Ark. Code Ann. § 4-1-201 (2026)
General definitions
- Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other chapters of this subtitle that apply to particular chapters or parts thereof, have the meanings stated.
-
Subject to definitions contained in other chapters of this subtitle that apply to particular chapters or parts thereof:
- “Action”, in the sense of a judicial proceeding, includes recoupment, counterclaim, set-off, suit in equity, and any other proceedings in which rights are determined.
- “Aggrieved party” means a party entitled to pursue a remedy.
- “Agreement”, as distinguished from “contract”, means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in § 4-1-303.
- “Bank” means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company.
- “Bearer” means a person in control of a negotiable electronic document of title or a person in possession of a negotiable instrument, negotiable tangible document of title, or certificated security that is payable to bearer or indorsed in blank.
- “Bill of lading” means a document of title evidencing the receipt of goods for shipment issued by a person engaged in the business of directly or indirectly transporting or forwarding goods. The term does not include a warehouse receipt.
- “Branch” includes a separately incorporated foreign branch of a bank.
- “Burden of establishing” a fact means the burden of persuading the trier of fact that the existence of the fact is more probable than its nonexistence.
- “Buyer in ordinary course of business” means a person that buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind. A person buys goods in the ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller's own usual or customary practices. A person that sells oil, gas, or other minerals at the wellhead or minehead is a person in the business of selling goods of that kind. A buyer in ordinary course of business may buy for cash, by exchange of other property, or on secured or unsecured credit, and may acquire goods or documents of title under a preexisting contract for sale. Only a buyer that takes possession of the goods or has a right to recover the goods from the seller under Chapter 2 may be a buyer in ordinary course of business. “Buyer in ordinary course of business” does not include a person that acquires goods in a transfer in bulk or as security for or in total or partial satisfaction of a money debt.
-
“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 heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and
- language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.
- “Consumer” means an individual who enters into a transaction primarily for personal, family, or household purposes.
- “Contract”, as distinguished from “agreement”, means the total legal obligation that results from the parties' agreement as determined by this subtitle as supplemented by any other applicable laws.
- “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.
- “Defendant” includes a person in the position of defendant in a counterclaim, cross-claim, or third-party claim.
- “Delivery”, with respect to an electronic document of title means voluntary transfer of control and with respect to an instrument, a tangible document of title, or chattel paper, means voluntary transfer of possession.
- “Document of title” means a record (i) that in the regular course of business or financing is treated as adequately evidencing that the person in possession or control of the record is entitled to receive, control, hold, and dispose of the record and the goods the record covers and (ii) that purports to be issued by or addressed to a bailee and to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass. The term includes a bill of lading, transport document, dock warrant, dock receipt, warehouse receipt, and order for delivery of goods. An electronic document of title means a document of title evidenced by a record consisting of information stored in an electronic medium. A tangible document of title means a document of title evidenced by a record consisting of information that is inscribed on a tangible medium.
- “Fault” means a default, breach, or wrongful act or omission.
-
“Fungible goods” means:
- goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit; or
- goods that by agreement are treated as equivalent.
- “Genuine” means free of forgery or counterfeiting.
- “Good faith,” except otherwise provided in Chapter 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing.
-
“Holder” means:
- the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession;
- the person in possession of a negotiable tangible document of title if the goods are deliverable either to bearer or to the order of the person in possession; or
- the person in control of a negotiable electronic document of title.
- “Insolvency proceeding” includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.
-
“Insolvent” means:
- having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;
- being unable to pay debts as they become due; or
- being insolvent within the meaning of federal bankruptcy law.
- “Money” means a medium of exchange currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two (2) or more countries.
- “Organization” means a person other than an individual.
- “Party”, as distinguished from a “third party”, means a person that has engaged in a transaction or made an agreement subject to this subtitle.
- “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity.
- “Present value” means the amount as of a date certain of one (1) or more sums payable in the future, discounted to the date certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the facts and circumstances at the time the transaction is entered into.
- “Purchase” means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.
- “Purchaser” means a person that takes by purchase.
- “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
- “Remedy” means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.
- “Representative” means a person empowered to act for another, including an agent, an officer of a corporation or association, and a trustee, executor, or administrator of an estate.
- “Right” includes remedy.
- “Security interest” means an interest in personal property or fixtures which secures payment or performance of an obligation. “Security interest” includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Chapter 9. “Security interest” does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under § 4-2-401, but a buyer may also acquire a “security interest” by complying with Chapter 9. Except as otherwise provided in § 4-2-505, the right of a seller or lessor of goods under Chapter 2 or 2A to retain or acquire possession of the goods is not a “security interest”, but a seller or lessor may also acquire a “security interest” by complying with Chapter 9. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under § 4-2-401 is limited in effect to a reservation of a “security interest.” Whether a transaction in the form of a lease creates a “security interest” is determined pursuant to § 4-1-203.
-
“Send” in connection with a writing, record, or notice means:
- to deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none to any address reasonable under the circumstances; or
- in any other way to cause to be received any record or notice within the time it would have arrived if properly sent.
- “Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing.
- “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
- “Surety” includes a guarantor or other secondary obligor.
- “Term” means a portion of an agreement that relates to a particular matter.
- “Unauthorized signature” means a signature made without actual, implied, or apparent authority. The term includes a forgery.
- “Warehouse receipt” means a document of title issued by a person engaged in the business of storing goods for hire.
- “Writing” includes printing, typewriting, or any other intentional reduction to tangible form. “Written” has a corresponding meaning.
History. Acts 1961, No. 185, § 1-201; 1967, No. 303, § 2 (1-201); 1973, No. 116, § 2; 1985, No. 514, § 1; A.S.A. 1947, § 85-1-201; Acts 1991, No. 572, §§ 1-3; 1993, No. 439, § 3; 2001, No. 1439, § 3; 2005, No. 856, § 9; 2007, No. 342, §§ 2-7.
Publisher's Notes. Acts 1973, No. 116, § 1, amended or reenacted the provisions of Acts 1961, No. 185, Art. 9, as amended (former chapter 9 of this title).
Acts 1973, No. 116, § 5, provided that all transactions which were subject to the provisions of Acts 1961, No. 185, Art. 9, as amended (former chapter 9 of this title), and which were executed prior to January 1, 1974 would be governed by Acts 1961, No. 185, Art. 9, as amended and in effect prior to January 1, 1974.
U.S. Code. The reference to the federal bankruptcy law in (23)(C) is probably a reference to the Bankruptcy Code of 1978, which is codified as 11 U.S.C. § 1 et seq.
Research References
Ark. L. Notes.
Copeland, A Statutory Primer: Article 2 of the U.C.C., — When Do Its Rules Apply?, 1990 Ark. L. Notes 39.
Laurence, Bona Fide Purchaser Analysis, Beverage Products Corporation v. Robinson and the Case Against Very Short Opinions, 1990 Ark. Law Notes 85.
Janet A. Flaccus, Counterfeit Checks — What Rules Should Cover These?, 2011 Ark. L. Notes 618.
Ark. L. Rev.
Note, Conditional Sales Contracts, True Leases, and the Lessee's Right to Terminate, 43 Ark. L. Rev. 899.
You've Got Mail … But Do You Have a Contract?: Does an E-Mail Satisfy the Arkansas Statute of Frauds?, 60 Ark. L. Rev. 707.
U. Ark. Little Rock L.J.
Adams, “Clear Title” for Farm Products: Congress and the Arkansas Legislature Attempt to Solve a Troublesome Problem, 10 U. Ark. Little Rock L.J. 619.
U. Ark. Little Rock L. Rev.
Survey of Legislation, 2005 Arkansas General Assembly, Business Law, 28 U. Ark. Little Rock L. Rev. 321.
Case Notes
Buyer in Ordinary Course of Business.
“Buying” does not include a transaction in which the person claiming to be a “buyer in ordinary course of business” merely acts as an agent for another, such as an auctioneer. Commercial Bank v. Hales, 281 Ark. 439, 665 S.W.2d 857 (1984).
Buyer was not buyer in ordinary course of business. Merchants & Planters Bank & Trust Co. v. Phoenix Hous. Sys., 21 Ark. App. 153, 729 S.W.2d 433 (1987).
Circuit court erred in granting an inventory lienholder summary judgment in its action seeking a declaration that its certificate of title was free and clear of any lien claimed by a direct lienholder where material questions of fact remained as to whether the dealership owner acted in good faith in purchasing two vehicles from the dealership and whether he and the direct lienholder qualified as buyers in the ordinary course. Ford Motor Credit Co., LLC v. First Nat'l Bank of Crossett, 2016 Ark. App. 408, 500 S.W.3d 188 (2016).
Conspicuous.
The requirement that an exclusion or modification of implied warranties be conspicuous is to ensure that attention of the buyer can reasonably be expected to be brought to it. Mack Trucks of Ark., Inc. v. Jet Asphalt & Rock Co., 246 Ark. 101, 437 S.W.2d 459 (1969), overruled in part on other grounds, Cavette v. Ford Motor Credit Co., 260 Ark. 874, 545 S.W.2d 612 (1977).
Disclaimer attempting to exclude or modify implied warranties was ineffective as a matter of law where it was in the body of the instrument and in the same size and color of type as other provisions. Mack Trucks of Ark., Inc. v. Jet Asphalt & Rock Co., 246 Ark. 101, 437 S.W.2d 459 (1969), overruled in part on other grounds, Cavette v. Ford Motor Credit Co., 260 Ark. 874, 545 S.W.2d 612 (1977).
Express warranty which was actually in the nature of a disclaimer of all other warranties which did not mention merchantability and which first appeared inside an operation and maintenance manual which was not supplied until after delivery of the equipment in question was invalid as not mentioning merchantability and as not being conspicuous. Marion Power Shovel Co. v. Huntsman, 246 Ark. 152, 437 S.W.2d 784 (1969).
Where documents involved were before Supreme Court on appeal, Supreme Court was in a position to determine whether express warranty which purported to be in lieu of all others was conspicuous. Marion Power Shovel Co. v. Huntsman, 246 Ark. 152, 437 S.W.2d 784 (1969).
A disclaimer of warranty which, though in italics, was in smaller and lighter type than other portions of the contract failed to meet the statutory requirement of conspicuousness. DeLemar Motor Co. v. White, 249 Ark. 708, 460 S.W.2d 802 (1970).
Where a disclaimer of express and implied warranties was located among much small type on the back of a tractor sales agreement, and the disclaimer was not set out in brackets or readily identifiable in any other manner, the disclaimer was not conspicuous and was therefore ineffective. Ford Motor Credit Co. v. Harper, 671 F.2d 1117 (8th Cir. 1982).
Where the manufacturer's disclaimer appeared on the back of the dealer's purchase order, but in print larger than the surrounding writing, and writing in large print on the front of the form, directly above the line for the buyer's signature, directed the buyer to the controlling terms on the back, the writing was such that should have attracted the attention of a reasonable buyer and, therefore, satisfied the standard for conspicuousness. Hunter v. Texas Instruments, Inc., 798 F.2d 299 (8th Cir. 1986).
Whether disclaimers are conspicuous is a factual determination, requiring not only the submission of labels and pamphlets, but also submission of information concerning the placement of the labels on containers, and representations made to the buyers. Young v. American Cyanamid Co., 786 F. Supp. 781 (E.D. Ark. 1991).
Delivery.
Where an instrument is no longer in possession of a party whose signature is on it, there is a presumption of delivery. Bryan v. Bartlett, 435 F.2d 28 (8th Cir. 1970), cert. denied, 402 U.S. 915, 91 S. Ct. 1373, 28 L. Ed. 2d 658 (1971).
Good Faith.
Corporation held to be lacking in good faith so as to bar its enforcement of security agreement. Thompson v. United States, 408 F.2d 1075 (8th Cir. 1969).
The distributor failed to present evidence sufficient to set out a claim for violation of good faith performance by the oil company when it introduced a cap on its rebate program, where the distributor did not produce evidence of the pricing or rebate practices of other oil companies nor did it present evidence of retailer-wholesaler price margins, price rebates, or ceilings on price rebates. Richard Short Oil Co. v. Texaco, Inc., 799 F.2d 415 (8th Cir. 1986).
The fact that every contract imposes an obligation to act in good faith does not create a cause of action for a violation of that obligation. Country Corner Food & Drug, Inc. v. First State Bank & Trust Co., 332 Ark. 645, 966 S.W.2d 894 (1998).
Good Faith Purchasers for Value.
Bank held to be good faith purchaser for value of bonds fraudulently appropriated by debtor and pledged to bank as collateral. First Am. Nat'l Bank v. Christian Found. Life Ins. Co., 242 Ark. 678, 420 S.W.2d 912 (1967).
The defendant did not breach the warranty of title, notwithstanding that a car he sold to the plaintiff was confiscated as a stolen vehicle, since he was a good faith purchaser where (1) the defendant purchased the car from a third party who, before he purchased the car, contacted the licensing agency and was informed that the car's title was good, and (2) the third party related this information to the defendant before the defendant purchased the car. Midway Auto Sales, Inc. v. Clarkson, 71 Ark. App. 316, 29 S.W.3d 788 (2000).
Trial court's determination that the course of dealing in the used-car trade was that a seller would reimburse the buyer when the seller could not deliver clear title to the vehicle was supported by the evidence and public policy, and fell within the definitions of trade usage and good faith in § 4-1-303 and subdivision (b)(20) of this section. Therefore, a seller of a vehicle with an encumbered title was required to reimburse the buyer even though the seller was itself a good faith purchaser. Superior, Inc. v. Arrington, 2009 Ark. App. 875 (2009).
Purchaser.
An auctioneer is merely a selling agent, not a “purchaser.” Commercial Bank v. Hales, 281 Ark. 439, 665 S.W.2d 857 (1984).
Send.
The deposit of returned checks in the mail by midnight complies with the requirement that the checks be “sent” to the bank's transferor. Union Nat'l Bank v. Metropolitan Nat'l Bank, 265 Ark. 340, 578 S.W.2d 220 (1979).
Cited: United States v. Baptist Golden Age Home, 226 F. Supp. 892 (W.D. Ark. 1964); Nicklaus v. Peoples Bank & Trust Co., 258 F. Supp. 482 (E.D. Ark. 1965); Commercial Credit Corp. v. Associates Discount Corp., 246 Ark. 118, 436 S.W.2d 809 (1969); Bailey v. Ford Motor Co., 246 Ark. 950, 440 S.W.2d 238 (1969); Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970); Starkey Constr., Inc. v. Elcon, Inc., 248 Ark. 958, 457 S.W.2d 509 (1970); Pine Bluff Prod. Credit Ass'n v. Lloyd, 252 Ark. 682, 480 S.W.2d 578 (1972); Planters' Prod. Credit Ass'n v. Bowles, 256 Ark. 1063, 511 S.W.2d 645 (1974); Pine Bluff Nat'l Bank v. Kesterson, 257 Ark. 813, 520 S.W.2d 253 (1975); Rex Fin. Corp. v. Marshall, 406 F. Supp. 567 (W.D. Ark. 1976); McMillan v. Meuser Material & Equip. Co., 260 Ark. 422, 541 S.W.2d 911 (1976); Bell v. Itek Leasing Corp., 262 Ark. 22, 555 S.W.2d 1 (1977); Walker Ford Sales v. Gaither, 265 Ark. 275, 578 S.W.2d 23 (1979); Swink & Co. v. Carroll McEntee & McGinley, Inc., 266 Ark. 279, 584 S.W.2d 393 (1979); Findley Mach. Co. v. Miller, 3 Ark. App. 264, 625 S.W.2d 542 (1981); Scholtes v. Signal Delivery Serv., Inc., 548 F. Supp. 487 (W.D. Ark. 1982); Rhodes v. Oaklawn Bank, 279 Ark. 51, 648 S.W.2d 470 (1983); Steele v. Murphy, 279 Ark. 235, 650 S.W.2d 573 (1983); Worthen Bank & Trust Co. v. Hilyard Drilling Co., 60 B.R. 500 (Bankr. W.D. Ark. 1986); Mooney v. Grant County Bank, 18 Ark. App. 224, 711 S.W.2d 841 (1986); In re Bearhouse, Inc., 84 B.R. 552 (Bankr. W.D. Ark. 1988); Hazen First State Bank v. Speight, 888 F.2d 574 (8th Cir. 1989); Niedermeier v. Central Prod. Credit Ass'n, 300 Ark. 116, 777 S.W.2d 210 (1989); Adams v. First State Bank, 300 Ark. 235, 778 S.W.2d 611 (1989); Reynolds v. Commodity Credit Corp., 300 Ark. 441, 780 S.W.2d 15 (1989); Miller v. First Nat'l Bank, 29 Ark. App. 247, 780 S.W.2d 589 (1989); In re Taylor, 130 B.R. 849 (Bankr. E.D. Ark. 1991); Galatia Community State Bank v. Kindy, 307 Ark. 467, 821 S.W.2d 765 (1991); Rice v. Fas Fax Corp. (In re Hot Shots Burgers & Fries, Inc.), 183 B.R. 848 (Bankr. E.D. Ark. 1995); Affiliated Foods S.W., Inc. v. Moran, 322 Ark. 808, 912 S.W.2d 8 (1995); Long v. Lampton, 324 Ark. 511, 922 S.W.2d 692 (1996); Lee County v. Volvo Constr. Equip. N. Am., Inc., No. 2:07-CV-00082 BSM, 2008 U.S. Dist. LEXIS 95745 (E.D. Ark. Nov. 20, 2008).