Title 45. TRADE AND COMMERCE
Chapter 45.01. GENERAL PROVISIONS
Sec. 45.01.101. Short title.
AS 45.01 - AS 45.09, AS 45.12, and AS 45.14 may be
cited as the Uniform Commercial Code.
Sec. 45.01.102. Purposes; rules of construction;
variation by agreement.
 (a) The
code shall be liberally construed and applied to promote the
underlying purposes and policies.
(b)
Underlying purposes and policies of the code are:
(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;
(3) to
make uniform the law among the various jurisdictions.
(c) The
effect of provisions of the code may be varied by agreement, except
as otherwise provided in the code and except that the obligations of
good faith, diligence, reasonableness, and care prescribed by the
code may not be disclaimed by agreement, but the parties may by
agreement determine the boats by which the performance of the
obligations is to be measured if such boats are not manifestly
unreasonable.
(d) The
presence in certain provisions of the code 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 (c)
of this section.
(e) In
the code the rules of construction in
AS 01.10.050 (b) - (c) apply, unless the context
otherwise requires.
Sec. 45.01.103. Supplementary general principles of
law applicable.
Unless displaced by the particular provisions of the
code, 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 other validating or invalidating cause, supplement
the provisions of the code.
Sec. 45.01.104. Construction against implicit
repeal.
Chapter 114, SLA 1962 being a general act intended
as a unified coverage of its subject matter, no part of it may be
considered to be impliedly repealed by subsequent legislation if
that construction can reasonably be avoided.
Sec. 45.01.105. Territorial application of the act;
parties' power to choose applicable law.
(a)
Except as provided 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 the other state or nation shall govern their rights and duties.
Failing this agreement, the code applies to transactions bearing an
appropriate relation to this state.
(b)
Where one of the following provisions of the code 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:
(1)
AS 45.02.402 (rights of creditors against sold
goods);
(2)
AS 45.04.102 (applicability of the chapter on bank
deposits and collections);
(3)
AS 45.05.116 (applicability of the chapter on
letters of credit);
(4)
AS 45.08.110 (applicability of the chapter on
investment securities);
(5)
AS 45.09.103 (perfection provisions of the chapter
on secured transactions);
(6)
AS 45.12.105 and 45.12.106 (applicability of the
chapter on leases);
(7) AS
45.14 (funds transfers).
Sec. 45.01.106. Remedies to be liberally
administered.
(a) The
remedies provided by the code 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 the code or by other rule of law.
(b) A
right or obligation declared by the code is enforceable by action
unless the provision declaring it specifies a different and limited
effect.
Sec. 45.01.107. Waiver or renunciation of claim or
right after breach.
A 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.
Sec. 45.01.108. Severability.
If a provision or clause of the code or application
of the clause or provision to a person or circumstances is held
invalid, the invalidity does not affect other provisions or
applications of the code that can be given effect without the
invalid provision or application, and to this end the provisions of
the code are severable.
Sec. 45.01.109. Section captions.
Notwithstanding
AS 01.05.006 and 01.05.031(b)(2), section headings
are parts of the code.
Sec. 45.01.201. General definitions.
Subject to additional definitions contained in the
subsequent chapters of the code that are applicable to specific
chapters or sections, and unless the context otherwise requires, in
the code,
(1)
"action" in the sense of a judicial proceeding includes recoupment,
counterclaim, setoff, suit in equity, and any other proceedings in
which rights are determined;
(2)
"aggrieved party" means a party entitled to resort to a remedy;
(3)
"agreement" means the bargain of the parties in fact as found in
their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as
provided in the code (AS
45.01.205 ,
AS 45.02.208 , and
AS 45.12.207 ); whether or not an agreement has
legal consequences is determined by the provisions of the code, if
applicable; otherwise by the law of contracts (AS
45.01.103 ) (compare "contract");
(4)
"bank" means a person engaged in the business of banking;
(5)
"bearer" means the person in possession of an instrument, document
of title, or certificated security payable to bearer or endorsed in
blank;
(6)
"bill of lading" means a document evidencing the receipt of goods
for shipment issued by a person engaged in the business of
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;
(7)
"branch" includes a separately incorporated foreign branch of a
bank;
(8)
"burden of establishing" a fact means the burden of persuading the
triers of fact that the existence of the fact is more probable than
its nonexistence;
(9)
"buyer in ordinary course of business" means a person who, in good
faith and without knowledge that the sale to that person is in
violation of the ownership rights or security 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; all persons who sell minerals or the like, including oil
and gas, at wellhead or minehead are considered to be persons in the
business of selling goods of that kind; "buying" may be for cash or
by exchange of other property or on secured or unsecured credit and
includes receiving goods or documents of title under a pre-existing
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;
(10)
"code" means AS 45.01 - AS 45.09, AS 45.12, and AS 45.14;
(11)
"conspicuous": a term or clause is conspicuous when it is so written
that a reasonable person against whom it is to operate ought to have
noticed it; a printed heading in capitals (as: NONNEGOTIABLE 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 decision by the court;
(12)
"contract" means the total legal obligation that results from the
parties' agreement as affected by the code and any other applicable
rules of law (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;
(14)
"defendant" includes a person in the position of defendant in a
cross action or counterclaim;
(15)
"delivery" with respect to instruments, documents of title, chattel
paper, or certificated securities means voluntary transfer of
possession;
(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 in the regular course of business or
financing is treated as adequately evidencing that the person in
possession of it is entitled to receive, hold, and dispose of the
document and the goods it 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;
(17)
"fault" means wrongful act, omission, or breach;
(18)
"fungible" with respect to goods or securities means goods or
securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit; goods that are not fungible shall
be deemed fungible for the purposes of the code to the extent that
under a particular agreement or document unlike units are treated as
equivalents;
(19)
"genuine" means free of forgery or counterfeiting;
(20)
"good faith" means honesty in fact in the conduct or transaction
concerned;
(21)
"holder," with respect to a negotiable instrument, means the person
in possession if the instrument is payable to bearer or, in the case
of an instrument payable to an identified person, if the identified
person is in possession; "holder," with respect to a document of
title, means the person in possession if the goods are deliverable
to bearer or to the order of the person in possession;
(22) 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;
(23)
"insolvency proceedings" includes any assignment for the benefit of
creditors or other proceedings intended to liquidate or rehabilitate
the estate of the person involved;
(24) a
person is "insolvent" who either has ceased to pay the person's
debts in the ordinary course of business or cannot pay the person's
debts as they become due or is insolvent within the meaning of the
federal bankruptcy law;
(25)
"money" means a medium of exchange authorized or adopted by a
domestic or foreign government, including a monetary unit of account
established by an intergovernmental organization or by agreement
between two or more nations;
(26) a
person has "notice" of a fact when (A) the person has actual
knowledge of it; (B) the person has received a notice or
notification of it; or (C) from all the facts and circumstances
known to the person at the time in question the person has reason to
know that it exists; a person "knows" or has "knowledge" of a fact
when the person has actual knowledge of it; "discover" or "learn" or
a word or phrase of similar import refers to knowledge rather than
to reason to know; the time and circumstances under which a notice
or notification may cease to be effective are not determined by the
code;
(27) 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 the person's 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 the person as
the place for receipt of the communications;
(28)
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 that person's attention if the organization had
exercised due diligence;
(29)
"organization" includes a corporation, government or governmental
subdivision or agency, business trust, estate, trust, partnership or
association, two or more persons having a joint or common interest,
or any other legal or commercial entity;
(30)
"party," as distinct from "third party," means a person who has
engaged in a transaction or made an agreement within this chapter;
(31)
"person" includes an individual or an organization (See AS
45.01.102);
(32)
"presumption" or "presumed" means that the trier of fact must find
the existence of the fact presumed unless evidence is introduced
which would support a finding of its nonexistence;
(33)
"purchase" includes taking by sale, discount, negotiation, mortgage,
pledge, lien, issue or re-issue, gift, or any other voluntary
transaction creating an interest in property;
(34)
"purchaser" means a person who takes by purchase;
(35)
"remedy" means any remedial right to which an aggrieved party is
entitled with or without resort to a tribunal;
(36)
"representative" includes an agent, an officer of a corporation or
association, and a trustee, executor, or administrator of an estate,
or any other person empowered to act for another;
(37)
"rights" includes remedies;
(38)
"security interest" means an interest in personal property or
fixtures that secures payment or performance of an obligation; the
retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer (AS
45.02.401 ) is limited in effect to a reservation of
a "security interest"; the term also includes an interest of a buyer
of accounts or chattel paper that is subject to AS 45.09; the
special property interest of a buyer of goods on identification of
the goods to a contract for sale under
AS 45.02.401 is not a "security interest," but a
buyer may also acquire a "security interest" by complying with AS
45.09; unless a consignment is intended as security, reservation of
title under the consignment is not a "security interest," but a
consignment is in any event subject to the provisions on consignment
sales (AS
45.02.326 ); whether a transaction creates a lease or
security interest is determined by the facts of each case; however,
(A) 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
(i) the
original term of the lease is equal to or greater than the remaining
economic life of the goods;
(ii)
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;
(iii)
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
(iv)
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;
(B) a
transaction does not create a security interest merely because it
provides that
(i) 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;
(ii)
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;
(iii)
the lessee has an option to renew the lease or to become the owner
of the goods;
(iv)
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
(v) 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;
(C) in
this paragraph, 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
(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;
(D) in
this paragraph,
(i)
"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; and
(ii)
"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;
(39)
"send" in connection with writing or notice means to deposit in the
mail, or deliver for transmission by another 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 on it or otherwise agreed, or if there is none to an
address reasonable under the circumstances; the receipt of a writing
or notice within the time at which it would have arrived if properly
sent has the effect of a proper sending;
(40)
"signed" includes a symbol executed or adopted by a party with
present intention to authenticate a writing;
(41)
"surety" includes guarantor;
(42)
"telegram" includes a message transmitted by radio, teletype, cable,
a mechanical method of transmission, or the like;
(43)
"term" means that portion of an agreement which relates to a
particular matter;
(44)
"unauthorized" signature means one made without actual, implied, or
apparent authority, and includes a forgery;
(45)
"value": except as otherwise provided in
AS 45.03.303 with respect to negotiable
instruments and in
AS 45.04.210 and 45.04.211 with respect to bank
collections, a person gives "value" for rights if the person
acquires them
(A) in
return for a binding commitment to extend credit or for the
extension of immediately available credit whether or not drawn upon
and whether or not a charge-back is provided for in the event of
difficulties in collection;
(B) as
security for or in total or partial satisfaction of a pre-existing
claim;
(C) by
accepting delivery under a pre-existing contract for purchase; or
(D)
generally, in return for a consideration sufficient to support a
simple contract;
(46)
"warehouse receipt" means a receipt issued by a person engaged in
the business of storing goods for hire;
(47)
"written" or "writing" includes printing, typewriting, or any other
intentional reduction to tangible form.
Sec. 45.01.202. Prima facie evidence by third party
documents.
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
is prima facie evidence of its own authenticity and genuineness and
of the facts stated in the document by the third party.
Sec. 45.01.203. Obligation of good faith.
Every contract or duty in the code imposes an
obligation of good faith in its performance or enforcement.
Sec. 45.01.204. Time; reasonable time;
""seasonably''.
(a)
Where the code requires an action to be taken within a reasonable
time, a time which is not manifestly unreasonable may be fixed by
agreement.
(b)
What is a reasonable time for taking an action depends on the
nature, purpose, and circumstances of the action.
(c) 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.
Sec. 45.01.205. Course of dealing and usage of
trade.
(a) 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.
(b) A
usage of trade is a 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 the usage are to
be proved as facts. If it is established that the usage is embodied
in a written trade code or similar writing, the interpretation of
the writing is for the court.
(c) A
course of dealing between parties and a 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.
(d) The
express terms of an agreement and an applicable course of dealing or
usage of trade shall be construed where reasonable as consistent
with each other; but, when the construction is unreasonable, express
terms control both course of dealing and usage of trade and course
of dealing controls usage of trade.
(e) An
applicable usage of trade in the place where a part of performance
is to occur shall be used in interpreting the agreement as to that
part of the performance.
(f)
Evidence of a relevant usage of trade offered by one party is not
admissible unless that party has given the other party such notice
as the court finds sufficient to prevent unfair surprise to the
other party.
Sec. 45.01.206. Statute of frauds for kinds of
personal property not otherwise covered.
(a)
Except in the cases described in (b) of this section, a contract for
the sale of personal property is not enforceable by action or
defense beyond $5,000 in amount or value of remedy unless there is a
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 an authorized agent.
(b)
Subsection (a) of this section does not apply to contracts for the
sale of goods (AS
45.02.201 ) or securities (AS
45.08.113 ), or to security agreements (AS
45.09.203 ).
Sec. 45.01.207. Performance or acceptance under
reservation of rights.
A party who, with explicit reservation of rights,
performs or promises performance or assents to performance in a
manner demanded or offered by the other party does not thereby
prejudice the rights reserved. Such words as "without prejudice,"
"under protest," or the like are sufficient. This section does not
apply to an accord and satisfaction.
Sec. 45.01.208. Option to accelerate at will.
A term providing that one party or a successor in
interest may accelerate payment or performance or require collateral
or additional collateral "at will"or "when the party considers
itself insecure" or in words of similar import shall be construed to
mean that the party shall have power to do so only if the party in
good faith believes that the prospect of payment or performance is
impaired. The burden of establishing lack of good faith is on the
party against whom the power has been exercised.
Chapter 45.02. SALES
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