BILL REQ. #: Z-0001.1
| State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 01/15/09. Referred to Committee on Judiciary.
AN ACT Relating to revising Article 7 of the Uniform Commercial Code, documents of title; amending RCW 62A.7-101, 62A.7-102, 62A.7-103, 62A.7-104, 62A.7-105, 62A.7-201, 62A.7-202, 62A.7-203, 62A.7-204, 62A.7-205, 62A.7-206, 62A.7-207, 62A.7-208, 62A.7-209, 62A.7-210, 62A.7-301, 62A.7-302, 62A.7-303, 62A.7-304, 62A.7-305, 62A.7-307, 62A.7-308, 62A.7-309, 62A.7-401, 62A.7-402, 62A.7-403, 62A.7-404, 62A.7-501, 62A.7-502, 62A.7-503, 62A.7-504, 62A.7-505, 62A.7-506, 62A.7-507, 62A.7-508, 62A.7-509, 62A.7-601, 62A.7-602, 62A.7-603, 62A.1-201, 62A.1-201, 62A.2-103, 62A.2-104, 62A.2-310, 62A.2-323, 62A.2-401, 62A.2-503, 62A.2-505, 62A.2-506, 62A.2-509, 62A.2-605, 62A.2-705, 62A.2A-103, 62A.2A-514, 62A.2A-526, 62A.4-104, 62A.4-210, 62A.8-103, 62A.9A-102, 62A.9A-203, 62A.9A-207, 62A.9A-208, 62A.9A-301, 62A.9A-310, 62A.9A-312, 62A.9A-313, 62A.9A-314, 62A.9A-317, 62A.9A-338, and 62A.9A-601; adding a new section to chapter 62A.7 RCW; creating new sections; repealing RCW 62A.10-104; and providing contingent effective dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 101 RCW 62A.7-101 and 1965 ex.s. c 157 s 7-101 are each
amended to read as follows:shall be known and)) may be cited as
Uniform Commercial Code—Documents of Title.
Sec. 102 RCW 62A.7-102 and 1965 ex.s. c 157 s 7-102 are each
amended to read as follows:
(a) "Bailee" means ((the)) a person ((who)) that by a warehouse
receipt, bill of lading, or other document of title acknowledges
possession of goods and contracts to deliver them.
(b) "Carrier" means a person that issues a bill of lading.
(c) "Consignee" means ((the)) a person named in a bill of lading to
((whom)) which or to whose order the bill promises delivery.
(((c))) (d) "Consignor" means ((the)) a person named in a bill of
lading as the person from ((whom)) which the goods have been received
for shipment.
(((d))) (e) "Delivery order" means a ((written)) record that
contains an order to deliver goods directed to a ((warehouseman))
warehouse, carrier, or other person ((who)) that in the ordinary course
of business issues warehouse receipts or bills of lading.
(((e) "Document" means document of title as defined in the general
definitions in Article 1 (RCW 62A.1-201).))
(f) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(g) "Goods" means all things ((which)) that are treated as movable
for the purposes of a contract ((of)) for storage or transportation.
(((g))) (h) "Issuer" means a bailee ((who)) that issues a document
((except that)) of title or, in ((relation to)) the case of an
unaccepted delivery order ((it means)), the person ((who)) that orders
the possessor of goods to deliver. ((Issuer)) The term includes
((any)) a person for ((whom)) which an agent or employee purports to
act in issuing a document if the agent or employee has real or apparent
authority to issue documents, ((notwithstanding that)) even if the
issuer ((received no)) did not receive any goods ((or that)), the goods
were misdescribed, or ((that)) in any other respect the agent or
employee violated ((his)) the issuer's instructions.
(((h) "Warehouseman" is)) (i) "Person entitled under the document"
means the holder, in the case of a negotiable document of title, or the
person to which delivery of the goods is to be made by the terms of, or
pursuant to instructions in a record under, a nonnegotiable document of
title.
(j) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(k) "Sign" means, with present intent to authenticate or adopt a
record:
(i) To execute or adopt a tangible symbol; or
(ii) To attach to or logically associate with the record an
electronic sound, symbol, or process.
(l) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(m) "Warehouse" means a person engaged in the business of storing
goods for hire.
(2) ((Other definitions applying to this Article or to specified
Parts thereof, and the sections in which they appear are:)) Definitions in other articles applying to this article and
the sections in which they appear are:
"Duly negotiate". RCW 62A.7-501.
"Person entitled under the document". RCW 62A.7-403(4).
(3)
(a) "Contract for sale". RCW 62A.2-106((.));
(("Overseas". RCW 62A.2-323.)) (b) "Lessee in ordinary course of
business," RCW 62A.2A-103; and
(c) "Receipt" of goods((.)), RCW 62A.2-103.
(((4))) (3) In addition, Article 1 contains general definitions and
principles of construction and interpretation applicable throughout
this article.
Sec. 103 RCW 62A.7-103 and 1965 ex.s. c 157 s 7-103 are each
amended to read as follows:,)) OR STATUTE((, TARIFF,
CLASSIFICATION OR REGULATION)). To the extent that)) (1) This
article is subject to any treaty or statute of the United States((,))
or regulatory statute of this state ((or tariff, classification or
regulation filed or issued pursuant thereto)) to the extent the treaty,
statute, or regulatory statute is applicable((, the provisions of this
Article are subject thereto)).
(2) This article does not modify or repeal any law prescribing the
form or content of a document of title or the services or facilities to
be afforded by a bailee, or otherwise regulating a bailee's business in
respects not specifically treated in this article. However, violation
of such a law does not affect the status of a document of title that
otherwise is within the definition of a document of title.
(3) This act modifies, limits, and supersedes the federal
electronic signatures in global and national commerce act (15 U.S.C.
Sec. 7001, et seq.) but does not modify, limit, or supersede section
101(c) of that act (15 U.S.C. Sec. 7001(c)) or authorize electronic
delivery of any of the notices described in section 103(b) of that act
(15 U.S.C. Sec. 7003(b)).
Sec. 104 RCW 62A.7-104 and 1965 ex.s. c 157 s 7-104 are each
amended to read as follows:WAREHOUSE RECEIPT, BILL OF LADING
OR OTHER)) DOCUMENT OF TITLE. A warehouse receipt, bill of
lading or other document of title is negotiable)) Except as otherwise provided in subsection (3) of this
section, a document of title is negotiable if by its terms the goods
are to be delivered to bearer or to the order of a named person((
(a); or)).
(b) where recognized in overseas trade, if it runs to a named
person or assigns.
(2) Any other document
(2) A document of title other than one described in subsection (1)
of this section is non-negotiable. A bill of lading ((in which it is
stated)) that states that the goods are consigned to a named person is
not made negotiable by a provision that the goods are to be delivered
only against ((a written)) an order in a record signed by the same or
another named person.
(3) A document of title is non-negotiable if, at the time it is
issued, the document has a conspicuous legend, however expressed, that
it is non-negotiable.
Sec. 105 RCW 62A.7-105 and 1965 ex.s. c 157 s 7-105 are each
amended to read as follows:CONSTRUCTION AGAINST NEGATIVE IMPLICATION.)) REISSUANCE IN
ALTERNATIVE MEDIUM. The omission from either Part 2 or Part 3 of
this Article of a provision corresponding to a provision made in the
other Part does not imply that a corresponding rule of law is not
applicable.)) (1) Upon request of a person entitled under an electronic
document of title, the issuer of the electronic document may issue a
tangible document of title as a substitute for the electronic document
if:
(a) The person entitled under the electronic document surrenders
control of the document to the issuer; and
(b) The tangible document when issued contains a statement that it
is issued in substitution for the electronic document.
(2) Upon issuance of a tangible document of title in substitution
for an electronic document of title in accordance with subsection (1)
of this section:
(a) The electronic document ceases to have any effect or validity;
and
(b) The person that procured issuance of the tangible document
warrants to all subsequent persons entitled under the tangible document
that the warrantor was a person entitled under the electronic document
when the warrantor surrendered control of the electronic document to
the issuer.
(3) Upon request of a person entitled under a tangible document of
title, the issuer of the tangible document may issue an electronic
document of title as a substitute for the tangible document if:
(a) The person entitled under the tangible document surrenders
possession of the document to the issuer; and
(b) The electronic document when issued contains a statement that
it is issued in substitution for the tangible document.
(4) Upon issuance of an electronic document of title in
substitution for a tangible document of title in accordance with
subsection (3) of this section:
(a) The tangible document ceases to have any effect or validity;
and
(b) The person that procured issuance of the electronic document
warrants to all subsequent persons entitled under the electronic
document that the warrantor was a person entitled under the tangible
document when the warrantor surrendered possession of the tangible
document to the issuer.
NEW SECTION. Sec. 106 A new section is added to chapter 62A.7
RCW to be codified as RCW 62A.7-106 to read as follows:
(2) A system satisfies subsection (1) of this section, and a person
is deemed to have control of an electronic document of title, if the
document is created, stored, and assigned in such a manner that:
(a) A single authoritative copy of the document exists which is
unique, identifiable, and, except as otherwise provided in (d), (e),
and (f) of this subsection, unalterable;
(b) The authoritative copy identifies the person asserting control
as:
(i) The person to which the document was issued; or
(ii) If the authoritative copy indicates that the document has been
transferred, the person to which the document was most recently
transferred;
(c) The authoritative copy is communicated to and maintained by the
person asserting control or its designated custodian;
(d) Copies or amendments that add or change an identified assignee
of the authoritative copy can be made only with the consent of the
person asserting control;
(e) Each copy of the authoritative copy and any copy of a copy is
readily identifiable as a copy that is not the authoritative copy; and
(f) Any amendment of the authoritative copy is readily identifiable
as authorized or unauthorized.
Sec. 201 RCW 62A.7-201 and 1965 ex.s. c 157 s 7-201 are each
amended to read as follows:WHO)) PERSON THAT MAY ISSUE A WAREHOUSE RECEIPT; STORAGE UNDER
((GOVERNMENT)) BOND. warehouseman)) warehouse.
(2) ((Where)) If goods, including distilled spirits and
agricultural commodities, are stored under a statute requiring a bond
against withdrawal or a license for the issuance of receipts in the
nature of warehouse receipts, a receipt issued for the goods ((has like
effect as)) is deemed to be a warehouse receipt even ((though)) if
issued by a person ((who)) that is the owner of the goods and is not a
((warehouseman)) warehouse.
Sec. 202 RCW 62A.7-202 and 2000 c 58 s 1 are each amended to read
as follows:ESSENTIAL TERMS; OPTIONAL TERMS))
EFFECT OF OMISSION.
(2) Unless a warehouse receipt ((embodies within its written,
printed, or electronic terms)) provides for each of the following, the
((warehouseman)) warehouse is liable for damages caused ((by the
omission)) to a person injured ((thereby)) by its omission:
(a) A statement of the location of the warehouse facility where the
goods are stored;
(b) The date of issue of the receipt;
(c) The ((consecutive number)) unique identification code of the
receipt;
(d) A statement whether the goods received will be delivered to the
bearer, to a ((specified)) named person, or to a ((specified)) named
person or ((his)) its order;
(e) The rate of storage and handling charges, ((except that where))
unless goods are stored under a field warehousing arrangement, in which
case a statement of that fact is sufficient on a non-negotiable
receipt;
(f) A description of the goods or ((of)) the packages containing
them;
(g) The signature of the ((warehouseman, which may be made by his
authorized)) warehouse or its agent;
(h) If the receipt is issued for goods ((of which the warehouseman
is owner)) that the warehouse owns, either solely ((or)), jointly, or
in common with others, a statement of the fact of ((such)) that
ownership; and
(i) A statement of the amount of advances made and of liabilities
incurred for which the ((warehouseman)) warehouse claims a lien or
security interest (((RCW 62A.7-209). If)), unless the precise amount
of ((such)) advances made or ((of such)) liabilities incurred ((is)),
at the time of the issue of the receipt, is unknown to the
((warehouseman)) warehouse or to ((his)) its agent ((who issues it,))
that issued the receipt, in which case a statement of the fact that
advances have been made or liabilities incurred and the purpose
((thereof)) of the advances or liabilities is sufficient.
(3) A ((warehouseman)) warehouse may insert in ((his)) its receipt
any ((other)) terms ((which)) that are not contrary to the provisions
of this title and do not impair ((his)) its obligation of delivery
(((RCW 62A.7-403) or his)) under RCW 62A.7-403 or its duty of care
((()) under RCW 62A.7-204(())). Any contrary provision((s shall be))
is ineffective.
Sec. 203 RCW 62A.7-203 and 1965 ex.s. c 157 s 7-203 are each
amended to read as follows:relying in either case)), that relies upon the
description ((therein)) of the goods in the document may recover from
the issuer damages caused by the non-receipt or misdescription of the
goods, except to the extent that:
(1) The document conspicuously indicates that the issuer does not
know whether ((any)) all or part ((or all)) of the goods in fact were
received or conform to the description, such as ((where)) a case in
which the description is in terms of marks or labels or kind, quantity,
or condition, or the receipt or description is qualified by "contents,
condition and quality unknown", "said to contain" or ((the like)) words
of similar import, if ((such)) the indication ((be)) is true((,)); or
(2) The party or purchaser otherwise has notice of the nonreceipt
or misdescription.
Sec. 204 RCW 62A.7-204 and 1981 c 13 s 1 are each amended to read
as follows:WAREHOUSEMAN'S))
WAREHOUSE'S LIABILITY. warehouseman)) warehouse is liable for
damages for loss of or injury to the goods caused by ((his)) its
failure to exercise ((such)) care ((in)) with regard to ((them as))
the goods that a reasonably careful ((man)) person would exercise under
((like)) similar circumstances ((but)). Unless otherwise agreed
((he)), the warehouse is not liable for damages ((which)) that could
not have been avoided by the exercise of ((such)) that care.
(2) Damages may be limited by a term in the warehouse receipt or
storage agreement limiting the amount of liability in case of loss or
damage((, and setting forth a specific liability per article or item,
or value per unit of weight,)) beyond which the ((warehouseman shall))
warehouse is not ((be)) liable((; provided, however, that such
liability may on written)). Such a limitation is not effective with
respect to the warehouse's liability for conversion to its own use. On
request of the bailor in a record at the time of signing ((such)) the
storage agreement or within a reasonable time after receipt of the
warehouse receipt, the warehouse's liability may be increased on part
or all of the goods ((thereunder, in which)) covered by the storage
agreement or the warehouse receipt. In this event, increased rates may
be charged based on ((such)) an increased valuation((, but that no such
increase shall be permitted contrary to a lawful limitation of
liability contained in the warehouseman's tariff, if any. No such
limitation is effective with respect to the warehouseman's liability
for conversion to his own use)) of the goods.
(3) Reasonable provisions as to the time and manner of presenting
claims and ((instituting)) commencing actions based on the bailment may
be included in the warehouse receipt or ((tariff)) storage agreement.
(4) This section does not ((impair or repeal the duties of care or
liabilities or penalties for breach thereof as provided in)) modify or
repeal the provisions of chapters 22.09 and 22.32 RCW.
Sec. 205 RCW 62A.7-205 and 1965 ex.s. c 157 s 7-205 are each
amended to read as follows:the)) ordinary course of business of fungible goods sold and
delivered by a ((warehouseman who)) warehouse that is also in the
business of buying and selling such goods takes the goods free of any
claim under a warehouse receipt even ((though it)) if the receipt is
negotiable and has been duly negotiated.
Sec. 206 RCW 62A.7-206 and 1965 ex.s. c 157 s 7-206 are each
amended to read as follows:WAREHOUSEMAN'S)) WAREHOUSE'S OPTION.
warehouseman may on notifying)) warehouse, by giving notice to
the person on whose account the goods are held and any other person
known to claim an interest in the goods, may require payment of any
charges and removal of the goods from the warehouse at the termination
of the period of storage fixed by the document((,)) of title or, if
((no)) a period is not fixed, within a stated period not less than
thirty days after the ((notification)) warehouse gives notice. If the
goods are not removed before the date specified in the ((notification))
notice, the ((warehouseman)) warehouse may sell them ((in accordance
with the provisions of the section on enforcement of a warehouseman's
lien ()) pursuant to RCW 62A.7-210(())).
(2) If a ((warehouseman)) warehouse in good faith believes that
((the)) goods are about to deteriorate or decline in value to less than
the amount of ((his)) its lien within the time ((prescribed)) provided
in subsection (1) ((for notification, advertisement)) of this section
and ((sale)) RCW 62A.7-210, the ((warehouseman)) warehouse may specify
in the ((notification)) notice given under subsection (1) of this
section any reasonable shorter time for removal of the goods and ((in
case)), if the goods are not removed, may sell them at public sale held
not less than one week after a single advertisement or posting.
(3) If, as a result of a quality or condition of the goods of which
the ((warehouseman had no)) warehouse did not have notice at the time
of deposit, the goods are a hazard to other property ((or to)), the
warehouse facilities, or ((to)) other persons, the ((warehouseman))
warehouse may sell the goods at public or private sale without
advertisement or posting on reasonable notification to all persons
known to claim an interest in the goods. If the ((warehouseman))
warehouse, after a reasonable effort, is unable to sell the goods
((he)), it may dispose of them in any lawful manner and ((shall)) does
not incur ((no)) liability by reason of ((such)) that disposition.
(4) ((The warehouseman must)) A warehouse shall deliver the goods
to any person entitled to them under this article upon due demand made
at any time ((prior to)) before sale or other disposition under this
section.
(5) ((The warehouseman)) A warehouse may satisfy ((his)) its lien
from the proceeds of any sale or disposition under this section but
((must)) shall hold the balance for delivery on the demand of any
person to ((whom he)) which the warehouse would have been bound to
deliver the goods.
Sec. 207 RCW 62A.7-207 and 1965 ex.s. c 157 s 7-207 are each
amended to read as follows:provides, a warehouseman must)),
a warehouse shall keep separate the goods covered by each receipt so as
to permit at all times identification and delivery of those goods
((except that)). However, different lots of fungible goods may be
commingled.
(2) If different lots of fungible goods ((so)) are commingled, the
goods are owned in common by the persons entitled thereto and the
((warehouseman)) warehouse is severally liable to each owner for that
owner's share. ((Where)) If, because of over-issue, a mass of fungible
goods is insufficient to meet all the receipts ((which)) the
((warehouseman)) warehouse has issued against it, the persons entitled
include all holders to ((whom)) which overissued receipts have been
duly negotiated.
Sec. 208 RCW 62A.7-208 and 1965 ex.s. c 157 s 7-208 are each
amended to read as follows:Where)) If a blank in a negotiable
tangible warehouse receipt has been filled in without authority, a
good-faith purchaser for value and without notice of the ((want)) lack
of authority may treat the insertion as authorized. Any other
unauthorized alteration leaves any tangible or electronic warehouse
receipt enforceable against the issuer according to its original tenor.
Sec. 209 RCW 62A.7-209 and 1987 c 395 s 1 are each amended to
read as follows:WAREHOUSEMAN)) WAREHOUSE. warehouseman))
warehouse has a lien against the bailor on the goods covered by a
warehouse receipt or storage agreement or on the proceeds thereof in
((his)) its possession for charges for storage or transportation ((()),
including demurrage and terminal charges(())), insurance, labor, or
other charges, present or future, in relation to the goods, and for
expenses necessary for preservation of the goods or reasonably incurred
in their sale pursuant to law. If the person on whose account the
goods are held is liable for ((like)) similar charges or expenses in
relation to other goods whenever deposited and it is stated in the
warehouse receipt or storage agreement that a lien is claimed for
charges and expenses in relation to other goods, the ((warehouseman))
warehouse also has a lien against ((him)) the goods covered by the
warehouse receipt or storage agreement or on the proceeds thereof in
its possession for ((such)) those charges and expenses, whether or not
the other goods have been delivered by the ((warehouseman)) warehouse.
((But)) However, as against a person to ((whom)) which a negotiable
warehouse receipt is duly negotiated, a ((warehouseman's)) warehouse's
lien is limited to charges in an amount or at a rate specified ((on))
in the warehouse receipt or, if no charges are so specified ((then)),
to a reasonable charge for storage of the specific goods covered by the
receipt subsequent to the date of the receipt. ((A warehouseman's lien
as provided in this chapter takes priority over all other liens and
perfected or unperfected security interests.))
(2) ((The warehouseman)) A warehouse may also reserve a security
interest against the bailor for ((a)) the maximum amount specified on
the receipt for charges other than those specified in subsection (1) of
this section, such as for money advanced and interest. ((Such a)) The
security interest is governed by ((the Article on Secured Transactions
(Article 9))) chapter 62A.9A RCW.
(3) A ((warehouseman's)) warehouse's lien for charges and expenses
under subsection (1) of this section or a security interest under
subsection (2) of this section is also effective against any person
((who)) that so entrusted the bailor with possession of the goods that
a pledge of them by ((him)) the bailor to a good faith purchaser for
value would have been valid ((but is not effective against a person as
to whom the document confers no right in the goods covered by it under
RCW 62A.7-503.)). However, the lien or security interest is not
effective against a person that before issuance of a document of title
had a legal interest or a perfected security interest in the goods and
that did not:
(4) A warehouseman loses his lien on any goods which he voluntarily
delivers or which he
(a) Deliver or entrust the goods or any document of title covering
the goods to the bailor or the bailor's nominee with:
(i) Actual or apparent authority to ship, store, or sell;
(ii) Power to obtain delivery under RCW 62A.7-403; or
(iii) Power of disposition under RCW 62A.2-403, 62A.2A-304(2),
62A.2A-305(2), 62A.9A-320, or 62A.9A-321(c) or other statute or rule of
law; or
(b) Acquiesce in the procurement by the bailor or its nominee of
any document.
(4) A warehouse's lien on household goods for charges and expenses
in relation to the goods under subsection (1) of this section is also
effective against all persons if the depositor was the legal possessor
of the goods at the time of deposit. In this subsection, "household
goods" means furniture, furnishings, or personal effects used by the
depositor in a dwelling.
(5) A warehouse loses its lien on any goods that it voluntarily
delivers or unjustifiably refuses to deliver.
Sec. 210 RCW 62A.7-210 and 1965 ex.s. c 157 s 7-210 are each
amended to read as follows:WAREHOUSEMAN'S)) WAREHOUSE'S LIEN. warehouseman's)) warehouse's lien may be enforced by public or
private sale of the goods, in ((bloc)) bulk or in ((parcels)) packages,
at any time or place and on any terms which are commercially
reasonable, after notifying all persons known to claim an interest in
the goods. ((Such)) The notification must include a statement of the
amount due, the nature of the proposed sale and the time and place of
any public sale. The fact that a better price could have been obtained
by a sale at a different time or in a ((different)) method different
from that selected by the ((warehouseman)) warehouse is not of itself
sufficient to establish that the sale was not made in a commercially
reasonable manner. The warehouse sells in a commercially reasonable
manner if the ((warehouseman either)) warehouse sells the goods in the
usual manner in any recognized market therefor, ((or if he)) sells at
the price current in ((such)) that market at the time of ((his)) the
sale, or ((if he has)) otherwise ((sold)) sells in conformity with
commercially reasonable practices among dealers in the type of goods
sold((, he has sold in a commercially reasonable manner)). A sale of
more goods than apparently necessary to be offered to ((insure)) ensure
satisfaction of the obligation is not commercially reasonable, except
in cases covered by the preceding sentence.
(2) A ((warehouseman's)) warehouse may enforce its lien on goods,
other than goods stored by a merchant in the course of ((his)) its
business ((may be enforced)), only ((as follows)) if the following
requirements are satisfied:
(a) All persons known to claim an interest in the goods must be
notified.
(b) ((The notification must be delivered in person or sent by
registered or certified letter to the last known address of any person
to be notified.)) The notification must include an itemized statement of the
claim, a description of the goods subject to the lien, a demand for
payment within a specified time not less than ten days after receipt of
the notification, and a conspicuous statement that unless the claim is
paid within that time the goods will be advertised for sale and sold by
auction at a specified time and place.
(c)
(((d))) (c) The sale must conform to the terms of the notification.
(((e))) (d) The sale must be held at the nearest suitable place to
((that)) where the goods are held or stored.
(((f))) (e) After the expiration of the time given in the
notification, an advertisement of the sale must be published once a
week for two weeks consecutively in a newspaper of general circulation
where the sale is to be held. The advertisement must include a
description of the goods, the name of the person on whose account
((they)) the goods are being held, and the time and place of the sale.
The sale must take place at least fifteen days after the first
publication. If there is no newspaper of general circulation where the
sale is to be held, the advertisement must be posted at least ten days
before the sale in not ((less)) fewer than six conspicuous places in
the neighborhood of the proposed sale.
(3) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred ((under)) in complying with this
section. In that event, the goods ((must)) may not be sold, but must
be retained by the ((warehouseman)) warehouse subject to the terms of
the receipt and this article.
(4) ((The warehouseman)) A warehouse may buy at any public sale
held pursuant to this section.
(5) A purchaser in good faith of goods sold to enforce a
((warehouseman's)) warehouse's lien takes the goods free of any rights
of persons against ((whom)) which the lien was valid, despite the
warehouse's noncompliance ((by the warehouseman)) with ((the
requirements of)) this section.
(6) ((The warehouseman)) A warehouse may satisfy ((his)) its lien
from the proceeds of any sale pursuant to this section but ((must))
shall hold the balance, if any, for delivery on demand to any person to
((whom he)) which the warehouse would have been bound to deliver the
goods.
(7) The rights provided by this section ((shall be)) are in
addition to all other rights allowed by law to a creditor against
((his)) a debtor.
(8) ((Where)) If a lien is on goods stored by a merchant in the
course of ((his)) its business, the lien may be enforced in accordance
with ((either)) subsection (1) or (2) of this section.
(9) ((The warehouseman)) A warehouse is liable for damages caused
by failure to comply with the requirements for sale under this section
and, in case of willful violation, is liable for conversion.
Sec. 301 RCW 62A.7-301 and 1965 ex.s. c 157 s 7-301 are each
amended to read as follows:who)) of lading which has given
value in good faith, or a holder to ((whom)) which a negotiable bill
has been duly negotiated, relying ((in either case)) upon the
description ((therein)) of the goods((,)) in the bill or upon the date
((therein)) shown in the bill, may recover from the issuer damages
caused by the misdating of the bill or the nonreceipt or misdescription
of the goods, except to the extent that the ((document)) bill indicates
that the issuer does not know whether any part or all of the goods in
fact were received or conform to the description, such as ((where)) in
a case in which the description is in terms of marks or labels or kind,
quantity, or condition or the receipt or description is qualified by
"contents or condition of contents of packages unknown,"((,)) "said to
contain,"((,)) "shipper's weight, load, and count," or ((the like))
words of similar import, if ((such)) that indication ((be)) is true.
(2) ((When)) If goods are loaded by ((an)) the issuer ((who is a
common carrier,)) of a bill of lading:
(a) The issuer ((must)) shall count the packages of goods if
((package freight)) shipped in packages and ascertain the kind and
quantity if shipped in bulk ((freight. In)); and
(b) Words such ((cases)) as "shipper's weight, load, and count," or
((other)) words of similar import indicating that the description was
made by the shipper are ineffective except as to ((freight)) goods
concealed ((by)) in packages.
(3) ((When)) If bulk ((freight is)) goods are loaded by a shipper
((who)) that makes available to the issuer of a bill of lading adequate
facilities for weighing ((such freight, an)) those goods, the issuer
((who is a common carrier must)) shall ascertain the kind and quantity
within a reasonable time after receiving the ((written)) shipper's
request ((of the shipper)) in a record to do so. ((In such cases)) In
that case, "shipper's weight" or ((other)) words of ((like purport))
similar import are ineffective.
(4) The issuer ((may)) of a bill of lading, by ((inserting))
including in the bill the words "shipper's weight, load, and count," or
((other)) words of ((like purport)) similar import, may indicate that
the goods were loaded by the shipper((;)), and, if ((such)) that
statement ((be)) is true, the issuer ((shall)) is not ((be)) liable for
damages caused by the improper loading. ((But their)) However,
omission of such words does not imply liability for ((such)) damages
caused by improper loading.
(5) ((The)) A shipper ((shall be deemed to have guaranteed to the))
guarantees to an issuer the accuracy at the time of shipment of the
description, marks, labels, number, kind, quantity, condition, and
weight, as furnished by ((him;)) the shipper, and the shipper shall
indemnify the issuer against damage caused by inaccuracies in ((such))
those particulars. ((The)) This right of ((the issuer to such))
indemnity ((shall in no way)) does not limit ((his)) the issuer's
responsibility ((and)) or liability under the contract of carriage to
any person other than the shipper.
Sec. 302 RCW 62A.7-302 and 1965 ex.s. c 157 s 7-302 are each
amended to read as follows:persons)) a person acting
as its agent((s)) or by ((connecting carriers)) a performing carrier,
is liable to ((anyone)) any person entitled to recover on the bill or
other document for any breach by ((such other persons or by a
connecting)) the other person or the performing carrier of its
obligation under the bill or other document ((but)). However, to the
extent that the bill or other document covers an undertaking to be
performed overseas or in territory not contiguous to the continental
United States or an undertaking including matters other than
transportation, this liability for breach by the other person or the
performing carrier may be varied by agreement of the parties.
(2) ((Where)) If goods covered by a through bill of lading or other
document of title embodying an undertaking to be performed in part by
((persons)) a person other than the issuer are received by ((any such))
that person, ((he)) the person is subject, with respect to ((his)) its
own performance while the goods are in ((his)) its possession, to the
obligation of the issuer. ((His)) The person's obligation is
discharged by delivery of the goods to another ((such)) person pursuant
to the bill or other document((,)) and does not include liability for
breach by any other ((such)) person((s)) or by the issuer.
(3) The issuer of ((such)) a through bill of lading or other
document ((shall be)) of title described in subsection (1) of this
section is entitled to recover from the ((connecting)) performing
carrier, or ((such)) other person in possession of the goods when the
breach of the obligation under the bill or other document
occurred((,)):
(a) The amount it may be required to pay to ((anyone)) any person
entitled to recover on the bill or other document ((therefor)) for the
breach, as may be evidenced by any receipt, judgment, or transcript
((thereof, and)) of judgment; and
(b) The amount of any expense reasonably incurred by ((it)) the
issuer in defending any action ((brought)) commenced by ((anyone)) any
person entitled to recover on the bill or other document ((therefor))
for the breach.
Sec. 303 RCW 62A.7-303 and 1965 ex.s. c 157 s 7-303 are each
amended to read as follows:the)) a carrier may deliver the
goods to a person or destination other than that stated in the bill or
may otherwise dispose of the goods, without liability for misdelivery,
on instructions from:
(a) The holder of a negotiable bill; ((or))
(b) The consignor on a non-negotiable bill ((notwithstanding)),
even if the consignee has given contrary instructions ((from the
consignee)); ((or))
(c) The consignee on a non-negotiable bill in the absence of
contrary instructions from the consignor, if the goods have arrived at
the billed destination or if the consignee is in possession of the
tangible bill or in control of the electronic bill; or
(d) The consignee on a non-negotiable bill, if ((he)) the consignee
is entitled as against the consignor to dispose of ((them)) the goods.
(2) Unless ((such)) instructions described in subsection (1) of
this section are ((noted on)) included in a negotiable bill of lading,
a person to ((whom)) which the bill is duly negotiated ((can)) may hold
the bailee according to the original terms.
Sec. 304 RCW 62A.7-304 and 1965 ex.s. c 157 s 7-304 are each
amended to read as follows:where)) as
customary in ((overseas)) international transportation, a tangible bill
of lading ((must)) may not be issued in a set of parts. The issuer is
liable for damages caused by violation of this subsection.
(2) ((Where)) If a tangible bill of lading is lawfully ((drawn))
issued in a set of parts, each of which ((is numbered)) contains an
identification code and is expressed to be valid only if the goods have
not been delivered against any other part, the whole of the parts
constitutes one bill.
(3) ((Where)) If a tangible negotiable bill of lading is lawfully
issued in a set of parts and different parts are negotiated to
different persons, the title of the holder to ((whom)) which the first
due negotiation is made prevails as to both the document of title and
the goods even ((though)) if any later holder may have received the
goods from the carrier in good faith and discharged the carrier's
obligation by ((surrender of his)) surrendering its part.
(4) ((Any)) A person ((who)) that negotiates or transfers a single
part of a tangible bill of lading ((drawn)) issued in a set is liable
to holders of that part as if it were the whole set.
(5) The bailee ((is obliged to)) shall deliver in accordance with
((Part 4 of this Article)) RCW 62A.7-401 through 62A.7-404 against the
first presented part of a tangible bill of lading lawfully ((drawn))
issued in a set. ((Such)) Delivery in this manner discharges the
bailee's obligation on the whole bill.
Sec. 305 RCW 62A.7-305 and 1965 ex.s. c 157 s 7-305 are each
amended to read as follows:may)), at the request
of the consignor, may procure the bill to be issued at destination or
at any other place designated in the request.
(2) Upon request of ((anyone)) any person entitled as against
((the)) a carrier to control the goods while in transit and on
surrender of possession or control of any outstanding bill of lading or
other receipt covering ((such)) the goods, the issuer, subject to RCW
62A.7-105, may procure a substitute bill to be issued at any place
designated in the request.
Sec. 306 RCW 62A.7-307 and 1965 ex.s. c 157 s 7-307 are each
amended to read as follows:subsequent to)) after the date of ((its)) the carrier's
receipt of the goods for storage or transportation ((()), including
demurrage and terminal charges(())), and for expenses necessary for
preservation of the goods incident to their transportation or
reasonably incurred in their sale pursuant to law. ((But)) However,
against a purchaser for value of a negotiable bill of lading, a
carrier's lien is limited to charges stated in the bill or the
applicable tariffs((,)) or, if no charges are stated ((then to)), a
reasonable charge.
(2) A lien for charges and expenses under subsection (1) of this
section on goods ((which)) that the carrier was required by law to
receive for transportation is effective against the consignor or any
person entitled to the goods unless the carrier had notice that the
consignor lacked authority to subject the goods to ((such)) those
charges and expenses. Any other lien under subsection (1) of this
section is effective against the consignor and any person ((who)) that
permitted the bailor to have control or possession of the goods unless
the carrier had notice that the bailor lacked ((such)) authority.
(3) A carrier loses ((his)) its lien on any goods ((which he)) that
it voluntarily delivers or ((which he)) unjustifiably refuses to
deliver.
Sec. 307 RCW 62A.7-308 and 1965 ex.s. c 157 s 7-308 are each
amended to read as follows:bloc)) bulk or
in ((parcels)) packages, at any time or place and on any terms
((which)) that are commercially reasonable, after notifying all persons
known to claim an interest in the goods. ((Such)) The notification
must include a statement of the amount due, the nature of the proposed
sale, and the time and place of any public sale. The fact that a
better price could have been obtained by a sale at a different time or
in a method different ((method)) from that selected by the carrier is
not of itself sufficient to establish that the sale was not made in a
commercially reasonable manner. The carrier sells goods in a
commercially reasonable manner if the carrier ((either)) sells the
goods in the usual manner in any recognized market therefor ((or if
he)), sells at the price current in ((such)) that market at the time of
((his)) the sale, or ((if he has)) otherwise ((sold)) sells in
conformity with commercially reasonable practices among dealers in the
type of goods sold ((he has sold in a commercially reasonable manner)).
A sale of more goods than apparently necessary to be offered to ensure
satisfaction of the obligation is not commercially reasonable, except
in cases covered by the preceding sentence.
(2) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred ((under)) in complying with this
section. In that event, the goods ((must)) may not be sold, but must
be retained by the carrier, subject to the terms of the bill of lading
and this article.
(3) ((The)) A carrier may buy at any public sale pursuant to this
section.
(4) A purchaser in good faith of goods sold to enforce a carrier's
lien takes the goods free of any rights of persons against ((whom))
which the lien was valid, despite the carrier's noncompliance ((by the
carrier)) with ((the requirements of)) this section.
(5) ((The)) A carrier may satisfy ((his)) its lien from the
proceeds of any sale pursuant to this section but ((must)) shall hold
the balance, if any, for delivery on demand to any person to ((whom
he)) which the carrier would have been bound to deliver the goods.
(6) The rights provided by this section ((shall be)) are in
addition to all other rights allowed by law to a creditor against
((his)) a debtor.
(7) A carrier's lien may be enforced ((in accordance with))
pursuant to either subsection (1) of this section or the procedure set
forth in subsection (2) of RCW 62A.7-210.
(8) ((The)) A carrier is liable for damages caused by failure to
comply with the requirements for sale under this section and, in case
of willful violation, is liable for conversion.
Sec. 308 RCW 62A.7-309 and 1965 ex.s. c 157 s 7-309 are each
amended to read as follows:Save as otherwise provided in RCW 81.29.010 and 81.29.020))
(1) A carrier ((who)) that issues a bill of lading, whether
negotiable or non-negotiable ((must)), shall exercise the degree of
care in relation to the goods which a reasonably careful ((man)) person
would exercise under ((like)) similar circumstances. This subsection
does not affect any statute, regulation, or rule of law that imposes
liability upon a common carrier for damages not caused by its
negligence.
(2) Damages may be limited by a ((provision)) term in the bill of
lading or in a transportation agreement that the carrier's liability
((shall)) may not exceed a value stated in the ((document)) bill or
transportation agreement if the carrier's rates are dependent upon
value and the consignor ((by the carrier's tariff)) is afforded an
opportunity to declare a higher value ((or a value as lawfully provided
in the tariff, or where no tariff)) and the consignor is ((filed he is
otherwise)) advised of ((such)) the opportunity((; but no)). However,
such a limitation is not effective with respect to the carrier's
liability for conversion to its own use.
(3) Reasonable provisions as to the time and manner of presenting
claims and ((instituting)) commencing actions based on the shipment may
be included in a bill of lading or ((tariff)) a transportation
agreement.
Sec. 401 RCW 62A.7-401 and 1965 ex.s. c 157 s 7-401 are each
amended to read as follows:regardless of the fact that)) even if:
(((a))) (1) The document ((may)) does not comply with the
requirements of this article or of any other ((law)) statute, rule, or
regulation regarding its ((issue)) issuance, form, or content; ((or)) (2) The issuer ((
(b)may have)) violated laws regulating the
conduct of ((his)) its business; ((or)) (3) The goods covered by the document were owned by the
bailee ((
(c)at the time)) when the document was issued; or
(((d))) (4) The person issuing the document ((does not come within
the definition of warehouseman if it)) is not a warehouse but the
document purports to be a warehouse receipt.
Sec. 402 RCW 62A.7-402 and 1965 ex.s. c 157 s 7-402 are each
amended to read as follows:Neither)) A duplicate
((nor)) or any other document of title purporting to cover goods
already represented by an outstanding document of the same issuer does
not confer((s)) any right in the goods, except as provided in the case
of tangible bills of lading in a set of parts, overissue of documents
for fungible goods ((and)), substitutes for lost, stolen, or destroyed
documents, or substitute documents issued pursuant to RCW 62A.7-105.
((But)) The issuer is liable for damages caused by ((his)) its
overissue or failure to identify a duplicate document ((as such)) by a
conspicuous notation ((on its face)).
Sec. 403 RCW 62A.7-403 and 1965 ex.s. c 157 s 7-403 are each
amended to read as follows:WAREHOUSEMAN OR CARRIER)) BAILEE TO DELIVER;
EXCUSE. The)) A bailee ((must)) shall deliver the goods to a
person entitled under ((the)) a document ((who)) of title if the person
complies with subsections (2) and (3) of this section, unless and to
the extent that the bailee establishes any of the following:
(a) Delivery of the goods to a person whose receipt was rightful as
against the claimant;
(b) Damage to or delay, loss or destruction of the goods for which
the bailee is not liable;
(c) Previous sale or other disposition of the goods in lawful
enforcement of a lien or on ((warehouseman's)) a warehouse's lawful
termination of storage;
(d) The exercise by a seller of ((his)) its right to stop delivery
pursuant to ((the provisions of the Article on Sales ())RCW
62A.2-705(())) or by a lessor of its right to stop delivery pursuant to
RCW 62A.2A-526;
(e) A diversion, reconsignment, or other disposition pursuant to
((the provisions of this Article ())RCW 62A.7-303(() or tariff
regulating such right));
(f) Release, satisfaction, or any other ((fact affording a))
personal defense against the claimant; or
(g) Any other lawful excuse.
(2) A person claiming goods covered by a document of title ((must))
shall satisfy the bailee's lien ((where)) if the bailee so requests or
((where)) if the bailee is prohibited by law from delivering the goods
until the charges are paid.
(3) Unless ((the)) a person claiming the goods is ((one)) a person
against ((whom)) which the document ((confers no)) of title does not
confer a right under RCW 62A.7-503(1)((, he must surrender for
cancellation or notation of partial deliveries any outstanding
negotiable document covering the goods, and)):
(a) The person claiming under a document shall surrender possession
or control of any outstanding negotiable document covering the goods
for cancellation or indication of partial deliveries; and
(b) The bailee ((must)) shall cancel the document or conspicuously
((note)) indicate in the document the partial delivery ((thereon or
be)) or the bailee is liable to any person to ((whom)) which the
document is duly negotiated.
(((4) "Person entitled under the document" means holder in the case
of a negotiable document, or the person to whom delivery is to be made
by the terms of or pursuant to written instructions under a non-negotiable document.))
Sec. 404 RCW 62A.7-404 and 1965 ex.s. c 157 s 7-404 are each
amended to read as follows:RECEIPT OR
BILL)) DOCUMENT OF TITLE. who in)) that in good faith
((including observance of reasonable commercial standards)) has
received goods and delivered or otherwise disposed of ((them)) the
goods according to the terms of ((the)) a document of title or pursuant
to this article is not liable ((therefor. This rule applies even
though)) for the goods even if:
(1) The person from ((whom he)) which the bailee received the goods
((had no)) did not have authority to procure the document or to dispose
of the goods ((and even though)); or
(2) The person to ((whom he)) which the bailee delivered the goods
((had no)) did not have authority to receive ((them)) the goods.
Sec. 501 RCW 62A.7-501 and 1965 ex.s. c 157 s 7-501 are each
amended to read as follows:"))DUE NEGOTIATION((")).
running)):
(a) If the document's original terms run to the order of a named
person, the document is negotiated by ((his)) the named person's
indorsement and delivery. After ((his)) the named person's indorsement
in blank or to bearer, any person ((can)) may negotiate ((it)) the
document by delivery alone.
(((2)(a) A negotiable document of title is also negotiated by
delivery alone when by its original terms it runs to bearer;))
(b) when a document running
(b) If the document's original terms run to bearer, it is
negotiated by delivery alone.
(c) If the document's original terms run to the order of a named
person and it is delivered to ((him)) the named person, the effect is
the same as if the document had been negotiated.
(((3))) (d) Negotiation of ((a negotiable)) the document ((of
title)) after it has been indorsed to a ((specified)) named person
requires indorsement by the ((special indorsee as well as)) named
person and delivery.
(((4))) (e) A ((negotiable)) document ((of title)) is (("))duly
negotiated((" when)) if it is negotiated in the manner stated in this
((section)) subsection to a holder ((who)) that purchases it in good
faith, without notice of any defense against or claim to it on the part
of any person, and for value, unless it is established that the
negotiation is not in the regular course of business or financing or
involves receiving the document in settlement or payment of a ((money))
monetary obligation.
(((5))) (2) The following rules apply to a negotiable electronic
document of title:
(a) If the document's original terms run to the order of a named
person or to bearer, the document is negotiated by delivery of the
document to another person. Indorsement by the named person is not
required to negotiate the document.
(b) If the document's original terms run to the order of a named
person and the named person has control of the document, the effect is
the same as if the document had been negotiated.
(c) A document is duly negotiated if it is negotiated in the manner
stated in this subsection to a holder that purchases it in good faith,
without notice of any defense against or claim to it on the part of any
person, and for value, unless it is established that the negotiation is
not in the regular course of business or financing or involves taking
delivery of the document in settlement or payment of a monetary
obligation.
(3) Indorsement of a non-negotiable document of title neither makes
it negotiable nor adds to the transferee's rights.
(((6))) (4) The naming in a negotiable bill of lading of a person
to be notified of the arrival of the goods does not limit the
negotiability of the bill ((nor)) or constitute notice to a purchaser
((thereof)) of the bill of any interest of ((such)) that person in the
goods.
Sec. 502 RCW 62A.7-502 and 1965 ex.s. c 157 s 7-502 are each
amended to read as follows:the following
section and to the provisions of)) RCW 62A.7-205 ((on fungible goods))
and 62A.7-503, a holder to ((whom)) which a negotiable document of
title has been duly negotiated acquires thereby:
(a) Title to the document;
(b) Title to the goods;
(c) All rights accruing under the law of agency or estoppel,
including rights to goods delivered to the bailee after the document
was issued; and
(d) The direct obligation of the issuer to hold or deliver the
goods according to the terms of the document free of any defense or
claim by ((him)) the issuer except those arising under the terms of the
document or under this article((.)), but in the case of a delivery
order, the bailee's obligation accrues only upon the bailee's
acceptance of the delivery order and the obligation acquired by the
holder is that the issuer and any indorser will procure the acceptance
of the bailee.
(2) Subject to ((the following section)) RCW 62A.7-503, title and
rights ((so)) acquired by due negotiation are not defeated by any
stoppage of the goods represented by the document of title or by
surrender of ((such)) the goods by the bailee((,)) and are not impaired
even ((though)) if:
(a) The due negotiation or any prior due negotiation constituted a
breach of duty ((or even though));
(b) Any person has been deprived of possession of ((the)) a
negotiable tangible document or control of a negotiable electronic
document by misrepresentation, fraud, accident, mistake, duress, loss,
theft, or conversion((,)); or ((even though))
(c) A previous sale or other transfer of the goods or document has
been made to a third person.
Sec. 503 RCW 62A.7-503 and 2000 c 250 s 9A-814 are each amended
to read as follows:who))
that before issuance of the document had a legal interest or a
perfected security interest in ((them and who neither)) the goods and
that did not:
(a) ((delivered or entrusted them)) Deliver or entrust the goods or
any document of title covering ((them)) the goods to the bailor or
((his)) the bailor's nominee with:
(i) Actual or apparent authority to ship, store, or sell ((or with
));
(ii) Power to obtain delivery under ((this Article ())RCW
62A.7-403(())); or ((with))
(iii) Power of disposition under ((this Title ())RCW 62A.2-403
((and 62A.9A-320))), 62A.2A-304(2), 62A.2A-305(2), 62A.9-320,
62A.9-321(c), or other statute or rule of law; ((nor)) or
(b) ((acquiesced)) Acquiesce in the procurement by the bailor or
((his)) its nominee of any document ((of title)).
(2) Title to goods based upon an unaccepted delivery order is
subject to the rights of ((anyone to whom)) any person to which a
negotiable warehouse receipt or bill of lading covering the goods has
been duly negotiated. ((Such a)) That title may be defeated under
((the next section)) RCW 62A.7-504 to the same extent as the rights of
the issuer or a transferee from the issuer.
(3) Title to goods based upon a bill of lading issued to a freight
forwarder is subject to the rights of ((anyone to whom)) any person to
which a bill issued by the freight forwarder is duly negotiated((;
but)). However, delivery by the carrier in accordance with ((Part 4 of
this Article)) RCW 62A.7-401 through 62A.7-404 pursuant to its own bill
of lading discharges the carrier's obligation to deliver.
Sec. 504 RCW 62A.7-504 and 1965 ex.s. c 157 s 7-504 are each
amended to read as follows:THE)) ABSENCE OF DUE NEGOTIATION; EFFECT OF
DIVERSION; ((SELLER'S)) STOPPAGE OF DELIVERY. whom))
which the document has been delivered but not duly negotiated, acquires
the title and rights ((which his)) that its transferor had or had
actual authority to convey.
(2) In the case of a transfer of a non-negotiable document of
title, until but not after the bailee receives ((notification)) notice
of the transfer, the rights of the transferee may be defeated:
(a) By those creditors of the transferor ((who)) which could treat
the ((sale)) transfer as void under RCW ((62A.7-402; or)) 62A.2-402 or
62A.2A-308;
(b) By a buyer from the transferor in ordinary course of business
if the bailee has delivered the goods to the buyer or received
notification of ((his)) the buyer's rights; ((or))
(c) By a lessee from the transferor in ordinary course of business
if the bailee has delivered the goods to the lessee or received
notification of the lessee's rights; or
(d) As against the bailee, by good faith dealings of the bailee
with the transferor.
(3) A diversion or other change of shipping instructions by the
consignor in a non-negotiable bill of lading which causes the bailee
not to deliver the goods to the consignee defeats the consignee's title
to the goods if ((they)) the goods have been delivered to a buyer in
ordinary course of business or a lessee in ordinary course of business
and, in any event, defeats the consignee's rights against the bailee.
(4) Delivery of the goods pursuant to a non-negotiable document of
title may be stopped by a seller under RCW 62A.2-705((, and)) or a
lessor under RCW 62A.2A-526, subject to the requirements of due
notification ((there provided)) in those statutes. A bailee
((honoring)) that honors the seller's or lessor's instructions is
entitled to be indemnified by the seller or lessor against any
resulting loss or expense.
Sec. 505 RCW 62A.7-505 and 1965 ex.s. c 157 s 7-505 are each
amended to read as follows:by)) previous
indorsers.
Sec. 506 RCW 62A.7-506 and 1965 ex.s. c 157 s 7-506 are each
amended to read as follows:his)) its transferor supply
any necessary indorsement but the transfer becomes a negotiation only
as of the time the indorsement is supplied.
Sec. 507 RCW 62A.7-507 and 1965 ex.s. c 157 s 7-507 are each
amended to read as follows:TRANSFER OF RECEIPT OR BILL))
DELIVERY OF DOCUMENT OF TITLE. Where)) If a person negotiates or
((transfers)) delivers a document of title for value, otherwise than as
a mere intermediary under ((the next following section, then)) RCW
62A.7-508, unless otherwise agreed ((he warrants to his immediate
purchaser only)), the transferor, in addition to any warranty made in
selling or leasing the goods, warrants to its immediate purchaser only
that:
(a) ((that)) The document is genuine; ((and))
(b) ((that he has no)) The transferor does not have knowledge of
any fact ((which)) that would impair ((its)) the document's validity or
worth; and
(c) ((that his)) The negotiation or ((transfer)) delivery is
rightful and fully effective with respect to the title to the document
and the goods it represents.
Sec. 508 RCW 62A.7-508 and 1965 ex.s. c 157 s 7-508 are each
amended to read as follows:such)) the
delivery of the documents only its own good faith and authority((.
This rule applies)) even ((though)) if the collecting bank or other
intermediary has purchased or made advances against the claim or draft
to be collected.
Sec. 509 RCW 62A.7-509 and 1965 ex.s. c 157 s 7-509 are each
amended to read as follows:RECEIPT OR BILL: WHEN)) ADEQUATE COMPLIANCE WITH COMMERCIAL
CONTRACT. The question)) Whether a document of title is adequate to
fulfill the obligations of a contract for sale, a contract for lease,
or the conditions of a letter of credit is ((governed by the Articles
on Sales (Article 2) and on Letters of Credit (Article 5))) determined
by chapter 62A.2, 62A.2A, or 62A.5 RCW.
Sec. 601 RCW 62A.7-601 and 1965 ex.s. c 157 s 7-601 are each
amended to read as follows:AND MISSING)), STOLEN, OR DESTROYED DOCUMENTS OF TITLE. has been)) of title is lost, stolen, or destroyed, a
court may order delivery of the goods or issuance of a substitute
document and the bailee may without liability to any person comply with
((such)) the order. If the document was negotiable ((the claimant must
post security approved by the)), a court ((to indemnify)) may not order
delivery of the goods or issuance of a substitute document without the
claimant's posting security unless it finds that any person ((who))
that may suffer loss as a result of non-surrender of possession or
control of the document is adequately protected against the loss. If
the document was ((not negotiable, such)) non-negotiable, the court may
require security ((may be required at the discretion of the court)).
The court may also ((in its discretion)) order payment of the bailee's
reasonable costs and ((counsel)) attorneys' fees in any action under
this subsection.
(2) A bailee ((who)) that, without a court order, delivers goods to
a person claiming under a missing negotiable document of title is
liable to any person injured thereby((, and)). If the delivery is not
in good faith ((becomes)), the bailee is liable for conversion.
Delivery in good faith is not conversion if ((made in accordance with
a filed classification or tariff or, where no classification or tariff
is filed, if)) the claimant posts security with the bailee in an amount
at least double the value of the goods at the time of posting to
indemnify any person injured by the delivery ((who)) which files a
notice of claim within one year after the delivery.
Sec. 602 RCW 62A.7-602 and 1965 ex.s. c 157 s 7-602 are each
amended to read as follows:ATTACHMENT OF)) JUDICIAL PROCESS AGAINST GOODS COVERED BY ((A))
NEGOTIABLE DOCUMENT OF TITLE. Except where the)) Unless a document
of title was originally issued upon delivery of the goods by a person
((who had no)) that did not have power to dispose of them, ((no)) a
lien ((attaches)) does not attach by virtue of any judicial process to
goods in the possession of a bailee for which a negotiable document of
title is outstanding unless possession or control of the document
((be)) is first surrendered to the bailee or ((its)) the document's
negotiation is enjoined((, and)). The bailee ((shall)) may not be
compelled to deliver the goods pursuant to process until possession or
control of the document is surrendered to ((him or impounded by)) the
bailee or to the court. ((One who purchases)) A purchaser of the
document for value without notice of the process or injunction takes
free of the lien imposed by judicial process.
Sec. 603 RCW 62A.7-603 and 1965 ex.s. c 157 s 7-603 are each
amended to read as follows:he)) the bailee has ((had)) a reasonable time to
ascertain the validity of the adverse claims or to ((bring an action to
compel all claimants to interplead and may compel such)) commence an
action for interpleader. The bailee may assert an interpleader, either
in defending an action for non-delivery of the goods, or by original
action((, whichever is appropriate)).
Sec. 701 RCW 62A.1-201 and 2001 c 32 s 9 are each amended to read
as follows:
(1) "Action" in the sense of a judicial proceeding includes
recoupment, counterclaim, set-off, suit in equity and any other
proceedings in which rights are determined.
(2) "Aggrieved party" means a party entitled to resort to a remedy.
(3) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as
provided in this title (RCW 62A.1-205, RCW 62A.2-208, and RCW 62A.2A-207). Whether an agreement has legal consequences is determined by the
provisions of this title, if applicable; otherwise by the law of
contracts (RCW 62A.1-103). (Compare "Contract".)
(4) "Bank" means any person engaged in the business of banking.
(5) "Bearer" means ((the)) a person in control of a negotiable
electronic document of title or a person in possession of an
instrument, a negotiable tangible document of title, or a certificated
security payable to bearer or indorsed in blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of directly or indirectly transporting or forwarding goods((,
and includes an airbill. "Airbill" means a document serving for air
transportation as a bill of lading does for marine or rail
transportation, and includes an air consignment note or air waybill)).
The term does not include a warehouse receipt.
(7) "Branch" includes a separately incorporated foreign branch of
a bank.
(8) "Burden of establishing" a fact means the burden of persuading
the triers of fact that the existence of the fact is more probable than
its non-existence.
(9) "Buyer in ordinary course of business" means a person that buys
goods in good faith, without knowledge that the sale violates the
rights of another person in the goods, and in the ordinary course from
a person, other than a pawnbroker, in the business of selling goods of
that kind. A person buys goods in the ordinary course if the sale to
the person comports with the usual or customary practices in the kind
of business in which the seller is engaged or with the seller's own
usual or customary practices. A person that sells oil, gas, or other
minerals at the wellhead or minehead is a person in the business of
selling goods of that kind. A buyer in ordinary course of business may
buy for cash, by exchange of other property, or on secured or unsecured
credit, and may acquire goods or documents of title under a pre-existing contract for sale. Only a buyer that takes possession of the
goods or has a right to recover the goods from the seller under Article
62A.2 RCW may be a buyer in ordinary course of business. A person that
acquires goods in a transfer in bulk or as security for or in total or
partial satisfaction of a money debt is not a buyer in ordinary course
of business.
(10) "Conspicuous"((: A term or clause is conspicuous when it is
so written that a reasonable person against whom it is to operate ought
to have noticed it. A printed heading in capitals (as: NON-NEGOTIABLE
BILL OF LADING) is conspicuous. Language in the body of a form is
"conspicuous" if it is in larger or other contrasting type or color.
But in a telegram any stated term is "conspicuous")), with reference to
a term, means so written, displayed, or presented that a reasonable
person against which it is to operate ought to have noticed it.
Whether a term ((or clause)) is "conspicuous" or not is ((for)) a
decision ((by)) for the court. Conspicuous terms include the
following:
(a) A heading in capitals equal to or greater in size than the
surrounding text, or in contrasting type, font, or color to the
surrounding text of the same or lesser size; and
(b) Language in the body of a record or display in larger type than
the surrounding text, or in contrasting type, font, or color to the
surrounding text of the same size, or set off from surrounding text of
the same size by symbols or other marks that call attention to the
language.
(11) "Contract" means the total legal obligation which results from
the parties' agreement as affected by this title and any other
applicable rules of law. (Compare "Agreement".)
(12) "Creditor" includes a general creditor, a secured creditor, a
lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity and an executor or administrator of an insolvent
debtor's or assignor's estate.
(13) "Defendant" includes a person in the position of defendant in
a cross-action or counterclaim.
(14) "Delivery" with respect to an electronic document of title
means voluntary transfer of control and with respect to instruments,
tangible documents of title, chattel paper, or certificated securities
means voluntary transfer of possession.
(15) "Document of title" ((includes bill of lading, dock warrant,
dock receipt, warehouse receipt or order for the delivery of goods, and
also any other document which)) means a record (a) that in the regular
course of business or financing is treated as adequately evidencing
that the person in possession or control of ((it)) the record is
entitled to receive, control, hold and dispose of the ((document))
record and the goods ((it)) the record covers((. To be a document of
title a document must purport to be issued by or addressed to a bailee
and purport)) and (b) that purports to be issued by or addressed to a
bailee and to cover goods in the bailee's possession which are either
identified or are fungible portions of an identified mass. The term
includes a bill of lading, transport document, dock warrant, dock
receipt, warehouse receipt, and order for delivery of goods. An
"electronic document of title" means a document of title evidenced by
a record consisting of information stored in an electronic medium. A
"tangible document of title" means a document of title evidenced by a
record consisting of information that is inscribed on a tangible
medium.
(16) "Fault" means wrongful act, omission or breach.
(17) "Fungible" with respect to goods or securities means goods or
securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible shall
be deemed fungible for the purposes of this title to the extent that
under a particular agreement or document unlike units are treated as
equivalents.
(18) "Genuine" means free of forgery or counterfeiting.
(19) "Good faith" means honesty in fact in the conduct or
transaction concerned.
(20) "Holder" ((with respect to a negotiable instrument,)) means:
(a) The person in possession ((if the)) of a negotiable instrument
that is payable either to bearer or((, in the case of an instrument
payable)) to an identified person((, if the identified)) that is the
person ((is)) in possession((. "Holder" with respect to a document of
title means));
(b) The person in possession of a negotiable tangible document of
title if the goods are deliverable either to bearer or to the order of
the person in possession; or
(c) The person in control of a negotiable electronic document of
title.
(21) To "honor" is to pay or to accept and pay, or where a credit
so engages to purchase or discount a draft complying with the terms of
the credit.
(22) "Insolvency proceedings" includes any assignment for the
benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate of the person involved.
(23) A person is "insolvent" who either has ceased to pay his or
her debts in the ordinary course of business or cannot pay his or her
debts as they become due or is insolvent within the meaning of the
federal bankruptcy law.
(24) "Money" means a medium of exchange authorized or adopted by a
domestic or foreign government and includes a monetary unit of account
established by an intergovernmental organization or by agreement
between two or more nations.
(25) Subject to subsection (27) of this section, a person has
"notice" of a fact ((when)) if the person:
(a) ((he or she)) Has actual knowledge of it; ((or))
(b) ((he or she)) Has received a notice or notification of it; or
(c) From all the facts and circumstances known to ((him or her))
the person at the time in question ((he or she)), has reason to know
that it exists.
A person "knows" or has "knowledge" of a fact when ((he or she)) the
person has actual knowledge of it. "Discover" or "learn" or a word or
phrase of similar import refers to knowledge rather than to reason to
know. The time and circumstances under which a notice or notification
may cease to be effective are not determined by this title.
(26) A person "notifies" or "gives" a notice or notification to
another person by taking such steps as may be reasonably required to
inform the other person in ordinary course, whether or not ((such)) the
other person actually comes to know of it. Subject to subsection (27)
of this section, a person "receives" a notice or notification when:
(a) It comes to ((his or her)) that person's attention; or
(b) It is duly delivered in a form reasonable under the
circumstances at the place of business through which the contract was
made or at ((any other place)) another location held out by ((him or
her)) that person as the place for receipt of such communications.
(27) Notice, knowledge, or a notice or notification received by an
organization is effective for a particular transaction from the time
when it is brought to the attention of the individual conducting that
transaction, and in any event, from the time when it would have been
brought to ((his or her)) the individual's attention if the
organization had exercised due diligence. An organization exercises
due diligence if it maintains reasonable routines for communicating
significant information to the person conducting the transaction and
there is reasonable compliance with the routines. Due diligence does
not require an individual acting for the organization to communicate
information unless such communication is part of ((his or her)) the
individual's regular duties or ((unless he or she)) the individual has
reason to know of the transaction and that the transaction would be
materially affected by the information.
(28) "Organization" includes a corporation, government or
governmental subdivision or agency, business trust, estate, trust,
partnership or association, two or more persons having a joint or
common interest, or any other legal or commercial entity.
(29) "Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within this title.
(30) "Person" includes an individual or an organization (See RCW
62A.1-102).
(31) "Presumption" or "presumed" means that the trier of fact must
find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(32) "Purchase" includes taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or re-issue, gift or
any other voluntary transaction creating an interest in property.
(33) "Purchaser" means a person who takes by purchase.
(34) "Remedy" means any remedial right to which an aggrieved party
is entitled with or without resort to a tribunal.
(35) "Representative" includes an agent, an officer of a
corporation or association, and a trustee, executor or administrator of
an estate, or any other person empowered to act for another.
(36) "Rights" includes remedies.
(37) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation, except
for lease-purchase agreements under chapter 63.19 RCW. The term also
includes any interest of a consignor and a buyer of accounts, chattel
paper, a payment intangible, or a promissory note in a transaction that
is subject to Article 9A. The special property interest of a buyer of
goods on identification of such goods to a contract for sale under RCW
62A.2-401 is not a "security interest", but a buyer may also acquire a
"security interest" by complying with Article 9A. Except as otherwise
provided in RCW 62A.2-505, the right of a seller or lessor of goods
under Article 2 or 2A to retain or acquire possession of the goods is
not a "security interest," but a seller or lessor may also acquire a
"security interest" by complying with Article 9A. The retention or
reservation of title by a seller of goods notwithstanding shipment or
delivery to the buyer (RCW 62A.2-401) is limited in effect to a
reservation of a "security interest."
Whether a transaction creates a lease or security interest is
determined by the facts of each case. However, a transaction creates
a security interest if the consideration the lessee is to pay the
lessor for the right to possession and use of the goods is an
obligation for the term of the lease not subject to termination by the
lessee, and:
(a) The original term of the lease is equal to or greater than the
remaining economic life of the goods;
(b) The lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner of the
goods;
(c) The lessee has an option to renew the lease for the remaining
economic life of the goods for no additional consideration or nominal
additional consideration upon compliance with the lease agreement; or
(d) The lessee has an option to become the owner of the goods for
no additional consideration or nominal additional consideration upon
compliance with the lease agreement.
A transaction does not create a security interest merely because it
provides that:
(a) The present value of the consideration the lessee is obligated
to pay the lessor for the right to possession and use of the goods is
substantially equal to or is greater than the fair market value of the
goods at the time the lease is entered into;
(b) The lessee assumes risk of loss of the goods, or agrees to pay
taxes, insurance, filing, recording, or registration fees, or service
or maintenance costs with respect to the goods;
(c) The lessee has an option to renew the lease or to become the
owner of the goods;
(d) The lessee has an option to renew the lease for a fixed rent
that is equal to or greater than the reasonably predictable fair market
rent for the use of the goods for the term of the renewal at the time
the option is to be performed;
(e) The lessee has an option to become the owner of the goods for
a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the option is to
be performed; or
(f) The amount of rental payments may or will be increased or
decreased by reference to the amount realized by the lessor upon sale
or disposition of the goods.
For purposes of this subsection (37):
(a) Additional consideration is not nominal if (i) when the option
to renew the lease is granted to the lessee the rent is stated to be
the fair market rent for the use of the goods for the term of the
renewal determined at the time the option is to be performed, or (ii)
when the option to become the owner of the goods is granted to the
lessee the price is stated to be the fair market value of the goods
determined at the time the option is to be performed. Additional
consideration is nominal if it is less than the lessee's reasonably
predictable cost of performing under the lease agreement if the option
is not exercised;
(b) "Reasonably predictable" and "remaining economic life of the
goods" are to be determined with reference to the facts and
circumstances at the time the transaction is entered into; and
(c) "Present value" means the amount as of a date certain of one or
more sums payable in the future, discounted to the date certain. The
discount is determined by the interest rate specified by the parties if
the rate is not manifestly unreasonable at the time the transaction is
entered into; otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and circumstances of
each case at the time the transaction was entered into.
(38) "Send" in connection with ((any)) a writing, record, or notice
means:
(a) To deposit in the mail or deliver for transmission by any other
usual means of communication with postage or cost of transmission
provided for and properly addressed and, in the case of an instrument
to an address specified thereon or otherwise agreed, or if there ((be))
is none to any address reasonable under the circumstances((. The
receipt of any writing)); or
(b) In any other way to cause to be received any record or notice
within the time ((at which)) it would have arrived if properly sent
((has the effect of a proper sending)).
(39) "Signed" includes any symbol executed or adopted by a party
with present intention to authenticate a writing.
(40) "Surety" includes guarantor.
(41) "Telegram" includes a message transmitted by radio, teletype,
cable, any mechanical method of transmission, or the like.
(42) "Term" means that portion of an agreement which relates to a
particular matter.
(43) "Unauthorized" signature means one made without actual,
implied or apparent authority and includes a forgery.
(44) "Value". Except as otherwise provided with respect to
negotiable instruments and bank collections (RCW 62A.3-303, RCW 62A.4-210, and RCW 62A.4-211) a person gives "value" for rights if he or she
acquires them:
(a) In return for a binding commitment to extend credit or for the
extension of immediately available credit whether or not drawn upon and
whether or not a charge-back is provided for in the event of
difficulties in collection; or
(b) As security for or in total or partial satisfaction of a
preexisting claim; or
(c) By accepting delivery pursuant to a pre-existing contract for
purchase; or
(d) Generally, in return for any consideration sufficient to
support a simple contract.
(45) "Warehouse receipt" means a ((receipt)) document of title
issued by a person engaged in the business of storing goods for hire.
(46) "Written" or "writing" includes printing, typewriting or any
other intentional reduction to tangible form.
Sec. 702 RCW 62A.1-201 and 2001 c 32 s 9 are each amended to read
as follows:
Subject to ((additional)) definitions contained in ((the
subsequent)) other articles of ((this Title which are applicable to
specific)) the Uniform Commercial Code that apply to particular
articles or parts thereof((, and unless the context otherwise requires,
in this Title)):
(1) "Action," in the sense of a judicial proceeding, includes
recoupment, counterclaim, set-off, suit in equity, and any other
proceeding((s)) in which rights are determined.
(2) "Aggrieved party" means a party entitled to ((resort to))
pursue a remedy.
(3) "Agreement," as distinguished from "contract," means the
bargain of the parties in fact, as found in their language or ((by
implication)) inferred from other circumstances, including course of
performance, course of dealing, or usage of trade ((or course of
performance)) as provided in ((this Title (RCW 62A.1-205, RCW 62A.2-208, and RCW 62A.2A-207). Whether an agreement has legal consequences
is determined by the provisions of this Title, if applicable; otherwise
by the law of contracts (RCW 62A.1-103))) RCW 62A.1-303. (((Compare
"Contract".)))
(4) "Bank" means ((any)) a person engaged in the business of
banking and includes a savings bank, savings and loan association,
credit union, and trust company.
(5) "Bearer" means ((the)) a person in control of a negotiable
electronic document of title or a person in possession of ((an)) a
negotiable instrument, negotiable tangible document of title, or
certificated security that is payable to bearer or indorsed in blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of directly or indirectly transporting or forwarding goods((,
and includes an airbill. "Airbill" means a document serving for air
transportation as a bill of lading does for marine or rail
transportation, and includes an air consignment note or air waybill)).
The term does not include a warehouse receipt.
(7) "Branch" includes a separately incorporated foreign branch of
a bank.
(8) "Burden of establishing" a fact means the burden of persuading
the trier((s)) of fact that the existence of the fact is more probable
than its ((non-existence)) nonexistence.
(9) "Buyer in ordinary course of business" means a person that buys
goods in good faith, without knowledge that the sale violates the
rights of another person in the goods, and in the ordinary course from
a person, other than a pawnbroker, in the business of selling goods of
that kind. A person buys goods in the ordinary course if the sale to
the person comports with the usual or customary practices in the kind
of business in which the seller is engaged or with the seller's own
usual or customary practices. A person that sells oil, gas, or other
minerals at the wellhead or minehead is a person in the business of
selling goods of that kind. A buyer in ordinary course of business may
buy for cash, by exchange of other property, or on secured or unsecured
credit, and may acquire goods or documents of title under a ((pre-existing)) preexisting contract for sale. Only a buyer that takes
possession of the goods or has a right to recover the goods from the
seller under Article 62A.2 RCW may be a buyer in ordinary course of
business. "Buyer in the ordinary course of business" does not include
a person that acquires goods in a transfer in bulk or as security for
or in total or partial satisfaction of a money debt ((is not a buyer in
ordinary course of business)).
(10) "Conspicuous,"((:)) with reference to a term ((or clause is
conspicuous when it is)), means so written, displayed, or presented
that a reasonable person against ((whom)) which it is to operate ought
to have noticed it. ((A printed heading in capitals (as: NON-NEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a
form is "conspicuous" if it is in larger or other contrasting type or
color. But in a telegram any stated term is "conspicuous".)) Whether
a term ((or clause)) is "conspicuous" or not is ((for)) a decision
((by)) for the court. Conspicuous terms include the following:
(a) A heading in capitals equal to or greater in size than the
surrounding text, or in contrasting type, font, or color to the
surrounding text of the same or lesser size; and
(b) Language in the body of a record or display in larger type than
the surrounding text, or in contrasting type, font, or color to the
surrounding text of the same size, or set off from surrounding text of
the same size by symbols or other marks that call attention to the
language.
(11) "Consumer" means an individual who enters into a transaction
primarily for personal, family, or household purposes.
(12) "Contract," as distinguished from "agreement," means the total
legal obligation ((which)) that results from the parties' agreement as
((affected)) determined by ((this Title and)) the Uniform Commercial
Code as supplemented by any other applicable ((rules of)) laws.
(((Compare "Agreement".))) (13) "Creditor" includes a general creditor, a secured
creditor, a lien creditor, and any representative of creditors,
including an assignee for the benefit of creditors, a trustee in
bankruptcy, a receiver in equity, and an executor or administrator of
an insolvent debtor's or assignor's estate.
(12)
(((13))) (14) "Defendant" includes a person in the position of
defendant in a ((cross-action or)) counterclaim, cross-claim, or third-party claim.
(((14))) (15) "Delivery," with respect to an electronic document of
title means voluntary transfer of control and with respect to an
instrument((s)), a tangible document((s)) of title, or chattel paper((,
or certificated securities)) means voluntary transfer of possession.
(((15))) (16) "Document of title" ((includes bill of lading, dock
warrant, dock receipt, warehouse receipt or order for the delivery of
goods, and also any other document which)) means a record (a) that in
the regular course of business or financing is treated as adequately
evidencing that the person in possession or control of ((it)) the
record is entitled to receive, control, hold, and dispose of the
((document)) record and the goods ((it)) the record covers((. To be a
document of title a document must purport to be issued by or addressed
to a bailee and purport to cover goods in the bailee's possession which
are either identified or are fungible portions of an identified mass))
and (b) that purports to be issued by or addressed to a bailee and to
cover goods in the bailee's possession which are either identified or
are fungible portions of an identified mass. The term includes a bill
of lading, transport document, dock warrant, dock receipt, warehouse
receipt, and order for delivery of goods. An electronic document of
title means a document of title evidenced by a record consisting of
information stored in an electronic medium. A tangible document of
title means a document of title evidenced by a record consisting of
information that is inscribed on a tangible medium.
(((16))) (17) "Fault" means a default, breach, or wrongful act((,))
or omission ((or breach)).
(((17))) (18) "Fungible goods" ((with respect to goods or
securities)) means:
(a) Goods ((or securities)) of which any unit ((is)), by nature or
usage of trade, is the equivalent of any other like unit((.)); or
(b) Goods ((which are not fungible shall be deemed fungible for the
purposes of this Title to the extent)) that ((under a particular)) by
agreement ((or document unlike units)) are treated as equivalent((s)).
(((18))) (19) "Genuine" means free of forgery or counterfeiting.
(((19))) (20) "Good faith," except as otherwise provided in Article
5, means honesty in fact ((in the conduct or transaction concerned))
and the observance of reasonable commercial standards of fair dealing.
(((20))) (21) "Holder" with respect to a negotiable instrument,
means:
(a) The person in possession ((if the)) of a negotiable instrument
that is payable either to bearer or((, in the case of an instrument
payable to an identified person, if the)) to an identified person that
is the person in possession((. "Holder" with respect to));
(b) The person in possession of a negotiable tangible document of
title ((means the person in possession)) if the goods are deliverable
either to bearer or to the order of the person in possession; or
(c) The person in control of a negotiable electronic document of
title.
(((21) To "honor" is to pay or to accept and pay, or where a credit
so engages to purchase or discount a draft complying with the terms of
the credit.))
(22) "Insolvency proceeding((s))" includes ((any)) an assignment
for the benefit of creditors or other proceeding((s)) intended to
liquidate or rehabilitate the estate of the person involved.
(23) ((A person is)) "Insolvent" ((who either has)) means:
(a) Having generally ceased to pay ((his or her)) debts in the
ordinary course of business ((or cannot)) other than as a result of a
bona fide dispute;
(b) Being unable to pay ((his or her)) debts as they become due; or
((is))
(c) Being insolvent within the meaning of ((the)) federal
bankruptcy law.
(24) "Money" means a medium of exchange currently authorized or
adopted by a domestic or foreign government ((and)). The term includes
a monetary unit of account established by an intergovernmental
organization or by agreement between two or more ((nations)) countries.
(25) ((A person has "notice" of a fact when)) "Organization" ((
(a) he or she has actual knowledge of it; or
(b) he or she has received a notice or notification of it; or
(c) from all the facts and circumstances known to him or her at the
time in question he or she has reason to know that it exists.
A person "knows" or has "knowledge" of a fact when he or she has actual
knowledge of it. "Discover" or "learn" or a word or phrase of similar
import refers to knowledge rather than to reason to know. The time and
circumstances under which a notice or notification may cease to be
effective are not determined by this Title.
(26) A person "notifies" or "gives" a notice or notification to
another by taking such steps as may be reasonably required to inform
the other in ordinary course whether or not such other actually comes
to know of it. A person "receives" a notice or notification when
(a) it comes to his or her attention; or
(b) it is duly delivered at the place of business through which the
contract was made or at any other place held out by him or her as the
place for receipt of such communications.
(27) Notice, knowledge or a notice or notification received by an
organization is effective for a particular transaction from the time
when it is brought to the attention of the individual conducting that
transaction, and in any event from the time when it would have been
brought to his or her attention if the organization had exercised due
diligence. An organization exercises due diligence if it maintains
reasonable routines for communicating significant information to the
person conducting the transaction and there is reasonable compliance
with the routines. Due diligence does not require an individual acting
for the organization to communicate information unless such
communication is part of his or her regular duties or unless he or she
has reason to know of the transaction and that the transaction would be
materially affected by the information.
(28)includes a corporation, government or
governmental subdivision or agency, business trust, estate, trust,
partnership or association, two or more persons having a joint or
common interest, or any other legal or commercial entity)) means a
person other than an individual.
(((29))) (26) "Party,"((,)) as ((distinct)) distinguished from
"third party,"((,)) means a person ((who)) that has engaged in a
transaction or made an agreement ((within this Title)) subject to the
Uniform Commercial Code.
(((30))) (27) "Person" ((includes)) means an individual ((or an
organization (See RCW 62A.1-102).)), corporation, business trust, estate, trust, partnership,
limited liability company, association, joint venture, government,
governmental subdivision, agency, or instrumentality, public
corporation, or any other legal or commercial entity.
(31) "Presumption" or "presumed" means that the trier of fact must
find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(32)
(28) "Present value" means the amount as of a date certain of one
or more sums payable in the future, discounted to the date certain by
use of either an interest rate specified by the parties if that rate is
not manifestly unreasonable at the time the transaction is entered into
or, if an interest rate is not so specified, a commercially reasonable
rate that takes into account the facts and circumstances at the time
the transaction is entered into.
(29) "Purchase" ((includes)) means taking by sale, lease, discount,
negotiation, mortgage, pledge, lien, security interest, issue or ((re-issue)) reissue, gift, or any other voluntary transaction creating an
interest in property.
(((33))) (30) "Purchaser" means a person ((who)) that takes by
purchase.
(((34))) (31) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.
(32) "Remedy" means any remedial right to which an aggrieved party
is entitled with or without resort to a tribunal.
(((35))) (33) "Representative" ((includes)) means a person
empowered to act for another, including an agent, an officer of a
corporation or association, and a trustee, executor, or administrator
of an estate((, or any other person empowered to act for another)).
(((36))) (34) "Right((s))" includes ((remedies)) remedy.
(((37))) (35) "Security interest" means an interest in personal
property or fixtures which secures payment or performance of an
obligation((, except for lease-purchase agreements under chapter 63.19
RCW. The term also)). "Security interest" includes any interest of a
consignor and a buyer of accounts, chattel paper, a payment intangible,
or a promissory note in a transaction that is subject to Article 9A.
"Security interest" does not include the special property interest of
a buyer of goods on identification of ((such)) those goods to a
contract for sale under RCW 62A.2-401 ((is not a "security interest")),
but a buyer may also acquire a "security interest" by complying with
Article 9A. Except as otherwise provided in RCW 62A.2-505, the right
of a seller or lessor of goods under Article 2 or 2A to retain or
acquire possession of the goods is not a "security interest," but a
seller or lessor may also acquire a "security interest" by complying
with Article 9A. The retention or reservation of title by a seller of
goods notwithstanding shipment or delivery to the buyer ((()) under RCW
62A.2-401(())) is limited in effect to a reservation of a "security
interest." Whether a transaction in the form of a lease creates a
((lease or)) "security interest" is determined ((by the facts of each
case. However, a transaction creates a security interest if the
consideration the lessee is to pay the lessor for the right to
possession and use of the goods is an obligation for the term of the
lease not subject to termination by the lessee, and:)) pursuant to
RCW 62A.1-203.
(a) The original term of the lease is equal to or greater than the
remaining economic life of the goods;
(b) The lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner of the
goods;
(c) The lessee has an option to renew the lease for the remaining
economic life of the goods for no additional consideration or nominal
additional consideration upon compliance with the lease agreement; or
(d) The lessee has an option to become the owner of the goods for
no additional consideration or nominal additional consideration upon
compliance with the lease agreement.
A transaction does not create a security interest merely because it
provides that:
(a) The present value of the consideration the lessee is obligated
to pay the lessor for the right to possession and use of the goods is
substantially equal to or is greater than the fair market value of the
goods at the time the lease is entered into;
(b) The lessee assumes risk of loss of the goods, or agrees to pay
taxes, insurance, filing, recording, or registration fees, or service
or maintenance costs with respect to the goods;
(c) The lessee has an option to renew the lease or to become the
owner of the goods;
(d) The lessee has an option to renew the lease for a fixed rent
that is equal to or greater than the reasonably predictable fair market
rent for the use of the goods for the term of the renewal at the time
the option is to be performed;
(e) The lessee has an option to become the owner of the goods for
a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the option is to
be performed; or
(f) The amount of rental payments may or will be increased or
decreased by reference to the amount realized by the lessor upon sale
or disposition of the goods.
For purposes of this subsection (37):
(a) Additional consideration is not nominal if (i) when the option
to renew the lease is granted to the lessee the rent is stated to be
the fair market rent for the use of the goods for the term of the
renewal determined at the time the option is to be performed, or (ii)
when the option to become the owner of the goods is granted to the
lessee the price is stated to be the fair market value of the goods
determined at the time the option is to be performed. Additional
consideration is nominal if it is less than the lessee's reasonably
predictable cost of performing under the lease agreement if the option
is not exercised;
(b) "Reasonably predictable" and "remaining economic life of the
goods" are to be determined with reference to the facts and
circumstances at the time the transaction is entered into; and
(c) "Present value" means the amount as of a date certain of one or
more sums payable in the future, discounted to the date certain. The
discount is determined by the interest rate specified by the parties if
the rate is not manifestly unreasonable at the time the transaction is
entered into; otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and circumstances of
each case at the time the transaction was entered into
(((38))) (36) "Send" in connection ((with any)) a writing, record,
or notice means:
(a) To deposit in the mail or deliver for transmission by any other
usual means of communication with postage or cost of transmission
provided for and properly addressed and, in the case of an instrument,
to an address specified thereon or otherwise agreed, or if there be
none to any address reasonable under the circumstances((. The receipt
of any writing)); or
(b) In any other way to cause to be received any record or notice
within the time ((at which)) it would have arrived if properly sent
((has the effect of a proper sending)).
(((39))) (37) "Signed" includes any symbol executed or adopted ((by
a party)) with present intention to ((authenticate)) adopt or accept a
writing.
(((40))) (38) "State" means a State of the United States, the
District of Columbia, Puerto Rico, the United States Virgin Islands, or
any territory or insular possession subject to the jurisdiction of the
United States.
(39) "Surety" includes a guarantor or other secondary obligor.
(((41) "Telegram" includes a message transmitted by radio,
teletype, cable, any mechanical method of transmission, or the like.)) (40) "Term" means ((
(42)that)) a portion of an agreement
((which)) that relates to a particular matter.
(((43))) (41) "Unauthorized((")) signature" means ((one)) a
signature made without actual, implied, or apparent authority ((and)).
The term includes a forgery.
(((44) "Value". Except as otherwise provided with respect to
negotiable instruments and bank collections (RCW 62A.3-303, RCW 62A.4-210, and RCW 62A.4-211) a person gives "value" for rights if he or she
acquires them)) (42) "Warehouse receipt" means a ((
(a) in return for a binding commitment to extend credit or for the
extension of immediately available credit whether or not drawn upon and
whether or not a charge-back is provided for in the event of
difficulties in collection; or
(b) as security for or in total or partial satisfaction of a
preexisting claim; or
(c) by accepting delivery pursuant to a pre-existing contract for
purchase; or
(d) generally, in return for any consideration sufficient to
support a simple contract.
(45)receipt)) document of
title issued by a person engaged in the business of storing goods for
hire.
(((46) "Written" or)) (43) "Writing" includes printing,
typewriting, or any other intentional reduction to tangible form.
"Written" has a corresponding meaning.
Sec. 801 RCW 62A.2-103 and 2000 c 250 s 9A-803 are each amended
to read as follows:
(a) "Buyer" means a person who buys or contracts to buy goods.
(b) "Good faith" in the case of a merchant means honesty in fact
and the observance of reasonable commercial standards of fair dealing
in the trade.
(c) "Receipt" of goods means taking physical possession of them.
(d) "Seller" means a person who sells or contracts to sell goods.
(2) Other definitions applying to this article or to specified
Parts thereof, and the sections in which they appear are:
| "Acceptance." | RCW 62A.2-606. | |
| "Banker's credit." | RCW 62A.2-325. | |
| "Between merchants." | RCW 62A.2-104. | |
| "Cancellation." | RCW 62A.2-106(4). | |
| "Commercial unit." | RCW 62A.2-105. | |
| "Confirmed credit." | RCW 62A.2-325. | |
| "Conforming to contract." | RCW 62A.2-106. | |
| "Contract for sale." | RCW 62A.2-106. | |
| "Cover." | RCW 62A.2-712. | |
| "Entrusting." | RCW 62A.2-403. | |
| "Financing agency." | RCW 62A.2-104. | |
| "Future goods." | RCW 62A.2-105. | |
| "Goods." | RCW 62A.2-105. | |
| "Identification." | RCW 62A.2-501. | |
| "Installment contract." | RCW 62A.2-612. | |
| "Letter of credit." | RCW 62A.2-325. | |
| "Lot." | RCW 62A.2-105. | |
| "Merchant." | RCW 62A.2-104. | |
| "Overseas." | RCW 62A.2-323. | |
| RCW 62A.2-707. | ||
| "Present sale." | RCW 62A.2-106. | |
| "Sale." | RCW 62A.2-106. | |
| "Sale on approval." | RCW 62A.2-326. | |
| "Sale or return." | RCW 62A.2-326. | |
| "Termination." | RCW 62A.2-106. |
| "Check." | RCW 62A.3-104. | |
| "Consignee." | RCW 62A.7-102. | |
| "Consignor." | RCW 62A.7-102. | |
| "Control." | RCW 62A.7-106. | |
| "Consumer goods." | RCW 62A.9A-102. | |
| "Dishonor." | RCW 62A.3-502. | |
| "Draft." | RCW 62A.3-104. |
Sec. 802 RCW 62A.2-104 and 1965 ex.s. c 157 s 2-104 are each
amended to read as follows:.))
(2) "Financing agency" means a bank, finance company or other
person who in the ordinary course of business makes advances against
goods or documents of title or who by arrangement with either the
seller or the buyer intervenes in ordinary course to make or collect
payment due or claimed under the contract for sale, as by purchasing or
paying the seller's draft or making advances against it or by merely
taking it for collection whether or not documents of title accompany or
are associated with the draft. "Financing agency" includes also a bank
or other person who similarly intervenes between persons who are in the
position of seller and buyer in respect to the goods (RCW 62A.2-707).
(3) "Between merchants" means in any transaction with respect to
which both parties are chargeable with the knowledge or skill of
merchants.
Sec. 803 RCW 62A.2-310 and 1965 ex.s. c 157 s 2-310 are each
amended to read as follows:
(a) Payment is due at the time and place at which the buyer is to
receive the goods even though the place of shipment is the place of
delivery; and
(b) If the seller is authorized to send the goods he or she may
ship them under reservation, and may tender the documents of title, but
the buyer may inspect the goods after their arrival before payment is
due unless such inspection is inconsistent with the terms of the
contract (RCW 62A.2-513); and
(c) If delivery is authorized and made by way of documents of title
otherwise than by subsection (b) of this section then payment is due
regardless of where the goods are to be received (1) at the time and
place at which the buyer is to receive delivery of the tangible
documents ((regardless of where the goods are to be received)) or (2)
at the time the buyer is to receive delivery of the electronic
documents and at the seller's place of business or if none, the
seller's residence; and
(d) Where the seller is required or authorized to ship the goods on
credit the credit period runs from the time of shipment but post-dating
the invoice or delaying its dispatch will correspondingly delay the
starting of the credit period.
Sec. 804 RCW 62A.2-323 and 1965 ex.s. c 157 s 2-323 are each
amended to read as follows:
(2) Where in a case within subsection (1) of this section a
tangible bill of lading has been issued in a set of parts, unless
otherwise agreed if the documents are not to be sent from abroad the
buyer may demand tender of the full set; otherwise only one part of the
bill of lading need be tendered. Even if the agreement expressly
requires a full set:
(a) Due tender of a single part is acceptable within the provisions
of this article on cure of improper delivery (subsection (1) of RCW
62A.2-508); and
(b) Even though the full set is demanded, if the documents are sent
from abroad the person tendering an incomplete set may nevertheless
require payment upon furnishing an indemnity which the buyer in good
faith deems adequate.
(3) A shipment by water or by air or a contract contemplating such
shipment is "overseas" insofar as by usage of trade or agreement it is
subject to the commercial, financing or shipping practices
characteristic of international deep water commerce.
Sec. 805 RCW 62A.2-401 and 1965 ex.s. c 157 s 2-401 are each
amended to read as follows:
(1) Title to goods cannot pass under a contract for sale prior to
their identification to the contract (RCW 62A.2-501), and unless
otherwise explicitly agreed the buyer acquires by their identification
a special property as limited by this title. Any retention or
reservation by the seller of the title (property) in goods shipped or
delivered to the buyer is limited in effect to a reservation of a
security interest. Subject to these provisions and to the provisions
of the Article on Secured Transactions (((Article 9)) chapter 62A.9
RCW), title to goods passes from the seller to the buyer in any manner
and on any conditions explicitly agreed on by the parties.
(2) Unless otherwise explicitly agreed title passes to the buyer at
the time and place at which the seller completes his or her performance
with reference to the physical delivery of the goods, despite any
reservation of a security interest and even though a document of title
is to be delivered at a different time or place; and in particular and
despite any reservation of a security interest by the bill of lading:
(a) If the contract requires or authorizes the seller to send the
goods to the buyer but does not require him or her to deliver them at
destination, title passes to the buyer at the time and place of
shipment; but
(b) If the contract requires delivery at destination, title passes
on tender there.
(3) Unless otherwise explicitly agreed where delivery is to be made
without moving the goods((,)):
(a) If the seller is to deliver a tangible document of title, title
passes at the time when and the place where he or she delivers such
documents and if the seller is to deliver an electronic document of
title, title passes when the seller delivers the document; or
(b) If the goods are at the time of contracting already identified
and no documents of title are to be delivered, title passes at the time
and place of contracting.
(4) A rejection or other refusal by the buyer to receive or retain
the goods, whether or not justified, or a justified revocation of
acceptance revests title to the goods in the seller. Such revesting
occurs by operation of law and is not a "sale."((.))
Sec. 806 RCW 62A.2-503 and 1965 ex.s. c 157 s 2-503 are each
amended to read as follows:
(a) Tender must be at a reasonable hour, and if it is of goods they
must be kept available for the period reasonably necessary to enable
the buyer to take possession; but
(b) Unless otherwise agreed the buyer must furnish facilities
reasonably suited to the receipt of the goods.
(2) Where the case is within the next section respecting shipment
tender requires that the seller comply with its provisions.
(3) Where the seller is required to deliver at a particular
destination tender requires that he or she comply with subsection (1)
of this section and also in any appropriate case tender documents as
described in subsections (4) and (5) of this section.
(4) Where goods are in the possession of a bailee and are to be
delivered without being moved:
(a) Tender requires that the seller either tender a negotiable
document of title covering such goods or procure acknowledgment by the
bailee of the buyer's right to possession of the goods; but
(b) Tender to the buyer of a non-negotiable document of title or of
a ((written direction to)) record directing the bailee to deliver is
sufficient tender unless the buyer seasonably objects, and except as
otherwise provided in chapter 62A.9 RCW, receipt by the bailee of
notification of the buyer's rights fixes those rights as against the
bailee and all third persons; but risk of loss of the goods and of any
failure by the bailee to honor the non-negotiable document of title or
to obey the direction remains on the seller until the buyer has had a
reasonable time to present the document or direction, and a refusal by
the bailee to honor the document or to obey the direction defeats the
tender.
(5) Where the contract requires the seller to deliver documents:
(a) He or she must tender all such documents in correct form,
except as provided in this article with respect to bills of lading in
a set (subsection (2) of RCW 62A.2-323); and
(b) Tender through customary banking channels is sufficient and
dishonor of a draft accompanying or associated with the documents
constitutes non-acceptance or rejection.
Sec. 807 RCW 62A.2-505 and 1965 ex.s. c 157 s 2-505 are each
amended to read as follows:
(a) His or her procurement of a negotiable bill of lading to his or
her own order or otherwise reserves in him or her a security interest
in the goods. His or her procurement of the bill to the order of a
financing agency or of the buyer indicates in addition only the
seller's expectation of transferring that interest to the person named.
(b) A non-negotiable bill of lading to himself or herself or his or
her nominee reserves possession of the goods as security but except in
a case of conditional delivery (subsection (2) of RCW 62A.2-507) a non-negotiable bill of lading naming the buyer as consignee reserves no
security interest even though the seller retains possession or control
of the bill of lading.
(2) When shipment by the seller with reservation of a security
interest is in violation of the contract for sale it constitutes an
improper contract for transportation within the preceding section but
impairs neither the rights given to the buyer by shipment and
identification of the goods to the contract nor the seller's powers as
a holder of a negotiable document of title.
Sec. 808 RCW 62A.2-506 and 1965 ex.s. c 157 s 2-506 are each
amended to read as follows:
(2) The right to reimbursement of a financing agency which has in
good faith honored or purchased the draft under commitment to or
authority from the buyer is not impaired by subsequent discovery of
defects with reference to any relevant document which was apparently
regular ((on its face)).
Sec. 809 RCW 62A.2-509 and 1965 ex.s. c 157 s 2-509 are each
amended to read as follows:
(a) If it does not require him or her to deliver them at a
particular destination, the risk of loss passes to the buyer when the
goods are duly delivered to the carrier even though the shipment is
under reservation (RCW 62A.2-505); but
(b) If it does require him or her to deliver them at a particular
destination and the goods are there duly tendered while in the
possession of the carrier, the risk of loss passes to the buyer when
the goods are there duly so tendered as to enable the buyer to take
delivery.
(2) Where the goods are held by a bailee to be delivered without
being moved, the risk of loss passes to the buyer:
(a) On his or her receipt of possession or control a negotiable
document of title covering the goods; or
(b) On acknowledgment by the bailee of the buyer's right to
possession of the goods; or
(c) After his or her receipt of possession or control a non-negotiable document of title or other ((written)) direction to deliver
in a record, as provided in subsection (4)(b) of RCW 62A.2-503.
(3) In any case not within subsection (1) or (2) of this section,
the risk of loss passes to the buyer on his or her receipt of the goods
if the seller is a merchant; otherwise the risk passes to the buyer on
tender of delivery.
(4) The provisions of this section are subject to contrary
agreement of the parties and to the provisions of this article on sale
on approval (RCW 62A.2-327) and on effect of breach on risk of loss
(RCW 62A.2-510).
Sec. 810 RCW 62A.2-605 and 1965 ex.s. c 157 s 2-605 are each
amended to read as follows:
(a) Where the seller could have cured it if stated seasonably; or
(b) Between merchants when the seller has after rejection made a
request in writing for a full and final written statement of all
defects on which the buyer proposes to rely.
(2) Payment against documents made without reservation of rights
precludes recovery of the payment for defects apparent ((on the face
of)) in the documents.
Sec. 811 RCW 62A.2-705 and 1965 ex.s. c 157 s 2-705 are each
amended to read as follows:
(2) As against such buyer the seller may stop delivery until:
(a) Receipt of the goods by the buyer; or
(b) Acknowledgment to the buyer by any bailee of the goods except
a carrier that the bailee holds the goods for the buyer; or
(c) Such acknowledgment to the buyer by a carrier by reshipment or
as ((warehouseman)) a warehouse; or
(d) Negotiation to the buyer of any negotiable document of title
covering the goods.
(3)(a) To stop delivery the seller must so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.
(b) After such notification the bailee must hold and deliver the
goods according to the directions of the seller but the seller is
liable to the bailee for any ensuing charges or damages.
(c) If a negotiable document of title has been issued for goods the
bailee is not obliged to obey a notification to stop until surrender of
possession or control of the document.
(d) A carrier who has issued a non-negotiable bill of lading is not
obliged to obey a notification to stop received from a person other
than the consignor.
Sec. 901 RCW 62A.2A-103 and 2000 c 250 s 9A-808 are each amended
to read as follows:
(a) "Buyer in ordinary course of business" means a person who in
good faith and without knowledge that the sale to him or her is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods buys in ordinary course from a
person in the business of selling goods of that kind but does not
include a pawnbroker. "Buying" may be for cash, or by exchange of
other property, or on secured or unsecured credit, and includes
((receiving)) acquiring goods or documents of title under a preexisting
contract for sale but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
(b) "Cancellation" occurs when either party puts an end to the
lease contract for default by the other party.
(c) "Commercial unit" means such a unit of goods as by commercial
usage is a single whole for purposes of lease and division of which
materially impairs its character or value on the market or in use. A
commercial unit may be a single article, as a machine, or a set of
articles, as a suite of furniture or a line of machinery, or a
quantity, as a gross or carload, or any other unit treated in use or in
the relevant market as a single whole.
(d) "Conforming" goods or performance under a lease contract means
goods or performance that are in accordance with the obligations under
the lease contract.
(e) "Consumer lease" means a lease that a lessor regularly engaged
in the business of leasing or selling makes to a lessee who is an
individual who takes under the lease primarily for a personal, family,
or household purpose, if the total payments to be made under the lease
contract, excluding payments for options to renew or buy, do not exceed
twenty-five thousand dollars.
(f) "Fault" means wrongful act, omission, breach, or default.
(g) "Finance lease" means a lease with respect to which:
(i) The lessor does not select, manufacture, or supply the goods;
(ii) The lessor acquires the goods or the right to possession and
use of the goods in connection with the lease; and
(iii) Only in the case of a consumer lease, either:
(A) The lessee receives a copy of the contract by which the lessor
acquired the goods or the right to possession and use of the goods
before signing the lease contract;
(B) The lessee's approval of the contract by which the lessor
acquired the goods or the right to possession and use of the goods is
a condition to effectiveness of the lease contract; or
(C) The lessee, before signing the lease contract, receives an
accurate and complete statement designating the promises and
warranties, and any disclaimers of warranties, limitations or
modifications of remedies, or liquidated damages, including those of a
third party, such as the manufacturer of the goods, provided to the
lessor by the person supplying the goods in connection with or as part
of the contract by which the lessor acquired the goods or the right to
possession and use of the goods.
(h) "Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures (RCW 62A.2A-309),
but the term does not include money, documents, instruments, accounts,
chattel paper, general intangibles, or minerals or the like, including
oil and gas, before extraction. The term also includes the unborn
young of animals.
(i) "Installment lease contract" means a lease contract that
authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a clause
"each delivery is a separate lease" or its equivalent.
(j) "Lease" means a transfer of the right to possession and use of
goods for a term in return for consideration, but a sale, including a
sale on approval or a sale or return, or retention or creation of a
security interest is not a lease. Unless the context clearly indicates
otherwise, the term includes a sublease.
(k) "Lease agreement" means the bargain, with respect to the lease,
of the lessor and the lessee in fact as found in their language or by
implication from other circumstances including course of dealing or
usage of trade or course of performance as provided in this article.
Unless the context clearly indicates otherwise, the term includes a
sublease agreement.
(l) "Lease contract" means the total legal obligation that results
from the lease agreement as affected by this article and any other
applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.
(m) "Leasehold interest" means the interest of the lessor or the
lessee under a lease contract.
(n) "Lessee" means a person who acquires the right to possession
and use of goods under a lease. Unless the context clearly indicates
otherwise, the term includes a sublessee.
(o) "Lessee in ordinary course of business" means a person who in
good faith and without knowledge that the lease to him or her is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods, leases in ordinary course from
a person in the business of selling or leasing goods of that kind, but
does not include a pawnbroker. "Leasing" may be for cash, or by
exchange of other property, or on secured or unsecured credit and
includes ((receiving)) acquiring goods or documents of title under a
preexisting lease contract but does not include a transfer in bulk or
as security for or in total or partial satisfaction of a money debt.
(p) "Lessor" means a person who transfers the right to possession
and use of goods under a lease. Unless the context clearly indicates
otherwise, the term includes a sublessor.
(q) "Lessor's residual interest" means the lessor's interest in the
goods after expiration, termination, or cancellation of the lease
contract.
(r) "Lien" means a charge against or interest in goods to secure
payment of a debt or performance of an obligation, but the term does
not include a security interest.
(s) "Lot" means a parcel or a single article that is the subject
matter of a separate lease or delivery, whether or not it is sufficient
to perform the lease contract.
(t) "Merchant lessee" means a lessee that is a merchant with
respect to goods of the kind subject to the lease.
(u) "Present value" means the amount as of a date certain of one or
more sums payable in the future, discounted to the date certain. The
discount is determined by the interest rate specified by the parties if
the rate was not manifestly unreasonable at the time the transaction
was entered into; otherwise, the discount is determined by a
commercially reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was entered
into.
(v) "Purchase" includes taking by sale, lease, mortgage, security
interest, pledge, gift, or any other voluntary transaction creating an
interest in goods.
(w) "Sublease" means a lease of goods the right to possession and
use of which was acquired by the lessor as a lessee under an existing
lease.
(x) "Supplier" means a person from whom a lessor buys or leases
goods to be leased under a finance lease.
(y) "Supply contract" means a contract under which a lessor buys or
leases goods to be leased.
(z) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the lease contract otherwise
than for default.
(2) Other definitions applying to this article or to specified
Parts thereof, and the sections in which they appear are:
| "Accessions." | RCW 62A.2A-310(1). | |
| RCW 62A.2A-309(1)(d). | ||
| "Encumbrance." | RCW 62A.2A-309(1)(e). | |
| "Fixtures." | RCW 62A.2A-309(1)(a). | |
| "Fixture filing." | RCW 62A.2A-309(1)(b). | |
| RCW 62A.2A-309(1)(c). |
| "Account." | RCW 62A.9A-102(a)(2). | |
| "Between merchants." | RCW 62A.2-104(3). | |
| "Buyer." | RCW 62A.2-103(1)(a). | |
| "Chattel paper." | RCW 62A.9A-102(a)(11). | |
| "Consumer goods." | RCW 62A.9A-102(a)(23). | |
| "Document." | RCW 62A.9A-102(a)(30). | |
| "Entrusting." | RCW 62A.2-403(3). | |
| "General intangible." | RCW 62A.9A-102(a)(42). | |
| "Good faith." | RCW 62A.2-103(1)(b). | |
| "Instrument." | RCW 62A.9A-102(a)(47). | |
| "Merchant." | RCW 62A.2-104(1). | |
| "Mortgage." | RCW 62A.9A-102(a)(55). | |
| RCW 62A.9A-102(a)(68). | ||
| "Receipt." | RCW 62A.2-103(1)(c). | |
| "Sale." | RCW 62A.2-106(1). | |
| "Sale on approval." | RCW 62A.2-326. | |
| "Sale or return." | RCW 62A.2-326. | |
| "Seller." | RCW 62A.2-103(1)(d). |
Sec. 902 RCW 62A.2A-514 and 1993 c 230 s 2A-514 are each amended
to read as follows:
(a) If, stated seasonably, the lessor or the supplier could have
cured it (RCW 62A.2A-513); or
(b) Between merchants if the lessor or the supplier after rejection
has made a request in writing for a full and final written statement of
all defects on which the lessee proposes to rely.
(2) A lessee's failure to reserve rights when paying rent or other
consideration against documents precludes recovery of the payment for
defects apparent ((on the face of)) in the documents.
Sec. 903 RCW 62A.2A-526 and 1993 c 230 s 2A-526 are each amended
to read as follows:
(2) In pursuing its remedies under subsection (1) of this section,
the lessor may stop delivery until:
(a) Receipt of the goods by the lessee;
(b) Acknowledgment to the lessee by any bailee of the goods, except
a carrier, that the bailee holds the goods for the lessee; or
(c) Such an acknowledgment to the lessee by a carrier via
reshipment or as ((warehouseman)) a warehouse.
(3)(a) To stop delivery, a lessor shall so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.
(b) After notification, the bailee shall hold and deliver the goods
according to the directions of the lessor, but the lessor is liable to
the bailee for any ensuing charges or damages.
(c) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other
than the consignor.
Sec. 1001 RCW 62A.4-104 and 1995 c 48 s 56 are each amended to
read as follows:
(a) In this article, unless the context otherwise requires:
(1) "Account" means any deposit or credit account with a bank,
including a demand, time, savings, passbook, share draft, or like
account, other than an account evidenced by a certificate of deposit;
(2) "Afternoon" means the period of a day between noon and
midnight;
(3) "Banking day" means the part of a day on which a bank is open
to the public for carrying on substantially all of its banking
functions, except that it shall not include a Saturday, Sunday, or
legal holiday;
(4) "Clearing house" means an association of banks or other payors
regularly clearing items;
(5) "Customer" means a person having an account with a bank or for
whom a bank has agreed to collect items, including a bank that
maintains an account at another bank;
(6) "Documentary draft" means a draft to be presented for
acceptance or payment if specified documents, certificated securities
(RCW 62A.8-102) or instructions for uncertificated securities (RCW
62A.8-102), or other certificates, statements, or the like are to be
received by the drawee or other payor before acceptance or payment of
the draft;
(7) "Draft" means a draft as defined in RCW 62A.3-104 or an item,
other than an instrument, that is an order;
(8) "Drawee" means a person ordered in a draft to make payment;
(9) "Item" means an instrument or a promise or order to pay money
handled by a bank for collection or payment. The term does not include
a payment order governed by Article 4A or a credit or debit card slip;
(10) "Midnight deadline" with respect to a bank is midnight on its
next banking day following the banking day on which it receives the
relevant item or notice or from which the time for taking action
commences to run, whichever is later;
(11) "Settle" means to pay in cash, by clearing-house settlement,
in a charge or credit or by remittance, or otherwise as agreed. A
settlement may be either provisional or final;
(12) "Suspends payments" with respect to a bank means that it has
been closed by order of the supervisory authorities, that a public
officer has been appointed to take it over or that it ceases or refuses
to make payments in the ordinary course of business.
(b) Other definitions applying to this article and the sections in
which they appear are:
| RCW 62A.4-110. | ||
| "Bank" | RCW 62A.4-105. | |
| "Collecting bank" | RCW 62A.4-105. | |
| "Depositary bank" | RCW 62A.4-105. | |
| "Intermediary bank" | RCW 62A.4-105. | |
| "Payor bank" | RCW 62A.4-105. | |
| "Presenting bank" | RCW 62A.4-105. | |
| "Presentment notice" | RCW 62A.4-110. |
| "Acceptance" | RCW 62A.3-409. | |
| "Alteration" | RCW 62A.3-407. | |
| "Cashier's check" | RCW 62A.3-104. | |
| "Certificate of deposit" | RCW 62A.3-104. | |
| "Certified check" | RCW 62A.3-409. | |
| "Check" | RCW 62A.3-104. | |
| "Control" | RCW 62A.7-106. | |
| "Draft" | RCW 62A.3-104. | |
| "Good faith" | RCW 62A.3-103. | |
| "Holder in due course" | RCW 62A.3-302. | |
| "Instrument" | RCW 62A.3-104. | |
| "Notice of dishonor" | RCW 62A.3-503. | |
| "Order" | RCW 62A.3-103. | |
| "Ordinary care" | RCW 62A.3-103. | |
| "Person entitled to enforce" | RCW 62A.3-301. | |
| "Presentment" | RCW 62A.3-501. | |
| "Promise" | RCW 62A.3-103. | |
| "Prove" | RCW 62A.3-103. | |
| "Teller's check" | RCW 62A.3-104. | |
| "Unauthorized signature" | RCW 62A.3-403. |
Sec. 1002 RCW 62A.4-210 and 2001 c 32 s 13 are each amended to
read as follows:
(1) In case of an item deposited in an account, to the extent to
which credit given for the item has been withdrawn or applied;
(2) In case of an item for which it has given credit available for
withdrawal as of right, to the extent of the credit given whether or
not the credit is drawn upon or there is a right of charge-back; or
(3) If it makes an advance on or against the item.
(b) If credit given for several items received at one time or
pursuant to a single agreement is withdrawn or applied in part, the
security interest remains upon all the items, any accompanying
documents or the proceeds of either. For the purpose of this section,
credits first given are first withdrawn.
(c) Receipt by a collecting bank of a final settlement for an item
is a realization on its security interest in the item, accompanying
documents, and proceeds. So long as the bank does not receive final
settlement for the item or give up possession of the item or possession
or control of the accompanying documents for purposes other than
collection, the security interest continues to that extent and is
subject to Article 9A, but:
(1) No security agreement is necessary to make the security
interest enforceable RCW 62A.9A-203(b)(3)(A);
(2) No filing is required to perfect the security interest; and
(3) The security interest has priority over conflicting perfected
security interests in the item, accompanying documents, or proceeds.
Sec. 1101 RCW 62A.8-103 and 2000 c 250 s 9A-815 are each amended
to read as follows:
(2) An "investment company security" is a security. "Investment
company security" means a share or similar equity interest issued by an
entity that is registered as an investment company under the federal
investment company laws, an interest in a unit investment trust that is
so registered, or a face-amount certificate issued by a face-amount
certificate company that is so registered. Investment company security
does not include an insurance policy or endowment policy or annuity
contract issued by an insurance company.
(3) An interest in a partnership or limited liability company is
not a security unless it is dealt in or traded on securities exchanges
or in securities markets, its terms expressly provide that it is a
security governed by this article, or it is an investment company
security. However, an interest in a partnership or limited liability
company is a financial asset if it is held in a securities account.
(4) A writing that is a security certificate is governed by this
article and not by Article 3, even though it also meets the
requirements of that article. However, a negotiable instrument
governed by Article 3 is a financial asset if it is held in a
securities account.
(5) An option or similar obligation issued by a clearing
corporation to its participants is not a security, but is a financial
asset.
(6) A commodity contract, as defined in RCW 62A.9A-102(a)(15), is
not a security or a financial asset.
(7) A document of title is not a financial asset unless RCW
62A.8-102(1)(i)(iii) applies.
Sec. 1201 RCW 62A.9A-102 and 2001 c 32 s 16 are each amended to
read as follows:
(1) "Accession" means goods that are physically united with other
goods in such a manner that the identity of the original goods is not
lost.
(2)(A) "Account," except as used in "account for," means a right to
payment of a monetary obligation, whether or not earned by performance,
(i) for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of, (ii) for services rendered or to be
rendered, (iii) for a policy of insurance issued or to be issued, (iv)
for a secondary obligation incurred or to be incurred, (v) for energy
provided or to be provided, (vi) for the use or hire of a vessel under
a charter or other contract, (vii) arising out of the use of a credit
or charge card or information contained on or for use with the card, or
(viii) as winnings in a lottery or other game of chance operated or
sponsored by a state, governmental unit of a state, or person licensed
or authorized to operate the game by a state or governmental unit of a
state. The term includes health-care-insurance receivables.
(B) The term does not include (i) rights to payment evidenced by
chattel paper or an instrument, (ii) commercial tort claims, (iii)
deposit accounts, (iv) investment property, (v) letter-of-credit rights
or letters of credit, or (vi) rights to payment for money or funds
advanced or sold, other than rights arising out of the use of a credit
or charge card or information contained on or for use with the card.
(3) "Account debtor" means a person obligated on an account,
chattel paper, or general intangible. The term does not include
persons obligated to pay a negotiable instrument, even if the
instrument constitutes part of chattel paper.
(4) "Accounting," except as used in "accounting for," means a
record:
(A) Authenticated by a secured party;
(B) Indicating the aggregate unpaid secured obligations as of a
date not more than thirty-five days earlier or thirty-five days later
than the date of the record; and
(C) Identifying the components of the obligations in reasonable
detail.
(5) "Agricultural lien" means an interest, other than a security
interest, in farm products:
(A) Which secures payment or performance of an obligation for:
(i) Goods or services furnished in connection with a debtor's
farming operation; or
(ii) Rent on real property leased by a debtor in connection with
its farming operation;
(B) Which is created by statute in favor of a person that:
(i) In the ordinary course of its business, furnished goods or
services to a debtor in connection with a debtor's farming operation;
or
(ii) Leased real property to a debtor in connection with the
debtor's farming operation; and
(C) Whose effectiveness does not depend on the person's possession
of the personal property.
(6) "As-extracted collateral" means:
(A) Oil, gas, or other minerals that are subject to a security
interest that:
(i) Is created by a debtor having an interest in the minerals
before extraction; and
(ii) Attaches to the minerals as extracted; or
(B) Accounts arising out of the sale at the wellhead or minehead of
oil, gas, or other minerals in which the debtor had an interest before
extraction.
(7) "Authenticate" means:
(A) To sign; or
(B) To execute or otherwise adopt a symbol, or encrypt or similarly
process a record in whole or in part, with the present intent of the
authenticating person to identify the person and adopt or accept a
record.
(8) "Bank" means an organization that is engaged in the business of
banking. The term includes savings banks, savings and loan
associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks, deposit
accounts, or the like.
(10) "Certificate of title" means a certificate of title with
respect to which a statute provides for the security interest in
question to be indicated on the certificate as a condition or result of
the security interest's obtaining priority over the rights of a lien
creditor with respect to the collateral.
(11) "Chattel paper" means a record or records that evidence both
a monetary obligation and a security interest in specific goods, a
security interest in specific goods and software used in the goods, a
security interest in specific goods and license of software used in the
goods, a lease of specific goods, or a lease of specific goods and
license of software used in the goods. In this subsection, "monetary
obligation" means a monetary obligation secured by the goods or owed
under a lease of the goods and includes a monetary obligation with
respect to software used in the goods. The term "chattel paper" does
not include (A) charters or other contracts involving the use or hire
of a vessel or (B) records that evidence a right to payment arising out
of the use of a credit or charge card or information contained on or
for use with the card. If a transaction is evidenced by records that
include an instrument or series of instruments, the group of records
taken together constitutes chattel paper.
(12) "Collateral" means the property subject to a security interest
or agricultural lien. The term includes:
(A) Proceeds to which a security interest attaches;
(B) Accounts, chattel paper, payment intangibles, and promissory
notes that have been sold; and
(C) Goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) The claimant is an organization; or
(B) The claimant is an individual, and the claim:
(i) Arose in the course of the claimant's business or profession;
and
(ii) Does not include damages arising out of personal injury to, or
the death of, an individual.
(14) "Commodity account" means an account maintained by a commodity
intermediary in which a commodity contract is carried for a commodity
customer.
(15) "Commodity contract" means a commodity futures contract, an
option on a commodity futures contract, a commodity option, or another
contract if the contract or option is:
(A) Traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to
federal commodities laws; or
(B) Traded on a foreign commodity board of trade, exchange, or
market, and is carried on the books of a commodity intermediary for a
commodity customer.
(16) "Commodity customer" means a person for which a commodity
intermediary carries a commodity contract on its books.
(17) "Commodity intermediary" means a person that:
(A) Is registered as a futures commission merchant under federal
commodities law; or
(B) In the ordinary course of its business, provides clearance or
settlement services for a board of trade that has been designated as a
contract market pursuant to federal commodities law.
(18) "Communicate" means:
(A) To send a written or other tangible record;
(B) To transmit a record by any means agreed upon by the persons
sending and receiving the record; or
(C) In the case of transmission of a record to or by a filing
office, to transmit a record by any means prescribed by filing-office
rule.
(19) "Consignee" means a merchant to which goods are delivered in
a consignment.
(20) "Consignment" means a transaction, regardless of its form, in
which a person delivers goods to a merchant for the purpose of sale
and:
(A) The merchant:
(i) Deals in goods of that kind under a name other than the name of
the person making delivery;
(ii) Is not an auctioneer; and
(iii) Is not generally known by its creditors to be substantially
engaged in selling the goods of others;
(B) With respect to each delivery, the aggregate value of the goods
is one thousand dollars or more at the time of delivery;
(C) The goods are not consumer goods immediately before delivery;
and
(D) The transaction does not create a security interest that
secures an obligation.
(21) "Consignor" means a person that delivers goods to a consignee
in a consignment.
(22) "Consumer debtor" means a debtor in a consumer transaction.
(23) "Consumer goods" means goods that are used or bought for use
primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer transaction in
which:
(A) An individual incurs a consumer obligation; and
(B) A security interest in consumer goods secures the obligation.
(25) "Consumer obligation" means an obligation which:
(A) Is incurred as part of a transaction entered into primarily for
personal, family, or household purposes; and
(B) Arises from an extension of credit, or commitment to extend
credit, in an aggregate amount not exceeding forty thousand dollars, or
is secured by personal property used or expected to be used as a
principal dwelling.
"Consumer obligor" means an obligor who is an individual and who
incurred a consumer obligation.
(26) "Consumer transaction" means a transaction in which (A) an
individual incurs a consumer obligation, (B) a security interest
secures the obligation, and (C) the collateral is held or acquired
primarily for personal, family, or household purposes. The term
includes consumer-goods transactions.
(27) "Continuation statement" means an amendment of a financing
statement which:
(A) Identifies, by its file number, the initial financing statement
to which it relates; and
(B) Indicates that it is a continuation statement for, or that it
is filed to continue the effectiveness of, the identified financing
statement.
(28) "Debtor" means:
(A) A person having an interest, other than a security interest or
other lien, in the collateral, whether or not the person is an obligor;
(B) A seller of accounts, chattel paper, payment intangibles, or
promissory notes; or
(C) A consignee.
(29) "Deposit account" means a demand, time, savings, passbook, or
similar account maintained with a bank. The term does not include
investment property or accounts evidenced by an instrument.
(30) "Document" means a document of title or a receipt of the type
described in RCW 62A.7-201(2).
(31) "Electronic chattel paper" means chattel paper evidenced by a
record or records consisting of information stored in an electronic
medium.
(32) "Encumbrance" means a right, other than an ownership interest,
in real property. The term includes mortgages and other liens on real
property.
(33) "Equipment" means goods other than inventory, farm products,
or consumer goods.
(34) "Farm products" means goods, other than standing timber, with
respect to which the debtor is engaged in a farming operation and which
are:
(A) Crops grown, growing, or to be grown, including:
(i) Crops produced on trees, vines, and bushes; and
(ii) Aquatic goods produced in aquacultural operations;
(B) Livestock, born or unborn, including aquatic goods produced in
aquacultural operations;
(C) Supplies used or produced in a farming operation; or
(D) Products of crops or livestock in their unmanufactured states.
(35) "Farming operation" means raising, cultivating, propagating,
fattening, grazing, or any other farming, livestock, or aquacultural
operation.
(36) "File number" means the number assigned to an initial
financing statement pursuant to RCW 62A.9A-519(a).
(37) "Filing office" means an office designated in RCW 62A.9A-501
as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to RCW
62A.9A-526.
(39) "Financing statement" means a record or records composed of an
initial financing statement and any filed record relating to the
initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying RCW
62A.9A-502 (a) and (b). The term includes the filing of a financing
statement covering goods of a transmitting utility which are or are to
become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an interest in them arises under real
property law.
(42) "General intangible" means any personal property, including
things in action, other than accounts, chattel paper, commercial tort
claims, deposit accounts, documents, goods, instruments, investment
property, letter-of-credit rights, letters of credit, money, and oil,
gas, or other minerals before extraction. The term includes payment
intangibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (A) fixtures, (B) standing timber
that is to be cut and removed under a conveyance or contract for sale,
(C) the unborn young of animals, (D) crops grown, growing, or to be
grown, even if the crops are produced on trees, vines, or bushes, and
(E) manufactured homes. The term also includes a computer program
embedded in goods and any supporting information provided in connection
with a transaction relating to the program if (i) the program is
associated with the goods in such a manner that it customarily is
considered part of the goods, or (ii) by becoming the owner of the
goods, a person acquires a right to use the program in connection with
the goods. The term does not include a computer program embedded in
goods that consist solely of the medium in which the program is
embedded. The term also does not include accounts, chattel paper,
commercial tort claims, deposit accounts, documents, general
intangibles, instruments, investment property, letter-of-credit rights,
letters of credit, money, or oil, gas, or other minerals before
extraction or a manufactured home converted to real property under
chapter 65.20 RCW.
(45) "Governmental unit" means a subdivision, agency, department,
county, parish, municipality, or other unit of the government of the
United States, a state, or a foreign country. The term includes an
organization having a separate corporate existence if the organization
is eligible to issue debt on which interest is exempt from income
taxation under the laws of the United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance which is a right to payment of a
monetary obligation for health-care goods or services provided.
(47) "Instrument" means a negotiable instrument or any other
writing that evidences a right to the payment of a monetary obligation,
is not itself a security agreement or lease, and is of a type that in
ordinary course of business is transferred by delivery with any
necessary indorsement or assignment. The term does not include (A)
investment property, (B) letters of credit, (C) writings that evidence
a right to payment arising out of the use of a credit or charge card or
information contained on or for use with the card, (D) writings that do
not contain a promise or order to pay, or (E) writings that are
expressly nontransferable or nonassignable.
(48) "Inventory" means goods, other than farm products, which:
(A) Are leased by a person as lessor;
(B) Are held by a person for sale or lease or to be furnished under
a contract of service;
(C) Are furnished by a person under a contract of service; or
(D) Consist of raw materials, work in process, or materials used or
consumed in a business.
(49) "Investment property" means a security, whether certificated
or uncertificated, security entitlement, securities account, commodity
contract, or commodity account.
(50) "Jurisdiction of organization," with respect to a registered
organization, means the jurisdiction under whose law the organization
is organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the beneficiary
has demanded or is at the time entitled to demand payment or
performance. The term does not include the right of a beneficiary to
demand payment or performance under a letter of credit.
(52) "Lien creditor" means:
(A) A creditor that has acquired a lien on the property involved by
attachment, levy, or the like;
(B) An assignee for benefit of creditors from the time of
assignment;
(C) A trustee in bankruptcy from the date of the filing of the
petition; or
(D) A receiver in equity from the time of appointment.
(53) "Manufactured home" means a manufactured home or mobile home
as defined in RCW 46.04.302.
(54) [Reserved]
(55) "Mortgage" means a consensual interest in real property,
including fixtures, which secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as debtor under
RCW 62A.9A-203(d) by a security agreement previously entered into by
another person.
(57) "New value" means (A) money, (B) money's worth in property,
services, or new credit, or (C) release by a transferee of an interest
in property previously transferred to the transferee. The term does
not include an obligation substituted for another obligation.
(58) "Noncash proceeds" means proceeds other than cash proceeds.
(59) "Obligor" means a person that, with respect to an obligation
secured by a security interest in or an agricultural lien on the
collateral, (A) owes payment or other performance of the obligation,
(B) has provided property other than the collateral to secure payment
or other performance of the obligation, or (C) is otherwise accountable
in whole or in part for payment or other performance of the obligation.
The term does not include issuers or nominated persons under a letter
of credit.
(60) "Original debtor", except as used in RCW 62A.9A-310(c), means
a person that, as debtor, entered into a security agreement to which a
new debtor has become bound under RCW 62A.9A-203(d).
(61) "Payment intangible" means a general intangible under which
the account debtor's principal obligation is a monetary obligation.
(62) "Person related to," with respect to an individual, means:
(A) The spouse of the individual;
(B) A brother, brother-in-law, sister, or sister-in-law of the
individual;
(C) An ancestor or lineal descendant of the individual or the
individual's spouse; or
(D) Any other relative, by blood or marriage, of the individual or
the individual's spouse who shares the same home with the individual.
(63) "Person related to," with respect to an organization, means:
(A) A person directly or indirectly controlling, controlled by, or
under common control with the organization;
(B) An officer or director of, or a person performing similar
functions with respect to, the organization;
(C) An officer or director of, or a person performing similar
functions with respect to, a person described in (63)(A) of this
subsection;
(D) The spouse of an individual described in (63)(A), (B), or (C)
of this subsection; or
(E) An individual who is related by blood or marriage to an
individual described in (63)(A), (B), (C), or (D) of this subsection
and shares the same home with the individual.
(64) "Proceeds", except as used in RCW 62A.9A-609(b), means the
following property:
(A) Whatever is acquired upon the sale, lease, license, exchange,
or other disposition of collateral;
(B) Whatever is collected on, or distributed on account of,
collateral;
(C) Rights arising out of collateral;
(D) To the extent of the value of collateral, claims arising out of
the loss, nonconformity, or interference with the use of, defects or
infringement of rights in, or damage to, the collateral; or
(E) To the extent of the value of collateral and to the extent
payable to the debtor or the secured party, insurance payable by reason
of the loss or nonconformity of, defects or infringement of rights in,
or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a promise
to pay a monetary obligation, does not evidence an order to pay, and
does not contain an acknowledgment by a bank that the bank has received
for deposit a sum of money or funds.
(66) "Proposal" means a record authenticated by a secured party,
which includes the terms on which the secured party is willing to
accept collateral in full or partial satisfaction of the obligation it
secures pursuant to RCW 62A.9A-620, 62A.9A-621, and 62A.9A-622.
(67) "Public-finance transaction" means a secured transaction in
connection with which:
(A) Debt securities are issued;
(B) All or a portion of the securities issued have an initial
stated maturity of at least twenty years; and
(C) The debtor, obligor, secured party, account debtor or other
person obligated on collateral, assignor or assignee of a secured
obligation, or assignor or assignee of a security interest is a state
or a governmental unit of a state.
(68) "Pursuant to commitment," with respect to an advance made or
other value given by a secured party, means pursuant to the secured
party's obligation, whether or not a subsequent event of default or
other event not within the secured party's control has relieved or may
relieve the secured party from its obligation.
(69) "Record," except as used in "for record," "of record," "record
or legal title," and "record owner," means information that is
inscribed on a tangible medium or which is stored in an electronic or
other medium and is retrievable in perceivable form.
(70) "Registered organization" means an organization organized
solely under the law of a single state or the United States and as to
which the state or the United States must maintain a public record
showing the organization to have been organized.
(71) "Secondary obligor" means an obligor to the extent that:
(A) The obligor's obligation is secondary; or
(B) The obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor, another obligor,
or property of either.
(72) "Secured party" means:
(A) A person in whose favor a security interest is created or
provided for under a security agreement, whether or not any obligation
to be secured is outstanding;
(B) A person that holds an agricultural lien;
(C) A consignor;
(D) A person to which accounts, chattel paper, payment intangibles,
or promissory notes have been sold;
(E) A trustee, indenture trustee, agent, collateral agent, or other
representative in whose favor a security interest or agricultural lien
is created or provided for; or
(F) A person that holds a security interest arising under RCW
62A.2-401, 62A.2-505, 62A.2-711(3), 62A.2A-508(5), 62A.4-210, or 62A.5-118.
(73) "Security agreement" means an agreement that creates or
provides for a security interest.
(74) "Send," in connection with a record or notification, means:
(A) To deposit in the mail, deliver for transmission, or transmit
by any other usual means of communication, with postage or cost of
transmission provided for, addressed to any address reasonable under
the circumstances; or
(B) To cause the record or notification to be received within the
time that it would have been received if properly sent under (A) of
this subsection.
(75) "Software" means a computer program and any supporting
information provided in connection with a transaction relating to the
program. The term does not include a computer program that is included
in the definition of goods.
(76) "State" means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(77) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance of an
account, chattel paper, a document, a general intangible, an
instrument, or investment property.
(78) "Tangible chattel paper" means chattel paper evidenced by a
record or records consisting of information that is inscribed on a
tangible medium.
(79) "Termination statement" means an amendment of a financing
statement which:
(A) Identifies, by its file number, the initial financing statement
to which it relates; and
(B) Indicates either that it is a termination statement or that the
identified financing statement is no longer effective.
(80) "Transmitting utility" means a person primarily engaged in the
business of:
(A) Operating a railroad, subway, street railway, or trolley bus;
(B) Transmitting communications electrically, electromagnetically,
or by light;
(C) Transmitting goods by pipeline or sewer; or
(D) Transmitting or producing and transmitting electricity, steam,
gas, or water.
(b) Definitions in other articles. The following definitions in
other articles apply to this article:
| RCW 62A.5-102. | ||
| RCW 62A.5-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.3-104. | ||
| RCW 62A.8-102. | ||
| RCW 62A.2-106. | ||
| "Control." | RCW 62A.7-106. | |
| RCW 62A.4-104. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.3-302. | ||
| "Issuer" with respect to documents of title. | RCW 62A.7-102. | |
| RCW 62A.5-102. | ||
| RCW 62A.8-201. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.2A-103. | ||
| RCW 62A.5-102. | ||
| RCW 62A.2-104. | ||
| RCW 62A.3-104. | ||
| RCW 62A.5-102. | ||
| RCW 62A.3-104. | ||
| RCW 62A.5-114. | ||
| RCW 62A.3-103. | ||
| RCW 62A.2-106. | ||
| RCW 62A.8-501. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. |
Sec. 1202 RCW 62A.9A-203 and 2000 c 250 s 9A-203 are each amended
to read as follows:
(b) Enforceability. Except as otherwise provided in subsections
(c) through (i) of this section, a security interest is enforceable
against the debtor and third parties with respect to the collateral
only if:
(1) Value has been given;
(2) The debtor has rights in the collateral or the power to
transfer rights in the collateral to a secured party; and
(3) One of the following conditions is met:
(A) The debtor has authenticated a security agreement that provides
a description of the collateral and, if the security interest covers
timber to be cut, a description of the land concerned;
(B) The collateral is not a certificated security and is in the
possession of the secured party under RCW 62A.9A-313 pursuant to the
debtor's security agreement;
(C) The collateral is a certificated security in registered form
and the security certificate has been delivered to the secured party
under RCW 62A.8-301 pursuant to the debtor's security agreement; or
(D) The collateral is deposit accounts, electronic chattel paper,
investment property, ((or)) letter-of-credit rights or electronic
documents, and the secured party has control under RCW 62A.7-106,
62A.9A-104, 62A.9A-105, 62A.9A-106, or 62A.9A-107 pursuant to the
debtor's security agreement.
(c) Other UCC provisions. Subsection (b) of this section is
subject to RCW 62A.4-210 on the security interest of a collecting bank,
RCW 62A.5-118 on the security interest of a letter-of-credit issuer or
nominated person, RCW 62A.9A-110 on a security interest arising under
Article 2 or 2A, and RCW 62A.9A-206 on security interests in investment
property.
(d) When person becomes bound by another person's security
agreement. A person becomes bound as debtor by a security agreement
entered into by another person if, by operation of law other than this
article or by contract:
(1) The security agreement becomes effective to create a security
interest in the person's property; or
(2) The person becomes generally obligated for the obligations of
the other person, including the obligation secured under the security
agreement, and acquires or succeeds to all or substantially all of the
assets of the other person.
(e) Effect of new debtor becoming bound. If a new debtor becomes
bound as debtor by a security agreement entered into by another person:
(1) The agreement satisfies subsection (b)(3) of this section with
respect to existing or after-acquired property of the new debtor to the
extent the property is described in the agreement; and
(2) Another agreement is not necessary to make a security interest
in the property enforceable.
(f) Proceeds and supporting obligations. The attachment of a
security interest in collateral gives the secured party the rights to
proceeds provided by RCW 62A.9A-315 and is also attachment of a
security interest in a supporting obligation for the collateral.
(g) Lien securing right to payment. The attachment of a security
interest in a right to payment or performance secured by a security
interest or other lien on personal or real property is also attachment
of a security interest in the security interest, mortgage, or other
lien.
(h) Security entitlement carried in securities account. The
attachment of a security interest in a securities account is also
attachment of a security interest in the security entitlements carried
in the securities account.
(i) Commodity contracts carried in commodity account. The
attachment of a security interest in a commodity account is also
attachment of a security interest in the commodity contracts carried in
the commodity account.
Sec. 1203 RCW 62A.9A-207 and 2000 c 250 s 9A-207 are each amended
to read as follows:
(b) Expenses, risks, duties, and rights when secured party in
possession. Except as otherwise provided in subsection (d) of this
section, if a secured party has possession of collateral:
(1) Reasonable expenses, including the cost of insurance and
payment of taxes or other charges, incurred in the custody,
preservation, use, or operation of the collateral are chargeable to the
debtor and are secured by the collateral;
(2) The risk of accidental loss or damage is on the debtor to the
extent of a deficiency in any effective insurance coverage;
(3) The secured party shall keep the collateral identifiable, but
fungible collateral may be commingled; and
(4) The secured party may use or operate the collateral:
(A) For the purpose of preserving the collateral or its value;
(B) As permitted by an order of a court having competent
jurisdiction; or
(C) Except in the case of consumer goods, in the manner and to the
extent agreed by the debtor.
(c) Duties and rights when secured party in possession or control.
Except as otherwise provided in subsection (d) of this section, a
secured party having possession of collateral or control of collateral
under RCW 62A.7-106, 62A.9A-104, 62A.9A-105, 62A.9A-106, or 62A.9A-107:
(1) May hold as additional security any proceeds, except money or
funds, received from the collateral;
(2) Shall apply money or funds received from the collateral to
reduce the secured obligation, unless remitted to the debtor; and
(3) May create a security interest in the collateral.
(d) Buyer of certain rights to payment. If the secured party is a
buyer of accounts, chattel paper, payment intangibles, or promissory
notes or a consignor:
(1) Subsection (a) of this section does not apply unless the
secured party is entitled under an agreement:
(A) To charge back uncollected collateral; or
(B) Otherwise to full or limited recourse against the debtor or a
secondary obligor based on the nonpayment or other default of an
account debtor or other obligor on the collateral; and
(2) Subsections (b) and (c) of this section do not apply.
Sec. 1204 RCW 62A.9A-208 and 2001 c 32 s 21 are each amended to
read as follows:
(b) Duties of secured party after receiving demand from debtor.
Within ten days after receiving an authenticated demand by the debtor:
(1) A secured party having control of a deposit account under RCW
62A.9A-104(a)(2) shall send to the bank with which the deposit account
is maintained an authenticated statement that releases the bank from
any further obligation to comply with instructions originated by the
secured party;
(2) A secured party having control of a deposit account under RCW
62A.9A-104(a)(3) shall:
(A) Pay the debtor the balance on deposit in the deposit account;
or
(B) Transfer the balance on deposit into a deposit account in the
debtor's name;
(3) A secured party, other than a buyer, having control of
electronic chattel paper under RCW 62A.9A-105 shall:
(A) Communicate the authoritative copy of the electronic chattel
paper to the debtor or its designated custodian;
(B) If the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic chattel
paper is maintained for the secured party, communicate to the custodian
an authenticated record releasing the designated custodian from any
further obligation to comply with instructions originated by the
secured party and instructing the custodian to comply with instructions
originated by the debtor; and
(C) Take appropriate action to enable the debtor or its designated
custodian to make copies of or revisions to the authoritative copy
which add or change an identified assignee of the authoritative copy
without the consent of the secured party;
(4) A secured party having control of investment property under RCW
62A.8-106(4)(b) or 62A.9A-106(b) shall send to the securities
intermediary or commodity intermediary with which the security
entitlement or commodity contract is maintained an authenticated record
that releases the securities intermediary or commodity intermediary
from any further obligation to comply with entitlement orders or
directions originated by the secured party; ((and))
(5) A secured party having control of a letter-of-credit right
under RCW 62A.9A-107 shall send to each person having an unfulfilled
obligation to pay or deliver proceeds of the letter of credit to the
secured party an authenticated release from any further obligation to
pay or deliver proceeds of the letter of credit to the secured party;
and
(6) A secured party having control of an electronic document shall:
(A) Give control of the electronic document to the debtor or its
designated custodian;
(B) If the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic document
is maintained for the secured party, communicate to the custodian an
authenticated record releasing the designated custodian from any
further obligation to comply with instructions originated by the
secured party and instructing the custodian to comply with instructions
originated by the debtor; and
(C) Take appropriate action to enable the debtor or its designated
custodian to make copies of or revisions to the authoritative copy
which add or change an identified assignee of the authoritative copy
without the consent of the secured party.
Sec. 1205 RCW 62A.9A-301 and 2001 c 32 s 22 are each amended to
read as follows:
(1) Except as otherwise provided in this section, while a debtor is
located in a jurisdiction, the local law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority
of a security interest in collateral.
(2) While collateral is located in a jurisdiction, the local law of
that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a possessory security interest in
that collateral.
(3) Except as otherwise provided in subsection (4) of this section,
while tangible negotiable documents, goods, instruments, money, or
tangible chattel paper is located in a jurisdiction, the local law of
that jurisdiction governs:
(A) Perfection of a security interest in the goods by filing a
fixture filing;
(B) Perfection of a security interest in timber to be cut; and
(C) The effect of perfection or nonperfection and the priority of
a nonpossessory security interest in the collateral.
(4) The local law of the jurisdiction in which the wellhead or
minehead is located governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in as-extracted
collateral.
Sec. 1206 RCW 62A.9A-310 and 2000 c 250 s 9A-310 are each amended
to read as follows:
(b) Exceptions: Filing not necessary. The filing of a financing
statement is not necessary to perfect a security interest:
(1) That is perfected under RCW 62A.9A-308 (d), (e), (f), or (g);
(2) That is perfected under RCW 62A.9A-309 when it attaches;
(3) In property subject to a statute, regulation, or treaty
described in RCW 62A.9A-311(a);
(4) In goods in possession of a bailee which is perfected under RCW
62A.9A-312(d) (1) or (2);
(5) In certificated securities, documents, goods, or instruments
which is perfected without filing, control, or possession under RCW
62A.9A-312 (e), (f), or (g);
(6) In collateral in the secured party's possession under RCW
62A.9A-313;
(7) In a certificated security which is perfected by delivery of
the security certificate to the secured party under RCW 62A.9A-313;
(8) In deposit accounts, electronic chattel paper, electronic
documents, investment property, or letter-of-credit rights which is
perfected by control under RCW 62A.9A-314;
(9) In proceeds which is perfected under RCW 62A.9A-315; or
(10) That is perfected under RCW 62A.9A-316.
(c) Assignment of perfected security interest. If a secured party
assigns a perfected security interest or agricultural lien, a filing
under this article is not required to continue the perfected status of
the security interest against creditors of and transferees from the
original debtor.
(d) Further exception: Filing not necessary for handler's lien.
The filing of a financing statement is not necessary to perfect the
agricultural lien of a handler on orchard crops as provided in RCW
60.11.020(3).
Sec. 1207 RCW 62A.9A-312 and 2000 c 250 s 9A-312 are each amended
to read as follows:
(b) Control or possession of certain collateral. Except as
otherwise provided in RCW 62A.9A-315 (c) and (d) for proceeds:
(1) A security interest in a deposit account may be perfected only
by control under RCW 62A.9A-314;
(2) And except as otherwise provided in RCW 62A.9A-308(d), a
security interest in a letter-of-credit right may be perfected only by
control under RCW 62A.9A-314; and
(3) A security interest in money may be perfected only by the
secured party's taking possession under RCW 62A.9A-313.
(c) Goods covered by negotiable document. While goods are in the
possession of a bailee that has issued a negotiable document covering
the goods:
(1) A security interest in the goods may be perfected by perfecting
a security interest in the document; and
(2) A security interest perfected in the document has priority over
any security interest that becomes perfected in the goods by another
method during that time.
(d) Goods covered by nonnegotiable document. While goods are in
the possession of a bailee that has issued a nonnegotiable document
covering the goods, a security interest in the goods may be perfected
by:
(1) Issuance of a document in the name of the secured party;
(2) The bailee's receipt of notification of the secured party's
interest; or
(3) Filing as to the goods.
(e) Temporary perfection: New value. A security interest in
certificated securities, negotiable documents, or instruments is
perfected without filing or the taking of possession or control for a
period of twenty days from the time it attaches to the extent that it
arises for new value given under an authenticated security agreement.
(f) Temporary perfection: Goods or documents made available to
debtor. A perfected security interest in a negotiable document or
goods in possession of a bailee, other than one that has issued a
negotiable document for the goods, remains perfected for twenty days
without filing if the secured party makes available to the debtor the
goods or documents representing the goods for the purpose of:
(1) Ultimate sale or exchange; or
(2) Loading, unloading, storing, shipping, transshipping,
manufacturing, processing, or otherwise dealing with them in a manner
preliminary to their sale or exchange.
(g) Temporary perfection: Delivery of security certificate or
instrument to debtor. A perfected security interest in a certificated
security or instrument remains perfected for twenty days without filing
if the secured party delivers the security certificate or instrument to
the debtor for the purpose of:
(1) Ultimate sale or exchange; or
(2) Presentation, collection, enforcement, renewal, or registration
of transfer.
(h) Expiration of temporary perfection. After the twenty-day
period specified in subsection (e), (f), or (g) of this section
expires, perfection depends upon compliance with this article.
Sec. 1208 RCW 62A.9A-313 and 2001 c 32 s 26 are each amended to
read as follows:
(b) Goods covered by certificate of title. With respect to goods
covered by a certificate of title issued by this state, a secured party
may perfect a security interest in the goods by taking possession of
the goods only in the circumstances described in RCW 62A.9A-316(d).
(c) Collateral in possession of person other than debtor. With
respect to collateral other than certificated securities and goods
covered by a document, a secured party takes possession of collateral
in the possession of a person other than the debtor, the secured party,
or a lessee of the collateral from the debtor in the ordinary course of
the debtor's business, when:
(1) The person in possession authenticates a record acknowledging
that it holds possession of the collateral for the secured party's
benefit; or
(2) The person takes possession of the collateral after having
authenticated a record acknowledging that it will hold possession of
collateral for the secured party's benefit.
(d) Time of perfection by possession; continuation of perfection.
If perfection of a security interest depends upon possession of the
collateral by a secured party, perfection occurs no earlier than the
time the secured party takes possession and continues only while the
secured party retains possession.
(e) Time of perfection by delivery; continuation of perfection. A
security interest in a certificated security in registered form is
perfected by delivery when delivery of the certificated security occurs
under RCW 62A.8-301 and remains perfected by delivery until the debtor
obtains possession of the security certificate.
(f) Acknowledgment not required. A person in possession of
collateral is not required to acknowledge that it holds possession for
a secured party's benefit.
(g) Effectiveness of acknowledgment; no duties or confirmation. If
a person acknowledges that it holds possession for the secured party's
benefit:
(1) The acknowledgment is effective under subsection (c) of this
section or RCW 62A.8-301(1), even if the acknowledgment violates the
rights of a debtor; and
(2) Unless the person otherwise agrees or law other than this
article otherwise provides, the person does not owe any duty to the
secured party and is not required to confirm the acknowledgment to
another person.
(h) Secured party's delivery to person other than debtor. A
secured party having possession of collateral does not relinquish
possession by delivering the collateral to a person other than the
debtor or a lessee of the collateral from the debtor in the ordinary
course of the debtor's business if the person was instructed before the
delivery or is instructed contemporaneously with the delivery:
(1) To hold possession of the collateral for the secured party's
benefit; or
(2) To redeliver the collateral to the secured party.
(i) Effect of delivery under subsection (h) of this section; no
duties or confirmation. A secured party does not relinquish
possession, even if a delivery under subsection (h) of this section
violates the rights of a debtor. A person to which collateral is
delivered under subsection (h) of this section does not owe any duty to
the secured party and is not required to confirm the delivery to
another person unless the person otherwise agrees or law other than
this article otherwise provides.
Sec. 1209 RCW 62A.9A-314 and 2000 c 250 s 9A-314 are each amended
to read as follows:or)) electronic chattel paper, or electronic documents may be
perfected by control of the collateral under RCW 62A.7-106, 62A.9A-104,
62A.9A-105, 62A.9A-106, or 62A.9A-107.
(b) Specified collateral: Time of perfection by control;
continuation of perfection. A security interest in deposit accounts,
electronic chattel paper, ((or)) letter-of-credit rights, or electronic
documents is perfected by control under RCW 62A.7-106, 62A.9A-104,
62A.9A-105, or 62A.9A-107 when the secured party obtains control and
remains perfected by control only while the secured party retains
control.
(c) Investment property: Time of perfection by control;
continuation of perfection. A security interest in investment property
is perfected by control under RCW 62A.9A-106 from the time the secured
party obtains control and remains perfected by control until:
(1) The secured party does not have control; and
(2) One of the following occurs:
(A) If the collateral is a certificated security, the debtor has or
acquires possession of the security certificate;
(B) If the collateral is an uncertificated security, the issuer has
registered or registers the debtor as the registered owner; or
(C) If the collateral is a security entitlement, the debtor is or
becomes the entitlement holder.
Sec. 1210 RCW 62A.9A-317 and 2001 c 32 s 27 are each amended to
read as follows:
(1) A person entitled to priority under RCW 62A.9A-322; and
(2) Except as otherwise provided in subsection (e) of this section,
a person that becomes a lien creditor before the earlier of the time:
(A) The security interest or agricultural lien is perfected; or
(B) One of the conditions specified in RCW 62A.9A-203(b)(3) is met
and a financing statement covering the collateral is filed.
(b) Buyers that receive delivery. Except as otherwise provided in
subsection (e) of this section, a buyer, other than a secured party, of
tangible chattel paper, tangible documents, goods, instruments, or a
security certificate takes free of a security interest or agricultural
lien if the buyer gives value and receives delivery of the collateral
without knowledge of the security interest or agricultural lien and
before it is perfected.
(c) Lessees that receive delivery. Except as otherwise provided in
subsection (e) of this section, a lessee of goods takes free of a
security interest or agricultural lien if the lessee gives value and
receives delivery of the collateral without knowledge of the security
interest or agricultural lien and before it is perfected.
(d) Licensees and buyers of certain collateral. A licensee of a
general intangible or a buyer, other than a secured party, of accounts,
electronic chattel paper, electronic documents, general intangibles, or
investment property other than a certificated security takes free of a
security interest if the licensee or buyer gives value without
knowledge of the security interest and before it is perfected.
(e) Purchase-money security interest. Except as otherwise provided
in RCW 62A.9A-320 and 62A.9A-321, if a person files a financing
statement with respect to a purchase-money security interest before or
within twenty days after the debtor receives delivery of the
collateral, the security interest takes priority over the rights of a
buyer, lessee, or lien creditor which arise between the time the
security interest attaches and the time of filing.
Sec. 1211 RCW 62A.9A-338 and 2000 c 250 s 9A-338 are each amended
to read as follows:
(1) The security interest or agricultural lien is subordinate to a
conflicting perfected security interest in the collateral to the extent
that the holder of the conflicting security interest gives value in
reasonable reliance upon the incorrect information; and
(2) A purchaser, other than a secured party, of the collateral
takes free of the security interest or agricultural lien to the extent
that, in reasonable reliance upon the incorrect information, the
purchaser gives value and, in the case of tangible chattel paper,
tangible documents, goods, instruments, or a security certificate,
receives delivery of the collateral.
Sec. 1212 RCW 62A.9A-601 and 2000 c 250 s 9A-601 are each amended
to read as follows:
(1) May reduce a claim to judgment, foreclose, or otherwise enforce
the claim, security interest, or agricultural lien by any available
judicial procedure; and
(2) If the collateral is documents, may proceed either as to the
documents or as to the goods they cover.
(b) Rights and duties of secured party in possession or control.
A secured party in possession of collateral or control of collateral
under RCW 62A.7-106, 62A.9A-104, 62A.9A-105, 62A.9A-106, or 62A.9A-107
has the rights and duties provided in RCW 62A.9A-207.
(c) Rights cumulative; simultaneous exercise. The rights under
subsections (a) and (b) of this section are cumulative and may be
exercised simultaneously.
(d) Rights of debtor and obligor. Except as otherwise provided in
subsection (g) of this section and RCW 62A.9A-605, after default, a
debtor and an obligor have the rights provided in this part and by
agreement of the parties.
(e) Lien of levy after judgment. If a secured party has reduced
its claim to judgment, the lien of any levy that may be made upon the
collateral by virtue of an execution based upon the judgment relates
back to the earliest of:
(1) The date of perfection of the security interest or agricultural
lien in the collateral;
(2) The date of filing a financing statement covering the
collateral; or
(3) Any date specified in a statute under which the agricultural
lien was created.
(f) Execution sale. A sale pursuant to an execution is a
foreclosure of the security interest or agricultural lien by judicial
procedure within the meaning of this section. A secured party may
purchase at the sale and thereafter hold the collateral free of any
other requirements of this article.
(g) Consignor or buyer of certain rights to payment. Except as
otherwise provided in RCW 62A.9A-607(c), this part imposes no duties
upon a secured party that is a consignor or is a buyer of accounts,
chattel paper, payment intangibles, or promissory notes.
(h) Enforcement restrictions. All rights and remedies provided in
this part with respect to promissory notes or an agreement between an
account debtor and a debtor which relates to a health-care-insurance
receivable or a general intangible, including a contract, permit,
license, or franchise, are subject to RCW 62A.9A-408 to the extent
applicable.
NEW SECTION. Sec. 1301 RCW 62A.10-104 (Laws not repealed) and
1995 c 48 s 71 & 1965 ex.s. c 157 s 10-104 are each repealed.
NEW SECTION. Sec. 1302
NEW SECTION. Sec. 1303
NEW SECTION. Sec. 1304
NEW SECTION. Sec. 1305