U.C.C. § 1-201 — General Definitions

Editorial note. The 1952 Official Text defined 'good faith' as 'honesty in fact in the conduct or transaction concerned' — a purely subjective standard. Revised Article 1 (2001) added the objective 'reasonable commercial standards of fair dealing' component previously confined to the merchant provisions of Articles 2, 3, 4, and 9.

Editorial note. To supply uniform definitions applicable throughout the Code, thereby preventing inconsistent constructions of common terms across Articles.

Editorial note. The definitions apply throughout the Uniform Commercial Code except where the context clearly requires otherwise (§ 1-201(a)). Additional definitions applicable only to particular Articles appear in each substantive Article's definition section (e.g., §§ 2-103, 3-103, 9-102).

Editorial note. Section 1-201(b) enumerates 43 defined terms, including 'agreement,' 'bearer,' 'bona fide purchaser,' 'good faith,' 'holder,' 'money,' 'notice,' 'organization,' 'person,' 'present value,' 'purchase,' 'record,' 'right,' 'security interest,' 'send,' 'signed,' 'surety,' and 'value.'

Editorial note. The revised definition of 'good faith' (§ 1-201(b)(20)) is the most consequential change of the 2001 Revision. A minority of States retain the older, subjective definition; the practitioner must confirm the enacted text.

Editorial note. Courts routinely cite § 1-201 to resolve threshold definitional questions. The definitions of 'holder,' 'purchase,' 'security interest,' and 'signed' are especially heavily litigated.

Editorial note. See U.C.C. § 1-304 (obligation of good faith); § 3-103 (Article 3 definitions); § 9-102 (Article 9 definitions); Restatement (Second) of Contracts § 205 (good faith).

Editorial note. Every Code analysis begins with § 1-201. Article-specific definitions displace the general definition only where the Code expressly so provides.