BILL REQ. #: H-3467.3
| State of Washington | 62nd Legislature | 2012 Regular Session |
READ FIRST TIME 01/25/12.
AN ACT Relating to the Uniform Commercial Code; amending RCW 62A.1-101, 62A.1-102, 62A.1-103, 62A.1-104, 62A.1-105, 62A.1-106, 62A.1-107, 62A.1-108, 62A.1-201, 62A.1-202, 62A.1-203, 62A.1-204, 62A.1-205, 62A.1-206, 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.2-103, 62A.2-104, 62A.2-202, 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-103, 62A.2A-501, 62A.2A-514, 62A.2A-518, 62A.2A-519, 62A.2A-526, 62A.2A-527, 62A.2A-528, 62A.3-103, 62A.4-104, 62A.4-210, 62A.4A-105, 62A.4A-106, 62A.4A-204, 62A.5-103, 62A.8-102, 62A.8-103, 62A.8-103, 62A.9A-102, 62A.9A-102, 62A.9A-203, 62A.9A-207, 62A.9A-208, 62A.9A-301, 62A.9A-310, 62A.9A-310, 62A.9A-312, 62A.9A-313, 62A.9A-313, 62A.9A-314, 62A.9A-317, 62A.9A-317, 62A.9A-338, 62A.9A-338, 62A.9A-601, 62A.9A-601, 62A.5-102, 62A.5-104, 62A.5-106, 62A.5-107, 62A.5-108, 62A.5-109, 62A.5-110, 62A.5-111, 62A.5-112, 62A.5-113, 62A.5-114, 62A.5-116, 62A.5-117, 62A.5-118, 62A.2-512, and 62A.9A-107; adding new sections to chapter 62A.1 RCW; adding a new section to chapter 62A.7 RCW; creating new sections; repealing RCW 62A.1-109, 62A.1-207, 62A.1-208, 62A.2-208, 62A.2A-207, and 62A.10-104; repealing 2011 c 74 s 801; providing an effective date; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 101 RCW 62A.1-101 and 1965 ex.s. c 157 s 1-101 are each
amended to read as follows:shall be known and)) may be cited
as the Uniform Commercial Code.
(b) This Article may be cited as Uniform Commercial Code--General
Provisions.
Sec. 102 RCW 62A.1-102 and 1965 ex.s. c 157 s 1-102 are each
amended to read as follows:PURPOSES; RULES OF CONSTRUCTION; VARIATION BY AGREEMENT.)) SCOPE
OF ARTICLE. (1) This Title shall be liberally construed and applied
to promote its underlying purposes and policies.)) This Article applies to a transaction to the
extent that it is governed by another article of this title.
(2) Underlying purposes and policies of this Title are
(a) to simplify, clarify and modernize the law governing commercial
transactions;
(b) to permit the continued expansion of commercial practices
through custom, usage and agreement of the parties;
(c) to make uniform the law among the various jurisdictions.
(3) The effect of provisions of this Title may be varied by
agreement, except as otherwise provided in this Title and except that
the obligations of good faith, diligence, reasonableness and care
prescribed by this Title may not be disclaimed by agreement but the
parties may by agreement determine the standards by which the
performance of such obligations is to be measured if such standards are
not manifestly unreasonable.
(4) The presence in certain provisions of this Title of the words
"unless otherwise agreed" or words of similar import does not imply
that the effect of other provisions may not be varied by agreement
under subsection (3).
(5) In this Title unless the context otherwise requires
(a) words in the singular number include the plural, and in the
plural include the singular;
(b) words of the masculine gender include the feminine and the
neuter, and when the sense so indicates words of the neuter gender may
refer to any gender.
Sec. 103 RCW 62A.1-103 and 1965 ex.s. c 157 s 1-103 are each
amended to read as follows:SUPPLEMENTARY GENERAL PRINCIPLES OF LAW APPLICABLE.))
CONSTRUCTION OF UNIFORM COMMERCIAL CODE TO PROMOTE ITS PURPOSES AND
POLICIES; APPLICABILITY OF SUPPLEMENTAL PRINCIPLES OF LAW.
(1) To simplify, clarify, and modernize the law governing
commercial transactions;
(2) To permit the continued expansion of commercial practices
through custom, usage, and agreement of the parties; and
(3) To make uniform the law among the various jurisdictions.
(b) Unless displaced by the particular provisions of this title,
the principles of law and equity, including the law merchant and the
law relative to capacity to contract, principal and agent, estoppel,
fraud, misrepresentation, duress, coercion, mistake, bankruptcy, ((or))
and other validating or invalidating cause ((shall)) supplement its
provisions.
Sec. 104 RCW 62A.1-104 and 1965 ex.s. c 157 s 1-104 are each
amended to read as follows:IMPLICIT)) IMPLIED REPEAL.
Sec. 105 RCW 62A.1-105 and 2001 c 32 s 8 are each amended to read
as follows:TERRITORIAL APPLICATION OF THE TITLE; PARTIES' POWER TO CHOOSE
APPLICABLE LAW.)) SEVERABILITY. (1) Except as provided hereafter in
this section, when a transaction bears a reasonable relation to this
state and also to another state or nation the parties may agree that
the law either of this state or of such other state or nation shall
govern their rights and duties. Failing such agreement this Title
applies to transactions bearing an appropriate relation to this state.)) If any provision or clause
of this title or its application to any person or circumstance is held
invalid, the invalidity does not affect other provisions or
applications of this title which can be given effect without the
invalid provision or application, and to this end the provisions of
this title are severable.
(2) Where one of the following provisions of this Title specifies
the applicable law, that provision governs and a contrary agreement is
effective only to the extent permitted by the law (including the
conflict of laws rules) so specified:
Rights of creditors against sold goods. RCW 62A.2-402.
Applicability of the Article on Leases. RCW 62A.2A-105 and
62A.2A-106.
Applicability of the Article on Bank Deposits and Collections. RCW
62A.4-102.
Governing law in the Article on Funds Transfers. RCW 62A.4A-507.
Letters of Credit. RCW 62A.5-116.
Applicability of the Article on Investment Securities. RCW
62A.8-110.
Law governing perfection, the effect of perfection or
nonperfection, and the priority of security interests and agricultural
liens. RCW 62A.9A-301 through 62A.9A-307.
Sec. 106 RCW 62A.1-106 and 1965 ex.s. c 157 s 1-106 are each
amended to read as follows:REMEDIES TO BE LIBERALLY ADMINISTERED.)) USE OF SINGULAR AND
PLURAL; GENDER. (1) The remedies provided by this Title shall be
liberally administered to the end that the aggrieved party may be put
in as good a position as if the other party had fully performed but
neither consequential or special nor penal damages may be had except as
specifically provided in this Title or by other rule of law.)) In this title, unless the statutory context otherwise
requires:
(2) Any right or obligation declared by this Title is enforceable
by action unless the provision declaring it specifies a different and
limited effect.
(1) Words in the singular number include the plural, and those in
the plural include the singular; and
(2) Words of any gender also refer to any other gender.
Sec. 107 RCW 62A.1-107 and 1965 ex.s. c 157 s 1-107. Cf. former
RCW sections: (i) RCW 62.01.119(3) are each amended to read as
follows:WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER BREACH.)) SECTION
CAPTIONS. Any claim or right arising out of an alleged breach can be
discharged in whole or in part without consideration by a written
waiver or renunciation signed and delivered by the aggrieved party.))
Section captions are part of this title.
Sec. 108 RCW 62A.1-108 and 1965 ex.s. c 157 s 1-108 are each
amended to read as follows:SEVERABILITY.)) RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND
NATIONAL COMMERCE ACT. If any provision or clause of this Title or
application thereof to any person or circumstances is held invalid,
such invalidity shall not affect other provisions or applications of
the Title which can be given effect without the invalid provision or
application, and to this end the provisions of this Title are declared
to be severable.)) Except as provided in this section, this Article
modifies, limits, and supersedes the federal electronic signatures in
global and national commerce act, 15 U.S.C. Sec. 7001 et seq., except
that nothing in this Article modifies, limits, or supersedes section
7001(c) of that act, and nothing in this section either authorizes or
prohibits electronic delivery of any of the notices described in
section 7003(b) of that act. This section does not modify, limit, or
supersede application of the federal electronic signatures in global
and national commerce act, 15 U.S.C. Sec. 7001 et seq., to transactions
governed by Article 2 or 2A of this title.
Sec. 109 RCW 62A.1-201 and 2001 c 32 s 9 are each amended to read
as follows:
(b) Subject to ((additional)) definitions contained in ((the
subsequent)) other articles of this title ((which are applicable to
specific)) 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 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)) 2 of this title may be a buyer in
ordinary course of business. "Buyer in 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)) 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 (i) 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 (ii) 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 of this title, 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
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)) subject to this title.
(((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 of
this title. "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 of this title. Except as otherwise provided
in RCW 62A.2-505, the right of a seller or lessor of goods under
Article 2 or 2A of this title to retain or acquire possession of the
goods is not a "security interest," but a seller or lessor may also
acquire a "security interest" by complying with Article 9A of this
title. 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 using 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. 110 RCW 62A.1-202 and 1965 ex.s. c 157 s 1-202 are each
amended to read as follows:PRIMA FACIE EVIDENCE BY THIRD PARTY DOCUMENTS.)) NOTICE;
KNOWLEDGE. A document in due form purporting to be a bill of lading,
policy or certificate of insurance, official weigher's or inspector's
certificate, consular invoice, or any other document authorized or
required by the contract to be issued by a third party shall be prima
facie evidence of its own authenticity and genuineness and of the facts
stated in the document by the third party.)) (a) Subject to subsection
(f) of this section, a person has "notice" of a fact if the person:
(1) Has actual knowledge of it;
(2) Has received a notice or notification of it; or
(3) From all the facts and circumstances known to the person at the
time in question, has reason to know that it exists.
(b) "Knowledge" means actual knowledge. "Knows" has a
corresponding meaning.
(c) "Discover," "learn," or words of similar import refer to
knowledge rather than to reason to know.
(d) 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 the other
person actually comes to know of it.
(e) Subject to subsection (f) of this section, a person "receives"
a notice or notification when:
(1) It comes to that person's attention; or
(2) It is duly delivered in a form reasonable under the
circumstances at the place of business through which the contract was
made or at another location held out by that person as the place for
receipt of such communications.
(f) Notice, knowledge, or a notice or notification received by an
organization is effective for a particular transaction from the time it
is brought to the attention of the individual conducting that
transaction and, in any event, from the time it would have been brought
to 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 the
communication is part of the individual's regular duties or the
individual has reason to know of the transaction and that the
transaction would be materially affected by the information.
Sec. 111 RCW 62A.1-203 and 1965 ex.s. c 157 s 1-203 are each
amended to read as follows:OBLIGATION OF GOOD FAITH.)) LEASE DISTINGUISHED FROM SECURITY
INTEREST. Every contract or duty within this Title imposes an
obligation of good faith in its performance or enforcement.)) (a)
Whether a transaction in the form of a lease creates a lease or
security interest is determined by the facts of each case.
(b) A transaction in the form of a lease creates a security
interest if the consideration that 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 and is not subject to termination by the lessee, and:
(1) The original term of the lease is equal to or greater than the
remaining economic life of the goods;
(2) 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;
(3) The lessee has an option to renew the lease for the remaining
economic life of the goods for no additional consideration or for
nominal additional consideration upon compliance with the lease
agreement; or
(4) The lessee has an option to become the owner of the goods for
no additional consideration or for nominal additional consideration
upon compliance with the lease agreement.
(c) A transaction in the form of a lease does not create a security
interest merely because:
(1) 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;
(2) The lessee assumes risk of loss of the goods;
(3) The lessee agrees to pay, with respect to the goods, taxes,
insurance, filing, recording, or registration fees, or service or
maintenance costs;
(4) The lessee has an option to renew the lease or to become the
owner of the goods;
(5) 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; or
(6) 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.
(d) 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. Additional consideration is
not nominal if:
(1) 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
(2) 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.
(e) The "remaining economic life of the goods" and "reasonably
predictable" fair market rent, fair market value, or cost of performing
under the lease agreement must be determined with reference to the
facts and circumstances at the time the transaction is entered into.
Sec. 112 RCW 62A.1-204 and 1965 ex.s. c 157 s 1-204 are each
amended to read as follows:TIME; REASONABLE TIME; "SEASONABLY".)) VALUE. (1) Whenever
this Title requires any action to be taken within a reasonable time,
any time which is not manifestly unreasonable may be fixed by
agreement.)) Except as otherwise provided in Articles 3, 4, and 5 of this
title, a person gives value for rights if the person acquires them:
(2) What is a reasonable time for taking any action depends on the
nature, purpose and circumstances of such action.
(3) An action is taken "seasonably" when it is taken at or within
the time agreed or if no time is agreed at or within a reasonable
time.
(1) 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;
(2) As security for, or in total or partial satisfaction of, a
preexisting claim;
(3) By accepting delivery under a preexisting contract for
purchase; or
(4) In return for any consideration sufficient to support a simple
contract.
Sec. 113 RCW 62A.1-205 and 1965 ex.s. c 157 s 1-205 are each
amended to read as follows:COURSE OF DEALING AND USAGE OF TRADE.)) REASONABLE TIME;
SEASONABLENESS. (1) A course of dealing is a sequence of previous
conduct between the parties to a particular transaction which is fairly
to be regarded as establishing a common basis of understanding for
interpreting their expressions and other conduct.)) (a) Whether a time for taking an action required by this
title is reasonable depends on the nature, purpose, and circumstances
of the action.
(2) A usage of trade is any practice or method of dealing having
such regularity of observance in a place, vocation or trade as to
justify an expectation that it will be observed with respect to the
transaction in question. The existence and scope of such a usage are
to be proved as facts. If it is established that such a usage is
embodied in a written trade code or similar writing the interpretation
of the writing is for the court.
(3) A course of dealing between parties and any usage of trade in
the vocation or trade in which they are engaged or of which they are or
should be aware give particular meaning to and supplement or qualify
terms of an agreement.
(4) The express terms of an agreement and an applicable course of
dealing or usage of trade shall be construed wherever reasonable as
consistent with each other; but when such construction is unreasonable
express terms control both course of dealing and usage of trade and
course of dealing controls usage of trade.
(5) An applicable usage of trade in the place where any part of
performance is to occur shall be used in interpreting the agreement as
to that part of the performance.
(6) Evidence of a relevant usage of trade offered by one party is
not admissible unless and until he has given the other party such
notice as the court finds sufficient to prevent unfair surprise to the
latter.
(b) An action is taken seasonably if it is taken at or within the
time agreed or, if no time is agreed, at or within a reasonable time.
Sec. 114 RCW 62A.1-206 and 1995 c 48 s 55 are each amended to
read as follows:STATUTE OF FRAUDS FOR KINDS OF PERSONAL PROPERTY NOT OTHERWISE
COVERED.)) PRESUMPTIONS. (1) Except in the cases described in
subsection (2) of this section a contract for the sale of personal
property is not enforceable by way of action or defense beyond five
thousand dollars in amount or value of remedy unless there is some
writing which indicates that a contract for sale has been made between
the parties at a defined or stated price, reasonably identifies the
subject matter, and is signed by the party against whom enforcement is
sought or by his authorized agent.)) Whenever this title creates
a "presumption" with respect to a fact, or provides that a fact is
"presumed," the trier of fact must find the existence of the fact
unless and until evidence is introduced that supports a finding of its
nonexistence.
(2) Subsection (1) of this section does not apply to contracts for
the sale of goods (RCW 62A.2-201) nor of securities (RCW 62A.8-113) nor
to security agreements (RCW 62A.9-203).
NEW SECTION. Sec. 115 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-301, to read as follows:
(b) In the absence of an agreement effective under subsection (a)
of this section, and except as provided in subsection (c) of this
section, this title applies to transactions bearing an appropriate
relation to this state.
(c) If one of the following provisions of this title specifies the
applicable law, that provision governs and a contrary agreement is
effective only to the extent permitted by the law so specified:
(1) RCW 62A.2-402;
(2) RCW 62A.2A-105 and 62A.2A-106;
(3) RCW 62A.4-102;
(4) RCW 62A.4A-507;
(5) RCW 62A.5-116;
(6) RCW 62A.8-110;
(7) RCW 62A.9A-301 through 62A.9A-307.
NEW SECTION. Sec. 116 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-302, to read as follows:
(b) The obligations of good faith, diligence, reasonableness, and
care prescribed by this title may not be disclaimed by agreement. The
parties, by agreement, may determine the standards by which the
performance of those obligations is to be measured if those standards
are not manifestly unreasonable. Whenever this title requires an
action to be taken within a reasonable time, a time that is not
manifestly unreasonable may be fixed by agreement.
(c) The presence in certain provisions of this title of the phrase
"unless otherwise agreed," or words of similar import, does not imply
that the effect of other provisions may not be varied by agreement
under this section.
NEW SECTION. Sec. 117 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-303, to read as follows:
(1) The agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and
(2) The other party, with knowledge of the nature of the
performance and opportunity for objection to it, accepts the
performance or acquiesces in it without objection.
(b) A "course of dealing" is a sequence of conduct concerning
previous transactions between the parties to a particular transaction
that is fairly to be regarded as establishing a common basis of
understanding for interpreting their expressions and other conduct.
(c) A "usage of trade" is any practice or method of dealing having
such regularity of observance in a place, vocation, or trade as to
justify an expectation that it will be observed with respect to the
transaction in question. The existence and scope of such a usage must
be proved as facts. If it is established that such a usage is embodied
in a trade code or similar record, the interpretation of the record is
a question of law.
(d) A course of performance or course of dealing between the
parties or usage of trade in the vocation or trade in which they are
engaged or of which they are or should be aware is relevant in
ascertaining the meaning of the parties' agreement, may give particular
meaning to specific terms of the agreement, and may supplement or
qualify the terms of the agreement. A usage of trade applicable in the
place in which part of the performance under the agreement is to occur
may be so utilized as to that part of the performance.
(e) Except as otherwise provided in subsection (f) of this section,
the express terms of an agreement and any applicable course of
performance, course of dealing, or usage of trade must be construed
whenever reasonable as consistent with each other. If such a
construction is unreasonable:
(1) Express terms prevail over course of performance, course of
dealing, and usage of trade;
(2) Course of performance prevails over course of dealing and usage
of trade; and
(3) Course of dealing prevails over usage of trade.
(f) Subject to RCW 62A.2-209 and 62A.2A-208, a course of
performance is relevant to show a waiver or modification of any term
inconsistent with the course of performance.
(g) Evidence of a relevant usage of trade offered by one party is
not admissible unless that party has given the other party notice that
the court finds sufficient to prevent unfair surprise to the other
party.
NEW SECTION. Sec. 118 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-304, to read as follows:
NEW SECTION. Sec. 119 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-305, to read as follows:
(b) Any right or obligation declared by this title is enforceable
by action unless the provision declaring it specifies a different and
limited effect.
NEW SECTION. Sec. 120 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-306, to read as follows:
NEW SECTION. Sec. 121 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-307, to read as follows:
NEW SECTION. Sec. 122 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-308, to read as follows:
(b) Subsection (a) of this section does not apply to an accord and
satisfaction.
NEW SECTION. Sec. 123 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-309, to read as follows:
NEW SECTION. Sec. 124 A new section is added to chapter 62A.1
RCW, to be codified as RCW 62A.1-310, to read as follows:
Sec. 201 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. 202 RCW 62A.7-102 and 2011 c 336 s 825 are each amended to
read as follows:(1))) (a) In this Article,
unless the context otherwise requires:
(((a))) (1) "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))) (2) "Carrier" means a person that issues a bill of lading.
(3) "Consignee" means ((the)) a person named in a bill of lading to
((whom)) which or to whose order the bill promises delivery.
(((c))) (4) "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))) (5) "Delivery order" means a ((written)) record that
contains an order to deliver goods directed to a warehouse
((operator)), 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).)) (6) [Reserved.]
(f)
(7) "Goods" means all things ((which)) that are treated as movable
for the purposes of a contract ((of)) for storage or transportation.
(((g))) (8) "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 or her)) the issuer's instructions.
(((h))) (9) "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.
(10) [Reserved.]
(11) "Sign" means, with present intent to authenticate or adopt a
record:
(A) To execute or adopt a tangible symbol; or
(B) To attach to or logically associate with the record an
electronic sound, symbol, or process.
(12) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(13) "Warehouse ((operator))" ((is)) 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:)) (b) 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)
(1) "Contract for sale((.))", RCW 62A.2-106((.));
"Overseas." RCW 62A.2-323.
(2) "Lessee in ordinary course of business," RCW 62A.2A-103; and
(3) "Receipt" of goods((.)), RCW 62A.2-103.
(((4))) (c) In addition, Article 1 contains general definitions and
principles of construction and interpretation applicable throughout
this Article.
Sec. 203 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)) (a) 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)).
(b) 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.
(c) 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)).
(d) A person in its capacity as an electronic data storage provider
or an electronic data transmitter is not subject to this Article.
Sec. 204 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. (1) A warehouse receipt, bill of lading
or other document of title is negotiable))
(a) Except as otherwise provided in subsection (c) 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((; or)).
(b) where recognized in overseas trade, if it runs to a named
person or assigns.
(2) Any other document
(b) A document of title other than one described in subsection (a)
of this section is nonnegotiable. 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.
(c) A document of title is nonnegotiable if, at the time it is
issued, the document has a conspicuous legend, however expressed, that
it is nonnegotiable.
Sec. 205 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.)) (a) 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:
(1) The person entitled under the electronic document surrenders
control of the document to the issuer; and
(2) The tangible document when issued contains a statement that it
is issued in substitution for the electronic document.
(b) Upon issuance of a tangible document of title in substitution
for an electronic document of title in accordance with subsection (a)
of this section:
(1) The electronic document ceases to have any effect or validity;
and
(2) 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.
(c) 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:
(1) The person entitled under the tangible document surrenders
possession of the document to the issuer; and
(2) The electronic document when issued contains a statement that
it is issued in substitution for the tangible document.
(d) Upon issuance of an electronic document of title in
substitution for a tangible document of title in accordance with
subsection (c) of this section:
(1) The tangible document ceases to have any effect or validity;
and
(2) 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. 206 A new section is added to chapter 62A.7
RCW, to be codified as RCW 62A.7-106, to read as follows:
(b) A system satisfies subsection (a) 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:
(1) A single authoritative copy of the document exists which is
unique, identifiable, and, except as otherwise provided in (4), (5),
and (6) of this subsection, unalterable;
(2) The authoritative copy identifies the person asserting control
as:
(A) The person to which the document was issued; or
(B) If the authoritative copy indicates that the document has been
transferred, the person to which the document was most recently
transferred;
(3) The authoritative copy is communicated to and maintained by the
person asserting control or its designated custodian;
(4) 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;
(5) 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
(6) Any amendment of the authoritative copy is readily identifiable
as authorized or unauthorized.
Sec. 301 RCW 62A.7-201 and 2011 c 336 s 826 are each amended to
read as follows:WHO)) PERSON THAT MAY ISSUE A WAREHOUSE RECEIPT; STORAGE UNDER
((GOVERNMENT)) BOND. (1))) (a) A warehouse receipt may be issued by
any warehouse ((operator)).
(((2) Where)) (b) 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
warehouse ((operator)).
Sec. 302 RCW 62A.7-202 and 2011 c 336 s 827 are each amended to
read as follows:ESSENTIAL TERMS; OPTIONAL TERMS))
EFFECT OF OMISSION. (1))) (a) A warehouse receipt need not be in any
particular form.
(((2))) (b) Unless a warehouse receipt ((embodies within its
written, printed, or electronic terms)) provides for each of the
following, the warehouse ((operator)) is liable for damages caused ((by
the omission)) to a person injured ((thereby)) by its omission:
(((a))) (1) A statement of the location of the warehouse facility
where the goods are stored;
(((b))) (2) The date of issue of the receipt;
(((c))) (3) The ((consecutive number)) unique identification code
of the receipt;
(((d))) (4) 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 or her)) its order;
(((e))) (5) 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 nonnegotiable
receipt;
(((f))) (6) A description of the goods or ((of)) the packages
containing them;
(((g))) (7) The signature of the warehouse ((operator, which may be
made by his or her authorized)) or its agent;
(((h))) (8) If the receipt is issued for goods ((of which the
warehouse operator 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))) (9) A statement of the amount of advances made and of
liabilities incurred for which the warehouse ((operator)) 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
warehouse ((operator)) or to ((his or her)) 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))) (c) A warehouse ((operator)) may insert in ((his or her))
its receipt any ((other)) terms ((which)) that are not contrary to the
provisions of this title and do not impair ((his or her)) its
obligation of delivery ((()) under RCW 62A.7-403(() or his or her)) or
its duty of care ((()) under RCW 62A.7-204(())). Any contrary
provision((s shall be)) is ineffective.
Sec. 303 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 nonreceipt 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. 304 RCW 62A.7-204 and 2011 c 336 s 828 are each amended to
read as follows:OPERATOR'S))
LIABILITY. (1))) (a) A warehouse ((operator)) is liable for damages
for loss of or injury to the goods caused by ((his or her)) its failure
to exercise ((such)) care ((in)) with regard to ((them as)) the goods
that a reasonably careful person would exercise under ((like)) similar
circumstances ((but)). Unless otherwise agreed ((he or she)), the
warehouse is not liable for damages ((which)) that could not have been
avoided by the exercise of ((such)) that care.
(((2))) (b) 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 warehouse
((operator shall not be)) is not 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 warehouse operator's tariff, if any. No
such limitation is effective with respect to the warehouse operator's
liability for conversion to his or her own use)) of the goods.
(((3))) (c) 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))) (d) 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. 305 RCW 62A.7-205 and 2011 c 336 s 829 are each amended to
read as follows:the)) ordinary course of business of fungible goods sold and
delivered by a warehouse ((operator who)) 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. 306 RCW 62A.7-206 and 2011 c 336 s 830 are each amended to
read as follows:WAREHOUSE OPERATOR'S)) WAREHOUSE'S
OPTION. (1))) (a) A warehouse ((operator may on notifying)), 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 warehouse ((operator)) may sell them ((in
accordance with the provisions of the section on enforcement of a
warehouse operator's lien ()) pursuant to RCW 62A.7-210(())).
(((2))) (b) If a warehouse ((operator)) in good faith believes that
((the)) goods are about to deteriorate or decline in value to less than
the amount of ((his or her)) its lien within the time ((prescribed))
provided in subsection (((1))) (a) of this section ((for notification,
advertisement, and sale)) and RCW 62A.7-210, the warehouse ((operator))
may specify in the ((notification)) notice given under subsection (a)
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))) (c) If, as a result of a quality or condition of the goods
of which the warehouse ((operator had no)) 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 warehouse
((operator)) 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 warehouse
((operator)), after a reasonable effort, is unable to sell the goods
((he or she)), it may dispose of them in any lawful manner and
((shall)) does not incur ((no)) liability by reason of ((such)) that
disposition.
(((4))) (d) The warehouse ((operator must)) 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))) (e) The warehouse ((operator)) may satisfy ((his or her))
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 or she)) which the warehouse would have been
bound to deliver the goods.
Sec. 307 RCW 62A.7-207 and 2011 c 336 s 831 are each amended to
read as follows:(1))) (a) Unless
the warehouse receipt provides otherwise ((provides)), a warehouse
((operator must)) 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))) (b) If different lots of fungible goods ((so)) are
commingled, the goods are owned in common by the persons entitled
thereto and the warehouse ((operator)) 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 warehouse ((operator)) has issued against it, the persons
entitled include all holders to ((whom)) which overissued receipts have
been duly negotiated.
Sec. 308 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. 309 RCW 62A.7-209 and 2011 c 336 s 832 are each amended to
read as follows:OPERATOR)). (1))) (a) A warehouse
((operator)) has a lien against the bailor on the goods covered by a
warehouse receipt or storage agreement or on the proceeds thereof in
((his or her)) 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 warehouse
((operator)) also has a lien against ((him or her)) 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 warehouse
((operator)). ((But)) However, as against a person to ((whom)) which
a negotiable warehouse receipt is duly negotiated, a ((warehouse
operator'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 ((warehouse operator's)) warehouse's lien as provided in
this chapter takes priority over all other liens and perfected or
unperfected security interests.
(((2))) (b) The warehouse ((operator)) 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))) (a) 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))) Article 9A of this title.
(((3))) (c) A ((warehouse operator's)) warehouse's lien for charges
and expenses under subsection (((1))) (a) of this section or a security
interest under subsection (((2))) (b) 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 or her)) 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)).
(((4) A warehouse operator loses his or her lien on any goods which
he or she voluntarily delivers or which he or she)) 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:
(1) Deliver or entrust the goods or any document of title covering
the goods to the bailor or the bailor's nominee with:
(A) Actual or apparent authority to ship, store, or sell;
(B) Power to obtain delivery under RCW 62A.7-403; or
(C) 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
(2) Acquiesce in the procurement by the bailor or its nominee of
any document.
(d) A warehouse's lien on household goods for charges and expenses
in relation to the goods under subsection (a) 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.
(e) A warehouse loses its lien on any goods that it voluntarily
delivers or unjustifiably refuses to deliver.
Sec. 310 RCW 62A.7-210 and 2011 c 336 s 833 are each amended to
read as follows:OPERATOR'S)) LIEN. (1))) (a) Except
as otherwise provided in subsection (((2))) (b) of this section, a
((warehouse operator'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)) 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 ((different)) method different
from that selected by the warehouse ((operator)) 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 warehouse ((operator either)) sells the goods in the
usual manner in any recognized market therefor, ((or if he or she))
sells at the price current in ((such)) that market at the time of ((his
or her)) the sale, or ((if he or she has)) otherwise ((sold)) sells in
conformity with commercially reasonable practices among dealers in the
type of goods sold((, he or she 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))) (b) A warehouse ((operator's)) may enforce its lien on
goods, other than goods stored by a merchant in the course of ((his or
her)) its business ((may be enforced)), only ((as follows)) if the
following requirements are satisfied:
(((a))) (1) 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.)) (2) 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))) (3) The sale must conform to the terms of the notification.
(((e))) (4) The sale must be held at the nearest suitable place to
that where the goods are held or stored.
(((f))) (5) 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))) (c) 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 warehouse ((operator)) subject to the terms
of the receipt and this Article.
(((4) The)) (d) A warehouse ((operator)) may buy at any public sale
held pursuant to this section.
(((5))) (e) A purchaser in good faith of goods sold to enforce a
((warehouse operator'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 warehouse operator)) with ((the
requirements of)) this section.
(((6) The)) (f) A warehouse ((operator)) may satisfy ((his or her))
its lien from the proceeds of any sale pursuant to this section but
must hold the balance, if any, for delivery on demand to any person to
((whom he or she)) which the warehouse would have been bound to deliver
the goods.
(((7))) (g) The rights provided by this section ((shall be)) are in
addition to all other rights allowed by law to a creditor against ((his
or her)) a debtor.
(((8) Where)) (h) If a lien is on goods stored by a merchant in the
course of ((his or her)) its business, the lien may be enforced in
accordance with either subsection (((1) or (2))) (a) or (b) of this
section.
(((9) The)) (i) A warehouse ((operator)) 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. 401 RCW 62A.7-301 and 1965 ex.s. c 157 s 7-301 are each
amended to read as follows:(1))) (a) A
consignee of a nonnegotiable bill ((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)) (b) If goods are loaded by ((an)) the issuer ((who is
a common carrier,)) of a bill of lading:
(1) 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
(2) 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)) (c) 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))) (d) 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)) (e) 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. 402 RCW 62A.7-302 and 1965 ex.s. c 157 s 7-302 are each
amended to read as follows:(1)))
(a) The issuer of a through bill of lading, or other document of title
embodying an undertaking to be performed in part by ((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)) (b) 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))) (c) The issuer of ((such)) a through bill of lading or
other document ((shall be)) of title described in subsection (a) 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((,)):
(1) 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
(2) 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. 403 RCW 62A.7-303 and 1965 ex.s. c 157 s 7-303 are each
amended to read as follows:(1))) (a)
Unless the bill of lading otherwise provides, ((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))) (1) The holder of a negotiable bill; ((or)) (2) The consignor on a nonnegotiable bill
((
(b)notwithstanding)), even if the consignee has given contrary
instructions ((from the consignee)); ((or)) (3) The consignee on a nonnegotiable 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
(c)
(((d))) (4) The consignee on a nonnegotiable bill, if ((he)) the
consignee is entitled as against the consignor to dispose of ((them))
the goods.
(((2))) (b) Unless ((such)) instructions described in subsection
(a) 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. 404 RCW 62A.7-304 and 1965 ex.s. c 157 s 7-304 are each
amended to read as follows:(1))) (a) Except ((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)) (b) 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)) (c) 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)) (d) 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))) (e) 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. 405 RCW 62A.7-305 and 1965 ex.s. c 157 s 7-305 are each
amended to read as follows:(1))) (a) Instead of issuing a bill of lading
to the consignor at the place of shipment, a carrier ((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))) (b) 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. 406 RCW 62A.7-307 and 1965 ex.s. c 157 s 7-307 are each
amended to read as follows:(1))) (a) A carrier has a lien on the goods
covered by a bill of lading or on the proceeds thereof in its
possession for charges ((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))) (b) A lien for charges and expenses under subsection
(((1))) (a) 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))) (a) 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))) (c) A carrier loses ((his)) its lien on any goods ((which
he)) that it voluntarily delivers or ((which he)) unjustifiably refuses
to deliver.
Sec. 407 RCW 62A.7-308 and 1965 ex.s. c 157 s 7-308 are each
amended to read as follows:(1))) (a) A carrier's lien on
goods 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)) 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))) (b) 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)) (c) A carrier may buy at any public sale pursuant to
this section.
(((4))) (d) 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)) (e) 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))) (f) 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))) (g) A carrier's lien may be enforced ((in accordance with))
pursuant to either subsection (((1))) (a) of this section or the
procedure set forth in ((subsection (2) of)) RCW 62A.7-210(b).
(((8) The)) (h) 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. 408 RCW 62A.7-309 and 2009 c 549 s 1017 are each amended to
read as follows:
(((1))) (a) A carrier ((who)) that issues a bill of lading, whether
negotiable or nonnegotiable, ((must)) shall exercise the degree of care
in relation to the goods which a reasonably careful 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))) (b) 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 of lading 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 or she 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))) (c) 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. 501 RCW 62A.7-401 and 2011 c 336 s 834 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 or her)) 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 warehouse operator if it)) is not a warehouse but the
document purports to be a warehouse receipt.
Sec. 502 RCW 62A.7-402 and 1965 ex.s. c 157 s 7-402 are each
amended to read as follows:RECEIPT OR BILL)) DOCUMENT OF TITLE; OVERISSUANCE.
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. 503 RCW 62A.7-403 and 2011 c 336 s 835 are each amended to
read as follows:WAREHOUSE OPERATOR OR CARRIER)) BAILEE TO DELIVER;
EXCUSE. (1) The)) (a) 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))) (b) and (c) of this
section, unless and to the extent that the bailee establishes any of
the following:
(((a))) (1) Delivery of the goods to a person whose receipt was
rightful as against the claimant;
(((b))) (2) Damage to or delay, loss, or destruction of the goods
for which the bailee is not liable;
(((c))) (3) Previous sale or other disposition of the goods in
lawful enforcement of a lien or on ((warehouse operator's)) a
warehouse's lawful termination of storage;
(((d))) (4) The exercise by a seller of ((his or her)) 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))) (5) A diversion, reconsignment, or other disposition
pursuant to ((the provisions of this Article ())RCW 62A.7-303(() or
tariff regulating such right));
(((f))) (6) Release, satisfaction, or any other ((fact affording
a)) personal defense against the claimant; or
(((g))) (7) Any other lawful excuse.
(((2))) (b) 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))) (c) 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 or she must
surrender for cancellation or notation of partial deliveries any
outstanding negotiable document covering the goods, and)) (a):
(1) 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
(2) 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
nonnegotiable document.))
Sec. 504 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. 601 RCW 62A.7-501 and 1965 ex.s. c 157 s 7-501 are each
amended to read as follows:"))DUE NEGOTIATION((")).
(1))) (a) The following rules apply to a negotiable tangible document
of title ((running)):
(1) 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;)) If the document's original terms run
to bearer, it is negotiated by delivery alone.
(b) when a document running
(3) 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))) (4) 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))) (5) 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))) (b) The following rules apply to a negotiable electronic
document of title:
(1) 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.
(2) 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.
(3) 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.
(c) Indorsement of a nonnegotiable document of title neither makes
it negotiable nor adds to the transferee's rights.
(((6))) (d) 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. 602 RCW 62A.7-502 and 1965 ex.s. c 157 s 7-502 are each
amended to read as follows:(1))) (a) Subject to ((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))) (1) Title to the document;
(((b))) (2) Title to the goods;
(((c))) (3) 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))) (4) 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))) (b) 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:
(1) The due negotiation or any prior due negotiation constituted a
breach of duty ((or even though));
(2) 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))
(3) A previous sale or other transfer of the goods or document has
been made to a third person.
Sec. 603 RCW 62A.7-503 and 2000 c 250 s 9A-814 are each amended
to read as follows:(1))) (a)
A document of title confers no right in goods against a person ((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)) (1) Deliver or entrust the
goods or any document of title covering ((them)) the goods to the
bailor or ((his)) the bailor's nominee with:
(A) Actual or apparent authority to ship, store, or sell ((or
with));
(B) Power to obtain delivery under ((this Article ())RCW 62A.7-403(())); or ((with))
(C) Power of disposition under ((this Title ())RCW 62A.2-403 ((and
62A.9A-320))), 62A.2A-304(2), 62A.2A-305(2), 62A.9A-320, or 62A.9A-321(c) or other statute or rule of law; ((nor)) or
(((b) acquiesced)) (2) Acquiesce in the procurement by the bailor
or ((his)) its nominee of any document ((of title)).
(((2))) (b) 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))) (c) 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. 604 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. (1))) (a) A transferee
of a document of title, whether negotiable or nonnegotiable, to
((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))) (b) In the case of a transfer of a nonnegotiable document
of title, until but not after the bailee receives ((notification))
notice of the transfer, the rights of the transferee may be defeated:
(((a))) (1) 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))) (2) 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)) (3) 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
(c)
(4) As against the bailee, by good-faith dealings of the bailee
with the transferor.
(((3))) (c) A diversion or other change of shipping instructions by
the consignor in a nonnegotiable 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))) (d) Delivery of the goods pursuant to a nonnegotiable
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. 605 RCW 62A.7-505 and 1965 ex.s. c 157 s 7-505 are each
amended to read as follows:A)) GUARANTOR FOR OTHER PARTIES. by)) previous
indorsers.
Sec. 606 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. 607 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)) (1) The document is genuine; ((and)) (2) The transferor does not have knowledge of
any fact ((
(b) that he has nowhich)) that would impair ((its)) the document's validity or
worth; and
(((c) that his)) (3) The negotiation or ((transfer)) delivery is
rightful and fully effective with respect to the title to the document
and the goods it represents.
Sec. 608 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. 609 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 Article 2, 2A, or 5 of this title.
Sec. 701 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.
(1))) (a) If a document ((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 nonsurrender of
possession or control of the document is adequately protected against
the loss. If the document was ((not negotiable, such)) nonnegotiable,
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))) (b) 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. 702 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. 703 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 nondelivery of the goods((,)) or by
original action((, whichever is appropriate)).
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.)) [Reserved.]
(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. | |
| "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.2-202 and 1965 ex.s. c 157 s 2-202 are each
amended to read as follows:
(a) By course of performance, course of dealing, or usage of trade
(((RCW 62A.1-205) or by course of performance (RCW 62A.2-208))) (RCW
62A.1-303); and
(b) By evidence of consistent additional terms unless the court
finds the writing to have been intended also as a complete and
exclusive statement of the terms of the agreement.
Sec. 804 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 (i) 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 (ii)
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. 805 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(1)); 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. 806 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 9A, 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. 807 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 nonnegotiable 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 Article 9A of this title, 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 nonnegotiable 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(2)); and
(b) Tender through customary banking channels is sufficient and
dishonor of a draft accompanying or associated with the documents
constitutes nonacceptance or rejection.
Sec. 808 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 nonnegotiable 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(2))
a nonnegotiable 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. 809 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. 810 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 of 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 of a
nonnegotiable document of title or other ((written)) direction to
deliver in a record, as provided in ((subsection (4)(b) of)) RCW 62A.2-503(4)(b).
(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. 811 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. 812 RCW 62A.2-705 and 2011 c 336 s 823 are each amended to
read as follows:,))
or larger shipments of express or freight when the buyer repudiates or
fails to make a payment due before delivery or if for any other reason
the seller has a right to withhold or reclaim the goods.
(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 a warehouse ((operator)); 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 nonnegotiable 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). | |
| (( | ||
| "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-103 and 2011 c 74 s 701 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. | |
| RCW 62A.2A-309. | ||
| "Encumbrance." | RCW 62A.2A-309. | |
| "Fixtures." | RCW 62A.2A-309. | |
| "Fixture filing." | RCW 62A.2A-309. | |
| RCW 62A.2A-309. |
| "Account." | RCW 62A.9A-102. | |
| "Between merchants." | RCW 62A.2-104. | |
| "Buyer." | RCW 62A.2-103. | |
| "Chattel paper." | RCW 62A.9A-102. | |
| "Consumer goods." | RCW 62A.9A-102. | |
| "Document." | RCW 62A.9A-102. | |
| "Entrusting." | RCW 62A.2-403. | |
| "General intangible." | RCW 62A.9A-102. | |
| (( | ||
| "Instrument." | RCW 62A.9A-102. | |
| "Merchant." | RCW 62A.2-104(1). | |
| "Mortgage." | RCW 62A.9A-102. | |
| RCW 62A.9A-102. | ||
| "Receipt." | RCW 62A.2-103. | |
| "Sale." | RCW 62A.2-106. | |
| "Sale on approval." | RCW 62A.2-326. | |
| "Sale or return." | RCW 62A.2-326. | |
| "Seller." | RCW 62A.2-103. |
Sec. 903 RCW 62A.2A-501 and 1993 c 230 s 2A-501 are each amended
to read as follows:
(2) If the lessor or the lessee is in default under the lease
contract, the party seeking enforcement has rights and remedies as
provided in this Article and, except as limited by this Article, as
provided in the lease agreement.
(3) If the lessor or the lessee is in default under the lease
contract, the party seeking enforcement may reduce the party's claim to
judgment, or otherwise enforce the lease contract by self help or any
available judicial procedure or nonjudicial procedure, including
administrative proceeding, arbitration, or the like, in accordance with
this Article.
(4) Except as otherwise provided in ((RCW 62A.1-106(1))) RCW 62A.1-305(a) or this Article or the lease agreement, the rights and remedies
referred to in subsections (2) and (3) of this section are cumulative.
(5) If the lease agreement covers both real property and goods, the
party seeking enforcement may proceed under this Part 5 as to the
goods, or under other applicable law as to both the real property and
the goods in accordance with that party's rights and remedies in
respect of the real property, in which case this Part 5 does not apply.
Sec. 904 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. 905 RCW 62A.2A-518 and 1993 c 230 s 2A-518 are each amended
to read as follows:())RCW 62A.2A-508(1)(())),
or, if agreed, after other default by the lessor, the lessee may cover
by making any purchase or lease of or contract to purchase or lease
goods in substitution for those due from the lessor.
(2) Except as otherwise provided with respect to damages liquidated
in the lease agreement (RCW 62A.2A-504) or otherwise determined
pursuant to agreement of the parties (((RCW 62A.1-102(3))) (RCW 62A.1-302 and 62A.2A-503), if a lessee's cover is by a lease agreement
substantially similar to the original lease agreement and the new lease
agreement is made in good faith and in a commercially reasonable
manner, the lessee may recover from the lessor as damages (i) the
present value, as of the date of the commencement of the term of the
new lease agreement, of the rent under the new lease applicable to that
period of the new lease term which is comparable to the then remaining
term of the original lease agreement minus the present value as of the
same date of the total rent for the then remaining lease term of the
original lease agreement, and (ii) any incidental or consequential
damages, less expenses saved in consequence of the lessor's default.
(3) If a lessee's cover is by lease agreement that for any reason
does not qualify for treatment under subsection (2) of this section, or
is by purchase or otherwise, the lessee may recover from the lessor as
if the lessee had elected not to cover and RCW 62A.2A-519 governs.
Sec. 906 RCW 62A.2A-519 and 1993 c 230 s 2A-519 are each amended
to read as follows:(RCW 62A.1-102(3)))) (RCW 62A.1-302 and 62A.2A-503), if a
lessee elects not to cover or a lessee elects to cover and the cover is
by lease agreement that for any reason does not qualify for treatment
under RCW 62A.2A-518(2), or is by purchase or otherwise, the measure of
damages for nondelivery or repudiation by the lessor or for rejection
or revocation of acceptance by the lessee is the present value, as of
the date of the default, of the then market rent minus the present
value as of the same date of the original rent, computed for the
remaining lease term of the original lease agreement, together with
incidental and consequential damages, less expenses saved in
consequence of the lessor's default.
(2) Market rent is to be determined as of the place for tender or,
in cases of rejection after arrival or revocation of acceptance, as of
the place of arrival.
(3) Except as otherwise agreed, if the lessee has accepted goods
and given notification (RCW 62A.2A-516(3)), the measure of damages for
nonconforming tender or delivery or other default by a lessor is the
loss resulting in the ordinary course of events from the lessor's
default as determined in any manner that is reasonable together with
incidental and consequential damages, less expenses saved in
consequence of the lessor's default.
(4) Except as otherwise agreed, the measure of damages for breach
of warranty is the present value at the time and place of acceptance of
the difference between the value of the use of the goods accepted and
the value if they had been as warranted for the lease term, unless
special circumstances show proximate damages of a different amount,
together with incidental and consequential damages, less expenses saved
in consequence of the lessor's default or breach of warranty.
Sec. 907 RCW 62A.2A-526 and 2011 c 336 s 824 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 a warehouse ((operator)).
(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. 908 RCW 62A.2A-527 and 1993 c 230 s 2A-527 are each amended
to read as follows:
(2) Except as otherwise provided with respect to damages liquidated
in the lease agreement (RCW 62A.2A-504) or otherwise determined
pursuant to agreement of the parties (((RCW 62A.1-102(3))) (RCW 62A.1-302 and 62A.2A-503), if the disposition is by lease agreement
substantially similar to the original lease agreement and the new lease
agreement is made in good faith and in a commercially reasonable
manner, the lessor may recover from the lessee as damages (i) accrued
and unpaid rent as of the date of the commencement of the term of the
new lease agreement, (ii) the present value, as of the same date, of
the total rent for the then remaining lease term of the original lease
agreement minus the present value, as of the same date, of the rent
under the new lease agreement applicable to that period of the new
lease term which is comparable to the then remaining term of the
original lease agreement, and (iii) any incidental damages allowed
under RCW 62A.2A-530, less expenses saved in consequence of the
lessee's default.
(3) If the lessor's disposition is by lease agreement that for any
reason does not qualify for treatment under subsection (2) of this
section, or is by sale or otherwise, the lessor may recover from the
lessee as if the lessor had elected not to dispose of the goods and RCW
62A.2A-528 governs.
(4) A subsequent buyer or lessee who buys or leases from the lessor
in good faith for value as a result of a disposition under this section
takes the goods free of the original lease contract and any rights of
the original lessee even though the lessor fails to comply with one or
more of the requirements of this Article.
(5) The lessor is not accountable to the lessee for any profit made
on any disposition. A lessee who has rightfully rejected or
justifiably revoked acceptance shall account to the lessor for any
excess over the amount of the lessee's security interest (RCW 62A.2A-508(((5)))).
Sec. 909 RCW 62A.2A-528 and 1993 c 230 s 2A-528 are each amended
to read as follows:(RCW 62A.1-102(3)))
(RCW 62A.1-302 and 62A.2A-503), if a lessor elects to retain the goods
or a lessor elects to dispose of the goods and the disposition is by
lease agreement that for any reason does not qualify for treatment
under RCW 62A.2A-527(2), or is by sale or otherwise, the lessor may
recover from the lessee as damages for a default of the type described
in RCW 62A.2A-523 (1) or (3)(a), or, if agreed, for other default of
the lessee, (i) accrued and unpaid rent as of the date of default if
the lessee has never taken possession of the goods, or, if the lessee
has taken possession of the goods, as of the date the lessor
repossesses the goods or an earlier date on which the lessee makes a
tender of the goods to the lessor, (ii) the present value as of the
date determined under (i) of this subsection (((1)(i) of this section))
of the total rent for the then remaining lease term of the original
lease agreement minus the present value as of the same date of the
market rent at the place where the goods are located computed for the
same lease term, and (iii) any incidental damages allowed under RCW
62A.2A-530, less expenses saved in consequence of the lessee's default.
(2) If the measure of damages provided in subsection (1) of this
section is inadequate to put a lessor in as good a position as
performance would have, the measure of damages is the present value of
the profit, including reasonable overhead, the lessor would have made
from full performance by the lessee, together with any incidental
damages allowed under RCW 62A.2A-530, due allowance for costs
reasonably incurred and due credit for payments or proceeds of
disposition.
Sec. 1001 RCW 62A.3-103 and 1993 c 229 s 5 are each amended to
read as follows:
(1) "Acceptor" means a drawee who has accepted a draft.
(2) "Drawee" means a person ordered in a draft to make payment.
(3) "Drawer" means a person who signs or is identified in a draft
as a person ordering payment.
(4) (("Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.)) [Reserved.]
(5) "Maker" means a person who signs or is identified in a note as
a person undertaking to pay.
(6) "Order" means a written instruction to pay money signed by the
person giving the instruction. The instruction may be addressed to any
person, including the person giving the instruction, or to one or more
persons jointly or in the alternative but not in succession. An
authorization to pay is not an order unless the person authorized to
pay is also instructed to pay.
(7) "Ordinary care" in the case of a person engaged in business
means observance of reasonable commercial standards, prevailing in the
area in which the person is located, with respect to the business in
which the person is engaged. In the case of a bank that takes an
instrument for processing for collection or payment by automated means,
reasonable commercial standards do not require the bank to examine the
instrument if the failure to examine does not violate the bank's
prescribed procedures and the bank's procedures do not vary
unreasonably from general banking usage not disapproved by this Article
or Article 4.
(8) "Party" means a party to an instrument.
(9) "Promise" means a written undertaking to pay money signed by
the person undertaking to pay. An acknowledgment of an obligation by
the obligor is not a promise unless the obligor also undertakes to pay
the obligation.
(10) "Prove" with respect to a fact means to meet the burden of
establishing the fact (RCW 62A.1-201(b)(8)).
(11) "Remitter" means a person who purchases an instrument from its
issuer if the instrument is payable to an identified person other than
the purchaser.
(b) Other definitions applying to this Article and the sections in
which they appear are:
| "Acceptance" | RCW 62A.3-409 | |
| "Accommodated party" | RCW 62A.3-419 | |
| "Accommodation party" | RCW 62A.3-419 | |
| "Alteration" | RCW 62A.3-407 | |
| "Anomalous indorsement" | RCW 62A.3-205 | |
| "Blank indorsement" | RCW 62A.3-205 | |
| "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 | |
| "Consideration" | RCW 62A.3-303 | |
| "Draft" | RCW 62A.3-104 | |
| "Holder in due course" | RCW 62A.3-302 | |
| "Incomplete instrument" | RCW 62A.3-115 | |
| "Indorsement" | RCW 62A.3-204 | |
| "Indorser" | RCW 62A.3-204 | |
| "Instrument" | RCW 62A.3-104 | |
| "Issue" | RCW 62A.3-105 | |
| "Issuer" | RCW 62A.3-105 | |
| "Negotiable instrument" | RCW 62A.3-104 | |
| "Negotiation" | RCW 62A.3-201 | |
| "Note" | RCW 62A.3-104 | |
| "Payable at a definite time" | RCW 62A.3-108 | |
| "Payable on demand" | RCW 62A.3-108 | |
| "Payable to bearer" | RCW 62A.3-109 | |
| "Payable to order" | RCW 62A.3-109 | |
| "Payment" | RCW 62A.3-602 | |
| "Person entitled to enforce" | RCW 62A.3-301 | |
| "Presentment" | RCW 62A.3-501 | |
| "Reacquisition" | RCW 62A.3-207 | |
| "Special indorsement" | RCW 62A.3-205 | |
| "Teller's check" | RCW 62A.3-104 | |
| "Transfer of instrument" | RCW 62A.3-203 | |
| "Traveler's check" | RCW 62A.3-104 | |
| "Value" | RCW 62A.3-303 |
| (( | ||
| "Banking day" | RCW 62A.4-104 | |
| "Clearing house" | RCW 62A.4-104 | |
| "Collecting bank" | RCW 62A.4-105 | |
| "Depositary bank" | RCW 62A.4-105 | |
| "Documentary draft" | RCW 62A.4-104 | |
| "Intermediary bank" | RCW 62A.4-105 | |
| "Item" | RCW 62A.4-104 | |
| "Payor bank" | RCW 62A.4-105 | |
| "Suspends payments" | RCW 62A.4-104 |
Sec. 1101 RCW 62A.4-104 and 1995 c 48 s 56 are each amended to
read as follows:
(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. | |
| "Draft" | RCW 62A.3-104. | |
| (( | ||
| "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. 1102 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. 1201 RCW 62A.4A-105 and 1991 sp.s. c 21 s 4A-105 are each
amended to read as follows:
(a) "Authorized account" means a deposit account of a customer in
a bank designated by the customer as a source of payment orders issued
by the customer to the bank. If a customer does not so designate an
account, any account of the customer is an authorized account if
payment of a payment order from that account is not inconsistent with
a restriction on the use of the account.
(b) "Bank" means a person engaged in the business of banking and
includes a savings bank, savings and loan association, credit union,
and trust company. A branch or separate office of a bank is a separate
bank for purposes of this Article.
(c) "Customer" means a person, including a bank, having an account
with a bank or from whom a bank has agreed to receive payment orders.
(d) "Funds-transfer business day" of a receiving bank means the
part of a day during which the receiving bank is open for the receipt,
processing, and transmittal of payment orders and cancellations and
amendments of payment orders.
(e) "Funds-transfer system" means a wire transfer network,
automated clearing house, or other communication system of a clearing
house or other association of banks through which a payment order by a
bank may be transmitted to the bank to which the order is addressed.
(f) (("Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.)) [Reserved.]
(g) "Prove" with respect to a fact means to meet the burden of
establishing the fact (RCW 62A.1-201(b)(8)).
(2) Other definitions applying to this Article and the sections in
which they appear are:
| "Acceptance" | RCW 62A.4A-209 | |
| "Beneficiary" | RCW 62A.4A-103 | |
| "Beneficiary's bank" | RCW 62A.4A-103 | |
| "Executed" | RCW 62A.4A-301 | |
| "Execution date" | RCW 62A.4A-301 | |
| "Funds transfer" | RCW 62A.4A-104 | |
| "Funds-transfer system rule" | RCW 62A.4A-501 | |
| "Intermediary bank" | RCW 62A.4A-104 | |
| "Originator" | RCW 62A.4A-104 | |
| "Originator's bank" | RCW 62A.4A-104 | |
| RCW 62A.4A-405 | ||
| RCW 62A.4A-406 | ||
| RCW 62A.4A-403 | ||
| "Payment date" | RCW 62A.4A-401 | |
| "Payment order" | RCW 62A.4A-103 | |
| "Receiving bank" | RCW 62A.4A-103 | |
| "Security procedure" | RCW 62A.4A-201 | |
| "Sender" | RCW 62A.4A-103 |
| "Clearing house" | (( | |
| "Item" | (( | |
| "Suspends payments" | (( |
Sec. 1202 RCW 62A.4A-106 and 1991 sp.s. c 21 s 4A-106 are each
amended to read as follows:RCW 62A.1-201(27))) RCW 62A.1-202. A receiving bank may fix a cut-off time or times on a funds-transfer business day for the receipt and
processing of payment orders and communications canceling or amending
payment orders. Different cut-off times may apply to payment orders,
cancellations, or amendments, or to different categories of payment
orders, cancellations, or amendments. A cut-off time may apply to
senders generally or different cut-off times may apply to different
senders or categories of payment orders. If a payment order or
communication canceling or amending a payment order is received after
the close of a funds-transfer business day or after the appropriate
cut-off time on a funds-transfer business day, the receiving bank may
treat the payment order or communication as received at the opening of
the next funds-transfer business day.
(2) If this Article refers to an execution date or payment date or
states a day on which a receiving bank is required to take action, and
the date or day does not fall on a funds-transfer business day, the
next day that is a funds-transfer business day is treated as the date
or day stated, unless the contrary is stated in this Article.
Sec. 1203 RCW 62A.4A-204 and 1991 sp.s. c 21 s 4A-204 are each
amended to read as follows:
(2) Reasonable time under subsection (1) of this section may be
fixed by agreement as stated in ((RCW 62A.1-204(1))) RCW 62A.1-302(b),
but the obligation of a receiving bank to refund payment as stated in
subsection (1) of this section may not otherwise be varied by
agreement.
Sec. 1301 RCW 62A.5-103 and 1997 c 56 s 4 are each amended to
read as follows:(1))) (a) This Article applies to letters of credit and
to certain rights and obligations arising out of transactions involving
letters of credit.
(((2))) (b) The statement of a rule in this Article does not by
itself require, imply, or negate application of the same or a different
rule to a situation not provided for, or to a person not specified, in
this Article.
(((3))) (c) With the exception of this subsection, subsections
(((1))) (a) and (((4))) (d) of this section, RCW 62A.5-102(((1) (i)))
(a) (9) and (((j))) (10), 62A.5-106(((4))) (d), and 62A.5-114(((4)))
(d), and except to the extent prohibited in ((RCW 62A.1-102(3))) RCW
62A.1-302 and 62A.5-117(((4))) (d), the effect of this Article may be
varied by agreement or by a provision stated or incorporated by
reference in an undertaking. A term in an agreement or undertaking
generally excusing liability or generally limiting remedies for failure
to perform obligations is not sufficient to vary obligations prescribed
by this Article.
(((4))) (d) Rights and obligations of an issuer to a beneficiary or
a nominated person under a letter of credit are independent of the
existence, performance, or nonperformance of a contract or arrangement
out of which the letter of credit arises or which underlies it,
including contracts or arrangements between the issuer and the
applicant and between the applicant and the beneficiary.
Sec. 1401 RCW 62A.8-102 and 1995 c 48 s 2 are each amended to
read as follows:
(a) "Adverse claim" means a claim that a claimant has a property
interest in a financial asset and that it is a violation of the rights
of the claimant for another person to hold, transfer, or deal with the
financial asset.
(b) "Bearer form," as applied to a certificated security, means a
form in which the security is payable to the bearer of the security
certificate according to its terms but not by reason of an indorsement.
(c) "Broker" means a person defined as a broker or dealer under the
federal securities laws, but without excluding a bank acting in that
capacity.
(d) "Certificated security" means a security that is represented by
a certificate.
(e) "Clearing corporation" means:
(i) A person that is registered as a "clearing agency" under the
federal securities laws;
(ii) A federal reserve bank; or
(iii) Any other person that provides clearance or settlement
services with respect to financial assets that would require it to
register as a clearing agency under the federal securities laws but for
an exclusion or exemption from the registration requirement, if its
activities as a clearing corporation, including adoption of rules, are
subject to regulation by a federal or state governmental authority.
(f) "Communicate" means to:
(i) Send a signed writing; or
(ii) Transmit information by any mechanism agreed upon by the
persons transmitting and receiving the information.
(g) "Entitlement holder" means a person identified in the records
of a securities intermediary as the person having a security
entitlement against the securities intermediary. If a person acquires
a security entitlement by virtue of RCW 62A.8-501(2) (b) or (c), that
person is the entitlement holder.
(h) "Entitlement order" means a notification communicated to a
securities intermediary directing transfer or redemption of a financial
asset to which the entitlement holder has a security entitlement.
(i) "Financial asset," except as otherwise provided in RCW 62A.8-103, means:
(i) A security;
(ii) An obligation of a person or a share, participation, or other
interest in a person or in property or an enterprise of a person, which
is, or is of a type, dealt in or traded on financial markets, or which
is recognized in any area in which it is issued or dealt in as a medium
for investment; or
(iii) Any property that is held by a securities intermediary for
another person in a securities account if the securities intermediary
has expressly agreed with the other person that the property is to be
treated as a financial asset under this Article.
As context requires, the term means either the interest itself or the
means by which a person's claim to it is evidenced, including a
certificated or uncertificated security, a security certificate, or a
security entitlement.
(j) (("Good faith," for purposes of the obligation of good faith in
the performance or enforcement of contracts or duties within this
Article, means honesty in fact and the observance of reasonable
commercial standards of fair dealing.)) [Reserved.]
(k) "Indorsement" means a signature that alone or accompanied by
other words is made on a security certificate in registered form or on
a separate document for the purpose of assigning, transferring, or
redeeming the security or granting a power to assign, transfer, or
redeem it.
(l) "Instruction" means a notification communicated to the issuer
of an uncertificated security which directs that the transfer of the
security be registered or that the security be redeemed.
(m) "Registered form," as applied to a certificated security, means
a form in which:
(i) The security certificate specifies a person entitled to the
security; and
(ii) A transfer of the security may be registered upon books
maintained for that purpose by or on behalf of the issuer, or the
security certificate so states.
(n) "Securities intermediary" means:
(i) A clearing corporation; or
(ii) A person, including a bank or broker, that in the ordinary
course of its business maintains securities accounts for others and is
acting in that capacity.
(o) "Security," except as otherwise provided in RCW 62A.8-103,
means an obligation of an issuer or a share, participation, or other
interest in an issuer or in property or an enterprise of an issuer:
(i) Which is represented by a security certificate in bearer or
registered form, or the transfer of which may be registered upon books
maintained for that purpose by or on behalf of the issuer;
(ii) Which is one of a class or series or by its terms is divisible
into a class or series of shares, participations, interests, or
obligations; and
(iii) Which:
(A) Is, or is of a type, dealt in or traded on securities exchanges
or securities markets; or
(B) Is a medium for investment and by its terms expressly provides
that it is a security governed by this Article.
(p) "Security certificate" means a certificate representing a
security.
(q) "Security entitlement" means the rights and property interest
of an entitlement holder with respect to a financial asset specified in
Part 5 of this Article.
(r) "Uncertificated security" means a security that is not
represented by a certificate.
(2) Other definitions applying to this Article and the sections in
which they appear are:
| Appropriate person | RCW 62A.8-107 |
| Control | RCW 62A.8-106 |
| Delivery | RCW 62A.8-301 |
| Investment company security | RCW 62A.8-103 |
| Issuer | RCW 62A.8-201 |
| Overissue | RCW 62A.8-210 |
| Protected purchaser | RCW 62A.8-303 |
| Securities account | RCW 62A.8-501 |
Sec. 1402 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. 1403 RCW 62A.8-103 and 2011 c 74 s 706 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, 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. 1501 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))) (i) charters or other contracts involving the use
or hire of a vessel or (((B))) (ii) 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)))
(i) an individual incurs a consumer obligation, (((B))) (ii) a security
interest secures the obligation, and (((C))) (iii) 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))) (b).
(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.)) [Reserved.]
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (((A))) (i) fixtures, (((B)))
(ii) standing timber that is to be cut and removed under a conveyance
or contract for sale, (((C))) (iii) the unborn young of animals,
(((D))) (iv) crops grown, growing, or to be grown, even if the crops
are produced on trees, vines, or bushes, and (((E))) (v) 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)))
(i) investment property, (((B))) (ii) letters of credit, (((C))) (iii)
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))) (iv) writings that do not contain a promise or order to
pay, or (((E))) (v) 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))) (i) money, (((B))) (ii) money's
worth in property, services, or new credit, or (((C))) (iii) 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))) (i) owes payment or other performance of the
obligation, (((B))) (ii) has provided property other than the
collateral to secure payment or other performance of the obligation, or
(((C))) (iii) 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. "Control" as provided in RCW
62A.7-106 and 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. | ||
| 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. 1502 RCW 62A.9A-102 and 2011 c 74 s 101 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) With present intent to adopt or accept a record, to attach to
or logically associate with the record an electronic sound, symbol, or
process.
(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. The term includes another
record maintained as an alternative to a certificate of title by the
governmental unit that issues certificates of title if a statute
permits the security interest in question to be indicated on the record
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))) (i) charters or other contracts involving the use
or hire of a vessel or (((B))) (ii) 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)))
(i) an individual incurs a consumer obligation, (((B))) (ii) a security
interest secures the obligation, and (((C))) (iii) 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))) (b).
(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.)) [Reserved.]
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (((A))) (i) fixtures, (((B)))
(ii) standing timber that is to be cut and removed under a conveyance
or contract for sale, (((C))) (iii) the unborn young of animals,
(((D))) (iv) crops grown, growing, or to be grown, even if the crops
are produced on trees, vines, or bushes, and (((E))) (v) 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)))
(i) investment property, (((B))) (ii) letters of credit, (((C))) (iii)
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))) (iv) writings that do not contain a promise or order to
pay, or (((E))) (v) 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 formed or 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))) (i) money, (((B))) (ii) money's
worth in property, services, or new credit, or (((C))) (iii) 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))) (i) owes payment or other performance of the
obligation, (((B))) (ii) has provided property other than the
collateral to secure payment or other performance of the obligation, or
(((C))) (iii) 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 or state registered domestic partner 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 state registered domestic partner; or
(D) Any other relative, by blood or by marriage or other law, of
the individual or the individual's spouse or state registered domestic
partner 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 or state registered domestic partner of an
individual described in (63)(A), (B), or (C) of this subsection; or
(E) An individual who is related by blood or by marriage or other
law 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) "Public organic record" means a record that is available to
the public for inspection and is:
(A) A record consisting of the record initially filed with or
issued by a state or the United States to form or organize an
organization and any record filed with or issued by the state or the
United States which amends or restates the initial record;
(B) An organic record of a business trust consisting of the record
initially filed with a state and any record filed with the state which
amends or restates the initial record, if a statute of the state
governing business trusts requires that the record be filed with the
state; or
(C) A record consisting of legislation enacted by the legislature
of a state or the congress of the United States which forms or
organizes an organization, any record amending the legislation, and any
record filed with or issued by the state or the United States which
amends or restates the name of the organization.
(69) "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.
(70) "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.
(71) "Registered organization" means an organization formed or
organized solely under the law of a single state or the United States
by the filing of a public organic record with, the issuance of a public
organic record by, or the enactment of legislation by the state or the
United States. The term includes a business trust that is formed or
organized under the law of a single state if a statute of the state
governing business trusts requires that the business trust's organic
record be filed with the state.
(72) "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.
(73) "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.
(74) "Security agreement" means an agreement that creates or
provides for a security interest.
(75) "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 (75)(A) of
this subsection.
(76) "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.
(77) "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.
(78) "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.
(79) "Tangible chattel paper" means chattel paper evidenced by a
record or records consisting of information that is inscribed on a
tangible medium.
(80) "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.
(81) "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. "Control" as provided in RCW
62A.7-106 and 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. | ||
| RCW 62A.4-104. | ||
| RCW 62A.8-102. | ||
| RCW 62A.8-102. | ||
| RCW 62A.3-302. | ||
| 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. 1503 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. 1504 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. 1505 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. 1506 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. 1507 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. 1508 RCW 62A.9A-310 and 2011 c 74 s 709 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. 1509 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. 1510 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. 1511 RCW 62A.9A-313 and 2011 c 74 s 710 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. 1512 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. 1513 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. 1514 RCW 62A.9A-317 and 2011 c 74 s 204 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
certificated security 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
collateral other than tangible chattel paper, tangible documents,
goods, instruments, or 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. 1515 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. 1516 RCW 62A.9A-338 and 2011 c 74 s 715 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. 1517 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.
Sec. 1518 RCW 62A.9A-601 and 2011 c 74 s 722 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. 1601 The following acts or parts of acts are
each repealed:
(1) RCW 62A.1-109 (Section captions) and 1965 ex.s. c 157 s 1-109;
(2) RCW 62A.1-207 (Performance or acceptance under reservation of
rights) and 1993 c 229 s 2 & 1965 ex.s. c 157 s 1-207;
(3) RCW 62A.1-208 (Option to accelerate at will) and 1965 ex.s. c
157 s 1-208;
(4) RCW 62A.2-208 (Course of performance or practical construction)
and 1965 ex.s. c 157 s 2-208;
(5) RCW 62A.2A-207 (Course of performance or practical
construction) and 1993 c 230 s 2A-207;
(6) RCW 62A.10-104 (Laws not repealed) and 1995 c 48 s 71 & 1965
ex.s. c 157 s 10-104; and
(7) 2011 c 74 s 801.
Sec. 1701 RCW 62A.5-102 and 1997 c 56 s 3 are each amended to
read as follows:
(((1))) (a) The definitions in this section apply throughout this
Article unless the context clearly requires otherwise:
(((a))) (1) "Adviser" means a person who, at the request of the
issuer, a confirmer, or another adviser, notifies or requests another
adviser to notify the beneficiary that a letter of credit has been
issued, confirmed, or amended.
(((b))) (2) "Applicant" means a person at whose request or for
whose account a letter of credit is issued. The term includes a person
who requests an issuer to issue a letter of credit on behalf of another
if the person making the request undertakes an obligation to reimburse
the issuer.
(((c))) (3) "Beneficiary" means a person who under the terms of a
letter of credit is entitled to have its complying presentation
honored. The term includes a person to whom drawing rights have been
transferred under a transferable letter of credit.
(((d))) (4) "Confirmer" means a nominated person who undertakes, at
the request or with the consent of the issuer, to honor a presentation
under a letter of credit issued by another.
(((e))) (5) "Dishonor" of a letter of credit means failure timely
to honor or to take an interim action, such as acceptance of a draft,
that may be required by the letter of credit.
(((f))) (6) "Document" means a draft or other demand, document of
title, investment security, certificate, invoice, or other record,
statement, or representation of fact, law, right, or opinion (i) which
is presented in a written or other medium permitted by the letter of
credit or, unless prohibited by the letter of credit, by the standard
practice referred to in RCW 62A.5-108(((5))) (e) and (ii) which is
capable of being examined for compliance with the terms and conditions
of the letter of credit. A document may not be oral.
(((g))) (7) "Good faith" means honesty in fact in the conduct or
transaction concerned.
(((h))) (8) "Honor" of a letter of credit means performance of the
issuer's undertaking in the letter of credit to pay or deliver an item
of value. Unless the letter of credit otherwise provides, "honor"
occurs:
(i) Upon payment;
(ii) If the letter of credit provides for acceptance, upon
acceptance of a draft and, at maturity, its payment; or
(iii) If the letter of credit provides for incurring a deferred
obligation, upon incurring the obligation and, at maturity, its
performance.
(((i))) (9) "Issuer" means a bank or other person that issues a
letter of credit, but does not include an individual who makes an
engagement for personal, family, or household purposes.
(((j))) (10) "Letter of credit" means a definite undertaking that
satisfies the requirements of RCW 62A.5-104 by an issuer to a
beneficiary at the request or for the account of an applicant or, in
the case of a financial institution, to itself or for its own account,
to honor a documentary presentation by payment or delivery of an item
of value.
(((k))) (11) "Nominated person" means a person whom the issuer (i)
designates or authorizes to pay, accept, negotiate, or otherwise give
value under a letter of credit and (ii) undertakes by agreement or
custom and practice to reimburse.
(((l))) (12) "Presentation" means delivery of a document to an
issuer or nominated person for honor or giving of value under a letter
of credit.
(((m))) (13) "Presenter" means a person making a presentation as or
on behalf of a beneficiary or nominated person.
(((n))) (14) "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.
(((o))) (15) "Successor of a beneficiary" means a person who
succeeds to substantially all of the rights of a beneficiary by
operation of law, including a corporation with or into which the
beneficiary has been merged or consolidated, an administrator,
executor, personal representative, trustee in bankruptcy, debtor in
possession, liquidator, and receiver.
(((2))) (b) Definitions in other Articles applying to this Article
and the sections in which they appear are:
"Accept" or "Acceptance" RCW 62A.3-409
"Value" RCW 62A.3-303, RCW 62A.4-211.
(((3))) (c) Article 1 contains certain additional general
definitions and principles of construction and interpretation
applicable throughout this Article.
Sec. 1702 RCW 62A.5-104 and 1997 c 56 s 5 are each amended to
read as follows:
A letter of credit, confirmation, advice, transfer, amendment, or
cancellation may be issued in any form that is a record and is
authenticated (((1))) (i) by a signature or (((2))) (ii) in accordance
with the agreement of the parties or the standard practice referred to
in RCW 62A.5-108(((5))) (e).
Sec. 1703 RCW 62A.5-106 and 1997 c 56 s 7 are each amended to
read as follows:
(((1))) (a) A letter of credit is issued and becomes enforceable
according to its terms against the issuer when the issuer sends or
otherwise transmits it to the person requested to advise or to the
beneficiary. A letter of credit is revocable only if it so provides.
(((2))) (b) After a letter of credit is issued, rights and
obligations of a beneficiary, applicant, confirmer, and issuer are not
affected by an amendment or cancellation to which that person has not
consented except to the extent the letter of credit provides that it is
revocable or that the issuer may amend or cancel the letter of credit
without that consent.
(((3))) (c) If there is no stated expiration date or other
provision that determines its duration, a letter of credit expires one
year after its stated date of issuance or, if none is stated, after the
date on which it is issued.
(((4))) (d) A letter of credit that states that it is perpetual
expires five years after its stated date of issuance, or if none is
stated, after the date on which it is issued.
Sec. 1704 RCW 62A.5-107 and 1997 c 56 s 8 are each amended to
read as follows:
(((1))) (a) A confirmer is directly obligated on a letter of credit
and has the rights and obligations of an issuer to the extent of its
confirmation. The confirmer also has rights against and obligations to
the issuer as if the issuer were an applicant and the confirmer had
issued the letter of credit at the request and for the account of the
issuer.
(((2))) (b) A nominated person who is not a confirmer is not
obligated to honor or otherwise give value for a presentation.
(((3))) (c) A person requested to advise may decline to act as an
adviser. An adviser that is not a confirmer is not obligated to honor
or give value for a presentation. An adviser undertakes to the issuer
and to the beneficiary accurately to advise the terms of the letter of
credit, confirmation, amendment, or advice received by that person and
undertakes to the beneficiary to check the apparent authenticity of the
request to advise. Even if the advice is inaccurate, the letter of
credit, confirmation, or amendment is enforceable as issued.
(((4))) (d) A person who notifies a transferee beneficiary of the
terms of a letter of credit, confirmation, amendment, or advice has the
rights and obligations of an adviser under subsection (((3))) (c) of
this section. The terms in the notice to the transferee beneficiary
may differ from the terms in any notice to the transferor beneficiary
to the extent permitted by the letter of credit, confirmation,
amendment, or advice received by the person who so notifies.
Sec. 1705 RCW 62A.5-108 and 1997 c 56 s 9 are each amended to
read as follows:
(((1))) (a) Except as otherwise provided in RCW 62A.5-109, an
issuer shall honor a presentation that, as determined by the standard
practice referred to in subsection (((5))) (e) of this section, appears
on its face strictly to comply with the terms and conditions of the
letter of credit. Except as otherwise provided in RCW 62A.5-113 and
unless otherwise agreed with the applicant, an issuer shall dishonor a
presentation that does not appear so to comply.
(((2))) (b) An issuer has a reasonable time after presentation, but
not beyond the end of the seventh business day of the issuer after the
day of its receipt of documents:
(((a))) (1) To honor;
(((b))) (2) If the letter of credit provides for honor to be
completed more than seven business days after presentation, to accept
a draft or incur a deferred obligation; or
(((c))) (3) To give notice to the presenter of discrepancies in the
presentation.
(((3))) (c) Except as otherwise provided in subsection (((4))) (d)
of this section, an issuer is precluded from asserting as a basis for
dishonor any discrepancy if timely notice is not given, or any
discrepancy not stated in the notice if timely notice is given.
(((4))) (d) Failure to give the notice specified in subsection
(((2))) (b) of this section or to mention fraud, forgery, or expiration
in the notice does not preclude the issuer from asserting as a basis
for dishonor fraud or forgery as described in RCW 62A.5-109(((1))) (a)
or expiration of the letter of credit before presentation.
(((5))) (e) An issuer shall observe standard practice of financial
institutions that regularly issue letters of credit. Determination of
the issuer's observance of the standard practice is a matter of
interpretation for the court. The court shall offer the parties a
reasonable opportunity to present evidence of the standard practice.
(((6))) (f) An issuer is not responsible for:
(((a))) (1) The performance or nonperformance of the underlying
contract, arrangement, or transaction;
(((b))) (2) An act or omission of others; or
(((c))) (3) Observance or knowledge of the usage of a particular
trade other than the standard practice referred to in subsection
(((5))) (e) of this section.
(((7))) (g) If an undertaking constituting a letter of credit under
RCW 62A.5-102(((1)(j))) (a)(10) contains nondocumentary conditions, an
issuer shall disregard the nondocumentary conditions and treat them as
if they were not stated.
(((8))) (h) An issuer that has dishonored a presentation shall
return the documents or hold them at the disposal of, and send advice
to that effect to, the presenter.
(((9))) (i) An issuer that has honored a presentation as permitted
or required by this Article:
(((a))) (1) Is entitled to be reimbursed by the applicant in
immediately available funds not later than the date of its payment of
funds;
(((b))) (2) Takes the documents free of claims of the beneficiary
or presenter;
(((c))) (3) Is precluded from asserting a right of recourse on a
draft under RCW 62A.3-414 and 62A.3-415;
(((d))) (4) Except as otherwise provided in RCW 62A.5-110 and
62A.5-117, is precluded from restitution of money paid or other value
given by mistake to the extent the mistake concerns discrepancies in
the documents or tender which are apparent on the face of the
presentation; and
(((e))) (5) Is discharged to the extent of its performance under
the letter of credit unless the issuer honored a presentation in which
a required signature of a beneficiary was forged.
Sec. 1706 RCW 62A.5-109 and 1997 c 56 s 10 are each amended to
read as follows:
(((1))) (a) If a presentation is made that appears on its face
strictly to comply with the terms and conditions of the letter of
credit, but a required document is forged or materially fraudulent, or
honor of the presentation would facilitate a material fraud by the
beneficiary on the issuer or applicant:
(((a))) (1) The issuer shall honor the presentation, if honor is
demanded by (i) a nominated person who has given value in good faith
and without notice of forgery or material fraud, (ii) a confirmer who
has honored its confirmation in good faith, (iii) a holder in due
course of a draft drawn under the letter of credit which was taken
after acceptance by the issuer or nominated person, or (iv) an assignee
of the issuer's or nominated person's deferred obligation that was
taken for value and without notice of forgery or material fraud after
the obligation was incurred by the issuer or nominated person; and
(((b))) (2) The issuer, acting in good faith, may honor or dishonor
the presentation in any other case.
(((2))) (b) If an applicant claims that a required document is
forged or materially fraudulent or that honor of the presentation would
facilitate a material fraud by the beneficiary on the issuer or
applicant, a court of competent jurisdiction may temporarily or
permanently enjoin the issuer from honoring a presentation or grant
similar relief against the issuer or other persons only if the court
finds that:
(((a))) (1) The relief is not prohibited under the law applicable
to an accepted draft or deferred obligation incurred by the issuer;
(((b))) (2) A beneficiary, issuer, or nominated person who may be
adversely affected is adequately protected against loss that it may
suffer because the relief is granted;
(((c))) (3) All of the conditions to entitle a person to the relief
under the law of this state have been met; and
(((d))) (4) On the basis of the information submitted to the court,
the applicant is more likely than not to succeed under its claim of
forgery or material fraud and the person demanding honor does not
qualify for protection under subsection (((1)(a))) (a)(1) of this
section.
Sec. 1707 RCW 62A.5-110 and 1997 c 56 s 11 are each amended to
read as follows:
(((1))) (a) If its presentation is honored, the beneficiary
warrants:
(((a))) (1) To the issuer, any other person to whom presentation is
made, and the applicant that there is no fraud or forgery of the kind
described in RCW 62A.5-109(((1))) (a); and
(((b))) (2) To the applicant that the drawing does not violate any
agreement between the applicant and beneficiary or any other agreement
intended by them to be augmented by the letter of credit.
(((2))) (b) The warranties in subsection (((1))) (a) of this
section are in addition to warranties arising under Articles 3, 4, 7,
and 8 because of the presentation or transfer of documents covered by
any of those articles.
Sec. 1708 RCW 62A.5-111 and 1997 c 56 s 12 are each amended to
read as follows:
(((1))) (a) If an issuer wrongfully dishonors or repudiates its
obligation to pay money under a letter of credit before presentation,
the beneficiary, successor, or nominated person presenting on its own
behalf may recover from the issuer the amount that is the subject of
the dishonor or repudiation. If the issuer's obligation under the
letter of credit is not for the payment of money, the claimant may
obtain specific performance or, at the claimant's election, recover an
amount equal to the value of performance from the issuer. In either
case, the claimant may also recover incidental but not consequential
damages. The claimant is not obligated to take action to avoid damages
that might be due from the issuer under this subsection. If, although
not obligated to do so, the claimant avoids damages, the claimant's
recovery from the issuer must be reduced by the amount of damages
avoided. The issuer has the burden of proving the amount of damages
avoided. In the case of repudiation the claimant need not present any
document.
(((2))) (b) If an issuer wrongfully dishonors a draft or demand
presented under a letter of credit or honors a draft or demand in
breach of its obligation to the applicant, the applicant may recover
damages resulting from the breach, including incidental but not
consequential damages, less any amount saved as a result of the breach.
(((3))) (c) If an adviser or nominated person other than a
confirmer breaches an obligation under this Article or an issuer
breaches an obligation not covered in subsection (((1) or (2))) (a) or
(b) of this section, a person to whom the obligation is owed may
recover damages resulting from the breach, including incidental but not
consequential damages, less any amount saved as a result of the breach.
To the extent of the confirmation, a confirmer has the liability of an
issuer specified in this subsection and subsections (((1) and (2))) (a)
and (b) of this section.
(((4))) (d) An issuer, nominated person, or adviser who is found
liable under subsection (((1), (2), or (3))) (a), (b), or (c) of this
section shall pay interest on the amount owed thereunder from the date
of wrongful dishonor or other appropriate date.
(((5))) (e) Reasonable attorney's fees and other expenses of
litigation must be awarded to the prevailing party in an action in
which a remedy is sought under this Article.
(((6))) (f) Damages that would otherwise be payable by a party for
breach of an obligation under this Article may be liquidated by
agreement or undertaking, but only in an amount or by a formula that is
reasonable in light of the harm anticipated.
Sec. 1709 RCW 62A.5-112 and 1997 c 56 s 13 are each amended to
read as follows:
(((1))) (a) Except as otherwise provided in RCW 62A.5-113, unless
a letter of credit provides that it is transferable, the right of a
beneficiary to draw or otherwise demand performance under a letter of
credit may not be transferred.
(((2))) (b) Even if a letter of credit provides that it is
transferable, the issuer may refuse to recognize or carry out a
transfer if:
(((a))) (1) The transfer would violate applicable law; or
(((b))) (2) The transferor or transferee has failed to comply with
any requirement stated in the letter of credit or any other requirement
relating to transfer imposed by the issuer which is within the standard
practice referred to in RCW 62A.5-108(5) or is otherwise reasonable
under the circumstances.
Sec. 1710 RCW 62A.5-113 and 1997 c 56 s 14 are each amended to
read as follows:
(((1))) (a) A successor of a beneficiary may consent to amendments,
sign and present documents, and receive payment or other items of value
in the name of the beneficiary without disclosing its status as a
successor.
(((2))) (b) A successor of a beneficiary may consent to amendments,
sign and present documents, and receive payment or other items of value
in its own name as the disclosed successor of the beneficiary. Except
as otherwise provided in subsection (((5))) (e) of this section, an
issuer shall recognize a disclosed successor of a beneficiary as
beneficiary in full substitution for its predecessor upon compliance
with the requirements for recognition by the issuer of a transfer of
drawing rights by operation of law under the standard practice referred
to in RCW 62A.5-108(((5))) (e) or, in the absence of such a practice,
compliance with other reasonable procedures sufficient to protect the
issuer.
(((3))) (c) An issuer is not obliged to determine whether a
purported successor is a successor of a beneficiary or whether the
signature of a purported successor is genuine or authorized.
(((4))) (d) Honor of a purported successor's apparently complying
presentation under subsection (((1) or (2))) (a) or (b) of this section
has the consequences specified in RCW 62A.5-108(((9))) (i) even if the
purported successor is not the successor of a beneficiary. Documents
signed in the name of the beneficiary or of a disclosed successor by a
person who is neither the beneficiary nor the successor of the
beneficiary are forged documents for the purposes of RCW 62A.5-109.
(((5))) (e) An issuer whose rights of reimbursement are not covered
by subsection (((4))) (d) of this section or substantially similar law
and any confirmer or nominated person may decline to recognize a
presentation under subsection (((2))) (b) of this section.
(((6))) (f) A beneficiary whose name is changed after the issuance
of a letter of credit has the same rights and obligations as a
successor of a beneficiary under this section.
Sec. 1711 RCW 62A.5-114 and 1997 c 56 s 15 are each amended to
read as follows:
(((1))) (a) In this section, "proceeds of a letter of credit" means
the cash, check, accepted draft, or other item of value paid or
delivered upon honor or giving of value by the issuer or any nominated
person under the letter of credit. The term does not include a
beneficiary's drawing rights or documents presented by the beneficiary.
(((2))) (b) A beneficiary may assign its right to part or all of
the proceeds of a letter of credit. The beneficiary may do so before
presentation as a present assignment of its right to receive proceeds
contingent upon its compliance with the terms and conditions of the
letter of credit.
(((3))) (c) An issuer or nominated person need not recognize an
assignment of proceeds of a letter of credit until it consents to the
assignment.
(((4))) (d) An issuer or nominated person has no obligation to give
or withhold its consent to an assignment of proceeds of a letter of
credit, but consent may not be unreasonably withheld if the assignee
possesses and exhibits the letter of credit and presentation of the
letter of credit is a condition to honor.
(((5))) (e) Rights of a transferee beneficiary or nominated person
are independent of the beneficiary's assignment of the proceeds of a
letter of credit and are superior to the assignee's right to the
proceeds.
(((6))) (f) Neither the rights recognized by this section between
an assignee and an issuer, transferee beneficiary, or nominated person
nor the issuer's or nominated person's payment of proceeds to an
assignee or a third person affect the rights between the assignee and
any person other than the issuer, transferee beneficiary, or nominated
person. The mode of creating and perfecting a security interest in or
granting an assignment of a beneficiary's rights to proceeds is
governed by Article 9A or other law. Against persons other than the
issuer, transferee beneficiary, or nominated person, the rights and
obligations arising upon the creation of a security interest or other
assignment of a beneficiary's right to proceeds and its perfection are
governed by Article 9A or other law.
Sec. 1712 RCW 62A.5-116 and 1997 c 56 s 17 are each amended to
read as follows:
(((1))) (a) The liability of an issuer, nominated person, or
adviser for action or omission is governed by the law of the
jurisdiction chosen by an agreement in the form of a record signed or
otherwise authenticated by the affected parties in the manner provided
in RCW 62A.5-104 or by a provision in the person's letter of credit,
confirmation, or other undertaking. The jurisdiction whose law is
chosen need not bear any relation to the transaction.
(((2))) (b) Unless subsection (((1))) (a) of this section applies,
the liability of an issuer, nominated person, or adviser for action or
omission is governed by the law of the jurisdiction in which the person
is located. The person is considered to be located at the address
indicated in the person's undertaking. If more than one address is
indicated, the person is considered to be located at the address from
which the person's undertaking was issued. For the purpose of
jurisdiction, choice of law, and recognition of interbranch letters of
credit, but not enforcement of a judgment, all branches of a bank are
considered separate juridical entities and a bank is considered to be
located at the place where its relevant branch is considered to be
located under this subsection.
(((3))) (c) Except as otherwise provided in this subsection, the
liability of an issuer, nominated person, or adviser is governed by any
rules of custom or practice, such as the Uniform Customs and Practice
for Documentary Credits, to which the letter of credit, confirmation,
or other undertaking is expressly made subject. If (((a))) (i) this
Article would govern the liability of an issuer, nominated person, or
adviser under subsection (((1) or (2))) (a) or (b) of this section,
(((b))) (ii) the relevant undertaking incorporates rules of custom or
practice, and (((c))) (iii) there is conflict between this Article and
those rules as applied to that undertaking, those rules govern except
to the extent of any conflict with the nonvariable provisions specified
in RCW 62A.5-103(((3))) (c).
(((4))) (d) If there is conflict between this Article and Article
3, 4, 4A, or 9A, this Article governs.
(((5))) (e) The forum for settling disputes arising out of an
undertaking within this Article may be chosen in the manner and with
the binding effect that governing law may be chosen in accordance with
subsection (((1))) (a) of this section.
Sec. 1713 RCW 62A.5-117 and 1997 c 56 s 18 are each amended to
read as follows:
(((1))) (a) An issuer that honors a beneficiary's presentation is
subrogated to the rights of the beneficiary to the same extent as if
the issuer were a secondary obligor of the underlying obligation owed
to the beneficiary and of the applicant to the same extent as if the
issuer were the secondary obligor of the underlying obligation owed to
the applicant.
(((2))) (b) An applicant that reimburses an issuer is subrogated to
the rights of the issuer against any beneficiary, presenter, or
nominated person to the same extent as if the applicant were the
secondary obligor of the obligations owed to the issuer and has the
rights of subrogation of the issuer to the rights of the beneficiary
stated in subsection (((1))) (a) of this section.
(((3))) (c) A nominated person who pays or gives value against a
draft or demand presented under a letter of credit is subrogated to the
rights of:
(((a))) (1) The issuer against the applicant to the same extent as
if the nominated person were a secondary obligor of the obligation owed
to the issuer by the applicant;
(((b))) (2) The beneficiary to the same extent as if the nominated
person were a secondary obligor of the underlying obligation owed to
the beneficiary; and
(((c))) (3) The applicant to the same extent as if the nominated
person were a secondary obligor of the underlying obligation owed to
the applicant.
(((4))) (d) Notwithstanding any agreement or term to the contrary,
the rights of subrogation stated in subsections (((1) and (2))) (a) and
(b) of this section do not arise until the issuer honors the letter of
credit or otherwise pays and the rights in subsection (((3))) (c) of
this section do not arise until the nominated person pays or otherwise
gives value. Until then, the issuer, nominated person, and the
applicant do not derive under this section present or prospective
rights forming the basis of a claim, defense, or excuse.
Sec. 1714 RCW 62A.5-118 and 2000 c 250 s 2 are each amended to
read as follows:
(a) An issuer or nominated person has a security interest in a
document presented under a letter of credit to the extent that the
issuer or nominated person honors or gives value for the presentation.
(b) So long as and to the extent that an issuer or nominated person
has not been reimbursed or has not otherwise recovered the value given
with respect to a security interest in a document under subsection (a)
of this section, the security interest continues and is subject to
Article 9A, but:
(1) A security agreement is not necessary to make the security
interest enforceable under RCW 62A.9A-203(((b)(3))) (2)(c);
(2) If the document is presented in a medium other than a written
or other tangible medium, the security interest is perfected; and
(3) If the document is presented in a written or other tangible
medium and is not a certificated security, chattel paper, a document of
title, an instrument, or a letter of credit, the security interest is
perfected and has priority over a conflicting security interest in the
document so long as the debtor does not have possession of the
document.
Sec. 1715 RCW 62A.2-512 and 1997 c 56 s 20 are each amended to
read as follows:
(1) Where the contract requires payment before inspection non-conformity of the goods does not excuse the buyer from so making
payment unless
(a) the non-conformity appears without inspection; or
(b) despite tender of the required documents the circumstances
would justify injunction against honor under the provisions of this
Title (RCW 62A.5-109(((2))) (b)).
(2) Payment pursuant to subsection (1) does not constitute an
acceptance of goods or impair the buyer's right to inspect or any of
his or her remedies.
Sec. 1716 RCW 62A.9A-107 and 2001 c 32 s 19 are each amended to
read as follows:
A secured party has control of a letter-of-credit right to the
extent of any right to payment or performance by the issuer or any
nominated person if the issuer or nominated person has consented to an
assignment of proceeds of the letter of credit under RCW
62A.5-114(((3))) (c) or otherwise applicable law or practice.
NEW SECTION. Sec. 1801 Sections 115 through 124 of this act must
be placed in chapter 62A.1 RCW under the heading:
NEW SECTION. Sec. 1802
NEW SECTION. Sec. 1803
NEW SECTION. Sec. 1804
NEW SECTION. Sec. 1805 Sections 901, 1402, 1501, 1507, 1510,
1513, 1515, and 1517 of this act expire July 1, 2013.
NEW SECTION. Sec. 1806 Sections 902, 1403, 1502, 1508, 1511,
1514, 1516, and 1518 of this act take effect July 1, 2013.