UCC 1-201 General Definitions (Overview: All You Need To Know)

What is UCC 1-201?

How do you legally define it?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our UCC legal knowledge!

Are you ready?

Let’s get started!

UCC 1-201 Overview

UCC stands for the “Uniform Commercial Code” representing a set of rules applicable to the sale of goods by merchants.

The UCC is broken down into nine articles outlined as follows:

  • Article 1: General Provisions 
  • Article 2: Sales 
  • Article 2A: Leases 
  • Article 3: Negotiable Instruments 
  • Article 4: Bank Deposits and Collections 
  • Article 4A: Funds Transfer 
  • Article 5: Letters of Credit
  • Article 6: Bulk Sales 
  • Article 7: Documents of Title 
  • Article 8: Investment Securities 
  • Article 9: Secured Transactions 

Article 1 of UCC is broken down into three parts:

  • Part 1: General Provisions
  • Part 2: General Definitions and Principles of Interpretation
  • Part 3: Territorial Applicability And General Rules

Part 2 of the UCC Article 1 is also sub-divided into six sections: 

  • Section 1-201: General Definitions
  • Section 1-202: Notice; Knowledge
  • Section 1-203: Lease Distinguished from Security Interest
  • Section 1-204: Value
  • Section 1-205: Reasonable Time; Seasonableness 
  • Section 1-206: Presumptions

As you can see, 1-201 UCC refers to Section 201 of UCC Article 1 titled “General Definitions”.

UCC 1-201 General Definitions

UCC 1 201 is composed of two paragraphs.

UCC 1 201(a) provides interpretation guidance by stating that when the defined terms are used in Article 1 of UCC, their meaning must be aligned with the definitions provided under 1-201.

Furthermore, if any other article of UCC makes reference to Article 1 and uses the same terms, the parties and courts must interpret their meaning based on the definitions provided under UCC 201.

UCC 1 201(b) lists the different terms along with their definition.

Defined Terms

Let’s look at the terms that are defined under UCC 1 201(b).

Here are the defined terms:

  • Action
  • Aggrieved Party
  • Agreement
  • Bank
  • Bearer
  • Bill of Lading
  • Branch
  • Burden of Establishing 
  • Buyer In Ordinary Course of Business
  • Conspicuous 
  • Consumer
  • Contract
  • Creditor
  • Defendant
  • Delivery
  • Document of Title
  • Fault
  • Fungible Goods
  • Genuine
  • Good Faith
  • Holder
  • Insolvency Proceeding
  • Insolvent
  • Money
  • Organization
  • Party
  • Person
  • Present Value
  • Purchase
  • Purchaser
  • Record
  • Remedy
  • Representative
  • Right
  • Security Interest
  • Send
  • Signed
  • State
  • Surety
  • Term
  • Unauthorized Signature 
  • Warehouse receipt
  • Writing 


Let’s look at a few definitions as examples of how Section 1-201 of UCC defines various terms.

For the purpose of our example, let’s look at the definition of:

  • Buyer in the ordinary course of business (UCC 1 201(b)(9))
  • Conspicuous (UCC 1 201(b)(10))
  • Money (UCC 1 201(b)(24))
  • Security interest (UCC 1 201(b)(35))

Buyer in the ordinary course of business (UCC 1 201(b)(9))

Under UCC 201/9, a buyer in the ordinary course of business refers to a “person” purchasing “goods” in good faith.

The Boston College Law Review has written an interesting article on the Good Faith requirement for buyers in ordinary course.

In other words, the person is not aware that the purchase is in violation of another person’s rights to the goods.

It’s considered in the ordinary course of business if the goods are bought as per usual or based on customary practices.

Conspicuous (UCC 1 201(b)(10))

Conspicuous under UCC 1 201(b) 10 refers to something that is clearly presented or noticeable.

UCC refers to “written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it”.

Money (UCC 1 201(b)(24))

Money, as defined in UCC 1 201(b) 24 refers to a “medium of exchange” authorized by the government.

Security interest (UCC 1 201(b)(35))

A security interest as outlined in UCC 1 201 (b) 35 refers to an interest in personal property used to secure a payment or secure the performance of an obligation.

A security interest can include the interests of a consignor, buyer of accounts, chattel paper, payment intangible, promissory note in a transaction subject to Article 9.


So what is the legal definition of UCC 1-201?

Let’s look at a summary of our findings.

UCC 1-201:

  • Section 1-201 UCC provides for the definition of terms applicable to UCC Article 1
  • Section 1-201(a) UCC indicates that any of the terms used in Article 1 UCC (or any other article of UCC referring to Article 1) should have the meaning ascribed to it in 1-201
  • Section 1-201(b) UCC provides for the actual definition of the various terms 
Conspicuous definition 
UCC filing
UCC financing statement
UCC lien 
UCC search
UCC 1-103
UCC 1-303
UCC 2-201
UCC 2-302
UCC 3-419
UCC 9-102
UCC Article 2
UCC Article 9
Uniform Commercial Code