007, is amended to read
15 1 as follows:
15 2 554.1202 PRIMA FACIE EVIDENCE BY THIRD PARTY THIRD=PARTY
15 3 DOCUMENTS.
15 4 A document in due form purporting to be a bill of lading,
15 5 policy or certificate of insurance, official weigher's or
15 6 inspector's certificate, consular invoice, or any other
15 7 document authorized or required by the contract to be issued
15 8 by a third party shall be is prima facie evidence of its own
15 9 authenticity and genuineness and of the facts stated in the
15 10 document by the third party.
15 11 Sec. 13. NEW SECTION. 554.1202A NOTICE == KNOWLEDGE.
15 12 1. Subject to subsection 6, a person has "notice" of a
15 13 fact if the person:
15 14 a. has actual knowledge of it;
15 15 b. has received a notice or notification of it; or
15 16 c. from all the facts and circumstances known to the
15 17 person at the time in question, has reason to know that it
15 18 exists.
15 19 2. "Knowledge" means actual knowledge. "Knows" has a
15 20 corresponding meaning.
15 21 3. "Discover", "learn", or words of similar import refer
15 22 to knowledge rather than to reason to know.
15 23 4. A person "notifies" or "gives" a notice or notification
15 24 to another person by taking such steps as may be reasonably
15 25 required to inform the other person in ordinary course,
15 26 whether or not the other person actually comes to know of it.
15 27 5. Subject to subsection 6, a person "receives" a notice
15 28 or notification when:
15 29 a. it comes to that person's attention; or
15 30 b. it is duly delivered in a form reasonable under the
15 31 circumstances at the place of business through which the
15 32 contract was made or at another location held out by that
15 33 person as the place for receipt of such communications.
15 34 6. Notice, knowledge, or a notice or notification received
15 35 by an organization is effective for a particular transaction
16 1 from the time it is brought to the attention of the individual
16 2 conducting that transaction and, in any event, from the time
16 3 it would have been brought to the individual's attention if
16 4 the organization had exercised due diligence. An organization
16 5 exercises due diligence if it maintains reasonable routines
16 6 for communicating significant information to the person
16 7 conducting the transaction and there is reasonable compliance
16 8 with the routines. Due diligence does not require an
16 9 individual acting for the organization to communicate
16 10 information unless the communication is part of the
16 11 individual's regular duties or the individual has reason to
16 12 know of the transaction and that the transaction would be
16 13 materially affected by the information.
16 14 Sec. 14. NEW SECTION. 554.1203A LEASE DISTINGUISHED FROM
16 15 SECURITY INTEREST.
16 16 1. Whether a transaction in the form of a lease creates a
16 17 lease or security interest is determined by the facts of each
16 18 case.
16 19 2. A transaction in the form of a lease creates a security
16 20 interest if the consideration that the lessee is to pay the
16 21 lessor for the right to possession and use of the goods is an
16 22 obligation for the term of the lease and is not subject to
16 23 termination by the lessee, and:
16 24 a. the original term of the lease is equal to or greater
16 25 than the remaining economic life of the goods;
16 26 b. the lessee is bound to renew the lease for the
16 27 remaining economic life of the goods or is bound to become the
16 28 owner of the goods;
16 29 c. the lessee has an option to renew the lease for the
16 30 remaining economic life of the goods for no additional
16 31 consideration or for nominal additional consideration upon
16 32 compliance with the lease agreement; or
16 33 d. the lessee has an option to become the owner of the
16 34 goods for no additional consideration or for nominal
16 35 additional consideration upon compliance with the lease
17 1 agreement.
17 2 3. A transaction in the form of a lease does not create a
17 3 security interest merely because:
17 4 a. the present value of the consideration the lessee is
17 5 obligated to pay the lessor for the right to possession and
17 6 use of the goods is substantially equal to or is greater than
17 7 the fair market value of the goods at the time the lease is
17 8 entered into;
17 9 b. the lessee assumes risk of loss of the goods;
17 10 c. the lessee agrees to pay, with respect to the goods,
17 11 taxes, insurance, filing, recording, or registration fees, or
17 12 service or maintenance costs;
17 13 d. the lessee has an option to renew the lease or to
17 14 become the owner of the goods;
17 15 e. the lessee has an option to renew the lease for a fixed
17 16 rent that is equal to or greater than the reasonably
17 17 predictable fair market rent for the use of the goods for the
17 18 term of the renewal at the time the option is to be performed;
17 19 or
17 20 f. the lessee has an option to become the owner of the
17 21 goods for a fixed price that is equal to or greater than the
17 22 reasonably predictable fair market value of the goods at the
17 23 time the option is to be performed.
17 24 4. Additional consideration is nominal if it is less than
17 25 the lessee's reasonably predictable cost of performing under
17 26 the lease agreement if the option is not exercised.
17 27 Additional consideration is not nominal if:
17 28 a. when the option to renew the lease is granted to the
17 29 lessee, the rent is stated to be the fair market rent for the
17 30 use of the goods for the term of the renewal determined at the
17 31 time the option is to be performed; or
17 32 b. when the option to become the owner of the goods is
17 33 granted to the lessee, the price is stated to be the fair
17 34 market value of the goods determined at the time the option is
17 35 to be performed.
18 1 5. The "remaining economic life of the goods" and
18 2 "reasonably predictable" fair market rent, fair market value,
18 3 or cost of performing under the lease agreement must be
18 4 determined with reference to the facts and circumstances at
18 5 the time the transaction is entered into.
18 6 Sec. 15. Section 554.1204, Code 2007, is amended to read
18 7 as follows:
18 8 554.1204 TIME == REASONABLE TIME == "SEASONABLY"
18 9 SEASONABLENESS.
18 10 1. Whenever this chapter requires any action to be taken
18 11 within a reasonable time, any time which is not manifestly
18 12 unreasonable may be fixed by agreement.
18 13 2. What is Whether a reasonable time for taking any an
18 14 action required by this chapter is reasonable depends on the
18 15 nature, purpose, and circumstances of such the action.
18 16 3. 2. An action is taken "seasonably" when seasonably if
18 17 it is taken at or within the time agreed or, if no time is
18 18 agreed, at or within a reasonable time.
18 19 Sec. 16. NEW SECTION. 554.1204A VALUE.
18 20 Except as otherwise provided in Articles 3, 4, and 5, a
18 21 person gives value for rights if the person acquires them:
18 22 1. in return for a binding commitment to extend credit or
18 23 for the extension of immediately available credit, whether or
18 24 not drawn upon and whether or not a charge=back is provided
18 25 for in the event of difficulties in collection;
18 26 2. as security for, or in total or partial satisfaction
18 27 of, a preexisting claim;
18 28 3. by accepting delivery under a preexisting contract for
18 29 purchase; or
18 30 4. in return for any consideration sufficient to support a
18 31 simple contract.
18 32 Sec. 17. Section 554.1205, Code 2007, is amended to read
18 33 as follows:
18 34 554.1205 COURSE OF PERFORMANCE, COURSE OF DEALING, AND
18 35 USAGE OF TRADE.
19 1 1. A "course of performance" is a sequence of conduct
19 2 between the parties to a particular transaction that exists
19 3 if:
19 4 a. the agreement of the parties with respect to the
19 5 transaction involves repeated occasions for performance by a
19 6 party; and
19 7 b. the other party, with knowledge of the nature of the
19 8 performance and opportunity for objection to it, accepts the
19 9 performance or acquiesces in it without objection.
19 10 1. 2. A course of dealing "course of dealing" is a
19 11 sequence of previous conduct concerning previous transactions
19 12 between the parties to a particular transaction which that is
19 13 fairly to be regarded as establishing a common basis of
19 14 understanding for interpreting their expressions and other
19 15 conduct.
19 16 2. 3. A usage of trade "usage of trade" is any practice
19 17 or method of dealing having such regularity of observance in a
19 18 place, vocation, or trade as to justify an expectation that it
19 19 will be observed with respect to the transaction in question.
19 20 The existence and scope of such a usage are to must be proved
19 21 as facts. If it is established that such a usage is embodied
19 22 in a written trade code or similar writing record, the
19 23 interpretation of the writing record is for the court a
19 24 question of law.
19 25 3. 4. A course of performance or course of dealing
19 26 between the parties and any or usage of trade in the vocation
19 27 or trade in which they are engaged or of which they are or
19 28 should be aware give particular meaning to and supplement or
19 29 qualify terms of an is relevant in ascertaining the meaning of
19 30 the parties' agreement, may give particular meaning to
19 31 specific terms of the agreement, and may supplement or qualify
19 32 the terms of the agreement. A usage of trade applicable in
19 33 the place in which part of the performance under the agreement
19 34 is to occur may be so utilized as to that part of the
19 35 performance.
20 1 4. 5. The Except as otherwise provided in subsection 6,
20 2 the express terms of an agreement and an any applicable course
20 3 of dealing, or usage of trade shall must be construed wherever
20 4 reasonable as consistent with each other; but when. If such a
20 5 construction is unreasonable:
20 6 a. express terms control both prevail over course of
20 7 performance, course of dealing, and usage of trade;
20 8 b. course of performance prevails over course of dealing
20 9 and usage of trade; and
20 10 c. course of dealing controls prevails over usage of
20 11 trade.
20 12 5. 6. An applicable usage of trade in the place where any
20 13 part Subject to section 554.2209, a course of performance is
20 14 to occur shall be used in interpreting the agreement as to
20 15 that part relevant to show a waiver or modification of any
20 16 term inconsistent with the course of the performance.
20 17 6. 7. Evidence of a relevant usage of trade offered by
20 18 one party is not admissible unless and until that party has
20 19 given the other party such notice as that the court finds
20 20 sufficient to prevent unfair surprise to the latter other
20 21 party.
20 22 Sec. 18. NEW SECTION. 554.1206A PRESUMPTIONS.
20 23 Whenever this chapter creates a "presumption" with respect
20 24 to a fact, or provides that a fact is "presumed", the trier of
20 25 fact must find the existence of the fact unless and until
20 26 evidence is introduced that supports a finding of its
20 27 nonexistence.
20 28 Sec. 19. Section 554.1207, subsection 1, Code 2007, is
20 29 amended to read as follows:
20 30 1. A party who, that with explicit reservation of rights,
20 31 performs or promises performance or assents to performance in
20 32 a manner demanded or offered by the other party does not
20 33 thereby prejudice the rights reserved. Such words as "without
20 34 prejudice", "under protest", or the like are sufficient.
20 35 Sec. 20. Section 554.1208, Code 2007, is amended to read
21 1 as follows:
21 2 554.1208 OPTION TO ACCELERATE AT WILL.
21 3 A term providing that one party or that party's successor
21 4 in interest may accelerate payment or performance or require
21 5 collateral or additional collateral "at will" or "when when
21 6 the party deems "deems itself insecure" or in words of similar
21 7 import shall be construed to mean, means that that party shall
21 8 have has power to do so only if that party in good faith
21 9 believes that the prospect of payment or performance is
21 10 impaired. The burden of establishing lack of good faith is on
21 11 the party against whom which the power has been exercised.
21 12 Sec. 21. Section 554.1209, Code 2007, is amended to read
21 13 as follows:
21 14 554.1209 SUBORDINATED OBLIGATIONS.
21 15 An obligation may be issued as subordinated to payment
21 16 performance of another obligation of the person obligated, or
21 17 a creditor may subordinate the creditor's its right to payment
21 18 performance of an obligation by agreement with either the
21 19 person obligated or another creditor of the person obligated.
21 20 Such a subordination Subordination does not create a security
21 21 interest as against either the common debtor or a subordinated
21 22 creditor. This section shall be construed as declaring the
21 23 law as it existed prior to the enactment of this section and
21 24 not as modifying it.
21 25 PART 3
21 26 TERRITORIAL APPLICABILITY AND GENERAL RULES
21 27 Sec. 22. NEW SECTION. 554.1302 VARIATION BY AGREEMENT.
21 28 1. Except as otherwise provided in subsection 2 or
21 29 elsewhere in this chapter, the effect of provisions of this
21 30 chapter may be varied by agreement.
21 31 2. The obligations of good faith, diligence,
21 32 reasonableness, and care prescribed by this chapter may not be
21 33 disclaimed by agreement. The parties, by agreement, may
21 34 determine the standards by which the performance of those
21 35 obligations is to be measured if those standards are not
22 1 manifestly unreasonable. Whenever this chapter requires an
22 2 action to be taken within a reasonable time, a time that is
22 3 not manifestly unreasonable may be fixed by agreement.
22 4 3. The presence in certain provisions of this chapter of
22 5 the phrase "unless otherwise agreed", or words of similar
22 6 import, does not imply that the effect of other provisions may
22 7 not be varied by agreement under this section.
22 8 DIVISION II
22 9 CONFORMING AMENDMENTS TO OTHER ARTICLES
22 10 PART A
22 11 ARTICLE 2
22 12 Sec. 23. Section 554.2103, subsection 1, paragraph b, Code
22 13 2007, is amended by striking the paragraph.
22 14 Sec. 24. Section 554.2202, subsection a, Code 2007, is
22 15 amended to read as follows:
22 16 a. by course of performance, course of dealing, or usage
22 17 of trade (section 554.1205) 554.1303) or by course of
22 18 performance (section 554.2208); and
22 19 PART B
22 20 ARTICLE 3
22 21 Sec. 25. Section 554.3103, subsection 1, paragraph d, Code
22 22 2007, is amended by striking the paragraph.
22 23 Sec. 26. Section 554.3103, subsection 1, paragraph j, Code
22 24 2007, is amended to read as follows:
22 25 j. "Prove" with respect to a fact means to meet the burden
22 26 of establishing the fact (section 554.1201, subsection 8) 2,
22 27 paragraph "h").
22 28 PART C
22 29 ARTICLE 4
22 30 Sec. 27. Section 554.4104, subsection 3, Code 2007, is
22 31 amended to read as follows:
22 32 3. The following definitions in other Articles apply to
22 33 this Article:
22 34 "Acceptance" Section 554.3409
22 35 "Alteration" Section 554.3407
23 1 "Cashier's check" Section 554.3104
23 2 "Certificate of deposit" Section 554.3104
23 3 "Certified check" Section 554.3409
23 4 "Check" Section 554.3104
23 5 "Good faith" Section 554.3103
23 6 "Holder in due course" Section 554.3302
23 7 "Instrument" Section 554.3104
23 8 "Notice of dishonor" Section 554.3503
23 9 "Order" Section 554.3103
23 10 "Ordinary care" Section 554.3103
23 11 "Person entitled
23 12 to enforce" Section 554.3301
23 13 "Presentment" Section 554.3501
23 14 "Promise" Section 554.3103
23 15 "Prove" Section 554.3103
23 16 "Teller's check" Section 554.3104
23 17 "Unauthorized signature" Section 554.3403
23 18 PART D
23 19 ARTICLE 5
23 20 Sec. 28. Section 554.5103, subsection 3, Code 2007, is
23 21 amended to read as follows:
23 22 3. With the exception of this subsection, subsections 1
23 23 and 4, section 554.5102, subsection 1, paragraphs "i" and "j",
23 24 section 554.5106, subsection 4, and section 554.5114,
23 25 subsection 4, and except to the extent prohibited in section
23 26 554.1102, subsection 3, 554.1302 and section 554.5117,
23 27 subsection 4, the effect of this Article may be varied by
23 28 agreement or by a provision stated or incorporated by
23 29 reference in an undertaking. A term in an agreement or
23 30 undertaking generally excusing liability or generally limiting
23 31 remedies for failure to perform obligations is not sufficient
23 32 to vary obligations prescribed by this Article.
23 33 PART E
23 34 ARTICLE 8
23 35 Sec. 29. Section 554.8102, subsection 1, paragraph j, Code
24 1 2007, is amended by striking the paragraph.
24 2 PART F
24 3 ARTICLE 9
24 4 Sec. 30. Section 554.9102, subsection 1, paragraph aq,
24 5 Code 2007, is amended by striking the paragraph.
24 6 PART G
24 7 ARTICLE 12
24 8 Sec. 31. Section 554.12105, subsection 1, paragraph f,
24 9 Code 2007, is amended by striking the paragraph.
24 10 Sec. 32. Section 554.12105, subsection 1, paragraph g,
24 11 Code 2007, is amended to read as follows:
24 12 g. "Prove" with respect to a fact means to meet the burden
24 13 of establishing the fact as defined in section 554.1201,
24 14 subsection 8 2, paragraph "h".
24 15 Sec. 33. Section 554.12106, subsection 1, Code 2007, is
24 16 amended to read as follows:
24 17 1. The time of receipt of a payment order or communication
24 18 canceling or amending a payment order is determined by the
24 19 rules applicable to receipt of a notice stated in section
24 20 554.1201, subsection 27 554.1202. A receiving bank may
24 21 establish a cut=off time or times on a funds=transfer business
24 22 day for the receipt and processing of payment orders, and
24 23 communications canceling or amending payment orders.
24 24 Different cut=off times may apply to payment orders,
24 25 cancellations, or amendments, or to different categories of
24 26 payment orders, cancellations, or amendments. A cut=off time
24 27 may apply to senders generally, or different cut=off times may
24 28 apply to different senders or categories of payment orders.
24 29 If a payment order or communication canceling or amending a
24 30 payment order is received after the close of a funds=transfer
24 31 business day or after the appropriate cut=off time on a
24 32 funds=transfer business day, the receiving bank may treat the
24 33 payment order or communication as received at the opening of
24 34 the next funds=transfer business day.
24 35 Sec. 34. Section 554.12204, subsection 2, Code 2007, is
25 1 amended to read as follows:
25 2 2. Reasonable time under subsection 1 may be fixed by
25 3 agreement as provided in section 554.1204 554.1302, subsection
25 4 1 2, but the obligation of a receiving bank to refund payment
25 5 as stated in subsection 1 may not otherwise be varied by
25 6 agreement.
25 7 PART H
25 8 ARTICLE 13
25 9 Sec. 35. Section 554.13501, subsection 4, Code 2007, is
25 10 amended to read as follows:
25 11 4. Except as otherwise provided in section 554.1106
25 12 554.1305, subsection 1, of or this Article or the lease
25 13 agreement, the rights and remedies referred to in subsections
25 14 2 and 3 are cumulative.
25 15 Sec. 36. Section 554.13518, subsection 2, Code 2007, is
25 16 amended to read as follows:
25 17 2. Except as otherwise provided with respect to damages
25 18 liquidated in the lease agreement (section 554.13504) or
25 19 otherwise determined pursuant to agreement of the parties
25 20 (sections 554.1102, subsection 3, 554.1302 and 554.13503), if
25 21 a lessee's cover is by a lease agreement substantially similar
25 22 to the original lease agreement and the new lease agreement is
25 23 made in good faith and in a commercially reasonable manner,
25 24 the lessee may recover from the lessor as damages (i) the
25 25 present value, as of the date of the commencement of the term
25 26 of the new lease agreement, of the rent under the new lease
25 27 agreement applicable to that period of the new lease term
25 28 which is comparable to the then remaining term of the original
25 29 lease agreement minus the present value as of the same date of
25 30 the total rent for the then remaining lease term of the
25 31 original lease agreement, and (ii) any incidental or
25 32 consequential damages, less expenses saved in consequence of
25 33 the lessor's default.
25 34 Sec. 37. Section 554.13519, subsection 1, Code 2007, is
25 35 amended to read as follows:
26 1 1. Except as otherwise provided with respect to damages
26 2 liquidated in the lease agreement (section 554.13504) or
26 3 otherwise determined pursuant to agreement of the parties
26 4 (sections 554.1102, subsection 3, 554.1302 and 554.13503), if
26 5 a lessee elects not to cover or a lessee elects to cover and
26 6 the cover is by lease agreement that for any reason does not
26 7 qualify for treatment under section 554.13518, subsection 2,
26 8 or is by purchase or otherwise, the measure of damages for
26 9 nondelivery or repudiation by the lessor or for rejection or
26 10 revocation of acceptance by the lessee is the present value,
26 11 as of the date of the default, of the then market rent minus
26 12 the present value as of the same date of the original rent,
26 13 computed for the remaining lease term of the original lease
26 14 agreement, together with incidental and consequential damages,
26 15 less expenses saved in consequence of the lessor's default.
26 16 Sec. 38. Section 554.13527, subsection 2, Code 2007, is
26 17 amended to read as follows:
26 18 2. Except as otherwise provided with respect to damages
26 19 liquidated in the lease agreement (section 554.13504) or
26 20 otherwise determined pursuant to agreement of the parties
26 21 (sections 554.1102, subsection 3, 554.1302 and 554.13503), if
26 22 the disposition is by lease agreement substantially similar to
26 23 the original lease agreement and the new lease agreement is
26 24 made in good faith and in a commercially reasonable manner,
26 25 the lessor may recover from the lessee as damages (i) accrued
26 26 and unpaid rent as of the date of the commencement of the term
26 27 of the new lease agreement, (ii) the present value, as of the
26 28 same date, of the total rent for the remaining lease term of
26 29 the original lease agreement minus the present value, as of
26 30 the same date, of the rent under the new lease agreement
26 31 applicable to that period of the new lease term which is
26 32 comparable to the then remaining term of the original lease
26 33 agreement, and (iii) any incidental damages allowed under
26 34 section 554.13530, less expenses saved in consequence of the
26 35 lessee's default.
27 1 Sec. 39. Section 554.13528, subsection 1, Code 2007, is
27 2 amended to read as follows:
27 3 1. Except as otherwise provided with respect to damages
27 4 liquidated in the lease agreement (section 554.13504) or
27 5 otherwise determined pursuant to agreement of the parties
27 6 (sections 554.1102, subsection 3, 554.1302 and 554.13503), if
27 7 a lessor elects to retain the goods or a lessor elects to
27 8 dispose of the goods and the disposition is by lease agreement
27 9 that for any reason does not qualify for treatment under
27 10 section 554.13527, subsection 2, or is by sale or otherwise,
27 11 the lessor may recover from the lessee as damages for a
27 12 default of the type described in section 554.13523, subsection
27 13 1, or section 554.13523, subsection 3, paragraph "a", or, if
27 14 agreed, for other default of the lessee, (i) accrued and
27 15 unpaid rent as of the date of default if the lessee has never
27 16 taken possession of the goods, or, if the lessee has taken
27 17 possession of the goods, as of the date the lessor repossesses
27 18 the goods or an earlier date on which the lessee makes a
27 19 tender of the goods to the lessor, (ii) the present value as
27 20 of the date determined under clause (i) of the total rent for
27 21 the then remaining lease term of the original lease agreement
27 22 minus the present value as of the same date of the market rent
27 23 at the place where the goods are located computed for the same
27 24 lease term, and (iii) any incidental damages allowed under
27 25 section 554.13530, less expenses saved in consequence of the
27 26 lessee's default.
27 27 PART I
27 28 PROVISIONS OUTSIDE THE UNIFORM COMMERCIAL CODE
27 29 Sec. 40. Section 3.3, Code 2007, is amended to read as
27 30 follows:
27 31 3.3 HEADNOTES AND HISTORICAL REFERENCES.
27 32 Proper headnotes may be placed at the beginning of a
27 33 section of a bill or a Code section, and at the end of a Code
27 34 section there may be placed a reference to the section number
27 35 of the Code, or any Iowa Act from which the matter of the Code
28 1 section was taken. However, except as provided in for the
28 2 uniform commercial code, pursuant to section 554.1109
28 3 554.1107, neither said headnotes nor said historical shall not
28 4 be considered as part of the law as enacted. Historical
28 5 references shall be considered as a part of the law as
28 6 enacted.
28 7 Sec. 41. Section 537.3603, subsection 6, Code 2007, is
28 8 amended to read as follows:
28 9 6. A lease or agreement which constitutes a security
28 10 interest as defined in section 554.1201, subsection 37 2.
28 11 Sec. 42. Section 554D.104, subsection 2, paragraph b, Code
28 12 2007, is amended to read as follows:
28 13 b. Chapter 554 other than articles 2 and 13 and sections
28 14 554.1107 and 554.1206 section 554.1306.
28 15 DIVISION III
28 16 CONTINGENT PROVISIONS
28 17 Sec. 43. Section 554.1201, subsections 5, 6, 14, 15, 20,
28 18 and 45, Code 2007, are amended to read as follows:
28 19 5. e. "Bearer" means the a person in control of a
28 20 negotiable electronic document of title or a person in
28 21 possession of an a negotiable instrument, negotiable tangible
28 22 document of title, or certificated security that is payable to
28 23 bearer or endorsed indorsed in blank.
28 24 6. f. "Bill of lading" means a document of title
28 25 evidencing the receipt of goods for shipment issued by a
28 26 person engaged in the business of directly or indirectly
28 27 transporting or forwarding goods, and includes an airbill.
28 28 "Airbill" means a document serving for air transportation as a
28 29 bill of lading does for marine or rail transportation, and
28 30 includes an air consignment note or air waybill. The term
28 31 does not include a warehouse receipt.
28 32 14. o. "Delivery", with respect to instruments an
28 33 electronic document of title means voluntary transfer of
28 34 control and with respect to an instrument, documents a
28 35 tangible document of title, or chattel paper, or certificated
29 1 securities means voluntary transfer of possession.
29 2 15. p. "Document of title" includes bill of lading, dock
29 3 warrant, dock receipt, warehouse receipt or order for the
29 4 delivery of goods, and also any other document which means a
29 5 record (i) that in the regular course of business or financing
29 6 is treated as adequately evidencing that the person in
29 7 possession or control of it the record is entitled to receive,
29 8 control, hold, and dispose of the document record and the
29 9 goods it the record covers and (ii) that purports to be issued
29 10 by or addressed to a bailee and to cover goods in the bailee's
29 11 possession which are either identified or are fungible
29 12 portions of an identified mass. The term includes a bill of
29 13 lading, transport document, dock warrant, dock receipt,
29 14 warehouse receipt, and order for delivery of goods. To be a
29 15 document of title a document must purport to be issued by or
29 16 addressed to a bailee and purport to cover goods in the
29 17 bailee's possession which are either identified or are
29 18 fungible portions of an identified mass. An electronic
29 19 document of title means a document of title evidenced by a
29 20 record consisting of information stored in an electronic
29 21 medium. A tangible document of title means a document of
29 22 title evidenced by a record consisting of information that is
29 23 inscribed on a tangible medium.
29 24 20. u. "Holder", with respect to a negotiable instrument,
29 25 means:
29 26 (1) the person in possession if the of a negotiable
29 27 instrument that is payable either to bearer or, in the case of
29 28 an instrument payable to an identified person, if the
29 29 identified that is the person is in possession.;
29 30 (2) "Holder" with respect to a document of title means the
29 31 person in possession of a negotiable tangible document of
29 32 title if the goods are deliverable either to bearer or to the
29 33 order of the person in possession.; or
29 34 (3) the person in control of a negotiable electronic
29 35 document of title.
30 1 45. ap. "Warehouse receipt" means a receipt document of
30 2 title issued by a person engaged in the business of storing
30 3 goods for hire.
30 4 Sec. 44. CONFLICTING PROVISIONS.
30 5 1. If the House File successor to House Study Bill 140, or
30 6 a Senate File companion to the House File, which revises
30 7 chapter 554, article 7, of the uniform commercial code, is
30 8 enacted in the 2007 Regular Session, notwithstanding section
30 9 4.8, all of the following apply:
30 10 a. The amendments to section 554.1201, subsections 5, 6,
30 11 14, 15, 20, and 45, Code 2007, as enacted in this division of
30 12 this Act, prevail over conflicting amendments to section
30 13 554.1201, subsections 5, 6, 14, 15, 20, and 45, Code 2007, as
30 14 enacted in division I of this Act.
30 15 b. The amendments to section 554.1201, subsections 25, 26,
30 16 and 27, as enacted in division I of this Act, prevail over
30 17 conflicting amendments to section 554.1201, subsections 25,
30 18 26, and 27, Code 2007, as enacted in the House File successor
30 19 to House Study Bill 140, or a Senate File companion to the
30 20 House File.
30 21 c. The amendments to section 554.1201, subsections 5, 6,
30 22 14, 15, 20, and 45, Code 2007, as enacted in this division of
30 23 this Act, prevail over conflicting amendments to section
30 24 554.1201, subsections 5, 6, 14, 15, 20, and 45, Code 2007, as
30 25 enacted in the House File successor to House Study Bill 140,
30 26 or a Senate File companion to the House File.
30 27 2. If the House File successor to House Study Bill 140, or
30 28 a Senate File companion to the House File, which revises
30 29 chapter 554, article 7, of the uniform commercial code, is not
30 30 enacted in the 2007 Regular Session, notwithstanding section
30 31 4.8, the amendments to section 554.1201, subsections 5, 6, 14,
30 32 15, 20, and 45, Code 2007, as enacted in division I of this
30 33 Act, prevail over conflicting amendments to section 554.1201,
30 34 subsections 5, 6, 14, 15, 20, and 45, Code 2007, as enacted in
30 35 this division of this Act.
31 1 DIVISION IV
31 2 TRANSFERS AND RECODIFICATIONS
31 3 Sec. 45. Section 554.1105, Code 2007, is transferred to
31 4 section 554.1301.
31 5 Sec. 46. Section 554.1106, Code 2007, is transferred to
31 6 section 554.1305.
31 7 Sec. 47. Section 554.1107, Code 2007, is transferred to
31 8 section 554.1306.
31 9 Sec. 48. Section 554.1108, Code 2007, is transferred to
31 10 section 554.1105.
31 11 Sec. 49. Section 554.1109, Code 2007, is transferred to
31 12 section 554.1107.
31 13 Sec. 50. Section 554.1202, Code 2007, is transferred to
31 14 section 554.1307.
31 15 Sec. 51. Section 554.1203, Code 2007, is transferred to
31 16 section 554.1304.
31 17 Sec. 52. Section 554.1204, Code 2007, is transferred to
31 18 section 554.1205.
31 19 Sec. 53. Section 554.1205, Code 2007, is transferred to
31 20 section 554.1303.
31 21 Sec. 54. Section 554.1207, Code 2007, is transferred to
31 22 section 554.1308.
31 23 Sec. 55. Section 554.1208, Code 2007, is transferred to
31 24 section 554.1309.
31 25 Sec. 56. Section 554.1209, Code 2007, is transferred to
31 26 section 554.1310.
31 27 Sec. 57. CODIFICATION.
31 28 1. The Code editor shall codify the following new Code
31 29 sections, as enacted in this Act, into the following Code
31 30 sections, which existed immediately prior to the effective
31 31 date of this Act and which are repealed or transferred
31 32 elsewhere by this Act:
31 33 a. Section 554.1102A to section 554.1102 following its
31 34 repeal in this Act.
31 35 b. Section 554.1106A to section 554.1106 following its
32 1 transfer in this Act.
32 2 c. Section 554.1108A to section 554.1108 following its
32 3 transfer in this Act.
32 4 d. Section 554.1202A to section 554.1202 following its
32 5 transfer in this Act.
32 6 e. Section 554.1203A to section 554.1203 following its
32 7 transfer in this Act.
32 8 f. Section 554.1204A to section 554.1204 following its
32 9 transfer in this Act.
32 10 g. Section 554.1206A to section 554.1206 following its
32 11 transfer in this Act.
32 12 2. The Code editor may transfer section 554.1110 to
32 13 section 554.1110A.
32 14 DIVISION V
32 15 REPEALS
32 16 Sec. 58. Section 554.1102, Code 2007, is repealed.
32 17 Sec. 59. Section 554.1206, Code 2007, is repealed.
32 18 Sec. 60. Section 554.2208, Code 2007, is repealed.
32 19 Sec. 61. Section 554.13207, Code 2007, is repealed.
32 20 EXPLANATION
32 21 This bill amends Article 1 of the Uniform Commercial Code
32 22 (UCC) codified as Code chapter 554. The Article contains
32 23 general provisions such as definitions and rules of
32 24 construction and applicability that govern the Code chapter,
32 25 unless otherwise excluded in the Article or another Article.
32 26 The bill is based on recommendations by the national
32 27 conference of commissioners on uniform state laws and the
32 28 American law institute.
32 29 The bill addresses almost every section of Article 1, in
32 30 many cases, to make corrections in terminology and to combine
32 31 and transfer sections as part of a comprehensive
32 32 reorganization of the Code chapter. Under the new
32 33 organizational scheme, the Article is divided into three
32 34 parts.
32 35 Part 1 contains general provisions relating to the short
33 1 titles for the Uniform Commercial Code and the Article, the
33 2 scope of the Article, the construction of the UCC and its
33 3 applicability, statutory construction against implied repeals,
33 4 severability, and references to singular and plural language
33 5 and gender language. A new section provides for electronic
33 6 signatures under federal law.
33 7 Part 2 provides general definitions and principles of
33 8 interpretation. For example, the bill amends the definition
33 9 of "good faith" and makes the term universally applicable
33 10 throughout the UCC with the exception of Article 5 (governing
33 11 letters of credit). The old definition referred to honesty in
33 12 fact in the conduct or transaction concerned. The bill amends
33 13 the provision to require both honesty in fact and the
33 14 observance of reasonable commercial standards of fair dealing.
33 15 There are new sections providing for fair notice of facts and
33 16 construing knowledge, methods to distinguish leases (see
33 17 Article 13) from security interests (see Article 9),
33 18 determination of value, and creating a presumption for a trier
33 19 of fact. An existing provision is amended which provides for
33 20 determining reasonableness of time before taking action.
33 21 Part 3 includes a new provision for determining territorial
33 22 applicability and the power to choose applicable law. Other
33 23 provisions govern how an agreement may vary the application of
33 24 the Code chapter. The bill amends provisions which provide
33 25 for course of dealings and usage of trade. It provides that
33 26 course of performance may be used to determine the scope and
33 27 terms of agreements, and eliminates provisions in Article 2
33 28 (governing sales) and Article 13 (governing leases) relating
33 29 to the same issue. The bill amends and transfers a number of
33 30 other provisions currently located in other parts of the
33 31 Article, including provisions relating to obligations of good
33 32 faith, the liberal administration of remedies, the right to
33 33 waive or renounce a claim or right following a breach, the use
33 34 of third=party documents as evidence in court, the reservation
33 35 of rights, the option of a party to accelerate performance,
34 1 and the subordination of obligations.
34 2 The bill includes alternative provisions amending
34 3 definitional provisions in Article 1 which will take effect
34 4 depending on whether the general assembly enacts a bill which
34 5 adopts revisions to UCC Article 7 providing for records
34 6 relating to warehouse documents and documents of title.
34 7 Internal references in the bill use the Code section
34 8 numbers which will be assigned when the bill's provisions are
34 9 codified in the 2007 Code Supplement.
34 10 LSB 1072HV 82
34 11 da:rj/je/5.1