§ 25-2A-103. Definitions and index of definitions.
Article 2A.
Leases.
PART 1.
GENERAL PROVISIONS.
§ 25‑2A‑103. Definitions and index of definitions.
(1) In this Articleunless the context otherwise requires:
(a) "Buyer inordinary course of business" means a person who, in good faith and withoutknowledge that the sale to him is in violation of the ownership rights orsecurity interest or leasehold interest of a third party in the goods, buys inordinary course from a person in the business of selling goods of that kind butdoes not include a pawnbroker. "Buying" may be for cash or byexchange of other property or on secured or unsecured credit and includesacquiring goods or documents of title under a preexisting contract for sale butdoes not include a transfer in bulk or as security for or in total or partialsatisfaction of a money debt.
(b) "Cancellation"occurs when either party puts an end to the lease contract for default by theother party.
(c) "Commercialunit" means such a unit of goods as by commercial usage is a single wholefor purposes of lease and division of which materially impairs its character orvalue on the market or in use. A commercial unit may be a single article, as amachine, 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 inthe relevant market as a single whole.
(d) "Conforming"goods or performance under a lease contract means goods or performance that arein accordance with the obligations under the lease contract.
(e) "Consumer lease"means a lease that a lessor regularly engaged in the business of leasing orselling makes to a lessee who is an individual and who takes under the leaseprimarily for a personal, family, or household purpose, if the total paymentsto be made under the lease contract, excluding payments for options to renew orbuy, do not exceed twenty‑five thousand dollars ($25,000).
(f) "Fault"means wrongful act, omission, breach, or default.
(g) "Financelease" means a lease with respect to which: (i) the lessor does notselect, manufacture, or supply the goods; (ii) the lessor acquires the goods orthe right to possession and use of the goods in connection with the lease; and(iii) one of the following occurs:
(A) the lessee receives acopy of the contract by which the lessor acquired the goods or the right topossession and use of the goods before signing the lease contract;
(B) the lessee's approvalof the contract by which the lessor acquired the goods or the right topossession and use of the goods is a condition to effectiveness of the leasecontract;
(C) the lessee, beforesigning the lease contract, receives an accurate and complete statementdesignating the promises and warranties, and any disclaimers of warranties,limitations or modifications of remedies, or liquidated damages, includingthose of a third party, such as the manufacturer of the goods, provided to thelessor by the person supplying the goods in connection with or as part of thecontract by which the lessor acquired the goods or the right to possession anduse of the goods; or
(D) if the lease is not aconsumer lease, the lessor, before the lessee signs the lease contract, informsthe lessee in writing (a) of the identity of the person supplying the goods tothe lessor, unless the lessee has selected that person and directed the lessorto acquire the goods or the right to possession and use of the goods from thatperson, (b) that the lessee is entitled under this Article to the promises andwarranties, including those of any third party, provided to the lessor by theperson supplying the goods in connection with or as part of the contract bywhich the lessor acquired the goods or the right to possession and use of thegoods, and (c) that the lessee may communicate with the person supplying thegoods to the lessor and receive an accurate and complete statement of thosepromises and warranties, including any disclaimers and limitations of them orof remedies.
(h) "Goods"means all things that are movable at the time of identification to the leasecontract, or are fixtures (G.S. 25‑2A‑309), but the term does notinclude money, documents, instruments, accounts, chattel paper, generalintangibles, or minerals or the like, including oil and gas, before extraction.The term also includes the unborn young of animals.
(i) "Installmentlease contract" means a lease contract that authorizes or requires thedelivery of goods in separate lots to be separately accepted, even though thelease contract contains a clause "each delivery is a separate lease"or its equivalent.
(j) "Lease"means a transfer of the right to possession and use of goods for a term inreturn for consideration, but a sale, including a sale on approval or a sale orreturn, or retention or creation of a security interest is not a lease. Unlessthe context clearly indicates otherwise, the term includes a sublease. The termincludes a motor vehicle operating agreement that is considered a lease under §7701(h) of the Internal Revenue Code.
(k) "Leaseagreement" means the bargain, with respect to the lease, of the lessor andthe lessee in fact as found in their language or by implication from othercircumstances including course of dealing or usage of trade or course ofperformance as provided in this Article. Unless the context clearly indicatesotherwise, the term includes a sublease agreement.
(l) "Leasecontract" means the total legal obligation that results from the leaseagreement as affected by this Article and any other applicable rules of law.Unless the context clearly indicates otherwise, the term includes a subleasecontract.
(m) "Leaseholdinterest" means the interest of the lessor or the lessee under a leasecontract.
(n) "Lessee"means a person who acquires the right to possession and use of goods under alease. Unless the context clearly indicates otherwise, the term includes asublessee.
(o) "Lessee inordinary course of business" means a person who, in good faith and withoutknowledge that the lease to him is in violation of the ownership rights orsecurity interest or leasehold interest of a third party in the goods, leasesin ordinary course from a person in the business of selling or leasing goods ofthat kind but does not include a pawnbroker. "Leasing" may be forcash or by exchange of other property or on secured or unsecured credit andincludes acquiring goods or documents of title under a preexisting leasecontract but does not include a transfer in bulk or as security for or in totalor partial satisfaction of a money debt.
(p) "Lessor"means a person who transfers the right to possession and use of goods under alease. Unless the context clearly indicates otherwise, the term includes asublessor.
(q) "Lessor'sresidual interest" means the lessor's interest in the goods afterexpiration, termination, or cancellation of the lease contract.
(r) "Lien"means a charge against or interest in goods to secure payment of a debt orperformance of an obligation, but the term does not include a securityinterest.
(s) "Lot"means a parcel or a single article that is the subject matter of a separatelease or delivery, whether or not it is sufficient to perform the leasecontract.
(t) "Merchantlessee" means a lessee that is a merchant with respect to goods of thekind subject to the lease.
(u) "Presentvalue" means the amount as of a date certain of one or more sums payablein the future, discounted to the date certain. The discount is determined bythe interest rate specified by the parties if the rate was not manifestlyunreasonable at the time the transaction was entered into; otherwise, the discountis determined by a commercially reasonable rate that takes into account thefacts and circumstances of each case at the time the transaction was enteredinto.
(v) "Purchase"includes taking by sale, lease, mortgage, security interest, pledge, gift, or anyother voluntary transaction creating an interest in goods.
(w) "Sublease"means a lease of goods the right to possession and use of which was acquired bythe lessor as a lessee under an existing lease.
(x) "Supplier"means a person from whom a lessor buys or leases goods to be leased under afinance lease.
(y) "Supplycontract" means a contract under which a lessor buys or leases goods to beleased.
(z) "Termination"occurs when either party pursuant to a power created by agreement or law putsan end to the lease contract otherwise than for default.
(2) Other definitionsapplying to this Article and the sections in which they appear are:
"Accessions". G.S.25‑2A‑310(1).
"Constructionmortgage". G.S. 25‑2A‑309(1)(d).
"Encumbrance". G.S.25‑2A‑309(1)(e).
"Fixtures". G.S.25‑2A‑309(1)(a).
"Fixturefiling". G.S. 25‑2A‑309(1)(b).
"Purchasemoney lease". G.S. 25‑2A‑309(1)(c).
(3) The followingdefinitions in other Articles apply to this Article:
"Account" G.S.25‑9‑102(a)(2).
"Betweenmerchants" G.S. 25‑2‑104(3).
"Buyer" G.S.25‑2‑103(1)(a).
"Chattelpaper" G.S. 25‑9‑102(a)(11).
"Consumergoods" G.S. 25‑9‑102(a)(23).
"Document" G.S.25‑9‑102(a)(30).
"Entrusting" G.S.25‑2‑403(3).
"Generalintangible" G.S. 25‑9‑102(a)(42).
"Instrument" G.S.25‑9‑102(a)(47).
"Merchant" G.S.25‑2‑104(1).
"Mortgage" G.S.25‑9‑102(a)(55).
"Pursuantto commitment" G.S. 25‑9‑102(a)(68).
"Receipt" G.S.25‑2‑103(1)(c).
"Sale" G.S.25‑2‑106(1).
"Saleon approval" G.S. 25‑2‑326.
"Saleor return" G.S. 25‑2‑326.
"Seller" G.S.25‑2‑103(1)(d).
(4) In addition,Article 1 contains general definitions and principles of construction andinterpretation applicable throughout this Article. (1993, c. 463, s. 1; 1993(Reg. Sess., 1994), c. 756, s. 1; 1995, c. 509, s. 21; 2000‑169, s. 13;2006‑112, ss. 5, 38.)