SB 2080 — UCC-GENERAL,DOCUMENTS OF TITLE

1-204) SB2080 Engrossed - 33 - LRB095 16125 WGH 42144 b Sec.

SB2080 Engrossed - 34 - LRB095 16125 WGH 42144 b (a) Whether a time for taking an action required by the Uniform Commercial Code is reasonable depends on the nature, purpose, and circumstances of the action.

but when such construction is unreasonable express terms control both course SB2080 Engrossed - 35 - LRB095 16125 WGH 42144 b of dealing and usage of trade and course of dealing controls usage of trade.

SB2080 Engrossed - 36 - LRB095 16125 WGH 42144 b (2) Subsection (1) of this Section does not apply to contracts for the sale of goods (Section 2-201) nor of securities (Section 8-113) nor to security agreements (Section 9-203).

A term providing that one party or his successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or "when he deems himself insecure" or in words of similar import shall be construed to mean that he shall have power to do so only if he in good faith believes that the prospect of payment or SB2080 Engrossed - 37 - LRB095 16125 WGH 42144 b performance is impaired.

(a) Except as otherwise provided in this Section, when a SB2080 Engrossed - 38 - LRB095 16125 WGH 42144 b 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.

SB2080 Engrossed - 39 - LRB095 16125 WGH 42144 b (b) The obligations of good faith, diligence, reasonableness, and care prescribed by the Uniform Commercial Code may not be disclaimed by agreement.

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 SB2080 Engrossed - 40 - LRB095 16125 WGH 42144 b objection.

(e) Except as otherwise provided in subsection (f), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be SB2080 Engrossed - 41 - LRB095 16125 WGH 42144 b construed whenever reasonable as consistent with each other.

(a) The remedies provided by the Uniform Commercial Code must 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 damages SB2080 Engrossed - 42 - LRB095 16125 WGH 42144 b nor penal damages may be had except as specifically provided in the Uniform Commercial Code or by other rule of law.

(a) A party that with explicit reservation of rights SB2080 Engrossed - 43 - LRB095 16125 WGH 42144 b 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.

SB2080 Engrossed - 44 - LRB095 16125 WGH 42144 b Section 10.

The Uniform Commercial Code is amended by changing the headings of ArticlesArticle 7 and Article 7, Part 1 and Sections 7-101, 7-102, 7-103, 7-104, and 7-105, the heading of Article 7, Part 2 and Sections 7-201, 7-202, 7-203, 7-204, 7-205, 7-206, 7-207, 7-208, 7-209, and 7-210, the heading of Article 7, Part 3 and Sections 7-301, 7-302, 7-303, 7-304, 7-305, 7-307, 7-308, and 7-309, the heading of Article 7, Part 4 and Sections 7-401, 7-402, 7-403, and 7-404, the heading of Article 7, Part 5 and Sections 7-501, 7-502, 7-503, 7-504, 7-505, 7-506, 7-507, 7-508, and 7-509, the heading of Article 7, Part 6 and Sections 7-601, 7-602, and 7-603 and adding Section 7-106, the heading of Article 7, Part 7, and Sections 7-701, 7-702, 7-703, and 7-704 as follows:

This Article may be cited as SB2080 Engrossed - 45 - LRB095 16125 WGH 42144 b Uniform Commercial Code-Documents of Title.

(6) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair SB2080 Engrossed - 46 - LRB095 16125 WGH 42144 b dealing.

SB2080 Engrossed - 47 - LRB095 16125 WGH 42144 b (12) "Shipper" means a person that enters into a contract of transportation with a carrier.

The owner of a self-service storage facility as defined in the Self-Service Storage Facility Act is not a warehouse for the purposes of this Article.

(d) "Delivery order" means a written order to deliver goods directed to a warehouseman, carrier or other person who in the SB2080 Engrossed - 48 - LRB095 16125 WGH 42144 b ordinary course of business issues warehouse receipts or bills of lading.

(e) "Document" means document of title as defined in the SB2080 - 48 - LRB095 16125 WGH 42144 b general definitions in Article 1 (Section 1--201).

(3) Definitions in other Articles applying to this Article SB2080 Engrossed - 49 - LRB095 16125 WGH 42144 b and the Sections in which they appear are:

SB2080 - 49 - LRB095 16125 WGH 42144 b "Receipt" of goods.

Section 7001, et.et seq.) but does not modify, limit, or SB2080 Engrossed - 50 - LRB095 16125 WGH 42144 b supersede Section 101(c) of that Act (15 U.S.C.

seq.) but does not modify, limit, or supersede Section 101(c) of that Act (15 U.S.C.

Section SB2080 - 50 - LRB095 16125 WGH 42144 b 7003(b)).

(c) A document of title is nonnegotiable if, at the time it SB2080 Engrossed - 51 - LRB095 16125 WGH 42144 b is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.

(1) A warehouse receipt, bill of lading or other document SB2080 - 51 - LRB095 16125 WGH 42144 b of title is negotiable (a) if by its terms the goods are to be delivered to bearer or to the order of a named person;

and (2) the tangible document when issued contains a statement that it is issued in substitution for the SB2080 Engrossed - 52 - LRB095 16125 WGH 42144 b electronic document.

(b) Upon issuance of a tangible document of title in substitution for an electronic document of title in accordance SB2080 - 52 - LRB095 16125 WGH 42144 b with subsection (a):

and SB2080 Engrossed - 53 - LRB095 16125 WGH 42144 b (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 SB2080 - 53 - LRB095 16125 WGH 42144 b entitled under the tangible document when the warrantor surrendered possession of the tangible document to the issuer.

SB2080 Engrossed - 54 - LRB095 16125 WGH 42144 b (2) the authoritative copy identifies the person asserting control as:

or SB2080 - 54 - LRB095 16125 WGH 42144 b (B) if the authoritative copy indicates that the document has been transferred, the person to which the document was most recently transferred;

SB2080 Engrossed - 55 - LRB095 16125 WGH 42144 b (a) A warehouse receipt may be issued by any warehouse.

(b) If goods, including distilled spirits and agricultural commodities, are stored under a statute requiring a bond SB2080 - 55 - LRB095 16125 WGH 42144 b against withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt issued for the goods is deemed to be a warehouse receipt even if issued by a person that is the owner of the goods and is not a warehouse.

SB2080 Engrossed - 56 - LRB095 16125 WGH 42144 b (2) the date of issue of the receipt;

(4) a statement whether the goods received will be SB2080 - 56 - LRB095 16125 WGH 42144 b delivered to the bearer, to a named person, or to a named person or its order;

(c) A warehouse may insert in its receipt any terms that are not contrary to the Uniform Commercial Code and do not SB2080 Engrossed - 57 - LRB095 16125 WGH 42144 b impair its obligation of delivery under Section 7-403 or its duty of care under Section 7-204.

SB2080 - 57 - LRB095 16125 WGH 42144 b (1) A warehouse receipt need not be in any particular form.

and SB2080 Engrossed - 58 - LRB095 16125 WGH 42144 b (i) a statement of the amount of advances made and of liabilities incurred for which the warehouseman claims a lien or security interest (Section 7--209).

If the precise amount of SB2080 - 58 - LRB095 16125 WGH 42144 b such advances made or of such liabilities incurred is, at the time of the issue of the receipt, unknown to the warehouseman or to his agent who issues it, a statement of the fact that advances have been made or liabilities incurred and the purpose thereof is sufficient.

(1) the document conspicuously indicates that the issuer does not know whether all or part of the goods in fact were received or conform to the description, such as a case in which the description is in terms of marks or SB2080 Engrossed - 59 - LRB095 16125 WGH 42144 b labels or kind, quantity, or condition, or the receipt or description is qualified by "contents, condition, and quality unknown", "said to contain", or words of similar SB2080 - 59 - LRB095 16125 WGH 42144 b import, if the indication is true;

(a) A warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard SB2080 Engrossed - 60 - LRB095 16125 WGH 42144 b to the goods that a reasonably careful person would exercise under similar circumstances.

Unless otherwise agreed, the warehouse is not liable for damages that could not have been SB2080 - 60 - LRB095 16125 WGH 42144 b avoided by the exercise of that care.

(2) Damages may be limited by a term in the warehouse SB2080 Engrossed - 61 - LRB095 16125 WGH 42144 b 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, SB2080 - 61 - LRB095 16125 WGH 42144 b beyond which the warehouseman shall not be liable;

SB2080 Engrossed - 62 - LRB095 16125 WGH 42144 b A buyer in the ordinary course of business of fungible goods sold and delivered by a warehouseman who is also in the business of buying and selling such goods takes free of any SB2080 - 62 - LRB095 16125 WGH 42144 b claim under a warehouse receipt even though it has been duly negotiated.

(b) If a warehouse in good faith believes that goods are about to deteriorate or decline in value to less than the amount of its lien within the time provided in subsection (a) and Section 7-210, the warehouse may specify in the notice given under subsection (a) any reasonable shorter time for removal of the goods and, if the goods are not removed, may sell them at public sale held not less than one week after a SB2080 Engrossed - 63 - LRB095 16125 WGH 42144 b single advertisement or posting.

(c) If, as a result of a quality or condition of the goods of which the warehouse did not have notice at the time of SB2080 - 63 - LRB095 16125 WGH 42144 b deposit, the goods are a hazard to other property, the warehouse facilities, or other persons, the warehouse may sell the goods at public or private sale without advertisement or posting on reasonable notification to all persons known to claim an interest in the goods.

If the goods are not removed before the date specified in the notification, the warehouseman may sell them SB2080 Engrossed - 64 - LRB095 16125 WGH 42144 b in accordance with the provisions of the Section on enforcement of a warehouseman’s lien (Section 7--210).

(2) If a warehouseman in good faith believes that the goods SB2080 - 64 - LRB095 16125 WGH 42144 b are about to deteriorate or decline in value to less than the amount of his lien within the time prescribed in subsection (1) for notification, advertisement and sale, the warehouseman may specify in the notification any reasonable shorter time for removal of the goods and in case the goods are not removed, may sell them at public sale held not less than one week after a single advertisement or posting.

SB2080 Engrossed - 65 - LRB095 16125 WGH 42144 b (Source:

7-207) SB2080 - 65 - LRB095 16125 WGH 42144 b Sec.

Where because of overissue a mass of fungible goods is insufficient to meet all the receipts which the warehouseman has issued against it, the SB2080 Engrossed - 66 - LRB095 16125 WGH 42144 b persons entitled include all holders to whom overissued receipts have been duly negotiated.

2101.) SB2080 - 66 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-208) (from Ch.

(a) A warehouse has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds thereof in its possession for charges for storage or transportation, including demurrage and terminal charges, SB2080 Engrossed - 67 - LRB095 16125 WGH 42144 b 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 SB2080 - 67 - LRB095 16125 WGH 42144 b pursuant to law.

(c) A warehouse’s lien for charges and expenses under subsection (a) or a security interest under subsection (b) is also effective against any person that so entrusted the bailor SB2080 Engrossed - 68 - LRB095 16125 WGH 42144 b with possession of the goods that a pledge of them by the bailor to a good-faith purchaser for value would have been valid.

However, the lien or security interest is not effective SB2080 - 68 - LRB095 16125 WGH 42144 b 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:

SB2080 Engrossed - 69 - LRB095 16125 WGH 42144 b (1) A warehouseman has a lien against the bailor on the goods covered by a warehouse receipt or on the proceeds thereof in his possession for charges for storage or transportation SB2080 - 69 - LRB095 16125 WGH 42144 b (including demurrage and terminal charges), insurance, labor, or 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.

(3) (a) A warehouseman’s lien for charges and expenses SB2080 Engrossed - 70 - LRB095 16125 WGH 42144 b under subsection (1) or a security interest under subsection (2) is also effective against any person who so entrusted the bailor with possession of the goods that a pledge of them by SB2080 - 70 - LRB095 16125 WGH 42144 b him 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 Section 7--503.

The SB2080 Engrossed - 71 - LRB095 16125 WGH 42144 b 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 SB2080 - 71 - LRB095 16125 WGH 42144 b obtained by a sale at a different time or in a method different from that selected by the warehouse is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner.

(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 10 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 SB2080 Engrossed - 72 - LRB095 16125 WGH 42144 b sold by auction at a specified time and place.

SB2080 - 72 - LRB095 16125 WGH 42144 b (4) The sale must be held at the nearest suitable place to where the goods are held or stored.

SB2080 Engrossed - 73 - LRB095 16125 WGH 42144 b (e) A purchaser in good faith of goods sold to enforce a warehouse’s lien takes the goods free of any rights of persons against which the lien was valid, despite the warehouse’s SB2080 - 73 - LRB095 16125 WGH 42144 b noncompliance with this Section.

The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the warehouseman is not of itself sufficient to establish that SB2080 Engrossed - 74 - LRB095 16125 WGH 42144 b the sale was not made in a commercially reasonable manner.

If the warehouseman either sells the goods in the usual manner in any recognized market therefor, or if he sells at the price SB2080 - 74 - LRB095 16125 WGH 42144 b current in such market at the time of his sale, or if he has otherwise sold in conformity with commercially reasonable practices among dealers in the type of goods sold, he has sold in a commercially reasonable manner.

(d) The sale must conform to the terms of the SB2080 Engrossed - 75 - LRB095 16125 WGH 42144 b notification.

SB2080 - 75 - LRB095 16125 WGH 42144 b (f) After the expiration of the time given in the notification, an advertisement of the sale must be published once a week for 2 weeks consecutively in a newspaper of general circulation where the sale is to be held.

(5) A purchaser in good faith of goods sold to enforce a warehouseman’s lien takes the goods free of any rights of persons against whom the lien was valid, despite noncompliance SB2080 Engrossed - 76 - LRB095 16125 WGH 42144 b by the warehouseman with the requirements of this Section.

(6) The warehouseman may satisfy his lien from the proceeds of any sale pursuant to this Section but must hold the balance, SB2080 - 76 - LRB095 16125 WGH 42144 b if any, for delivery on demand to any person to whom he would have been bound to deliver the goods.

SB2080 Engrossed - 77 - LRB095 16125 WGH 42144 b improper handling.

(a) A consignee of a nonnegotiable bill of lading which has given value in good faith, or a holder to which a negotiable SB2080 - 77 - LRB095 16125 WGH 42144 b bill has been duly negotiated, relying upon the description of the goods in the bill or upon the date 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 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 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,"count", or words of similar import, if that indication is true.

and (2) words such as "shipper’s weight, load, and count,"count", or words of similar import indicating that the description was made by the shipper are ineffective except as to goods concealed in packages.

(c) If bulk goods are loaded by a shipper that makes available to the issuer of a bill of lading adequate facilities for weighing those goods, the issuer shall ascertain the kind SB2080 Engrossed - 78 - LRB095 16125 WGH 42144 b and quantity within a reasonable time after receiving the shipper’s request in a record to do so.

SB2080 - 78 - LRB095 16125 WGH 42144 b (d) The issuer of a bill of lading, by including in the bill the words "shipper’s weight, load, and count,"count", or words of similar import, may indicate that the goods were loaded by the shipper, and, if that statement is true, the issuer is not liable for damages caused by the improper loading.

(1) A consignee of a non-negotiable bill who has given value in good faith or a holder to whom a negotiable bill has been duly negotiated relying in either case upon the description therein of the goods, or upon the date therein shown, may recover from the issuer damages caused by the misdating of the bill or the non-receipt or misdescription of the goods, except to the extent that the document indicates that the issuer does not know whether any part or all of the SB2080 Engrossed - 79 - LRB095 16125 WGH 42144 b goods in fact were received or conform to the description, as where the description is in terms of marks or labels or kind, quantity, or condition or the receipt or description is SB2080 - 79 - LRB095 16125 WGH 42144 b qualified by "contents or condition of contents of packages unknown", "said to contain", "shipper’s weight, load and count" or the like, if such indication be true.

(5) The shipper shall be deemed to have guaranteed to the SB2080 Engrossed - 80 - LRB095 16125 WGH 42144 b issuer the accuracy at the time of shipment of the description, marks, labels, number, kind, quantity, condition and weight, as furnished by him;

and the shipper shall indemnify the issuer SB2080 - 80 - LRB095 16125 WGH 42144 b against damage caused by inaccuracies in such particulars.

(b) If goods covered by a through bill of lading or other document of title embodying an undertaking to be performed in SB2080 Engrossed - 81 - LRB095 16125 WGH 42144 b part by a person other than the issuer are received by that person, the person is subject, with respect to its own performance while the goods are in its possession, to the SB2080 - 81 - LRB095 16125 WGH 42144 b obligation of the issuer.

(1) The issuer of a through bill of lading or other document embodying an undertaking to be performed in part by persons acting as its agents or by connecting carriers is liable to anyone entitled to recover on the document for any breach by such other persons or by a connecting carrier of its obligation under the document but to the extent that the bill SB2080 Engrossed - 82 - LRB095 16125 WGH 42144 b 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 SB2080 - 82 - LRB095 16125 WGH 42144 b liability may be varied by agreement of the parties.

change of SB2080 Engrossed - 83 - LRB095 16125 WGH 42144 b instructions.

(a) Unless the bill of lading otherwise provides, a carrier may deliver the goods to a person or destination other than SB2080 - 83 - LRB095 16125 WGH 42144 b that stated in the bill or may otherwise dispose of the goods, without liability for misdelivery, on instructions from:

or (b) the consignor on a non-negotiable bill SB2080 Engrossed - 84 - LRB095 16125 WGH 42144 b notwithstanding contrary instructions from the consignee;

or (c) the consignee on a non-negotiable bill in the absence of contrary instructions from the consignor, if the SB2080 - 84 - LRB095 16125 WGH 42144 b goods have arrived at the billed destination or if the consignee is in possession of the bill;

(c) If a tangible negotiable bill of lading is lawfully issued in a set of parts and different parts are negotiated to SB2080 Engrossed - 85 - LRB095 16125 WGH 42144 b different persons, the title of the holder to which the first due negotiation is made prevails as to both the document of title and the goods even if any later holder may have received SB2080 - 85 - LRB095 16125 WGH 42144 b the goods from the carrier in good faith and discharged the carrier’s obligation by surrendering its part.

SB2080 Engrossed - 86 - LRB095 16125 WGH 42144 b (4) Any person who negotiates or transfers a single part of a bill of lading drawn in a set is liable to holders of that part as if it were the whole set.

SB2080 - 86 - LRB095 16125 WGH 42144 b (5) The bailee is obliged to deliver in accordance with Part 4 of this Article against the first presented part of a bill of lading lawfully drawn in a set.

(2) Upon request of anyone entitled as against the carrier SB2080 Engrossed - 87 - LRB095 16125 WGH 42144 b to control the goods while in transit and on surrender of any outstanding bill of lading or other receipt covering such goods, the issuer may procure a substitute bill to be issued at SB2080 - 87 - LRB095 16125 WGH 42144 b any place designated in the request.

Any other lien under subsection (a) is effective against the consignor and any person that permitted the bailor to have control or possession of the goods unless SB2080 Engrossed - 88 - LRB095 16125 WGH 42144 b the carrier had notice that the bailor lacked authority.

SB2080 - 88 - LRB095 16125 WGH 42144 b (1) A carrier has a lien on the goods covered by a bill of lading for charges subsequent to the date of its 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.

2101.) SB2080 Engrossed - 89 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-308) (from Ch.

SB2080 - 89 - LRB095 16125 WGH 42144 b (a) A carrier’s lien on goods may be enforced by public or private sale of the goods, in bulk or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in the goods.

In that event, the goods may not SB2080 Engrossed - 90 - LRB095 16125 WGH 42144 b be sold but must be retained by the carrier, subject to the terms of the bill of lading and this Article.

(c) A carrier may buy at any public sale pursuant to this SB2080 - 90 - LRB095 16125 WGH 42144 b Section.

The fact that a better price could have been SB2080 Engrossed - 91 - LRB095 16125 WGH 42144 b obtained by a sale at a different time or in a different method from that selected by the carrier is not of itself sufficient to establish that the sale was not made in a commercially SB2080 - 91 - LRB095 16125 WGH 42144 b reasonable manner.

(5) The carrier may satisfy his lien from the proceeds of any sale pursuant to this Section but must hold the balance, if SB2080 Engrossed - 92 - LRB095 16125 WGH 42144 b any, for delivery on demand to any person to whom he would have been bound to deliver the goods.

(6) The rights provided by this Section shall be in SB2080 - 92 - LRB095 16125 WGH 42144 b addition to all other rights allowed by law to a creditor against his debtor.

(b) Damages may be limited by a term in the bill of lading or in a transportation agreement that the carrier’s liability may not exceed a value stated in the bill or transportation SB2080 Engrossed - 93 - LRB095 16125 WGH 42144 b agreement if the carrier’s rates are dependent upon value and the consignor is afforded an opportunity to declare a higher value and the consignor is advised of the opportunity.

However, SB2080 - 93 - LRB095 16125 WGH 42144 b such a limitation is not effective with respect to the carrier’s liability for conversion to its own use.

(3) Reasonable provisions as to the time and manner of presenting claims and instituting actions based on the shipment SB2080 Engrossed - 94 - LRB095 16125 WGH 42144 b may be included in a bill of lading or tariff.

2101.) SB2080 - 94 - LRB095 16125 WGH 42144 b (810 ILCS 5/Art.

or (b) the issuer may have violated laws regulating the SB2080 Engrossed - 95 - LRB095 16125 WGH 42144 b conduct of his business;

or SB2080 - 95 - LRB095 16125 WGH 42144 b (d) the person issuing the document does not come within the definition of warehouseman if it purports to be a warehouse receipt.

But the issuer is liable for damages SB2080 Engrossed - 96 - LRB095 16125 WGH 42144 b caused by his overissue or failure to identify a duplicate document as such by conspicuous notation on its face.

2101.) SB2080 - 96 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-403) (from Ch.

SB2080 Engrossed - 97 - LRB095 16125 WGH 42144 b (b) A person claiming goods covered by a document of title shall satisfy the bailee’s lien if the bailee so requests or if the bailee is prohibited by law from delivering the goods until SB2080 - 97 - LRB095 16125 WGH 42144 b the charges are paid.

SB2080 Engrossed - 98 - LRB095 16125 WGH 42144 b (d) the exercise by a seller of his right to stop delivery pursuant to the provisions of the Article on Sales (Section 2--705);

SB2080 - 98 - LRB095 16125 WGH 42144 b (e) a diversion, reconsignment or other disposition pursuant to the provisions of this Article (Section 7--303) or tariff regulating such right;

2101.) SB2080 Engrossed - 99 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-404) (from Ch.

No liability for good faith delivery SB2080 - 99 - LRB095 16125 WGH 42144 b pursuant to receipt of bill.

NEGOTIATION AND TRANSFER SB2080 Engrossed - 100 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-501) (from Ch.

Form of negotiation and requirements of due SB2080 - 100 - LRB095 16125 WGH 42144 b negotiation.

(5) 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 SB2080 Engrossed - 101 - LRB095 16125 WGH 42144 b in the regular course of business or financing or involves receiving the document in settlement or payment of a monetary obligation.

SB2080 - 101 - LRB095 16125 WGH 42144 b (b) The following rules apply to a negotiable electronic document of title:

(d) The naming in a negotiable bill of lading of a person SB2080 Engrossed - 102 - LRB095 16125 WGH 42144 b to be notified of the arrival of the goods does not limit the negotiability of the bill or constitute notice to a purchaser of the bill of any interest of that person in the goods.

SB2080 - 102 - LRB095 16125 WGH 42144 b (1) A negotiable document of title running to the order of a named person is negotiated by his indorsement and delivery.

(6) The naming in a negotiable bill of a person to be SB2080 Engrossed - 103 - LRB095 16125 WGH 42144 b notified of the arrival of the goods does not limit the negotiability of the bill nor constitute notice to a purchaser thereof of any interest of such person in the goods.

SB2080 - 103 - LRB095 16125 WGH 42144 b (Source:

(b) Subject to Section 7-503, title and rights acquired by due negotiation are not defeated by any stoppage of the goods SB2080 Engrossed - 104 - LRB095 16125 WGH 42144 b represented by the document of title or by surrender of the goods by the bailee and are not impaired even if:

(1) the due negotiation or any prior due negotiation SB2080 - 104 - LRB095 16125 WGH 42144 b constituted a breach of duty;

In the case of a delivery order the bailee’s obligation accrues only upon acceptance and the obligation acquired by the holder is that the issuer and any indorser will procure the acceptance of the SB2080 Engrossed - 105 - LRB095 16125 WGH 42144 b bailee.

(2) Subject to the following section, title and rights so acquired are not defeated by any stoppage of the goods SB2080 - 105 - LRB095 16125 WGH 42144 b represented by the document or by surrender of such goods by the bailee, and are not impaired even though the negotiation or any prior negotiation constituted a breach of duty or even though any person has been deprived of possession of the document by misrepresentation, fraud, accident, mistake, duress, loss, theft or conversion, or even though a previous sale or other transfer of the goods or document has been made to a third person.

SB2080 Engrossed - 106 - LRB095 16125 WGH 42144 b or (C) power of disposition under Section 2-403, 2A-304(2), 2A-305(2), 9-320, or 9-321(c) or other SB2080 - 106 - LRB095 16125 WGH 42144 b statute or rule of law;

(1) A document of title confers no right in goods against a person who before issuance of the document had a legal interest or a perfected security interest in them and who neither (a) delivered or entrusted them or any document of title covering them to the bailor or his nominee with actual or apparent authority to ship, store, or sell with power to obtain delivery under this Article (Section 7--403) or with power of disposition under this Act SB2080 Engrossed - 107 - LRB095 16125 WGH 42144 b (Sections 2--403 and 9-320) or other statute or rule of law;

nor (b) acquiesced in the procurement by the bailor or his SB2080 - 107 - LRB095 16125 WGH 42144 b nominee of any document of title.

(a) A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that its SB2080 Engrossed - 108 - LRB095 16125 WGH 42144 b transferor had or had actual authority to convey.

(b) In the case of a transfer of a nonnegotiable document of title, until but not after the bailee receives notice of the SB2080 - 108 - LRB095 16125 WGH 42144 b transfer, the rights of the transferee may be defeated:

A bailee that honors the seller’s or lessor’s instructions is entitled SB2080 Engrossed - 109 - LRB095 16125 WGH 42144 b to be indemnified by the seller or lessor against any resulting loss or expense.

(1) A transferee of a document, whether negotiable or SB2080 - 109 - LRB095 16125 WGH 42144 b non-negotiable, to whom the document has been delivered but not duly negotiated, acquires the title and rights which his transferor had or had actual authority to convey.

A bailee honoring the seller’s instructions is entitled to be SB2080 Engrossed - 110 - LRB095 16125 WGH 42144 b indemnified by the seller against any resulting loss or expense.

2101.) SB2080 - 110 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-505) (from Ch.

2101.) SB2080 Engrossed - 111 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-507) (from Ch.

Warranties on negotiation or delivery of SB2080 - 111 - LRB095 16125 WGH 42144 b document of title.

SB2080 Engrossed - 112 - LRB095 16125 WGH 42144 b (Source:

7-508) SB2080 - 112 - LRB095 16125 WGH 42144 b Sec.

Whether a document of title is adequate to fulfill the obligations of a contract for sale, a contract for lease, SB2080 Engrossed - 113 - LRB095 16125 WGH 42144 b or the conditions of a letter of credit is determined by Article 2, 2A, or 5.

The question whether a document is adequate to fulfill the SB2080 - 113 - LRB095 16125 WGH 42144 b obligations of a contract for sale or the conditions of a credit is governed by the Articles on Sales (Article 2) and on Letters of Credit (Article 5).

The court may SB2080 Engrossed - 114 - LRB095 16125 WGH 42144 b also order payment of the bailee’s reasonable costs and attorney’s fees in any action under this subsection.

(b) A bailee that, without a court order, delivers goods to SB2080 - 114 - LRB095 16125 WGH 42144 b a person claiming under a missing negotiable document of title is liable to any person injured thereby.

Delivery in good faith is not conversion if made in accordance with a filed SB2080 Engrossed - 115 - LRB095 16125 WGH 42144 b 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 SB2080 - 115 - LRB095 16125 WGH 42144 b posting to indemnify any person injured by the delivery who files a notice of claim within one year after the delivery.

Except where the document was originally issued upon delivery of the goods by a person who had no power to dispose of them, no lien attaches by virtue of any judicial process to goods in the possession of a bailee for which a negotiable SB2080 Engrossed - 116 - LRB095 16125 WGH 42144 b document of title is outstanding unless the document be first surrendered to the bailee or its negotiation enjoined, and the bailee shall not be compelled to deliver the goods pursuant to SB2080 - 116 - LRB095 16125 WGH 42144 b process until the document is surrendered to him or impounded by the court.

2101.) SB2080 Engrossed - 117 - LRB095 16125 WGH 42144 b (810 ILCS 5/Art.

7 heading new) PART 7 MISCELLANEOUS PROVISIONS SB2080 - 117 - LRB095 16125 WGH 42144 b (810 ILCS 5/7-701 new) Sec.

This amendatory Act of the 95th General Assembly does not apply to a right of action that has accrued before the effective date of this amendatory Act of SB2080 Engrossed - 118 - LRB095 16125 WGH 42144 b the 95th General Assembly.

(810 ILCS 5/7-704 new) SB2080 - 118 - LRB095 16125 WGH 42144 b Sec.

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or SB2080 Engrossed - 119 - LRB095 16125 WGH 42144 b of a contemporaneous oral agreement but may be explained or supplemented (a) by course of performance, course of dealing, or SB2080 - 119 - LRB095 16125 WGH 42144 b usage of trade (Section 1-303 1--205) or by course of performance (Section 2--208);

but when such construction is unreasonable, express terms shall control course of performance and course of performance shall control both course of dealing and usage of SB2080 Engrossed - 120 - LRB095 16125 WGH 42144 b trade (Section 1--205).

(3) Subject to the provisions of the next section on modification and waiver, such course of performance shall be SB2080 - 120 - LRB095 16125 WGH 42144 b relevant to show a waiver or modification of any term inconsistent with such course of performance.

(3) Subject to the provisions of Section 2A-208 on modification and waiver, course of performance is relevant to show a waiver or modification of any term inconsistent with the SB2080 Engrossed - 121 - LRB095 16125 WGH 42144 b course of performance.

87-493.) SB2080 - 121 - LRB095 16125 WGH 42144 b (810 ILCS 5/2A-501) (from Ch.

(5) If the lease agreement covers both real property and goods, the party seeking enforcement may proceed under this Part 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 SB2080 Engrossed - 122 - LRB095 16125 WGH 42144 b case this Part does not apply.

87-493.) SB2080 - 122 - LRB095 16125 WGH 42144 b (810 ILCS 5/2A-518) (from Ch.

SB2080 Engrossed - 123 - LRB095 16125 WGH 42144 b (3) If a lessee’s cover is by lease agreement that for any reason does not qualify for treatment under subsection (2), or is by purchase or otherwise, the lessee may recover from the SB2080 - 123 - LRB095 16125 WGH 42144 b lessor as if the lessee had elected not to cover and Section 2A-519 governs.

SB2080 Engrossed - 124 - LRB095 16125 WGH 42144 b (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.

SB2080 - 124 - LRB095 16125 WGH 42144 b (3) Except as otherwise agreed, if the lessee has accepted goods and given notification (Section 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.

(1) After a default by a lessee under the lease contract of the type described in Section 2A-523(1) or 2A-523(3)(a) or after the lessor refuses to deliver or takes possession of SB2080 Engrossed - 125 - LRB095 16125 WGH 42144 b goods (Section 2A-525 or 2A-526), or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale, or SB2080 - 125 - LRB095 16125 WGH 42144 b otherwise.

SB2080 Engrossed - 126 - LRB095 16125 WGH 42144 b (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 SB2080 - 126 - LRB095 16125 WGH 42144 b 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.

(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 2A-504) or otherwise determined pursuant to agreement of the parties (Sections 1-302 1-102(3) and 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 Section 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 Section 2A-523(1) or 2A-523(3)(a) or, if agreed, for other default of the lessee, (i) accrued and SB2080 Engrossed - 127 - LRB095 16125 WGH 42144 b 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 SB2080 - 127 - LRB095 16125 WGH 42144 b 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 clause (i) 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 Section 2A-530, less expenses saved in consequence of the lessee’s default.

(1) "Acceptor" means a drawee that has accepted a SB2080 Engrossed - 128 - LRB095 16125 WGH 42144 b draft.

SB2080 - 128 - LRB095 16125 WGH 42144 b (3) "Drawer" means a person who signs or is identified in a draft as a person ordering payment.

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 SB2080 Engrossed - 129 - LRB095 16125 WGH 42144 b procedures do not vary unreasonably from general banking usage not disapproved by this Article or Article 4.

SB2080 - 129 - LRB095 16125 WGH 42144 b (9) "Promise" means a written undertaking to pay money signed by the person undertaking to pay.

"Acceptance" Section 3-409 "Accommodated party" Section 3-419 "Accommodation party" Section 3-419 "Alteration" Section 3-407 "Anomalous indorsement" Section 3-205 "Blank indorsement" Section 3-205 "Cashier’s check" Section 3-104 "Certificate of deposit" Section 3-104 "Certified check" Section 3-409 "Check" Section 3-104 "Consideration" Section 3-303 "Draft" Section 3-104 SB2080 Engrossed - 130 - LRB095 16125 WGH 42144 b "Holder in due course" Section 3-302 "Incomplete instrument" Section 3-115 "Indorsement" Section 3-204 SB2080 - 130 - LRB095 16125 WGH 42144 b "Indorser" Section 3-204 "Instrument" Section 3-104 "Issue" Section 3-105 "Issuer" Section 3-105 "Negotiable instrument" Section 3-104 "Negotiation" Section 3-201 "Note" Section 3-104 "Payable at a definite time" Section 3-108 "Payable on demand" Section 3-108 "Payable to bearer" Section 3-109 "Payable to order" Section 3-109 "Payment" Section 3-602 "Person entitled to enforce" Section 3-301 "Presentment" Section 3-501 "Reacquisition" Section 3-207 "Special indorsement" Section 3-205 "Teller’s check" Section 3-104 "Transfer of instrument" Section 3-203 "Traveler’s check" Section 3-104 "Value" Section 3-303 (c) The following definitions in other Articles apply to this Article:

"Bank" Section 4-105 SB2080 Engrossed - 131 - LRB095 16125 WGH 42144 b "Banking day" Section 4-104 "Clearing house" Section 4-104 "Collecting bank" Section 4-105 SB2080 - 131 - LRB095 16125 WGH 42144 b "Depositary bank" Section 4-105 "Documentary draft" Section 4-104 "Intermediary bank" Section 4-105 "Item" Section 4-104 "Payor bank" Section 4-105 "Suspends payments" Section 4-104.

(2) "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan SB2080 Engrossed - 132 - LRB095 16125 WGH 42144 b association, credit union, and trust company.

SB2080 - 132 - LRB095 16125 WGH 42144 b (3) "Customer" means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders.

"Acceptance" Section 4A-209 "Beneficiary" Section 4A-103 "Beneficiary’s bank" Section 4A-103 SB2080 Engrossed - 133 - LRB095 16125 WGH 42144 b "Executed" Section 4A-301 "Execution date" Section 4A-301 "Funds transfer" Section 4A-104 SB2080 - 133 - LRB095 16125 WGH 42144 b "Funds transfer system rule" Section 4A-501 "Intermediary bank" Section 4A-104 "Originator" Section 4A-104 "Originator’s bank" Section 4A-104 "Payment by beneficiary’s bank to beneficiary" Section 4A-405 "Payment by originator to beneficiary" Section 4A-406 "Payment by sender to receiving bank" Section 4A-403 "Payment date" Section 4A-401 "Payment order" Section 4A-103 "Receiving bank" Section 4A-103 "Security procedure" Section 4A-201 "Sender" Section 4A-103 (c) The following definitions in Article 4 apply to this Article:

SB2080 Engrossed - 134 - LRB095 16125 WGH 42144 b (Source:

4A-106) SB2080 - 134 - LRB095 16125 WGH 42144 b Sec.

(b) 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 SB2080 Engrossed - 135 - LRB095 16125 WGH 42144 b contrary is stated in this Article.

86-1291.) SB2080 - 135 - LRB095 16125 WGH 42144 b (810 ILCS 5/4A-204) (from Ch.

(b) Reasonable time under subsection (a) may be fixed by SB2080 Engrossed - 136 - LRB095 16125 WGH 42144 b agreement as stated in Section 1-302(b) 1-204(1), but the obligation of a receiving bank to refund payment as stated in subsection (a) may not otherwise be varied by agreement.

SB2080 - 136 - LRB095 16125 WGH 42144 b (Source:

(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 SB2080 Engrossed - 137 - LRB095 16125 WGH 42144 b 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 SB2080 - 137 - LRB095 16125 WGH 42144 b beneficiary.

(2) Other definitions applying to this Article or to specified Parts thereof, and the sections in which they appear SB2080 Engrossed - 138 - LRB095 16125 WGH 42144 b are:

SB2080 - 138 - LRB095 16125 WGH 42144 b "Between merchants".

SB2080 Engrossed - 139 - LRB095 16125 WGH 42144 b (3) "Control" as provided in Section 7-106 and the The following definitions in other Articles apply to this Article:

SB2080 - 139 - LRB095 16125 WGH 42144 b "Consignee".

(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 SB2080 Engrossed - 140 - LRB095 16125 WGH 42144 b 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 SB2080 - 140 - LRB095 16125 WGH 42144 b 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.

SB2080 Engrossed - 141 - LRB095 16125 WGH 42144 b and (c) if delivery is authorized and made by way of documents of title otherwise than by subsection (b) then SB2080 - 141 - LRB095 16125 WGH 42144 b 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 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 regardless of where the goods are to be received;

(2) Where in a case within subsection (1) 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 SB2080 Engrossed - 142 - LRB095 16125 WGH 42144 b buyer may demand tender of the full set;

Even if the agreement expressly requires a full set SB2080 - 142 - LRB095 16125 WGH 42144 b (a) due tender of a single part is acceptable within the provisions of this Article on cure of improper delivery (subsection (1) of Section 2-508;

Insofar as situations are not covered by the other provisions of this SB2080 Engrossed - 143 - LRB095 16125 WGH 42144 b Article and matters concerning title become material the following rules apply:

(1) Title to goods cannot pass under a contract for sale SB2080 - 143 - LRB095 16125 WGH 42144 b prior to their identification to the contract (Section 2--501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by this Act.

SB2080 Engrossed - 144 - LRB095 16125 WGH 42144 b (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 SB2080 - 144 - LRB095 16125 WGH 42144 b title, title passes at the time when and the place where he delivers such documents and if the seller is to deliver an electronic document of title, title passes when the seller delivers the document;

The manner, time and place for tender are determined by the agreement and this Article, and in particular (a) tender must be at a reasonable hour, and if it is of goods they must be kept available for the period reasonably SB2080 Engrossed - 145 - LRB095 16125 WGH 42144 b necessary to enable the buyer to take possession;

SB2080 - 145 - LRB095 16125 WGH 42144 b (2) Where the case is within the next section respecting shipment tender requires that the seller comply with its provisions.

but risk of loss of the goods and of any failure by the bailee to honor the non-negotiable document of title or to obey the direction remains on the seller until the buyer has had a reasonable time to present the document or direction, and a refusal by the SB2080 Engrossed - 146 - LRB095 16125 WGH 42144 b bailee to honor the document or to obey the direction defeats the tender.

(5) Where the contract requires the seller to deliver SB2080 - 146 - LRB095 16125 WGH 42144 b documents (a) he 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 Section 2--323;

(b) a non-negotiable bill of lading to himself or his nominee reserves possession of the goods as security but except in a case of conditional delivery (subsection (2) of Section 2--507 a non-negotiable bill of lading naming the buyer as SB2080 Engrossed - 147 - LRB095 16125 WGH 42144 b 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 SB2080 - 147 - LRB095 16125 WGH 42144 b 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.

2101.) SB2080 Engrossed - 148 - LRB095 16125 WGH 42144 b (810 ILCS 5/2-509) (from Ch.

SB2080 - 148 - LRB095 16125 WGH 42144 b (1) Where the contract requires or authorizes the seller to ship the goods by carrier (a) if it does not require him 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 (Section 2--505);

(3) In any case not within subsection (1) or (2), the risk of loss passes to the buyer on his receipt of the goods if the SB2080 Engrossed - 149 - LRB095 16125 WGH 42144 b seller is a merchant;

(4) The provisions of this Section are subject to contrary SB2080 - 149 - LRB095 16125 WGH 42144 b agreement of the parties and to the provisions of this Article on sale on approval (Section 2--327) and on effect of breach on risk of loss (Section 2--510).

2101.) SB2080 Engrossed - 150 - LRB095 16125 WGH 42144 b (810 ILCS 5/2-705) (from Ch.

SB2080 - 150 - LRB095 16125 WGH 42144 b (1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he discovers the buyer to be insolvent (Section 2-702) and may stop delivery of carload, truckload, planeload 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.

(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 SB2080 Engrossed - 151 - LRB095 16125 WGH 42144 b damages.

(c) If a negotiable document of title has been issued for goods the bailee is not obliged to obey a notification to SB2080 - 151 - LRB095 16125 WGH 42144 b stop until surrender of possession or control of the document.

SB2080 Engrossed - 152 - LRB095 16125 WGH 42144 b (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 SB2080 - 152 - LRB095 16125 WGH 42144 b value on the market or in use.

(ii) the lessor acquires the goods or the right to possession and use of the goods in connection with the SB2080 Engrossed - 153 - LRB095 16125 WGH 42144 b lease;

(A) the lessee receives a copy of the contract SB2080 - 153 - LRB095 16125 WGH 42144 b by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;

or (D) if the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing (a) of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person SB2080 Engrossed - 154 - LRB095 16125 WGH 42144 b and directed the lessor to acquire the goods or the right to possession and use of the goods from that person, (b) that the lessee is entitled under this SB2080 - 154 - LRB095 16125 WGH 42144 b Article to the promises and warranties, including those of any third party, 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, and (c) that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies.

SB2080 Engrossed - 155 - LRB095 16125 WGH 42144 b (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 SB2080 - 155 - LRB095 16125 WGH 42144 b return, or retention or creation of a security interest is not a lease.

(o) "Lessee in ordinary course of business" means a person who in good faith and without knowledge that the SB2080 Engrossed - 156 - LRB095 16125 WGH 42144 b 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 SB2080 - 156 - LRB095 16125 WGH 42144 b business of selling or leasing goods of that kind but does not include a pawnbroker.

SB2080 Engrossed - 157 - LRB095 16125 WGH 42144 b (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 SB2080 - 157 - LRB095 16125 WGH 42144 b by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into;

SB2080 Engrossed - 158 - LRB095 16125 WGH 42144 b "Encumbrance".

SB2080 - 158 - LRB095 16125 WGH 42144 b "Purchase money lease".

(4) In addition, Article 1 contains general definitions and principles of construction and interpretation applicable SB2080 Engrossed - 159 - LRB095 16125 WGH 42144 b throughout this Article.

7-11-02.) SB2080 - 159 - LRB095 16125 WGH 42144 b (810 ILCS 5/2A-514) (from Ch.

(1) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee SB2080 Engrossed - 160 - LRB095 16125 WGH 42144 b to be insolvent and may stop delivery of carload, truckload, planeload, or larger shipments of express or freight if the lessee repudiates or fails to make a payment due before SB2080 - 160 - LRB095 16125 WGH 42144 b delivery, whether for rent, security or otherwise under the lease contract, or for any other reason the lessor has a right to withhold or take possession of the goods.

87-493.) SB2080 Engrossed - 161 - LRB095 16125 WGH 42144 b (810 ILCS 5/4-104) (from Ch.

SB2080 - 161 - LRB095 16125 WGH 42144 b (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;

(6) "Documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities (Section 8-102) or instructions for uncertificated securities (Section 8-102), or other certificates, statements, or the like are to be received by SB2080 Engrossed - 162 - LRB095 16125 WGH 42144 b the drawee or other payor before acceptance or payment of the draft;

(7) "Draft" means a draft as defined in Section 3-104 SB2080 - 162 - LRB095 16125 WGH 42144 b or an item, other than an instrument, that is an order;

SB2080 Engrossed - 163 - LRB095 16125 WGH 42144 b "Agreement for electronic presentment" Section 4-110.

SB2080 - 163 - LRB095 16125 WGH 42144 b "Collecting bank" Section 4-105.

SB2080 Engrossed - 164 - LRB095 16125 WGH 42144 b "Prove" Section 3-103.

SB2080 - 164 - LRB095 16125 WGH 42144 b (d) In addition Article 1 contains general definitions and principles of construction and interpretation applicable throughout this Article.

For the purpose of this Section, credits first given are first SB2080 Engrossed - 165 - LRB095 16125 WGH 42144 b withdrawn.

(c) Receipt by a collecting bank of a final settlement for an item is a realization on its security interest in the item, SB2080 - 165 - LRB095 16125 WGH 42144 b accompanying documents, and proceeds.

"Investment company security" means a share or similar equity SB2080 Engrossed - 166 - LRB095 16125 WGH 42144 b 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, SB2080 - 166 - LRB095 16125 WGH 42144 b or a face-amount certificate issued by a face-amount certificate company that is so registered.

SB2080 Engrossed - 167 - LRB095 16125 WGH 42144 b (Source:

9-102) SB2080 - 167 - LRB095 16125 WGH 42144 b Sec.

The term does not include (i) rights to payment evidenced by chattel paper or an instrument, (ii) commercial tort claims, (iii) SB2080 Engrossed - 168 - LRB095 16125 WGH 42144 b 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, SB2080 - 168 - LRB095 16125 WGH 42144 b other than rights arising out of the use of a credit or charge card or information contained on or for use with the card.

(B) which is created by statute in favor of a person that in the ordinary course of its business SB2080 Engrossed - 169 - LRB095 16125 WGH 42144 b furnished goods or services to a debtor in connection with a debtor’s farming operation;

and (C) whose effectiveness does not depend on the SB2080 - 169 - LRB095 16125 WGH 42144 b person’s possession of the personal property.

SB2080 Engrossed - 170 - LRB095 16125 WGH 42144 b (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 SB2080 - 170 - LRB095 16125 WGH 42144 b 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.

SB2080 Engrossed - 171 - LRB095 16125 WGH 42144 b (A) proceeds to which a security interest attaches;

(B) accounts, chattel paper, payment intangibles, SB2080 - 171 - LRB095 16125 WGH 42144 b and promissory notes that have been sold;

or (B) traded on a foreign commodity board of trade, exchange, or market, and is carried on the books of a SB2080 Engrossed - 172 - LRB095 16125 WGH 42144 b commodity intermediary for a commodity customer.

(16) "Commodity customer" means a person for which a commodity intermediary carries a commodity contract on its SB2080 - 172 - LRB095 16125 WGH 42144 b books.

SB2080 Engrossed - 173 - LRB095 16125 WGH 42144 b (ii) is not an auctioneer;

and (iii) is not generally known by its creditors to be substantially engaged in selling the goods of SB2080 - 173 - LRB095 16125 WGH 42144 b others;

(25) "Consumer obligor" means an obligor who is an individual and who incurred the obligation as part of a SB2080 Engrossed - 174 - LRB095 16125 WGH 42144 b transaction entered into primarily for personal, family, or household purposes.

(26) "Consumer transaction" means a transaction in SB2080 - 174 - LRB095 16125 WGH 42144 b which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes.

(29) "Deposit account" means a demand, time, savings, passbook, nonnegotiable certificates of deposit, uncertificated certificates of deposit, nontransferrable SB2080 Engrossed - 175 - LRB095 16125 WGH 42144 b certificates of deposit, or similar account maintained with a bank.

SB2080 - 175 - LRB095 16125 WGH 42144 b (30) "Document" means a document of title or a receipt of the type described in Section 7-201(b) 7-201(2).

or SB2080 Engrossed - 176 - LRB095 16125 WGH 42144 b (D) products of crops or livestock in their unmanufactured states.

(35) "Farming operation" means raising, cultivating, SB2080 - 176 - LRB095 16125 WGH 42144 b propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation.

(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, SB2080 Engrossed - 177 - LRB095 16125 WGH 42144 b letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction.

SB2080 - 177 - LRB095 16125 WGH 42144 b (43) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.

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, SB2080 Engrossed - 178 - LRB095 16125 WGH 42144 b money, or oil, gas, or other minerals before extraction.

(45) "Governmental unit" means a subdivision, agency, department, county, parish, municipality, or other unit of SB2080 - 178 - LRB095 16125 WGH 42144 b the government of the United States, a State, or a foreign country.

SB2080 Engrossed - 179 - LRB095 16125 WGH 42144 b (A) are leased by a person as lessor;

SB2080 - 179 - LRB095 16125 WGH 42144 b (C) are furnished by a person under a contract of service;

(C) a trustee in bankruptcy from the date of the SB2080 Engrossed - 180 - LRB095 16125 WGH 42144 b filing of the petition;

SB2080 - 180 - LRB095 16125 WGH 42144 b (53) "Manufactured home" means a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein.

or (B) in which a manufactured home, other than a manufactured home held as inventory, is the primary SB2080 Engrossed - 181 - LRB095 16125 WGH 42144 b collateral.

(55) "Mortgage" means a consensual interest in real property, including fixtures, which secures payment or SB2080 - 181 - LRB095 16125 WGH 42144 b performance of an obligation.

(60) "Original debtor", except as used in Section 9-310(c), means a person that, as debtor, entered into a security agreement to which a new debtor has become bound SB2080 Engrossed - 182 - LRB095 16125 WGH 42144 b under Section 9-203(d).

(61) "Payment intangible" means a general intangible under which the account debtor’s principal obligation is a SB2080 - 182 - LRB095 16125 WGH 42144 b monetary obligation.

(D) the spouse of an individual described in SB2080 Engrossed - 183 - LRB095 16125 WGH 42144 b subparagraph (A), (B), or (C);

or (E) an individual who is related by blood or marriage to an individual described in subparagraph SB2080 - 183 - LRB095 16125 WGH 42144 b (A), (B), (C), or (D) and shares the same home with the individual.

SB2080 Engrossed - 184 - LRB095 16125 WGH 42144 b (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 SB2080 - 184 - LRB095 16125 WGH 42144 b satisfaction of the obligation it secures pursuant to Sections 9-620, 9-621, and 9-622.

SB2080 Engrossed - 185 - LRB095 16125 WGH 42144 b (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 SB2080 - 185 - LRB095 16125 WGH 42144 b States must maintain a public record showing the organization to have been organized.

or (F) a person that holds a security interest arising SB2080 Engrossed - 186 - LRB095 16125 WGH 42144 b under Section 2-401, 2-505, 2-711(3), 2A-508(5), 4-210, or 5-118.

(73) "Security agreement" means an agreement that SB2080 - 186 - LRB095 16125 WGH 42144 b creates or provides for a security interest.

(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 SB2080 Engrossed - 187 - LRB095 16125 WGH 42144 b general intangible, an instrument, or investment property.

(78) "Tangible chattel paper" means chattel paper evidenced by a record or records consisting of information SB2080 - 187 - LRB095 16125 WGH 42144 b that is inscribed on a tangible medium.

SB2080 Engrossed - 188 - LRB095 16125 WGH 42144 b "Certificated security".

SB2080 - 188 - LRB095 16125 WGH 42144 b "Contract for sale".

SB2080 Engrossed - 189 - LRB095 16125 WGH 42144 b "Proceeds of a letter of credit".

SB2080 - 189 - LRB095 16125 WGH 42144 b "Securities account".

SB2080 Engrossed - 190 - LRB095 16125 WGH 42144 b (2) the debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party;

and SB2080 - 190 - LRB095 16125 WGH 42144 b (3) one of the following conditions is met:

Subsection (b) is subject to Section 4-210 on the security interest of a collecting bank, Section 5-118 on the security interest of a letter-of-credit issuer or nominated person, Section 9-110 on a security SB2080 Engrossed - 191 - LRB095 16125 WGH 42144 b interest arising under Article 2 or 2A, and Section 9-206 on security interests in investment property.

(d) When person becomes bound by another person’s security SB2080 - 191 - LRB095 16125 WGH 42144 b agreement.

The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by Section 9-315 and is also attachment of a security interest in a supporting obligation SB2080 Engrossed - 192 - LRB095 16125 WGH 42144 b for the collateral.

The attachment of a security interest in a right to payment or performance secured SB2080 - 192 - LRB095 16125 WGH 42144 b 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.

SB2080 Engrossed - 193 - LRB095 16125 WGH 42144 b (b) Expenses, risks, duties, and rights when secured party in possession.

SB2080 - 193 - LRB095 16125 WGH 42144 b (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;

SB2080 Engrossed - 194 - LRB095 16125 WGH 42144 b (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 SB2080 - 194 - LRB095 16125 WGH 42144 b collateral to reduce the secured obligation, unless remitted to the debtor;

SB2080 Engrossed - 195 - LRB095 16125 WGH 42144 b (b) Duties of secured party after receiving demand from debtor.

SB2080 - 195 - LRB095 16125 WGH 42144 b (1) a secured party having control of a deposit account under Section 9-104(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;

(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 SB2080 Engrossed - 196 - LRB095 16125 WGH 42144 b instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor;

and SB2080 - 196 - LRB095 16125 WGH 42144 b (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;

(A) give control of the electronic document to the SB2080 Engrossed - 197 - LRB095 16125 WGH 42144 b debtor or its designated custodian;

(B) if the debtor designates a custodian that is the designated custodian with which the authoritative SB2080 - 197 - LRB095 16125 WGH 42144 b 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;

(1) Except as otherwise provided in this Section, while a debtor is located in a jurisdiction, the local law of SB2080 Engrossed - 198 - LRB095 16125 WGH 42144 b that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.

SB2080 - 198 - LRB095 16125 WGH 42144 b (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.

When filing required to perfect security SB2080 Engrossed - 199 - LRB095 16125 WGH 42144 b interest or agricultural lien;

Except as otherwise SB2080 - 199 - LRB095 16125 WGH 42144 b provided in subsection (b) and Section 9-312(b), a financing statement must be filed to perfect all security interests and agricultural liens.

(8) in deposit accounts, electronic chattel paper, SB2080 Engrossed - 200 - LRB095 16125 WGH 42144 b electronic documents, investment property, letter-of-credit rights, or beneficial interests in Illinois land trusts which is perfected by control under SB2080 - 200 - LRB095 16125 WGH 42144 b Section 9-314;

SB2080 Engrossed - 201 - LRB095 16125 WGH 42144 b (1) a security interest in a deposit account may be perfected only by control under Section 9-314;

(2) and except as otherwise provided in Section SB2080 - 201 - LRB095 16125 WGH 42144 b 9-308(d), a security interest in a letter-of-credit right may be perfected only by control under Section 9-314;

A security interest in SB2080 Engrossed - 202 - LRB095 16125 WGH 42144 b certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to SB2080 - 202 - LRB095 16125 WGH 42144 b the extent that it arises for new value given under an authenticated security agreement.

After the 20-day SB2080 Engrossed - 203 - LRB095 16125 WGH 42144 b period specified in subsection (e), (f), or (g) expires, perfection depends upon compliance with this Article.

1-1-02.) SB2080 - 203 - LRB095 16125 WGH 42144 b (810 ILCS 5/9-313) (from Ch.

SB2080 Engrossed - 204 - LRB095 16125 WGH 42144 b (1) the person in possession authenticates a record acknowledging that it holds possession of the collateral for the secured party’s benefit;

or SB2080 - 204 - LRB095 16125 WGH 42144 b (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.

(1) the acknowledgment is effective under subsection SB2080 Engrossed - 205 - LRB095 16125 WGH 42144 b (c) or Section 8-301(a), even if the acknowledgment violates the rights of a debtor;

and (2) unless the person otherwise agrees or law other SB2080 - 205 - LRB095 16125 WGH 42144 b 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.

7-1-01.) SB2080 Engrossed - 206 - LRB095 16125 WGH 42144 b (810 ILCS 5/9-314) (from Ch.

A security interest in SB2080 - 206 - LRB095 16125 WGH 42144 b investment property, deposit accounts, electronic chattel paper, letter-of-credit rights, electronic documents, or beneficial interests in Illinois land trusts may be perfected by control of the collateral under Section 7-106, 9-104, 9-105, 9-106, 9-107, or 9-107.1.

SB2080 Engrossed - 207 - LRB095 16125 WGH 42144 b (B) if the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner;

or SB2080 - 207 - LRB095 16125 WGH 42144 b (C) if the collateral is a security entitlement, the debtor is or becomes the entitlement holder.

Except as otherwise provided in subsection (e), a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, SB2080 Engrossed - 208 - LRB095 16125 WGH 42144 b 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 SB2080 - 208 - LRB095 16125 WGH 42144 b security interest or agricultural lien and before it is perfected.

SB2080 Engrossed - 209 - LRB095 16125 WGH 42144 b (f) Public deposits.

An unperfected security interest shall take priority over the rights of a lien creditor if (i) the lien creditor is a trustee or receiver of a bank or acting SB2080 - 209 - LRB095 16125 WGH 42144 b in furtherance of its supervisory authority over such bank and (ii) a security interest is granted by the bank to secure a deposit of public funds with the bank or a repurchase agreement with the bank pursuant to the Government Securities Act of 1986, as amended.

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 SB2080 Engrossed - 210 - LRB095 16125 WGH 42144 b gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.

SB2080 - 210 - LRB095 16125 WGH 42144 b (Source:

Except as otherwise SB2080 Engrossed - 211 - LRB095 16125 WGH 42144 b provided in subsection (g) and Section 9-605, after default, a debtor and an obligor have the rights provided in this Part and by agreement of the parties.

SB2080 - 211 - LRB095 16125 WGH 42144 b (e) Lien of levy after judgment.

7-1-01.) SB2080 Engrossed - 212 - LRB095 16125 WGH 42144 b INDEX Statutes amended in order of appearance 810 ILCS 5/Art.

1-209 SB2080 Engrossed - 213 - LRB095 16125 WGH 42144 b 810 ILCS 5/Art.

7-203 SB2080 Engrossed - 214 - LRB095 16125 WGH 42144 b 810 ILCS 5/7-204 from Ch.

7-501 SB2080 Engrossed - 215 - LRB095 16125 WGH 42144 b 810 ILCS 5/7-502 from Ch.

2A-527 SB2080 Engrossed - 216 - LRB095 16125 WGH 42144 b 810 ILCS 5/2A-528 from Ch.

9-207 SB2080 Engrossed - 217 - LRB095 16125 WGH 42144 b 810 ILCS 5/9-208 from Ch.