Georgia Code, Volume 09, 2012 Supplement

2012·12.3 MB·English

by  State of Georgia

OFFICIAL CODE OF GEORGIA
ANNOTATED
2012 Supplement
IncludingActs ofthe 2012 Regular Session ofthe General Assembly
Prepared by
The Code Revision Commission
The Office ofLegislative Counsel
and
The Editorial StaffofLexisNexis®
Published Under Authority ofthe State ofGeorgia
Volume
9
2002 Edition
Title 11. Commercial Code
IncludingAnnotations to the Georgia Reports
and the GeorgiaAppeals Reports
Place in Pocket of Corresponding Volume of
Main Set
LexisNexis®
Charlottesville, Virginia
Copyright © 2003—2012
BY
The State of Georgia
All rights reserved.
ISBN 978-0-327-11074-3 (set)
ISBN 978-0-327-01806-3
5012929
(Pub.41805)
THIS SUPPLEMENT CONTAINS
Statutes:
All laws specifically codified by the General Assembly ofthe State of
Georgia through the 2012 Regular Session ofthe General Assembly.
Annotations ofJudicial Decisions:
Case annotations reflecting decisions posted to LexisNexis® through
March 30, 2012. These annotations will appear in the following tradi-
tional reporter sources: Georgia Reports; Georgia Appeals Reports;
Southeastern Reporter; Supreme Court Reporter; Federal Reporter;
Federal Supplement; Federal Rules Decisions; Lawyers' Edition;
United States Reports; and Bankruptcy Reporter.
Annotations ofAttorney General Opinions:
Constructions ofthe Official Code ofGeorgia Annotated, prior Codes
ofGeorgia, Georgia Laws, the Constitution ofGeorgia, and the Consti-
tution of the United States by the Attorney General of the State of
Georgia posted to LexisNexis® through March 30, 2012.
OtherAnnotations:
References to:
Emory Bankruptcy Developments Journal.
Emory International Law Review.
Emory Law Journal.
Georgia Journal of International and Comparative Law.
Georgia Law Review.
Georgia State University Law Review.
Mercer Law Review.
Georgia State Bar Journal.
Georgia Journal of Intellectual Property Law.
American Jurisprudence, Second Edition.
American Jurisprudence, Pleading and Practice.
American Jurisprudence, ProofofFacts.
American Jurisprudence, Trials.
Corpus Juris Secundum.
Uniform Laws Annotated.
American Law Reports, First through Sixth Series.
American Law Reports, Federal.
Tables:
In Volume 41, a Table Eleven-A comparing provisions of the 1976
Constitution ofGeorgia to the 1983 Constitution ofGeorgia and a Table
Eleven-B comparing provisions ofthe 1983 Constitution of Georgia to
the 1976 Constitution of Georgia.
An updated version of Table Fifteen which reflects legislation
through the 2012 Regular Session ofthe General Assembly.
iii
Indices:
A cumulative replacement index to laws codified in the 2012 supple-
ment pamphlets and in the bound volumes ofthe Code.
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IV
.
TITLE
11
COMMERCIAL CODE
Art.
1. General Provisions, 11-1-101 through 11-1-209.
2. Sales, 11-2-101 through 11-2-725.
2A. Leases, 11-2A-101 through 11-2A-532.
4. Bank Deposits and Collections, 11-4-101 through 11-4-504.
7 Warehouse Receipts, Bills ofLading, and Other Documents of
Title, 11-7-101 through 11-7-603.
8. Investment Securities, 11-8-101 through 11-8-603.
9. Secured Transactions, 11-9-101 through 11-9-710.
ARTICLE
1
GENERAL PROVISIONS
Part 2
General Definitions and Principles
ofInterpretation
Sec.
11-1-201. General definitions.
PART
1
SHORT TITLE, CONSTRUCTION, APPLICATION, AND SUBJECT
MATTER OF TITLE
11-1-101. Short title.
JUDICIAL DECISIONS
Cited inAgriCommodities, Inc. v. J. D.
Heiskell & Co., 297 Ga. App. 210, 676
S.E.2d 847 (2009).
RESEARCH REFERENCES
Am. J—ur. Pleading and Practice
Forms. 6Am. Jur. Pleading and Prac-
tice Forms, Commercial Code, § 1:1.
2012 Supp.
11-1-102 COMMERCIAL CODE 11-1-201
11-1-102. Purposes; rules of construction; variation by agree-
ment.
JUDICIAL DECISIONS
Cited in Dalton Point, L.P. v. Regions Hanson Staple Co., 285 Ga. 288, 676
Bank, Inc., 287 Ga. App. 468, 651 S.E.2d S.E.2d 169 (2009).
549 (2007); Ole Mexican Foods, Inc. v.
11-1-103. Supplementary general principles of law applicable.
JUDICIAL DECISIONS
Cited in Dudley v. Wachovia Bank,
N.A., 290 Ga. App. 220, 659 S.E.2d 658
(2008).
RESEARCH REFERENCES
Am. —Jur. Pleading and Practice tice Forms, Duress and Undue Influence,
Forms. 8CAm.Jur. PleadingandPrac- § 1.
PART 2
GENERAL DEFINITIONS AND PRINCIPLES OF
INTERPRETATION
11-1-201. General definitions.
Subject to additional definitions contained in the subsequent articles
ofthis title which are applicable to specific articles or parts thereof, and
unless the context otherwise requires, in this title:
(1) "Action" in the sense of a judicial proceeding includes
recoupment, counterclaim, 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 ofthe parties in fact as found
in their language or by implication from other circumstances includ-
ing course of dealing or usage of trade or course of performance as
provided in this title (Code Sections 11-1-205 and 11-2-208). Whether
an agreement has legal consequences is determined by the provisions
of this title, if applicable; otherwise by the law of contracts (Code
Section 11-1-103).
(4) "Bank" means any person engaged in the business ofbanking.
Wherever the word "branch" is used in this title, with reference to a
bank, it shall mean "branch office" as that term is defined in Code
Section 7-1-600.
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11-1-201 GENERAL PROVISIONS 11-1-201
(5) "Bearer" means a person in control of a negotiable electronic
document of title or a person in possession of an instrument, a
negotiable tangible document of title, or a certificated security
payable to bearer or indorsed in blank.
(6) "Bill oflading"means a document oftitle evidencingthe receipt
ofgoods for shipment issued by a person engaged in the business of
directlyor indirectlytransportingorforwardinggoods. The term does
not include a warehouse receipt.
(7) "Branch"includes a separately incorporated foreign branch ofa
bank.
(8) "Burden ofestablishing"a fact means the burden ofpersuading
the triers offact that the existence ofthe fact is more probable than
its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith without knowledge that the sale violates the
rights ofanother person in the goods, and in the ordinary course from
a person, other than a pawnbroker, in the business ofselling goods of
A
thatkind. person buys goods in the ordinary course ifthe sale to the
person comports with the usual or customary practices in the kind of
business in which the seller is engaged or with the seller's own usual
or customary practices. Aperson that sells oil, gas, or other minerals
at the wellhead or minehead is a person in the business of selling
goods ofthatkind.Abuyerin the ordinarycourse ofbusiness maybuy
for cash, by exchange of other property, or on secured or unsecured
credit and may acquire goods or documents oftitle under a preexist-
ing contract for sale. Only a buyer that takes possession ofthe goods
or has a right to recover the goods from the seller under Article 2 of
this title maybe a buyer in ordinary course ofbusiness.Aperson that
acquires goods in a transfer in bulk or as security for or in total or
partial satisfaction ofa money debt is not a buyer in ordinary course
ofbusiness.
(10) "Conspicuous," with reference to a term, means so written,
displayed, or presented that a reasonable person against which it is
to operate ought to have noticed it. Whether a term is "conspicuous"
or not is a decision for the court. Conspicuous terms include the
following:
(A) A heading in capitals equal to or greater in size than the
surrounding text, or in contrasting type, font, or color to the
surrounding text ofthe same or lesser size; and
(B) Language in the body of a record or display in larger type
than the surrounding text, or in contrasting type, font, or color to
the surrounding text ofthe same size, or set offfrom the surround-
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11-1-201 COMMERCIAL CODE 11-1-201
ing text of the same size by symbols or other marks that call
attention to the language.
(11) "Contract"means the total legal obligation which results from
the parties' agreement as affected by this title and any other
applicable rules oflaw.
(12) "Creditor" includes a general creditor, a secured creditor, a
lien creditor and any representative of creditors, including an as-
signee for the benefit ofcreditors, a trustee in bankruptcy, a receiver
in equity, and an executor or administrator ofan insolvent debtor's or
assignor's estate.
(13) "Defendant" includes a person in the position ofdefendant in
a cross-action or counterclaim.
(14) "Delivery" with respect to an electronic document of title
means voluntary transfer ofcontrol and with respect to instruments,
tangible documents of title, chattel paper, or certificated securities
means voluntary transfer ofpossession.
(15) "Document of title" means a record (a) that in the regular
course of business or financing is treated as adequately evidencing
that the person in possession or control of the record is entitled to
receive, control, hold, and dispose of the record and the goods the
record covers and (b) that purports to be issued by or addressed to a
bailee and to cover goods in the bailee's possession which are either
identified or are fungible portions of an identified mass. The term
includes a bill of lading, transport document, dock warrant, dock
receipt, warehouse receipt, and order for delivery of goods. An
electronic document oftitle means a document oftitle evidenced by a
record consisting of information stored in an electronic medium. A
tangible document oftitle means a document oftitle evidenced by a
record consisting of information that is inscribed on a tangible
medium.
(16) "Fault" means wrongful act, omission, or breach.
(17) "Fungible" with respect to goods or securities means goods or
securities of which any unit is, by nature or usage of trade, the
equivalent ofany other like unit. Goods which are not fungible shall
be deemed fungible for the purposes of this title to the extent that
under aparticular agreement ordocumentunlike units are treated as
equivalents.
(18) "Genuine" means free offorgery or counterfeiting.
(19) "Good faith" means honesty in fact in the conduct or transac-
tion concerned.
(20) "Holder" means:
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11-1-201 GENERAL PROVISIONS 11-1-201
(a) The person in possession of a negotiable instrument that is
payable eitherto bearer orto an identified person thatis the person
in possession;
(b) The person in possession ofa negotiable tangible document of
title ifthe goods are deliverable either to bearer or to the order of
the person in possession; or
(c) The person in control of a negotiable electronic document of
title.
(21) To "honor" is to pay or to accept and pay, or where a credit so
engages to purchase or discount a draft complying with the terms of
the credit.
(22) "Insolvency proceedings" includes any assignment for the
benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate ofthe person involved.
(23) Aperson is "insolvent"who either has ceased to pay his debts
in the ordinary course of business or cannot pay his debts as they
become due or is insolvent within the meaning of the federal
bankruptcy law.
(24) "Money" means a medium ofexchange authorized or adopted
by a domestic or foreign government and includes a monetary unit of
account established by an intergovernmental organization or by
agreement between two or more nations.
(25) Subject to subsection (27) of this Code section, a person has
"notice" of a fact ifthe person:
(a) Has actual knowledge ofit;
(b) Has received a notice or notification ofit; or
(c) From all the facts and circumstances known to the person at
the time in question, 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
similarimportrefers to knowledge ratherthan to reasontoknow. The
time and circumstances under which a notice or notification may
cease to be effective are not determined by this title.
A
(26) person "notifies"or "gives"a notice or notification to another
person by taking such steps as may be reasonably required to inform
the other person in ordinary course, whether or not the other person
actually comes to know ofit. Subject to subsection (27) of this Code
section, a person "receives" a notice or notification when:
(a) It comes to that person's attention; or
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11-1-201 COMMERCIAL CODE 11-1-201
(b) It is duly delivered in a form reasonable under the circum-
stances at the place of business through which the contract was
made or at another location held out by that person as the place for
receipt of such communications.
(27) Notice, knowledge, or a notice or notification received by an
organization is effective for a particular transaction from the time
when it is brought to the attention ofthe individual conducting that
transaction, and in any event, from the time when itwould have been
brought to the individual's attention ifthe organizationhad exercised
due diligence. An organization exercises due diligence ifit maintains
reasonable routines for communicating significant information to the
person conducting the transaction and there is reasonable compli-
ance with the routines. Due diligence does not require an individual
acting for the organization to communicate information unless such
communication is part of the individual's regular duties or the
individual has reason to know of the transaction and that the
transaction would be materially affected by the information.
(28) "Organization" includes a corporation, government or govern-
mental subdivision or agency, business trust, estate, trust, partner-
ship or association, two or more persons having a joint or common
interest, or any other legal or commercial entity.
(29) "Party,"as distinct from "third party,"means a personwho has
engaged in a transaction or made an agreement within this title.
(30) "Person" includes an individual or an organization (see Code
Section 11-1-102).
(31) "Presumption"or"presumed"means that the trier offact must
find the existence ofthe fact presumed unless and until evidence is
introduced which would support a finding ofits nonexistence.
(31.1) "Public sale" means a sale:
(A) Held at a place reasonably available to persons who might
desire to attend and submit bids; and
(B) At which those attending shall be given the opportunity to
bid on a competitive basis; and
(C) At which the sale, ifmade, shall be made to the highest and
best bidder; and
(D) Except as otherwise provided in this title for advertising or
dispensing with the advertising of public sales, ofwhich notice is
given by advertisement once a week for two weeks in the newspa-
per in which the sheriff's advertisements are published in the
countywhere the sale is to be held, and which notice shall state the
6 2012 Supp.