Full Text of SB1647 94th General Assembly
SB1647eng 94TH GENERAL ASSEMBLY
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| AN ACT concerning the Uniform Commercial Code.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Uniform Commercial Code is amended by | 5 |
| changing the heading of Article 1, Part 1 and Sections 1-101, | 6 |
| 1-102, 1-103, 1-104, 1-105, 1-106, 1-107, 1-108, and 1-109, the | 7 |
| heading of Article 1, Part 2 and Sections 1-201, 1-202, 1-203, | 8 |
| 1-204, 1-205, 1-206, 1-207, 1-208, and 1-209 and by adding the | 9 |
| heading of Article 1, Part 3 and Sections 1-301, 1-302, 1-303, | 10 |
| 1-304, 1-305, 1-306, 1-307, 1-308, 1-309, and 1-310 as follows:
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| (810 ILCS 5/Art. 1 Pt. 1 heading) | 12 |
| PART 1 .
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| GENERAL PROVISIONS
SHORT TITLE, CONSTRUCTION, APPLICATION
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| AND SUBJECT MATTER OF THE ACT
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| (810 ILCS 5/1-101) (from Ch. 26, par. 1-101)
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| Sec. 1-101. Short Titles.
Short title.
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| (a) This Act may be cited as the Uniform Commercial Code. | 18 |
| (b) This Article may be cited as Uniform Commercial Code - | 19 |
| General Provisions.
This Act shall be known and may be cited as
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| Uniform Commercial Code.
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| (Source: Laws 1961, p. 2101.)
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| (810 ILCS 5/1-102) (from Ch. 26, par. 1-102)
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| Sec. 1-102. Scope of Article.
Purposes, rules of | 24 |
| construction, variation by agreement.
This Article applies to a | 25 |
| transaction to the extent that it is governed by another | 26 |
| Article of the Uniform Commercial Code.
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| (1) This Act shall be liberally construed and applied to | 28 |
| promote its
underlying purposes and policies.
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| (2) Underlying purposes and policies of this Act are
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| (a) to simplify, clarify and modernize the law |
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| governing commercial
transactions;
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| (b) to permit the continued expansion of commercial | 3 |
| practices through
custom, usage and agreement of the parties;
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| (c) to make uniform the law among the various | 5 |
| jurisdictions.
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| (3) The effect of provisions of this Act may be varied by | 7 |
| agreement,
except as otherwise provided in this Act and except | 8 |
| that the obligations of
good faith, diligence, reasonableness | 9 |
| and care prescribed by this Act may
not be disclaimed by | 10 |
| agreement but the parties may by agreement determine
the | 11 |
| standards by which the performance of such obligations is to be
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| measured if such standards are not manifestly unreasonable.
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| (4) The presence in certain provisions of this Act of the | 14 |
| words "unless
otherwise agreed" or words of similar import does | 15 |
| not imply that the effect
of other provisions may not be varied | 16 |
| by agreement under subsection (3).
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| (5) In this Act unless the context otherwise requires
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| (a) words in the singular number include the plural, | 19 |
| and in the
plural include the singular;
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| (b) words of the masculine gender include the feminine | 21 |
| and the
neuter, and when the sense so indicates words of the | 22 |
| neuter gender may
refer to any gender.
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| (Source: Laws 1961, p. 2101.)
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| (810 ILCS 5/1-103) (from Ch. 26, par. 1-103)
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| Sec. 1-103. Construction of Uniform Commercial Code to | 26 |
| promote its purposes and policies; applicability of | 27 |
| supplemental principles of law.
Supplementary general | 28 |
| principles of law applicable.
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| (a) The Uniform Commercial Code must be liberally construed | 30 |
| and applied to promote its underlying purposes and policies, | 31 |
| which are: | 32 |
| (1) to simplify, clarify, and modernize the law | 33 |
| governing commercial transactions; | 34 |
| (2) to permit the continued expansion of commercial | 35 |
| practices through custom, usage, and agreement of the |
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| parties; and | 2 |
| (3) to make uniform the law among the various | 3 |
| jurisdictions. | 4 |
| (b) Unless displaced by the particular provisions of the | 5 |
| Uniform Commercial Code, the principles of law and equity, | 6 |
| including the law merchant and the law relative to capacity to | 7 |
| contract, principal and agent, estoppel, fraud, | 8 |
| misrepresentation, duress, coercion, mistake, bankruptcy, and | 9 |
| other validating or invalidating cause supplement its | 10 |
| provisions.
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| Unless displaced by the particular provisions of this Act, | 12 |
| the
principles of law and equity, including the law merchant | 13 |
| and the law
relative to capacity to contract, principal and | 14 |
| agent, estoppel, fraud,
misrepresentation, duress, coercion, | 15 |
| mistake, unjust enrichment,
bankruptcy, or other
validating or | 16 |
| invalidating cause shall supplement its provisions.
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| (Source: P.A. 88-123.)
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| (810 ILCS 5/1-104) (from Ch. 26, par. 1-104)
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| Sec. 1-104. Construction against implied repeal.
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| Construction against implicit repeal.
The Uniform Commercial | 21 |
| Code being a general Act intended as a unified coverage of its | 22 |
| subject matter, no part of it shall be deemed to be impliedly | 23 |
| repealed by subsequent legislation if such construction can | 24 |
| reasonably be avoided.
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| This Act being a general act intended as a unified coverage | 26 |
| of its
subject matter, no part of it shall be deemed to be | 27 |
| impliedly repealed by
subsequent legislation if such | 28 |
| construction can reasonably be avoided.
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| (Source: Laws 1961, p. 2101.)
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| (810 ILCS 5/1-105) (from Ch. 26, par. 1-105)
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| Sec. 1-105. Severability. If any provision or clause of the | 32 |
| Uniform Commercial Code or its application to any person or | 33 |
| circumstance is held invalid, the invalidity does not affect | 34 |
| other provisions or applications of the Uniform Commercial Code |
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| which can be given effect without the invalid provision or | 2 |
| application, and to this end the provisions of the Uniform | 3 |
| Commercial Code are severable.
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| Territorial application of the Act; parties' power to
choose | 5 |
| applicable law.
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| (1) Except as provided in this Section, when a transaction
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| bears a reasonable relation to this State and also to another | 8 |
| state or
nation the parties may agree that the law either of | 9 |
| this State or of
the other state or nation shall govern their | 10 |
| rights and
duties. Failing an agreement, this Act applies to
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| transactions bearing an appropriate relation to this State.
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| (2) Where one of the following provisions of this Act | 13 |
| specifies the
applicable law, that provision governs and a | 14 |
| contrary agreement is
effective only to the extent permitted by | 15 |
| the law (including the conflict
of laws rules) so specified:
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| Rights of creditors against sold goods. Section 2-402.
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| Applicability of the Article on Leases. Sections 2A-105 and | 18 |
| 2A-106.
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| Applicability of the Article on Bank Deposits and | 20 |
| Collections.
Section 4-102.
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| Governing law in the Article on Funds Transfers. Section | 22 |
| 4A-507.
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| Letters of Credit. Section 5-116.
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| Applicability of the Article on Investment Securities. | 25 |
| Section 8-110.
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| Law governing perfection, the effect of perfection or | 27 |
| nonperfection,
and the priority of security interests | 28 |
| and agricultural liens. Sections 9-301
through 9-307.
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| (Source: P.A. 91-893, eff. 7-1-01.)
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| (810 ILCS 5/1-106) (from Ch. 26, par. 1-106)
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| Sec. 1-106. Use of singular and plural; gender.
Remedies to | 32 |
| be liberally administered.
In the Uniform Commercial Code, | 33 |
| unless the statutory context otherwise requires:
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| (1) words in the singular number include the plural, | 35 |
| and those in the plural include the singular; and |
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| (2) words of any gender also refer to any other gender.
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| (1) The remedies provided by this Act shall be liberally | 3 |
| administered to
the end that the aggrieved party may be put in | 4 |
| as good a position as if the
other party had fully performed | 5 |
| but neither consequential or special nor
penal damages may be | 6 |
| had except as specifically provided in this Act or by
other | 7 |
| rule of law.
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| (2) Any right or obligation declared by this Act is | 9 |
| enforceable by
action unless the provision declaring it | 10 |
| specifies a different and limited
effect.
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| (Source: Laws 1961, 1st SS., p. 7.)
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| (810 ILCS 5/1-107) (from Ch. 26, par. 1-107)
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| Sec. 1-107. Section captions.
Waiver or renunciation of | 14 |
| claim or right after breach.
Section captions are part of the | 15 |
| Uniform Commercial Code.
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| Any claim or right arising out of an alleged breach can be | 17 |
| discharged in
whole or in part without consideration by a | 18 |
| written waiver or renunciation
signed and delivered by the | 19 |
| aggrieved party.
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| (Source: Laws 1961, p. 2101.)
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| (810 ILCS 5/1-108) (from Ch. 26, par. 1-108)
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| Sec. 1-108. Relation to Electronic Signatures in Global and | 23 |
| National Commerce Act.
Severability.
This Act modifies, | 24 |
| limits, and supersedes the federal Electronic Signatures in | 25 |
| Global and National Commerce Act, (15 U.S.C. Section 7001, et. | 26 |
| seq.) but does not modify, limit, or supersede Section 101(c) | 27 |
| of that Act (15 U.S.C. Section 7001(c)) or authorize electronic | 28 |
| delivery of any of the notices described in Section 103(b) of | 29 |
| that Act (15 U.S.C. Section 103(b)).
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| If any provision or clause of this Act or application | 31 |
| thereof to any
person or circumstances is held invalid, such | 32 |
| invalidity shall not affect
other provisions or applications of | 33 |
| the Act which can be given effect
without the invalid provision | 34 |
| or application, and to this end the
provisions of this Act are |
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| declared to be severable.
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| (Source: Laws 1961, p. 2101.)
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| (810 ILCS 5/1-109) (from Ch. 26, par. 1-109)
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| Sec. 1-109. (Blank).
Section captions.
Section captions | 5 |
| are parts of this Act. | 6 |
| (Source: Laws 1961, p. 2101.)
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| (810 ILCS 5/Art. 1 Pt. 2 heading) | 8 |
| PART 2 .
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| GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
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| (810 ILCS 5/1-201) (from Ch. 26, par. 1-201)
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| Sec. 1-201. General Definitions. | 12 |
| (a) Unless the context otherwise requires, words or phrases | 13 |
| defined in this Section, or in the additional definitions | 14 |
| contained in other Articles of the Uniform Commercial Code that | 15 |
| apply to particular Articles or parts thereof, have the | 16 |
| meanings stated.
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| (b) Subject to definitions contained in other Articles of | 18 |
| the Uniform Commercial Code that apply to particular Articles | 19 |
| or parts thereof:
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| (1) "Action", in the sense of a judicial proceeding, | 21 |
| includes recoupment, counterclaim, set-off, suit in | 22 |
| equity, and any other proceeding in which rights are | 23 |
| determined. | 24 |
| (2) "Aggrieved party" means a party entitled to pursue | 25 |
| a remedy. | 26 |
| (3) "Agreement", as distinguished from "contract", | 27 |
| means the bargain of the parties in fact, as found in their | 28 |
| language or inferred from other circumstances, including | 29 |
| course of performance, course of dealing, or usage of trade | 30 |
| as provided in Section 1-303. | 31 |
| (4) "Bank" means a person engaged in the business of | 32 |
| banking and includes a savings bank, savings and loan | 33 |
| association, credit union, and trust company. |
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| (5) "Bearer" means a person in possession of a | 2 |
| negotiable instrument, document of title, or certificated | 3 |
| security that is payable to bearer or indorsed in blank. | 4 |
| (6) "Bill of lading" means a document evidencing the | 5 |
| receipt of goods for shipment issued by a person engaged in | 6 |
| the business of transporting or forwarding goods. | 7 |
| (7) "Branch" includes a separately incorporated | 8 |
| foreign branch of a bank. | 9 |
| (8) "Burden of establishing" a fact means the burden of | 10 |
| persuading the trier of fact that the existence of the fact | 11 |
| is more probable than its nonexistence. | 12 |
| (9) "Buyer in ordinary course of business" means a | 13 |
| person that buys goods in good faith, without knowledge | 14 |
| that the sale violates the rights of another person in the | 15 |
| goods, and in the ordinary course from a person, other than | 16 |
| a pawnbroker, in the business of selling goods of that | 17 |
| kind. A person buys goods in the ordinary course if the | 18 |
| sale to the person comports with the usual or customary | 19 |
| practices in the kind of business in which the seller is | 20 |
| engaged or with the seller's own usual or customary | 21 |
| practices. A person that sells oil, gas, or other minerals | 22 |
| at the wellhead or minehead is a person in the business of | 23 |
| selling goods of that kind. A buyer in ordinary course of | 24 |
| business may buy for cash, by exchange of other property, | 25 |
| or on secured or unsecured credit, and may acquire goods or | 26 |
| documents of title under a preexisting contract for sale. | 27 |
| Only a buyer that takes possession of the goods or has a | 28 |
| right to recover the goods from the seller under Article 2 | 29 |
| may be a buyer in ordinary course of business. "Buyer in | 30 |
| ordinary course of business" does not include a person that | 31 |
| acquires goods in a transfer in bulk or as security for or | 32 |
| in total or partial satisfaction of a money debt. | 33 |
| (10) "Conspicuous", with reference to a term, means so | 34 |
| written, displayed, or presented that a reasonable person | 35 |
| against which it is to operate ought to have noticed it. | 36 |
| Whether a term is "conspicuous" or not is a decision for |
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| the court. Conspicuous terms include the following: | 2 |
| (A) a heading in capitals equal to or greater in | 3 |
| size than the surrounding text, or in contrasting type, | 4 |
| font, or color to the surrounding text of the same or | 5 |
| lesser size; and | 6 |
| (B) language in the body of a record or display in | 7 |
| larger type than the surrounding text, or in | 8 |
| contrasting type, font, or color to the surrounding | 9 |
| text of the same size, or set off from surrounding text | 10 |
| of the same size by symbols or other marks that call | 11 |
| attention to the language. | 12 |
| (11) "Consumer" means an individual who enters into a | 13 |
| transaction primarily for personal, family, or household | 14 |
| purposes. | 15 |
| (12) "Contract", as distinguished from "agreement", | 16 |
| means the total legal obligation that results from the | 17 |
| parties' agreement as determined by the Uniform Commercial | 18 |
| Code as supplemented by any other applicable laws. | 19 |
| (13) "Creditor" includes a general creditor, a secured | 20 |
| creditor, a lien creditor, and any representative of | 21 |
| creditors, including an assignee for the benefit of | 22 |
| creditors, a trustee in bankruptcy, a receiver in equity, | 23 |
| and an executor or administrator of an insolvent debtor's | 24 |
| or assignor's estate. | 25 |
| (14) "Defendant" includes a person in the position of | 26 |
| defendant in a counterclaim, cross-claim, or third-party | 27 |
| claim. | 28 |
| (15) "Delivery", with respect to an instrument, | 29 |
| document of title, or chattel paper, means voluntary | 30 |
| transfer of possession. | 31 |
| (16) "Document of title" includes bill of lading, dock | 32 |
| warrant, dock receipt, warehouse receipt or order for the | 33 |
| delivery of goods, and also any other document which in the | 34 |
| regular course of business or financing is treated as | 35 |
| adequately evidencing that the person in possession of it | 36 |
| is entitled to receive, hold, and dispose of the document |
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| and the goods it covers. To be a document of title, a | 2 |
| document must purport to be issued by or addressed to a | 3 |
| bailee and purport to cover goods in the bailee's | 4 |
| possession which are either identified or are fungible | 5 |
| portions of an identified mass. | 6 |
| (17) "Fault" means a default, breach, or wrongful act | 7 |
| or omission. | 8 |
| (18) "Fungible goods" means: | 9 |
| (A) goods of which any unit, by nature or usage of | 10 |
| trade, is the equivalent of any other like unit; or | 11 |
| (B) goods that by agreement are treated as | 12 |
| equivalent. | 13 |
| (19) "Genuine" means free of forgery or | 14 |
| counterfeiting. | 15 |
| (20) "Good faith" means honesty in fact in the conduct | 16 |
| or transaction concerned. | 17 |
| (21) "Holder" means: | 18 |
| (A) the person in possession of a negotiable | 19 |
| instrument that is payable either to bearer or to an | 20 |
| identified person that is the person in possession; or | 21 |
| (B) the person in possession of a document of title | 22 |
| if the goods are deliverable either to bearer or to the | 23 |
| order of the person in possession. | 24 |
| (22) "Insolvency proceeding" includes an assignment | 25 |
| for the benefit of creditors or other proceeding intended | 26 |
| to liquidate or rehabilitate the estate of the person | 27 |
| involved. | 28 |
| (23) "Insolvent" means: | 29 |
| (A) having generally ceased to pay debts in the | 30 |
| ordinary course of business other than as a result of | 31 |
| bona fide dispute; | 32 |
| (B) being unable to pay debts as they become due; | 33 |
| or | 34 |
| (C) being insolvent within the meaning of federal | 35 |
| bankruptcy law. | 36 |
| (24) "Money" means a medium of exchange currently |
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| authorized or adopted by a domestic or foreign government. | 2 |
| The term includes a monetary unit of account established by | 3 |
| an intergovernmental organization or by agreement between | 4 |
| two or more countries. | 5 |
| (25) "Organization" means a person other than an | 6 |
| individual. | 7 |
| (26) "Party", as distinguished from "third party", | 8 |
| means a person that has engaged in a transaction or made an | 9 |
| agreement subject to the Uniform Commercial Code. | 10 |
| (27) "Person" means an individual, corporation, | 11 |
| business trust, estate, trust, partnership, limited | 12 |
| liability company, association, joint venture, government, | 13 |
| governmental subdivision, agency, or instrumentality, | 14 |
| public corporation, or any other legal or commercial | 15 |
| entity. | 16 |
| (28) "Present value" means the amount as of a date | 17 |
| certain of one or more sums payable in the future, | 18 |
| discounted to the date certain by use of either an interest | 19 |
| rate specified by the parties if that rate is not | 20 |
| manifestly unreasonable at the time the transaction is | 21 |
| entered into or, if an interest rate is not so specified, a | 22 |
| commercially reasonable rate that takes into account the | 23 |
| facts and circumstances at the time the transaction is | 24 |
| entered into. | 25 |
| (29) "Purchase" means taking by sale, lease, discount, | 26 |
| negotiation, mortgage, pledge, lien, security interest, | 27 |
| issue or reissue, gift, or any other voluntary transaction | 28 |
| creating an interest in property. | 29 |
| (30) "Purchaser" means a person that takes by purchase. | 30 |
| (31) "Record" means information that is inscribed on a | 31 |
| tangible medium or that is stored in an electronic or other | 32 |
| medium and is retrievable in perceivable form. | 33 |
| (32) "Remedy" means any remedial right to which an | 34 |
| aggrieved party is entitled with or without resort to a | 35 |
| tribunal. | 36 |
| (33) "Representative" means a person empowered to act |
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| for another, including an agent, an officer of a | 2 |
| corporation or association, and a trustee, executor, or | 3 |
| administrator of an estate. | 4 |
| (34) "Right" includes remedy. | 5 |
| (35) "Security interest" means an interest in personal | 6 |
| property or fixtures which secures payment or performance | 7 |
| of an obligation. "Security interest" includes any | 8 |
| interest of a consignor and a buyer of accounts, chattel | 9 |
| paper, a payment intangible, or a promissory note in a | 10 |
| transaction that is subject to Article 9. "Security | 11 |
| interest" does not include the special property interest of | 12 |
| a buyer of goods on identification of those goods to a | 13 |
| contract for sale under Section 2-401, but a buyer may also | 14 |
| acquire a "security interest" by complying with Article 9. | 15 |
| Except as otherwise provided in Section 2-505, the right of | 16 |
| a seller or lessor of goods under Article 2 or 2A to retain | 17 |
| or acquire possession of the goods is not a "security | 18 |
| interest", but a seller or lessor may also acquire a | 19 |
| "security interest" by complying with Article 9. The | 20 |
| retention or reservation of title by a seller of goods | 21 |
| notwithstanding shipment or delivery to the buyer under | 22 |
| Section 2-401 is limited in effect to a reservation of a | 23 |
| "security interest". Whether a transaction in the form of a | 24 |
| lease creates a "security interest" is determined pursuant | 25 |
| to Section 1-203. | 26 |
| (36) "Send" in connection with a writing, record, or | 27 |
| notice means: | 28 |
| (A) to deposit in the mail or deliver for | 29 |
| transmission by any other usual means of communication | 30 |
| with postage or cost of transmission provided for and | 31 |
| properly addressed and, in the case of an instrument, | 32 |
| to an address specified thereon or otherwise agreed, or | 33 |
| if there be none to any address reasonable under the | 34 |
| circumstances; or | 35 |
| (B) in any other way to cause to be received any | 36 |
| record or notice within the time it would have arrived |
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| if properly sent. | 2 |
| (37) "Signed" includes using any symbol executed or | 3 |
| adopted with present intention to adopt or accept a | 4 |
| writing. | 5 |
| (38) "State" means a State of the United States, the | 6 |
| District of Columbia, Puerto Rico, the United States Virgin | 7 |
| Islands, or any territory or insular possession subject to | 8 |
| the jurisdiction of the United States. | 9 |
| (39) "Surety" includes a guarantor or other secondary | 10 |
| obligor. | 11 |
| (40) "Term" means a portion of an agreement that | 12 |
| relates to a particular matter. | 13 |
| (41) "Unauthorized signature" means a signature made | 14 |
| without actual, implied, or apparent authority. The term | 15 |
| includes a forgery. | 16 |
| (42) "Warehouse receipt" means a receipt issued by a | 17 |
| person engaged in the business of storing goods for hire. | 18 |
| (43) "Writing" includes printing, typewriting, or any | 19 |
| other intentional reduction to tangible form. "Written" | 20 |
| has a corresponding meaning.
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| Subject to additional definitions contained
in the subsequent | 22 |
| Articles of this Act which are applicable to specific
Articles | 23 |
| or Parts thereof, and unless the context otherwise requires, in | 24 |
| this
Act:
| 25 |
| (1) "Action" in the sense of a judicial proceeding includes | 26 |
| recoupment,
counterclaim, set-off, suit in equity and any other | 27 |
| proceedings in which
rights are determined.
| 28 |
| (2) "Aggrieved party" means a party entitled to resort to a | 29 |
| remedy.
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| (3) "Agreement" means the bargain of the parties in fact as | 31 |
| found in
their language or by implication from other | 32 |
| circumstances including course
of dealing or usage of trade or | 33 |
| course of performance as provided in this
Act (Sections 1-205, | 34 |
| 2-208, and 2A-207). Whether an agreement
has legal
consequences | 35 |
| is determined by the provisions of this Act, if applicable;
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| otherwise by the law of contracts (Section 1-103). (Compare |
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| "Contract".)
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| (4) "Bank" means any person engaged in the business of | 3 |
| banking.
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| (5) "Bearer" means the person in possession of an | 5 |
| instrument, document
of title, or certificated security | 6 |
| payable to bearer or indorsed in blank.
| 7 |
| (6) "Bill of lading" means a document evidencing the | 8 |
| receipt of goods
for shipment issued by a person engaged in the | 9 |
| business of transporting or
forwarding goods, and includes an | 10 |
| airbill. "Airbill" means a document
serving for air | 11 |
| transportation as a bill of lading does for marine or rail
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| transportation, and includes an air consignment note or air | 13 |
| waybill.
| 14 |
| (7) "Branch" includes a separately incorporated foreign | 15 |
| branch of a
bank.
| 16 |
| (8) "Burden of establishing" a fact means the burden of | 17 |
| persuading the
triers of fact that the existence of the fact is | 18 |
| more probable than its
non-existence.
| 19 |
| (9) "Buyer in ordinary course of business" means a person | 20 |
| that buys
goods in good
faith, without knowledge that the sale | 21 |
| violates the rights of another
person in the goods, and in the | 22 |
| ordinary
course from a person, other than a pawnbroker, in the | 23 |
| business of selling
goods of that kind. A person buys goods
in | 24 |
| the ordinary course if the sale to the person comports with the | 25 |
| usual or
customary practices in the kind of business in which | 26 |
| the seller is engaged or
with the seller's own usual or | 27 |
| customary practices.
A person that sells oil, gas, or other | 28 |
| minerals at the
wellhead or minehead is a person in the
| 29 |
| business of selling goods of that kind. A buyer in ordinary | 30 |
| course of
business may buy for cash, by exchange of
other | 31 |
| property, or on secured or unsecured credit, and may acquire | 32 |
| goods or documents of
title under a pre-existing
contract for | 33 |
| sale.
Only a buyer that takes possession of the goods or has a | 34 |
| right to recover the
goods from the seller under Article 2 may | 35 |
| be a buyer in ordinary course of
business. A person that | 36 |
| acquires goods in a transfer in bulk or as security
for or in |
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| total or partial satisfaction of a money debt is not a
buyer in | 2 |
| ordinary course of business.
| 3 |
| (10) "Conspicuous": A term or clause is conspicuous when it | 4 |
| is so
written that a reasonable person against whom it is to | 5 |
| operate ought to
have noticed it. A printed heading in capitals | 6 |
| (as: NON-NEGOTIABLE BILL OF
LADING) is conspicuous. Language in | 7 |
| the body of a form is "conspicuous" if
it is in larger or other | 8 |
| contrasting type or color. But in a telegram any
stated term is | 9 |
| "conspicuous". Whether a term or clause is "conspicuous" or
not | 10 |
| is for decision by the court.
| 11 |
| (11) "Contract" means the total legal obligation which | 12 |
| results from the
parties' agreement as affected by this Act and | 13 |
| any other applicable rules
of law. (Compare "Agreement".)
| 14 |
| (12) "Creditor" includes a general creditor, a secured | 15 |
| creditor, a lien
creditor and any representative of creditors, | 16 |
| including an assignee for the
benefit of creditors, a trustee | 17 |
| in bankruptcy, a receiver in equity and an
executor or | 18 |
| administrator of an insolvent debtor's or assignor's estate.
| 19 |
| (13) "Defendant" includes a person in the position of | 20 |
| defendant in a
cross-action or counterclaim.
| 21 |
| (14) "Delivery" with respect to instruments, documents of | 22 |
| title, chattel
paper or certificated securities means | 23 |
| voluntary transfer of possession.
| 24 |
| (15) "Document of title" includes bill of lading, dock | 25 |
| warrant, dock
receipt, warehouse receipt or order for the | 26 |
| delivery of goods, and also any
other document which in the | 27 |
| regular course of business or financing is
treated as | 28 |
| adequately evidencing that the person in possession of it is
| 29 |
| entitled to receive, hold and dispose of the document and the | 30 |
| goods it
covers. To be a document of title a document must | 31 |
| purport to be issued by
or addressed to a bailee and purport to | 32 |
| cover goods in the bailee's
possession which are either | 33 |
| identified or are fungible portions of an
identified mass.
| 34 |
| (16) "Fault" means wrongful act, omission or breach.
| 35 |
| (17) "Fungible" with respect to goods or securities means | 36 |
| goods or
securities of which any unit is, by nature or usage of |
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| trade, the
equivalent of any other like unit. Goods which are | 2 |
| not fungible shall be
deemed fungible for the purposes of this | 3 |
| Act to the extent that under a
particular agreement or document | 4 |
| unlike units are treated as equivalents.
| 5 |
| (18) "Genuine" means free of forgery or counterfeiting.
| 6 |
| (19) "Good faith" means honesty in fact in the conduct or | 7 |
| transaction
concerned.
| 8 |
| (20) "Holder" with respect to a negotiable instrument means | 9 |
| the person
in possession if the instrument is payable to bearer | 10 |
| or, in the
case of an instrument payable to an identified | 11 |
| person, if the identified
person is in possession. "Holder" | 12 |
| with respect to a document of title
means the person in | 13 |
| possession if the goods are deliverable to bearer or to
the | 14 |
| order of the person in possession.
| 15 |
| (21) To "honor" is to pay or accept and pay, or where a | 16 |
| credit so
engages to purchase or discount a draft complying | 17 |
| with the terms of the
credit.
| 18 |
| (22) "Insolvency proceedings" includes any assignment for | 19 |
| the benefit of
creditors or other proceedings intended to | 20 |
| liquidate or rehabilitate the
estate of the person involved.
| 21 |
| (23) A person is "insolvent" who either has ceased to pay | 22 |
| his debts in
the ordinary course of business or cannot pay his | 23 |
| debts as they become due
or is insolvent within the meaning of | 24 |
| the federal bankruptcy law.
| 25 |
| (24) "Money" means a medium of exchange authorized or | 26 |
| adopted by a
domestic or foreign government and includes a | 27 |
| monetary unit of account
established by an intergovernmental | 28 |
| organization or by agreement between 2
or more nations.
| 29 |
| (25) A person has "notice" of a fact when
| 30 |
| (a) he has actual knowledge of it; or
| 31 |
| (b) he has received a notice or notification of it; or
| 32 |
| (c) from all the facts and circumstances known to him | 33 |
| at the time in
question he has reason to know that it | 34 |
| exists. A person "knows" or has
"knowledge" of a fact when | 35 |
| he has actual knowledge of it. "Discover" or
"learn" or a | 36 |
| word or phrase of similar import refers to knowledge rather
|
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| than to reason to know. The time and circumstances under | 2 |
| which a notice or
notification may cease to be effective | 3 |
| are not determined by this Act.
| 4 |
| (26) A person "notifies" or "gives" a notice or | 5 |
| notification to another
by taking such steps as may be | 6 |
| reasonably required to inform the other in
ordinary course | 7 |
| whether or not such other actually comes to know of it. A
| 8 |
| person "receives" a notice or notification when
| 9 |
| (a) it comes to his attention; or
| 10 |
| (b) it is duly delivered at the place of business | 11 |
| through which the
contract was made or at any other place | 12 |
| held out by him as the place for
receipt of such | 13 |
| communications.
| 14 |
| (27) Notice, knowledge or a notice or notification received | 15 |
| by an
organization is effective for a particular transaction | 16 |
| from the time when
it is brought to the attention of the | 17 |
| individual conducting that
transaction, and in any event from | 18 |
| the time when it would have been brought
to his attention if | 19 |
| the organization had exercised due diligence. An
organization | 20 |
| exercises due diligence if it maintains reasonable routines
for | 21 |
| communicating significant information to the person conducting | 22 |
| the
transaction and there is reasonable compliance with the | 23 |
| routines. Due
diligence does not require an individual acting | 24 |
| for the organization to
communicate information unless such | 25 |
| communication is part of his regular
duties or unless he has | 26 |
| reason to know of the transaction and that the
transaction | 27 |
| would be materially affected by the information.
| 28 |
| (28) "Organization" includes a corporation, government or | 29 |
| governmental
subdivision or agency, business trust, estate, | 30 |
| trust, partnership or
association, two or more persons having a | 31 |
| joint or common interest, or any
other legal or commercial | 32 |
| entity.
| 33 |
| (29) "Party", as distinct from "third party", means a | 34 |
| person who has
engaged in a transaction or made an agreement | 35 |
| within this Act.
| 36 |
| (30) "Person" includes an individual or an organization |
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| (see Section
1-102).
| 2 |
| (31) "Presumption" or "presumed" means that the trier of | 3 |
| fact must find
the existence of the fact presumed unless and | 4 |
| until evidence is introduced
which would support a finding of | 5 |
| its non-existence.
| 6 |
| (32) "Purchase" includes taking by sale, discount, | 7 |
| negotiation,
mortgage, pledge, lien, security interest, issue | 8 |
| or reissue, gift or any
other voluntary
transaction creating an | 9 |
| interest in property.
| 10 |
| (33) "Purchaser" means a person who takes by purchase.
| 11 |
| (34) "Remedy" means any remedial right to which an | 12 |
| aggrieved party is
entitled with or without resort to a | 13 |
| tribunal.
| 14 |
| (35) "Representative" includes an agent, an officer of a | 15 |
| corporation or
association, and a trustee, executor or | 16 |
| administrator of an estate, or any
other person empowered to | 17 |
| act for another.
| 18 |
| (36) "Rights" includes remedies.
| 19 |
| (37) "Security interest" means an interest in personal | 20 |
| property or
fixtures which secures payment or performance of an | 21 |
| obligation. The term also includes any interest
of a consignor | 22 |
| and a buyer of accounts, chattel paper, a
payment intangible, | 23 |
| or a promissory note in a transaction that is
subject to | 24 |
| Article 9. The
special property interest of a buyer of goods on | 25 |
| identification of those
goods to a contract for sale under | 26 |
| Section 2-401 is not a "security
interest", but a buyer may | 27 |
| also acquire a "security interest", by complying
with Article | 28 |
| 9.
Except as otherwise provided in Section 2-505, the right of | 29 |
| a seller or
lessor of goods under Article 2 or 2A to retain or | 30 |
| acquire possession of the
goods is not a "security interest", | 31 |
| but a seller or lessor may also acquire
a "security interest" | 32 |
| by complying with Article 9. The
retention or reservation of | 33 |
| title by a seller of goods notwithstanding shipment
or delivery | 34 |
| to the buyer (Section 2-401) is limited in effect to a | 35 |
| reservation
of a "security interest".
| 36 |
| Whether a transaction creates a lease or security interest |
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| is
determined by the facts of each case; however, a transaction | 2 |
| creates a
security interest if the consideration the lessee is | 3 |
| to pay the lessor for
the right to possession and use of the | 4 |
| goods is an obligation for the term
of the lease not subject to | 5 |
| termination by the lessee; and
| 6 |
| (a) the original term of the lease is equal to or | 7 |
| greater than the
remaining economic life of the goods;
| 8 |
| (b) the lessee is bound to renew the lease for the | 9 |
| remaining economic
life of the goods or is bound to become | 10 |
| the owner of the goods;
| 11 |
| (c) the lessee has an option to renew the lease for the | 12 |
| remaining
economic life of the goods for no additional | 13 |
| consideration or nominal
additional consideration upon | 14 |
| compliance with the lease agreement; or
| 15 |
| (d) the lessee has an option to become the owner of the | 16 |
| goods for no
additional consideration or nominal | 17 |
| additional consideration upon
compliance with the lease | 18 |
| agreement.
| 19 |
| A transaction does not create a security interest merely | 20 |
| because it provides that:
| 21 |
| (a) the present value of the consideration the lessee | 22 |
| is obligated to
pay the lessor for the right to possession | 23 |
| and use of the goods is
substantially equal to or is | 24 |
| greater than the fair market value of the
goods at the time | 25 |
| the lease is entered into;
| 26 |
| (b) the lessee assumes risk of loss of the goods, or | 27 |
| agrees to pay taxes,
insurance, filing, recording, or | 28 |
| registration fees, or service or
maintenance costs with | 29 |
| respect to the goods;
| 30 |
| (c) the lessee has an option to renew the lease or to | 31 |
| become the owner
of the goods;
| 32 |
| (d) the lessee has an option to renew the lease for a | 33 |
| fixed rent that is
equal to or greater than the reasonably | 34 |
| predictable fair market rent for
the use of the goods for | 35 |
| the term of the renewal at the time the option is
to be | 36 |
| performed; or
|
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| (e) the lessee has an option to become the owner of the | 2 |
| goods for a
fixed price that is equal to or greater than | 3 |
| the reasonably predictable
fair market value of the goods | 4 |
| at the time the option is to be performed.
| 5 |
| For purposes of this subsection (37):
| 6 |
| (x) Additional consideration is not nominal if (i) when | 7 |
| the option to
renew the lease is granted to the lessee the | 8 |
| rent is stated to be the fair
market rent for the use of | 9 |
| the goods for the term of the renewal determined
at the | 10 |
| time the option is to be performed, or (ii) when the option | 11 |
| to
become the owner of the goods is granted to the lessee | 12 |
| the price is stated
to be the fair market value of the | 13 |
| goods determined at the time the option
is to be performed. | 14 |
| Additional consideration is nominal if it is less than
the | 15 |
| lessee's reasonably predictable cost of performing under | 16 |
| the lease
agreement if the option is not exercised;
| 17 |
| (y) "Reasonably predictable" and "remaining economic | 18 |
| life of the goods"
are to be determined with reference to | 19 |
| the facts and circumstances at the
time the transaction is | 20 |
| entered into; and
| 21 |
| (z) "Present value" means the amount as of a date | 22 |
| certain of one or more
sums payable in the future, | 23 |
| discounted to the date certain. The discount
is determined | 24 |
| by the interest rate specified by the parties if the rate | 25 |
| is
not manifestly unreasonable at the time the transaction | 26 |
| is entered into;
otherwise, the discount is determined by a | 27 |
| commercially reasonable rate
that takes into account the | 28 |
| facts and circumstances as of each case at the
time the | 29 |
| transaction was entered into.
| 30 |
| (38) "Send" in connection with any writing or notice means | 31 |
| to deposit in
the mail or deliver for transmission by any other | 32 |
| usual means of
communication with postage or cost of | 33 |
| transmission provided for and
properly addressed and in the | 34 |
| case of an instrument to an address specified
thereon or | 35 |
| otherwise agreed, or if there be none to any address reasonable
| 36 |
| under the circumstances. The receipt of any writing or notice |
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| within the
time at which it would have arrived if properly sent | 2 |
| has the effect of a
proper sending.
| 3 |
| (39) "Signed" includes any symbol executed or adopted by a | 4 |
| party with
present intention to authenticate a writing.
| 5 |
| (40) "Surety" includes guarantor.
| 6 |
| (41) "Telegram" includes a message transmitted by radio, | 7 |
| teletype,
cable, any mechanical method of transmission, or the | 8 |
| like.
| 9 |
| (42) "Term" means that portion of an agreement which | 10 |
| relates to a
particular matter.
| 11 |
| (43) "Unauthorized" signature means one made without
| 12 |
| actual, implied, or apparent authority and includes a forgery.
| 13 |
| (44) "Value". Except as otherwise provided with respect to | 14 |
| negotiable
instruments and bank collections (Sections 3-303, | 15 |
| 4-210, and
4-211), a
person gives "value" for rights if he | 16 |
| acquires them:
| 17 |
| (a) in return for a binding commitment to extend credit | 18 |
| or for the
extension of immediately available credit | 19 |
| whether or not drawn upon and
whether or not a charge-back | 20 |
| is provided for in the event of difficulties
in collection; | 21 |
| or
| 22 |
| (b) as security for or in total or partial satisfaction | 23 |
| of a
pre-existing claim; or
| 24 |
| (c) by accepting delivery pursuant to a pre-existing | 25 |
| contract for
purchase; or
| 26 |
| (d) generally, in return for any consideration | 27 |
| sufficient to support a
simple contract.
| 28 |
| (45) "Warehouse receipt" means a receipt issued by a person | 29 |
| engaged in
the business of storing goods for hire.
| 30 |
| (46) "Written" or "writing" includes printing, typewriting | 31 |
| or any other
intentional reduction to tangible form.
| 32 |
| (Source: P.A. 91-893, eff. 7-1-01.)
| 33 |
| (810 ILCS 5/1-202) (from Ch. 26, par. 1-202)
| 34 |
| Sec. 1-202. Notice; knowledge.
Prima facie evidence by | 35 |
| third party documents.
|
|
|
|
SB1647 Engrossed |
- 21 - |
LRB094 04037 WGH 34054 b |
|
| 1 |
| (a) Subject to subsection (f), a person has "notice" of a | 2 |
| fact if the person: | 3 |
| (1) has actual knowledge of it; | 4 |
| (2) has received a notice or notification of it; or | 5 |
| (3) from all the facts and circumstances known to the | 6 |
| person at the time in question, has reason to know that it | 7 |
| exists. | 8 |
| (b) "Knowledge" means actual knowledge. "Knows" has a | 9 |
| corresponding meaning. | 10 |
| (c) "Discover", "learn", or words of similar import refer | 11 |
| to knowledge rather than to reason to know. | 12 |
| (d) A person "notifies" or "gives" a notice or notification | 13 |
| to another person by taking such steps as may be reasonably | 14 |
| required to inform the other person in ordinary course, whether | 15 |
| or not the other person actually comes to know of it. | 16 |
| (e) Subject to subsection (f), a person "receives" a notice | 17 |
| or notification when: | 18 |
| (1) it comes to that person's attention; or | 19 |
| (2) it is duly delivered in a form reasonable under the | 20 |
| circumstances at the place of business through which the | 21 |
| contract was made or at another location held out by that | 22 |
| person as the place for receipt of such communications. | 23 |
| (f) Notice, knowledge, or a notice or notification received | 24 |
| by an organization is effective for a particular transaction | 25 |
| from the time it is brought to the attention of the individual | 26 |
| conducting that transaction and, in any event, from the time it | 27 |
| would have been brought to the individual's attention if the | 28 |
| organization had exercised due diligence. An organization | 29 |
| exercises due diligence if it maintains reasonable routines for | 30 |
| communicating significant information to the person conducting | 31 |
| the transaction and there is reasonable compliance with the | 32 |
| routines. Due diligence does not require an individual acting | 33 |
| for the organization to communicate information unless the | 34 |
| communication is part of the individual's regular duties or the | 35 |
| individual has reason to know of the transaction and that the | 36 |
| transaction would be materially affected by the information.
|
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| A document in due form purporting to be a bill of lading, | 2 |
| policy or
certificate of insurance, official weigher's or | 3 |
| inspector's certificate,
consular invoice, or any other | 4 |
| document authorized or required by the
contract to be issued by | 5 |
| a third party shall be prima facie evidence of its
own | 6 |
| authenticity and genuineness and of the facts stated in the | 7 |
| document by
the third party.
| 8 |
| (Source: Laws 1961, p. 2101.)
| 9 |
| (810 ILCS 5/1-203) (from Ch. 26, par. 1-203)
| 10 |
| Sec. 1-203. Lease distinguished from security interest.
| 11 |
| Obligation of good faith.
| 12 |
| (a) Whether a transaction in the form of a lease creates a | 13 |
| lease or security interest is determined by the facts of each | 14 |
| case. | 15 |
| (b) A transaction in the form of a lease creates a security | 16 |
| interest if the consideration that the lessee is to pay the | 17 |
| lessor for the right to possession and use of the goods is an | 18 |
| obligation for the term of the lease and is not subject to | 19 |
| termination by the lessee, and: | 20 |
| (1) the original term of the lease is equal to or | 21 |
| greater than the remaining economic life of the goods; | 22 |
| (2) the lessee is bound to renew the lease for the | 23 |
| remaining economic life of the goods or is bound to become | 24 |
| the owner of the goods; | 25 |
| (3) the lessee has an option to renew the lease for the | 26 |
| remaining economic life of the goods for no additional | 27 |
| consideration or for nominal additional consideration upon | 28 |
| compliance with the lease agreement; or | 29 |
| (4) the lessee has an option to become the owner of the | 30 |
| goods for no additional consideration or for nominal | 31 |
| additional consideration upon compliance with the lease | 32 |
| agreement. | 33 |
| (c) A transaction in the form of a lease does not create a | 34 |
| security interest merely because: | 35 |
| (1) the present value of the consideration the lessee |
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| is obligated to pay the lessor for the right to possession | 2 |
| and use of the goods is substantially equal to or is | 3 |
| greater than the fair market value of the goods at the time | 4 |
| the lease is entered into; | 5 |
| (2) the lessee assumes risk of loss of the goods; | 6 |
| (3) the lessee agrees to pay, with respect to the | 7 |
| goods, taxes, insurance, filing, recording, or | 8 |
| registration fees, or service or maintenance costs; | 9 |
| (4) the lessee has an option to renew the lease or to | 10 |
| become the owner of the goods; | 11 |
| (5) the lessee has an option to renew the lease for a | 12 |
| fixed rent that is equal to or greater than the reasonably | 13 |
| predictable fair market rent for the use of the goods for | 14 |
| the term of the renewal at the time the option is to be | 15 |
| performed; or | 16 |
| (6) the lessee has an option to become the owner of the | 17 |
| goods for a fixed price that is equal to or greater than | 18 |
| the reasonably predictable fair market value of the goods | 19 |
| at the time the option is to be performed. | 20 |
| (d) Additional consideration is nominal if it is less than | 21 |
| the lessee's reasonably predictable cost of performing under | 22 |
| the lease agreement if the option is not exercised. Additional | 23 |
| consideration is not nominal if: | 24 |
| (1) when the option to renew the lease is granted to | 25 |
| the lessee, the rent is stated to be the fair market rent | 26 |
| for the use of the goods for the term of the renewal | 27 |
| determined at the time the option is to be performed; or | 28 |
| (2) when the option to become the owner of the goods is | 29 |
| granted to the lessee, the price is stated to be the fair | 30 |
| market value of the goods determined at the time the option | 31 |
| is to be performed. | 32 |
| (e) The "remaining economic life of the goods" and | 33 |
| "reasonably predictable" fair market rent, fair market value, | 34 |
| or cost of performing under the lease agreement must be | 35 |
| determined with reference to the facts and circumstances at the | 36 |
| time the transaction is entered into.
|
|
|
|
SB1647 Engrossed |
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LRB094 04037 WGH 34054 b |
|
| 1 |
| Every contract or duty within this Act imposes an | 2 |
| obligation of good
faith in its performance or enforcement.
| 3 |
| (Source: Laws 1961, p. 2101.)
| 4 |
| (810 ILCS 5/1-204) (from Ch. 26, par. 1-204)
| 5 |
| Sec. 1-204. Value.
Time; reasonable time; "seasonably".
| 6 |
| Except as otherwise provided in Articles 3, 4, 5, and 6, a | 7 |
| person gives value for rights if the person acquires them:
| 8 |
| (1) in return for a binding commitment to extend credit | 9 |
| or for the extension of immediately available credit, | 10 |
| whether or not drawn upon and whether or not a charge-back | 11 |
| is provided for in the event of difficulties in collection; | 12 |
| (2) as security for, or in total or partial | 13 |
| satisfaction of, a preexisting claim; | 14 |
| (3) by accepting delivery under a preexisting contract | 15 |
| for purchase; or | 16 |
| (4) in return for any consideration sufficient to | 17 |
| support a simple contract.
| 18 |
| (1) Whenever this Act requires any action to be taken | 19 |
| within a
reasonable time, any time which is not manifestly | 20 |
| unreasonable may be fixed
by agreement.
| 21 |
| (2) What is a reasonable time for taking any action depends | 22 |
| on the
nature, purpose and circumstances of such action.
| 23 |
| (3) An action is taken "seasonably" when it is taken at or | 24 |
| within the
time agreed or if no time is agreed at or within | 25 |
| reasonable time.
| 26 |
| (Source: Laws 1961, p. 2101.)
| 27 |
| (810 ILCS 5/1-205) (from Ch. 26, par. 1-205)
| 28 |
| Sec. 1-205. Reasonable time; seasonableness.
Course of | 29 |
| dealing and usage of trade.
| 30 |
| (a) Whether a time for taking an action required by the | 31 |
| Uniform Commercial Code is reasonable depends on the nature, | 32 |
| purpose, and circumstances of the action. | 33 |
| (b) An action is taken seasonably if it is taken at or | 34 |
| within the time agreed or, if no time is agreed, at or within a |
|
|
|
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|
| 1 |
| reasonable time.
| 2 |
| (1) A course of dealing is a sequence of previous conduct | 3 |
| between the
parties to a particular transaction which is fairly | 4 |
| to be regarded as
establishing a common basis of understanding | 5 |
| for interpreting their
expressions and other conduct.
| 6 |
| (2) A usage of trade is any practice or method of dealing | 7 |
| having such
regularity of observance in a place, vocation or | 8 |
| trade as to justify an
expectation that it will be observed | 9 |
| with respect to the transaction in
question. The existence and | 10 |
| scope of such a usage are to be proved as
facts. If it is | 11 |
| established that such a usage is embodied in a written
trade | 12 |
| code or similar writing the interpretation of the writing is | 13 |
| for the
court.
| 14 |
| (3) A course of dealing between parties and any usage of | 15 |
| trade in the
vocation or trade in which they are engaged or of | 16 |
| which they are or should
be aware give particular meaning to | 17 |
| and supplement or qualify terms of an
agreement.
| 18 |
| (4) The express terms of an agreement and an applicable | 19 |
| course of
dealing or usage of trade shall be construed wherever | 20 |
| reasonable as
consistent with each other; but when such | 21 |
| construction is unreasonable
express terms control both course | 22 |
| of dealing and usage of trade and course
of dealing controls | 23 |
| usage of trade.
| 24 |
| (5) An applicable usage of trade in the place where any | 25 |
| part of
performance is to occur shall be used in interpreting | 26 |
| the agreement as to
that part of the performance.
| 27 |
| (6) Evidence of a relevant usage of trade offered by one | 28 |
| party is not
admissible unless and until he has given the other | 29 |
| party such notice as the
court finds sufficient to prevent | 30 |
| unfair surprise to the latter.
| 31 |
| (Source: Laws 1961, p. 2101.)
| 32 |
| (810 ILCS 5/1-206) (from Ch. 26, par. 1-206)
| 33 |
| Sec. 1-206. Presumptions.
Statute of frauds for kinds of | 34 |
| personal property not otherwise covered.
Whenever the Uniform | 35 |
| Commercial Code creates a "presumption" with respect to a fact, |
|
|
|
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| 1 |
| or provides that a fact is "presumed", the trier of fact must | 2 |
| find the existence of the fact unless and until evidence is | 3 |
| introduced that supports a finding of its nonexistence.
| 4 |
| (1) Except in the cases described in subsection (2) of this | 5 |
| Section a
contract for the sale of personal property is not | 6 |
| enforceable by way of
action or defense beyond $5,000 in amount | 7 |
| or value of remedy unless there
is some writing which indicates | 8 |
| that a contract for sale has been made
between the parties at a | 9 |
| defined or stated price, reasonably identifies the
subject | 10 |
| matter, and is signed by the party against whom enforcement is
| 11 |
| sought or by his authorized agent.
| 12 |
| (2) Subsection (1) of this Section does not apply to | 13 |
| contracts for the
sale of goods (Section 2-201) nor of | 14 |
| securities (Section 8-113)
nor to
security agreements (Section | 15 |
| 9-203).
| 16 |
| (Source: P.A. 89-364, eff. 1-1-96 .)
| 17 |
| (810 ILCS 5/1-207) (from Ch. 26, par. 1-207)
| 18 |
| Sec. 1-207. (Blank).
Performance or acceptance under | 19 |
| reservation of rights.
| 20 |
| (1) A party who, with explicit reservation of rights, | 21 |
| performs
or promises performance or assents to performance in a | 22 |
| manner
demanded or offered by the other party does not thereby | 23 |
| prejudice
the rights reserved. Such words as "without | 24 |
| prejudice", "under
protest" or the like are sufficient.
| 25 |
| (2) Subsection (1) does not apply to an accord and | 26 |
| satisfaction.
| 27 |
| (Source: P.A. 87-582.)
| 28 |
| (810 ILCS 5/1-208) (from Ch. 26, par. 1-208)
| 29 |
| Sec. 1-208. (Blank).
Option to Accelerate at Will.
| 30 |
| A term providing that one party or his successor in | 31 |
| interest may
accelerate payment or performance or require | 32 |
| collateral or additional
collateral "at will" or "when he deems | 33 |
| himself insecure" or in words of
similar import shall be | 34 |
| construed to mean that he shall have power to do so
only if he |
|
|
|
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|
| 1 |
| in good faith believes that the prospect of payment or
| 2 |
| performance is impaired. The burden of establishing lack of | 3 |
| good faith is
on the party against whom the power has been | 4 |
| exercised.
| 5 |
| (Source: Laws 1961, 1st SS., p. 7.)
| 6 |
| (810 ILCS 5/1-209) (from Ch. 26, par. 1-209)
| 7 |
| Sec. 1-209. (Blank).
Subordinated Obligations.
| 8 |
| An obligation may be issued as subordinated to payment of | 9 |
| another
obligation of the person obligated, or a creditor may | 10 |
| subordinate his right
to payment of an obligation by agreement | 11 |
| with either the person obligated
or another creditor of the | 12 |
| person obligated. Such a subordination does not
create a | 13 |
| security interest as against either the common debtor or a
| 14 |
| subordinated creditor. This Section shall be construed as | 15 |
| declaring the law
as it existed prior to the enactment of this | 16 |
| Section and not as modifying
it.
| 17 |
| (Source: P.A. 77-2810.)
| 18 |
| (810 ILCS 5/Art. 1 Pt. 3 heading new)
| 19 |
| PART 3 | 20 |
| TERRITORIAL APPLICABILITY AND GENERAL RULES | 21 |
| (810 ILCS 5/1-301 new)
| 22 |
| Sec. 1-301. Territorial applicability; parties' power to | 23 |
| choose applicable law. | 24 |
| (a) Except as otherwise provided in this Section, when a | 25 |
| transaction bears a reasonable relation to this State and also | 26 |
| to another state or nation the parties may agree that the law | 27 |
| either of this State or of such other state or nation shall | 28 |
| govern their rights and duties. | 29 |
| (b) In the absence of an agreement effective under | 30 |
| subsection (a), and except as provided in subsection (c), the | 31 |
| Uniform Commercial Code applies to transactions bearing an | 32 |
| appropriate relation to this State. | 33 |
| (c) If one of the following provisions of the Uniform |
|
|
|
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| 1 |
| Commercial Code specifies the applicable law, that provision | 2 |
| governs and a contrary agreement is effective only to the | 3 |
| extent permitted by the law so specified: | 4 |
| (1) Section 2-402; | 5 |
| (2) Sections 2A-105 and 2A-106; | 6 |
| (3) Section 4-102; | 7 |
| (4) Section 4A-507; | 8 |
| (5) Section 5-116; | 9 |
| (6) Section 8-110; | 10 |
| (7) Sections 9-301 through 9-307. | 11 |
| (810 ILCS 5/1-302 new)
| 12 |
| Sec. 1-302. Variation by agreement. | 13 |
| (a) Except as otherwise provided in subsection (b) or | 14 |
| elsewhere in the Uniform Commercial Code, the effect of | 15 |
| provisions of the Uniform Commercial Code may be varied by | 16 |
| agreement. | 17 |
| (b) The obligations of good faith, diligence, | 18 |
| reasonableness, and care prescribed by the Uniform Commercial | 19 |
| Code may not be disclaimed by agreement. The parties, by | 20 |
| agreement, may determine the standards by which the performance | 21 |
| of those obligations is to be measured if those standards are | 22 |
| not manifestly unreasonable. Whenever the Uniform Commercial | 23 |
| Code requires an action to be taken within a reasonable time, a | 24 |
| time that is not manifestly unreasonable may be fixed by | 25 |
| agreement. | 26 |
| (c) The presence in certain provisions of the Uniform | 27 |
| Commercial Code of the phrase "unless otherwise agreed", or | 28 |
| words of similar import, does not imply that the effect of | 29 |
| other provisions may not be varied by agreement under this | 30 |
| Section. | 31 |
| (810 ILCS 5/1-303 new)
| 32 |
| Sec. 1-303. Course of performance, course of dealing, and | 33 |
| usage of trade. | 34 |
| (a) A "course of performance" is a sequence of conduct |
|
|
|
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| 1 |
| between the parties to a particular transaction that exists if: | 2 |
| (1) the agreement of the parties with respect to the | 3 |
| transaction involves repeated occasions for performance by | 4 |
| a party; and | 5 |
| (2) the other party, with knowledge of the nature of | 6 |
| the performance and opportunity for objection to it, | 7 |
| accepts the performance or acquiesces in it without | 8 |
| objection. | 9 |
| (b) A "course of dealing" is a sequence of conduct | 10 |
| concerning previous transactions between the parties to a | 11 |
| particular transaction that is fairly to be regarded as | 12 |
| establishing a common basis of understanding for interpreting | 13 |
| their expressions and other conduct. | 14 |
| (c) A "usage of trade" is any practice or method of dealing | 15 |
| having such regularity of observance in a place, vocation, or | 16 |
| trade as to justify an expectation that it will be observed | 17 |
| with respect to the transaction in question. The existence and | 18 |
| scope of such a usage must be proved as facts. If it is | 19 |
| established that such a usage is embodied in a trade code or | 20 |
| similar record, the interpretation of the record is a question | 21 |
| of law. | 22 |
| (d) A course of performance or course of dealing between | 23 |
| the parties or usage of trade in the vocation or trade in which | 24 |
| they are engaged or of which they are or should be aware is | 25 |
| relevant in ascertaining the meaning of the parties' agreement, | 26 |
| may give particular meaning to specific terms of the agreement, | 27 |
| and may supplement or qualify the terms of the agreement. A | 28 |
| usage of trade applicable in the place in which part of the | 29 |
| performance under the agreement is to occur may be so utilized | 30 |
| as to that part of the performance. | 31 |
| (e) Except as otherwise provided in subsection (f), the | 32 |
| express terms of an agreement and any applicable course of | 33 |
| performance, course of dealing, or usage of trade must be | 34 |
| construed whenever reasonable as consistent with each other. If | 35 |
| such a construction is unreasonable: | 36 |
| (1) express terms prevail over course of performance, |
|
|
|
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|
| 1 |
| course of dealing, and usage of trade; | 2 |
| (2) course of performance prevails over course of | 3 |
| dealing and usage of trade; and | 4 |
| (3) course of dealing prevails over usage of trade. | 5 |
| (f) Subject to Section 2-209, a course of performance is | 6 |
| relevant to show a waiver or modification of any term | 7 |
| inconsistent with the course of performance. | 8 |
| (g) Evidence of a relevant usage of trade offered by one | 9 |
| party is not admissible unless that party has given the other | 10 |
| party notice that the court finds sufficient to prevent unfair | 11 |
| surprise to the other party. | 12 |
| (810 ILCS 5/1-304 new)
| 13 |
| Sec. 1-304. Obligation of good faith. Every contract or | 14 |
| duty within the Uniform Commercial Code imposes an obligation | 15 |
| of good faith in its performance and enforcement. | 16 |
| (810 ILCS 5/1-305 new)
| 17 |
| Sec. 1-305. Remedies to be liberally administered. | 18 |
| (a) The remedies provided by the Uniform Commercial Code | 19 |
| must be liberally administered to the end that the aggrieved | 20 |
| party may be put in as good a position as if the other party had | 21 |
| fully performed but neither consequential or special damages | 22 |
| nor penal damages may be had except as specifically provided in | 23 |
| the Uniform Commercial Code or by other rule of law. | 24 |
| (b) Any right or obligation declared by the Uniform | 25 |
| Commercial Code is enforceable by action unless the provision | 26 |
| declaring it specifies a different and limited effect. | 27 |
| (810 ILCS 5/1-306 new)
| 28 |
| Sec. 1-306. Waiver or renunciation of claim or right after | 29 |
| breach. A claim or right arising out of an alleged breach may | 30 |
| be discharged in whole or in part without consideration by | 31 |
| agreement of the aggrieved party in an authenticated record. | 32 |
| (810 ILCS 5/1-307 new)
|
|
|
|
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|
| 1 |
| Sec. 1-307. Prima facie evidence by third-party documents. | 2 |
| A document in due form purporting to be a bill of lading, | 3 |
| policy or certificate of insurance, official weigher's or | 4 |
| inspector's certificate, consular invoice, or any other | 5 |
| document authorized or required by the contract to be issued by | 6 |
| a third party is prima facie evidence of its own authenticity | 7 |
| and genuineness and of the facts stated in the document by the | 8 |
| third party. | 9 |
| (810 ILCS 5/1-308 new)
| 10 |
| Sec. 1-308. Performance or acceptance under reservation of | 11 |
| rights. | 12 |
| (a) A party that with explicit reservation of rights | 13 |
| performs or promises performance or assents to performance in a | 14 |
| manner demanded or offered by the other party does not thereby | 15 |
| prejudice the rights reserved. Such words as "without | 16 |
| prejudice", "under protest", or the like are sufficient. | 17 |
| (b) Subsection (a) does not apply to an accord and | 18 |
| satisfaction.
| 19 |
| (810 ILCS 5/1-309 new)
| 20 |
| Sec. 1-309. Option to accelerate at will. A term providing | 21 |
| that one party or that party's successor in interest may | 22 |
| accelerate payment or performance or require collateral or | 23 |
| additional collateral "at will" or when the party "deems itself | 24 |
| insecure", or words of similar import, means that the party has | 25 |
| power to do so only if that party in good faith believes that | 26 |
| the prospect of payment or performance is impaired. The burden | 27 |
| of establishing lack of good faith is on the party against | 28 |
| which the power has been exercised. | 29 |
| (810 ILCS 5/1-310 new)
| 30 |
| Sec. 1-310. Subordinated obligations. An obligation may be | 31 |
| issued as subordinated to performance of another obligation of | 32 |
| the person obligated, or a creditor may subordinate its right | 33 |
| to performance of an obligation by agreement with either the |
|
|
|
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|
| 1 |
| person obligated or another creditor of the person obligated. | 2 |
| Subordination does not create a security interest as against | 3 |
| either the common debtor or a subordinated creditor.
| 4 |
| Section 10. The Uniform Commercial Code is amended by | 5 |
| changing Sections 2-202, 2-208, 2A-207, 2A-501, 2A-518, | 6 |
| 2A-519, 2A-527, 2A-528, 3-103, 4A-105, 4A-106, 4A-204, and | 7 |
| 5-103 as follows:
| 8 |
| (810 ILCS 5/2-202) (from Ch. 26, par. 2-202)
| 9 |
| Sec. 2-202. Final written expression: parol or extrinsic | 10 |
| evidence.
| 11 |
| Terms with respect to which the confirmatory memoranda of | 12 |
| the parties
agree or which are otherwise set forth in a writing | 13 |
| intended by the parties
as a final expression of their | 14 |
| agreement with respect to such terms as are
included therein | 15 |
| may not be contradicted by evidence of any prior agreement
or | 16 |
| of a contemporaneous oral agreement but may be explained or | 17 |
| supplemented
| 18 |
| (a) by course of performance, course of dealing , or | 19 |
| usage of trade (Section 1-303
1--205 ) or by
course of | 20 |
| performance (Section 2--208) ; and
| 21 |
| (b) by evidence of consistent additional terms unless | 22 |
| the court finds
the writing to have been intended also as a | 23 |
| complete and exclusive
statement of the terms of the | 24 |
| agreement.
| 25 |
| (Source: Laws 1961, p. 2101.)
| 26 |
| (810 ILCS 5/2-208) (from Ch. 26, par. 2-208)
| 27 |
| Sec. 2-208. (Blank).
Course of performance or practical | 28 |
| construction.
| 29 |
| (1) Where the contract for sale involves repeated occasions | 30 |
| for
performance by either party with knowledge of the nature of | 31 |
| the performance
and opportunity for objection to it by the | 32 |
| other, any course of performance
accepted or acquiesced in | 33 |
| without objection shall be relevant to determine
the meaning of |
|
|
|
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|
| 1 |
| the agreement.
| 2 |
| (2) The express terms of the agreement and any such course | 3 |
| of
performance, as well as any course of dealing and usage of | 4 |
| trade, shall be
construed whenever reasonable as consistent | 5 |
| with each other; but when such
construction is unreasonable, | 6 |
| express terms shall control course of
performance and course of | 7 |
| performance shall control both course of dealing
and usage of | 8 |
| trade (Section 1--205).
| 9 |
| (3) Subject to the provisions of the next section on | 10 |
| modification and
waiver, such course of performance shall be | 11 |
| relevant to show a waiver or
modification of any term | 12 |
| inconsistent with such course of performance.
| 13 |
| (Source: Laws 1961, p. 2101.)
| 14 |
| (810 ILCS 5/2A-207) (from Ch. 26, par. 2A-207)
| 15 |
| Sec. 2A-207. (Blank).
Course of performance or practical
| 16 |
| construction.
| 17 |
| (1) If a lease contract involves repeated occasions for
| 18 |
| performance by either party with knowledge of the nature of the
| 19 |
| performance and opportunity for objection to it by the other,
| 20 |
| any course of performance accepted or acquiesced in without
| 21 |
| objection is relevant to determine the meaning of the lease
| 22 |
| agreement.
| 23 |
| (2) The express terms of a lease agreement and any
course | 24 |
| of performance, as well as any course of dealing and
usage of | 25 |
| trade, must be construed whenever reasonable as
consistent with | 26 |
| each other; but if that construction is
unreasonable, express | 27 |
| terms control course of performance,
course of performance | 28 |
| controls both course of dealing and usage
of trade, and course | 29 |
| of dealing controls usage of trade.
| 30 |
| (3) Subject to the provisions of Section 2A-208 on
| 31 |
| modification and waiver, course of performance is relevant to
| 32 |
| show a waiver or modification of any term inconsistent with the
| 33 |
| course of performance.
| 34 |
| (Source: P.A. 87-493.)
|
|
|
|
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|
| 1 |
| (810 ILCS 5/2A-501) (from Ch. 26, par. 2A-501)
| 2 |
| Sec. 2A-501. Default; procedure.
| 3 |
| (1) Whether the lessor or the lessee is in default under a
| 4 |
| lease contract is determined by the lease agreement and this
| 5 |
| Article.
| 6 |
| (2) If the lessor or the lessee is in default under the
| 7 |
| lease contract, the party seeking enforcement has rights and
| 8 |
| remedies as provided in this Article and, except as limited by
| 9 |
| this Article, as provided in the lease agreement.
| 10 |
| (3) If the lessor or the lessee is in default under the
| 11 |
| lease contract, the party seeking enforcement may reduce the
| 12 |
| party's claim to judgment, or otherwise enforce the lease
| 13 |
| contract by self-help or any available judicial procedure or
| 14 |
| nonjudicial procedure, including administrative proceeding,
| 15 |
| arbitration, or the like, in accordance with this Article.
| 16 |
| (4) Except as otherwise provided in Section 1-305(a)
| 17 |
| 1-106(1) or this Article or
the lease agreement, the rights and | 18 |
| remedies referred to in subsections (2)
and (3) are cumulative.
| 19 |
| (5) If the lease agreement covers both real property and
| 20 |
| goods, the party seeking enforcement may proceed under this
| 21 |
| Part as to the goods, or under other applicable law as to both
| 22 |
| the real property and the goods in accordance with that party's
| 23 |
| rights and remedies in respect of the real property, in which
| 24 |
| case this Part does not apply.
| 25 |
| (Source: P.A. 87-493.)
| 26 |
| (810 ILCS 5/2A-518) (from Ch. 26, par. 2A-518)
| 27 |
| Sec. 2A-518. Cover; substitute goods.
| 28 |
| (1) After a default by a lessor under the lease contract
of | 29 |
| the type described in Section 2A-508(1), or, if agreed, after | 30 |
| other
default by the lessor, the lessee may cover by making any | 31 |
| purchase or lease
of or contract to purchase or lease goods in | 32 |
| substitution for those due
from the lessor.
| 33 |
| (2) Except as otherwise provided with respect to damages | 34 |
| liquidated in
the lease agreement (Section 2A-504) or otherwise | 35 |
| determined pursuant to
agreement of the parties (Sections 1-302
|
|
|
|
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|
| 1 |
| 1-102(3) and 2A-503), if a lessee's
cover is by a lease | 2 |
| agreement substantially similar to the original lease
| 3 |
| agreement and the new lease agreement is made in good faith and | 4 |
| in a
commercially reasonable manner, the lessee may recover
| 5 |
| from the lessor as damages (i) the present value, as of the | 6 |
| date
of the commencement of the term of the new lease | 7 |
| agreement, of the rent under
the new lease agreement applicable | 8 |
| to that period of the new lease
term which is comparable to the | 9 |
| then remaining term of the original lease
agreement minus the | 10 |
| present value as of the same date of the total rent for the
| 11 |
| then remaining lease term of the original lease agreement, and | 12 |
| (ii) any
incidental or consequential damages, less expenses | 13 |
| saved in
consequence of the lessor's default.
| 14 |
| (3) If a lessee's cover is by lease agreement that for any | 15 |
| reason does
not qualify for treatment under subsection (2), or | 16 |
| is by purchase or
otherwise, the lessee may recover from the | 17 |
| lessor as if the lessee had
elected not to cover and Section | 18 |
| 2A-519 governs.
| 19 |
| (Source: P.A. 87-493.)
| 20 |
| (810 ILCS 5/2A-519) (from Ch. 26, par. 2A-519)
| 21 |
| Sec. 2A-519. Lessee's damages for nondelivery, | 22 |
| repudiation, default, and
breach of warranty in regard to | 23 |
| accepted goods.
| 24 |
| (1) Except as otherwise provided with respect to damages | 25 |
| liquidated in the
lease agreement (Section 2A-504) or otherwise | 26 |
| determined pursuant to
agreement of the parties (Sections 1-302
| 27 |
| 1-102(3) and 2A-503), if a lessee elects
not to cover or a | 28 |
| lessee elects to cover and the cover is by lease
agreement that | 29 |
| for any reason does not qualify for treatment under Section
| 30 |
| 2A-518(2), or is by purchase or otherwise, the measure of | 31 |
| damages for
nondelivery or repudiation by the lessor or for | 32 |
| rejection or revocation of
acceptance by the lessee is the | 33 |
| present value, as of the date of the
default, of the then | 34 |
| market rent minus the present value as of the same
date of the | 35 |
| original rent, computed for the remaining lease term of the
|
|
|
|
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|
| 1 |
| original lease agreement, together with incidental and | 2 |
| consequential
damages, less expenses saved in consequence of | 3 |
| the lessor's default.
| 4 |
| (2) Market rent is to be determined as of the place for
| 5 |
| tender or, in cases of rejection after arrival or revocation of
| 6 |
| acceptance, as of the place of arrival.
| 7 |
| (3) Except as otherwise agreed, if the lessee has accepted | 8 |
| goods and
given notification (Section 2A-516(3)), the measure | 9 |
| of damages for
nonconforming tender or delivery or other | 10 |
| default by a lessor is the loss
resulting in the ordinary | 11 |
| course of events from the lessor's
default as determined in any | 12 |
| manner that is reasonable together
with incidental and | 13 |
| consequential damages, less expenses saved
in consequence of | 14 |
| the lessor's default.
| 15 |
| (4) Except as otherwise agreed, the measure of damages for | 16 |
| breach of
warranty is the present value at the time and place | 17 |
| of acceptance of the
difference between the value of the use of | 18 |
| the goods accepted and the value
if they had been as warranted | 19 |
| for the lease term, unless special
circumstances show proximate | 20 |
| damages of a different amount, together with
incidental and | 21 |
| consequential damages, less expenses saved in consequence of
| 22 |
| the lessor's default or breach of warranty.
| 23 |
| (Source: P.A. 87-493.)
| 24 |
| (810 ILCS 5/2A-527) (from Ch. 26, par. 2A-527)
| 25 |
| Sec. 2A-527. Lessor's rights to dispose of goods.
| 26 |
| (1) After a default by a lessee under the lease contract
of | 27 |
| the type described in Section 2A-523(1) or 2A-523(3)(a) or | 28 |
| after the
lessor refuses to deliver or takes possession of | 29 |
| goods (Section 2A-525 or
2A-526), or, if agreed, after other | 30 |
| default by a lessee, the lessor may
dispose of the goods | 31 |
| concerned or the undelivered balance thereof by lease,
sale, or | 32 |
| otherwise.
| 33 |
| (2) Except as otherwise provided with respect to damages | 34 |
| liquidated in
the lease agreement (Section 2A-504) or otherwise | 35 |
| determined pursuant to
agreement of the parties (Sections 1-302
|
|
|
|
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| 1 |
| 1-102(3) and 2A-503), if the disposition
is by lease agreement | 2 |
| substantially similar to the original lease agreement
and the | 3 |
| new lease agreement is made in good faith and in a commercially
| 4 |
| reasonable manner, the lessor may recover from the lessee as | 5 |
| damages (i)
accrued and unpaid rent as of the date of the | 6 |
| commencement of the term of
the new lease agreement, (ii) the | 7 |
| present value, as of the same date, of
the total rent for the | 8 |
| then remaining lease term of the original lease
agreement minus | 9 |
| the present value, as of the same date, of the rent under
the | 10 |
| new lease agreement applicable to that period of the new lease | 11 |
| term
which is comparable to the then remaining term of the | 12 |
| original lease
agreement, and (iii) any incidental damages | 13 |
| allowed under Section 2A-530,
less expenses saved in | 14 |
| consequence of the lessee's default.
| 15 |
| (3) If the lessor's disposition is by lease agreement that | 16 |
| for
any reason does not qualify for treatment under subsection | 17 |
| (2),
or is by sale or otherwise, the lessor may recover from | 18 |
| the
lessee as if the lessor had elected not to dispose of the | 19 |
| goods
and Section 2A-528 governs.
| 20 |
| (4) A subsequent buyer or lessee who buys or leases
from | 21 |
| the lessor in good faith for value as a result of a
disposition | 22 |
| under this Section takes the goods free of the
original lease | 23 |
| contract and any rights of the original lessee even
though the | 24 |
| lessor fails to comply with one or more of the
requirements of | 25 |
| this Article.
| 26 |
| (5) The lessor is not accountable to the lessee for any
| 27 |
| profit made on any disposition. A lessee who has rightfully
| 28 |
| rejected or justifiably revoked acceptance shall account to the
| 29 |
| lessor for any excess over the amount of the lessee's security
| 30 |
| interest (Section 2A-508(5)).
| 31 |
| (Source: P.A. 87-493.)
| 32 |
| (810 ILCS 5/2A-528) (from Ch. 26, par. 2A-528)
| 33 |
| Sec. 2A-528. Lessor's damages for nonacceptance, failure | 34 |
| to pay,
repudiation, or other default.
| 35 |
| (1) Except as otherwise provided with respect to damages |
|
|
|
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| 1 |
| liquidated in
the lease agreement (Section 2A-504) or otherwise | 2 |
| determined pursuant to
agreement of the parties (Sections 1-302
| 3 |
| 1-102(3) and 2A-503), if a lessor elects
to retain the goods or | 4 |
| a lessor elects to dispose of the goods
and the disposition is | 5 |
| by lease agreement that for any reason does
not qualify for | 6 |
| treatment under Section 2A-527(2), or is by sale
or otherwise, | 7 |
| the lessor may recover from the lessee as damages
for a default | 8 |
| of the type described in Section 2A-523(1) or 2A-523(3)(a)
or, | 9 |
| if agreed, for other default of the lessee, (i) accrued and
| 10 |
| unpaid rent as of the date of default if the lessee has never | 11 |
| taken
possession of the goods, or, if the lessee has taken | 12 |
| possession of the
goods, as of the date the lessor repossesses | 13 |
| the goods or an earlier date
on which the lessee makes a tender | 14 |
| of the goods to the lessor, (ii) the
present value as of the | 15 |
| date determined under clause (i) of the total rent
for the then | 16 |
| remaining lease term of the original lease agreement minus the
| 17 |
| present value as of the same date of the market rent at the | 18 |
| place where the
goods are located computed for the same lease | 19 |
| term, and (iii) any
incidental damages allowed under Section | 20 |
| 2A-530, less expenses saved in
consequence of the lessee's | 21 |
| default.
| 22 |
| (2) If the measure of damages provided in subsection (1) is | 23 |
| inadequate
to put a lessor in as good a position as performance | 24 |
| would have, the
measure of damages is the present value of the | 25 |
| profit, including reasonable
overhead, the lessor would have | 26 |
| made from full performance by the lessee,
together with any | 27 |
| incidental damages allowed under Section 2A-530, due
allowance | 28 |
| for costs reasonably incurred and due credit for payments or
| 29 |
| proceeds of disposition.
| 30 |
| (Source: P.A. 87-493.)
| 31 |
| (810 ILCS 5/3-103) (from Ch. 26, par. 3-103)
| 32 |
| Sec. 3-103. Definitions.
| 33 |
| (a) In this Article:
| 34 |
| (1) "Acceptor" means a drawee that has accepted a | 35 |
| draft.
|
|
|
|
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| 1 |
| (2) "Drawee" means a person ordered in a draft to make | 2 |
| payment.
| 3 |
| (3) "Drawer" means a person who signs or is identified
| 4 |
| in a draft as a person ordering payment.
| 5 |
| (4)
"Good faith" means honesty in fact and the | 6 |
| observance of
reasonable commercial standards of fair | 7 |
| dealing.
| 8 |
| (5) "Maker" means a person who signs or is identified
| 9 |
| in a note as a person undertaking to pay.
| 10 |
| (6) "Order" means a written instruction to pay money | 11 |
| signed by the
person giving the instruction. The | 12 |
| instruction may be addressed to any
person, including the | 13 |
| person giving the instruction, or to one or more
persons | 14 |
| jointly or in the alternative but not in succession. An
| 15 |
| authorization to pay is not an order unless the person | 16 |
| authorized to pay is
also instructed to pay.
| 17 |
| (7) "Ordinary care" in the case of a person engaged in | 18 |
| business means
observance of reasonable commercial | 19 |
| standards, prevailing in the area in
which the person is | 20 |
| located with respect to the business in which the
person is | 21 |
| engaged. In the case of a bank that takes an instrument for
| 22 |
| processing for collection or payment by automated means, | 23 |
| reasonable
commercial standards do not require the bank to | 24 |
| examine the instrument if
the failure to examine does not | 25 |
| violate the bank's prescribed procedures
and the bank's | 26 |
| procedures do not vary unreasonably from general banking
| 27 |
| usage not disapproved by this Article or Article 4.
| 28 |
| (8) "Party" means a party to an instrument.
| 29 |
| (9) "Promise" means a written undertaking to pay money | 30 |
| signed by the
person undertaking to pay. An acknowledgment | 31 |
| of an obligation by the
obligor is not a promise unless the | 32 |
| obligor also undertakes to pay the
obligation.
| 33 |
| (10) "Prove" with respect to a fact means to meet the | 34 |
| burden of
establishing the fact (Section 1-201 (b) (8)).
| 35 |
| (11) "Remitter" means a person that purchases an | 36 |
| instrument from its
issuer if the instrument is payable to |
|
|
|
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| 1 |
| an identified person other than
the purchaser.
| 2 |
| (b) Other definitions applying to this Article and the | 3 |
| Sections in which
they appear are:
|
|
4 | | "Acceptance" |
Section 3-409 |
|
5 | | "Accommodated party" |
Section 3-419 |
|
6 | | "Accommodation party" |
Section 3-419 |
|
7 | | "Alteration" |
Section 3-407 |
|
8 | | "Anomalous indorsement" |
Section 3-205 |
|
9 | | "Blank indorsement" |
Section 3-205 |
|
10 | | "Cashier's check" |
Section 3-104 |
|
11 | | "Certificate of deposit" |
Section 3-104 |
|
12 | | "Certified check" |
Section 3-409 |
|
13 | | "Check" |
Section 3-104 |
|
14 | | "Consideration" |
Section 3-303 |
|
15 | | "Draft" |
Section 3-104 |
|
16 | | "Holder in due course" |
Section 3-302 |
|
17 | | "Incomplete instrument" |
Section 3-115 |
|
18 | | "Indorsement" |
Section 3-204 |
|
19 | | "Indorser" |
Section 3-204 |
|
20 | | "Instrument" |
Section 3-104 |
|
21 | | "Issue" |
Section 3-105 |
|
22 | | "Issuer" |
Section 3-105 |
|
23 | | "Negotiable instrument" |
Section 3-104 |
|
24 | | "Negotiation" |
Section 3-201 |
|
25 | | "Note" |
Section 3-104 |
|
26 | | "Payable at a definite time" |
Section 3-108 |
|
27 | | "Payable on demand" |
Section 3-108 |
|
28 | | "Payable to bearer" |
Section 3-109 |
|
29 | | "Payable to order" |
Section 3-109 |
|
30 | | "Payment" |
Section 3-602 |
|
31 | | "Person entitled to enforce" |
Section 3-301 |
|
32 | | "Presentment" |
Section 3-501 |
|
33 | | "Reacquisition" |
Section 3-207 |
|
34 | | "Special indorsement" |
Section 3-205 |
|
35 | | "Teller's check" |
Section 3-104 |
|
36 | | "Transfer of instrument" |
Section 3-203 |
|
|
|
|
|
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| 1 | | "Traveler's check" |
Section 3-104 |
|
2 | | "Value" |
Section 3-303 |
|
3 | | (c) The following definitions in other Articles apply to | 4 | | this Article: |
|
5 | | "Bank" |
Section 4-105 |
|
6 | | "Banking day" |
Section 4-104 |
|
7 | | "Clearing house" |
Section 4-104 |
|
8 | | "Collecting bank" |
Section 4-105 |
|
9 | | "Depositary bank" |
Section 4-105 |
|
10 | | "Documentary draft" |
Section 4-104 |
|
11 | | "Intermediary bank" |
Section 4-105 |
|
12 | | "Item" |
Section 4-104 |
|
13 | | "Payor bank" |
Section 4-105 |
|
14 | | "Suspends payments" |
Section 4-104. |
|
15 | | (d) In addition, Article 1 contains general definitions and | 16 | | principles
of construction and interpretation applicable | 17 | | throughout this Article. |
|
18 |
| (Source: P.A. 87-582; 87-1135.)
| 19 |
| (810 ILCS 5/4A-105) (from Ch. 26, par. 4A-105)
| 20 |
| Sec. 4A-105. Other definitions.
| 21 |
| (a) In this Article:
| 22 |
| (1) "Authorized account" means a deposit account of a | 23 |
| customer in a bank
designated by the customer as a source | 24 |
| of payment of payment orders issued
by the customer to the | 25 |
| bank. If a customer does not so designate an
account, any | 26 |
| account of the customer is an authorized account if payment | 27 |
| of
a payment order from that account is not inconsistent | 28 |
| with a restriction on
the use of that account.
| 29 |
| (2) "Bank" means a person engaged in the business of | 30 |
| banking and
includes a savings bank, savings and loan | 31 |
| association, credit union, and
trust company. A branch or | 32 |
| separate office of a bank is a separate bank
for purposes | 33 |
| of this Article.
| 34 |
| (3) "Customer" means a person, including a bank, having | 35 |
| an account with
a bank or from whom a bank has agreed to |
|
|
|
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| 1 |
| receive payment orders.
| 2 |
| (4) "Funds transfer business day" of a receiving bank | 3 |
| means the part of
a day during which the receiving bank is | 4 |
| open for the receipt, processing,
and transmittal of | 5 |
| payment orders and cancellations and amendments of payment
| 6 |
| orders.
| 7 |
| (5) "Funds transfer system" means a wire transfer | 8 |
| network, automated
clearinghouse, or other communication | 9 |
| system of a clearing house or other
association of banks | 10 |
| through which a payment order by a bank may be
transmitted | 11 |
| to the bank to which the order is addressed.
| 12 |
| (6)
"Good faith" means honesty in fact and the | 13 |
| observance of reasonable
commercial standards of fair | 14 |
| dealing.
| 15 |
| (7) "Prove" with respect to a fact means to meet the | 16 |
| burden of
establishing the fact (Section 1-201 (b) (8)).
| 17 |
| (b) Other definitions applying to this Article and the | 18 |
| Sections in which
they appear are:
|
|
19 | | "Acceptance" |
Section 4A-209 |
|
20 | | "Beneficiary" |
Section 4A-103 |
|
21 | | "Beneficiary's bank" |
Section 4A-103 |
|
22 | | "Executed" |
Section 4A-301 |
|
23 | | "Execution date" |
Section 4A-301 |
|
24 | | "Funds transfer" |
Section 4A-104 |
|
25 | | "Funds transfer system rule" |
Section 4A-501 |
|
26 | | "Intermediary bank" |
Section 4A-104 |
|
27 | | "Originator" |
Section 4A-104 |
|
28 | | "Originator's bank" |
Section 4A-104 |
|
29 | | "Payment by beneficiary's bank |
|
|
30 | | to beneficiary" |
Section 4A-405 |
|
31 | | "Payment by originator to |
|
|
32 | | beneficiary" |
Section 4A-406 |
|
33 | | "Payment by sender |
|
|
34 | | to receiving bank" |
Section 4A-403 |
|
35 | | "Payment date" |
Section 4A-401 |
|
36 | | "Payment order" |
Section 4A-103 |
|
|
|
|
|
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| 1 | | "Receiving bank" |
Section 4A-103 |
|
2 | | "Security procedure" |
Section 4A-201 |
|
3 | | "Sender" |
Section 4A-103 |
|
4 | | (c) The following definitions in Article 4 apply to this | 5 | | Article: |
|
6 | | "Clearing house" |
Section 4-104 |
|
7 | | "Item" |
Section 4-104 |
|
8 | | "Suspends payments" |
Section 4-104 |
|
9 |
| (d) In addition, Article 1 contains general definitions and | 10 |
| principles of
construction and interpretation applicable | 11 |
| throughout this Article.
| 12 |
| (Source: P.A. 86-1291 .)
| 13 |
| (810 ILCS 5/4A-106) (from Ch. 26, par. 4A-106)
| 14 |
| Sec. 4A-106. Time payment order is received.
| 15 |
| (a) The time of receipt of a payment order or communication | 16 |
| cancelling
or amending a payment order is determined by the | 17 |
| rules applicable to
receipt of a notice stated in Section 1-202
| 18 |
| 1-201(27) . A receiving bank may fix
a cut-off time or times on | 19 |
| a funds transfer business day for the receipt
and processing of | 20 |
| payment orders and communications cancelling or amending
| 21 |
| payment orders. Different cut-off times may apply to payment | 22 |
| orders,
cancellations, or amendments, or to different | 23 |
| categories of payment orders,
cancellations, or amendments. A | 24 |
| cut-off time may apply to senders
generally or different | 25 |
| cut-off times may apply to different senders or
categories of | 26 |
| payment orders. If a payment order or communication
cancelling | 27 |
| or amending a payment order is received after the close of a
| 28 |
| funds transfer business day or after the appropriate cut-off | 29 |
| time on a
funds transfer business day, the receiving bank may | 30 |
| treat the payment
order or communication as received at the | 31 |
| opening of the next funds
transfer business day.
| 32 |
| (b) If this Article refers to an execution date or payment | 33 |
| date or
states a day on which a receiving bank is required to | 34 |
| take action, and the
date or day does not fall on a funds | 35 |
| transfer business day, the next day
that is a funds transfer |
|
|
|
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|
| 1 |
| business day is treated as the date or day stated,
unless the | 2 |
| contrary is stated in this Article.
| 3 |
| (Source: P.A. 86-1291.)
| 4 |
| (810 ILCS 5/4A-204) (from Ch. 26, par. 4A-204)
| 5 |
| Sec. 4A-204. Refund of payment and duty of customer to | 6 |
| report with
respect to an unauthorized payment order.
| 7 |
| (a) If a receiving bank accepts a payment order issued
in | 8 |
| the name of its customer as sender which is (i) not authorized | 9 |
| and not
effective as the order of the customer under Section | 10 |
| 4A-202, or (ii) not
enforceable, in whole or in part, against | 11 |
| the customer under Section
4A-203, the bank shall refund any | 12 |
| payment of the payment order received
from the customer to the | 13 |
| extent the bank is not entitled to enforce payment
and shall | 14 |
| pay interest on the refundable amount calculated from the date
| 15 |
| the bank received payment to the date of the refund. However, | 16 |
| the customer
is not entitled to interest from the bank on the | 17 |
| amount to be refunded if
the customer fails to exercise | 18 |
| ordinary care to determine that the order
was not authorized by | 19 |
| the customer and to notify the bank of the relevant
facts | 20 |
| within a reasonable time not exceeding 90 days after the date | 21 |
| the
customer received notification from the bank that the order | 22 |
| was accepted or
that the customer's account was debited with | 23 |
| respect to the order. The
bank is not entitled to any recovery | 24 |
| from the customer on account of a
failure by the customer to | 25 |
| give notification as stated in this Section.
| 26 |
| (b) Reasonable time under subsection (a) may be fixed by | 27 |
| agreement as
stated in Section 1-302(b)
1-204(1) , but the | 28 |
| obligation of a receiving bank to
refund payment as stated in | 29 |
| subsection (a) may not otherwise be varied
by agreement.
| 30 |
| (Source: P.A. 90-655, eff. 7-30-98.)
| 31 |
| (810 ILCS 5/5-103) (from Ch. 26, par. 5-103)
| 32 |
| Sec. 5-103. Scope.
| 33 |
| (a) This Article applies to letters of credit and to | 34 |
| certain rights and
obligations arising out of transactions |
|
|
|
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| 1 |
| involving letters of credit.
| 2 |
| (b) The statement of a rule in this Article does not by | 3 |
| itself require,
imply, or negate application of the same or a | 4 |
| different rule to a situation not
provided for, or to a person | 5 |
| not specified, in this Article.
| 6 |
| (c) With the exception of this subsection, subsections (a) | 7 |
| and (d),
Sections 5-102(a)(9) and (10), 5-106(d), and 5-114(d), | 8 |
| and except to the
extent prohibited in Sections 1-302
1-102(3)
| 9 |
| and 5-117(d), the effect of this Article
may be varied by | 10 |
| agreement or by a provision stated or incorporated by
reference | 11 |
| in an undertaking. A term in an agreement or undertaking
| 12 |
| generally excusing liability or generally limiting remedies | 13 |
| for failure to
perform obligations is not sufficient to vary | 14 |
| obligations prescribed by this
Article.
| 15 |
| (d) Rights and obligations of an issuer to a beneficiary or | 16 |
| a
nominated person under a letter of credit are independent of | 17 |
| the existence,
performance, or nonperformance of a contract or | 18 |
| arrangement out of which
the letter of credit arises or which | 19 |
| underlies it, including contracts or
arrangements between the | 20 |
| issuer and the applicant and between the
applicant and the | 21 |
| beneficiary.
| 22 |
| (Source: P.A. 89-534, eff. 1-1-97.)
|
|