Title 13, Uniform Commercial Code

Debt. Where a secured party makes an advance, incurs an obligation, releases a perfected security interest, or otherwise gives new value which is to be secured in whole or in part by afteracquired property his security interest in the afteracquired collateral shall be deemed to b…

Products; Inventory. COL070307 Goods are: (1) Consumer goods if they are used or bought for use primarily for personal, family or household purposes; (2) Equipment if they are used or bought for use primarily in business (including farming or a profession) or by a debtor who is a…

For the purposes of this division any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described. COMMENT: Section 9110 is identical to Section 9-110 of the 1972 Official Text of the Uniform Commercial…

The creation of a security interest under this division may be a bulk transfer under Division 6, except as specified in subdivision (1) of Section 6103.

Unless otherwise agreed, when a secured party knows that collateral is owned by a person who is not the debtor, the owner of the collateral is entitled to receive from the secured party any surplus under Section COL070307 9502(2) or under Section 9504(1), and is not liable for th…

A security interest arising solely under the division on sales (Division 2) is subject to the provisions of this division except that to the extent that and so long as the debtor does not have or does not lawfully obtain possession of the goods (a) No security agreement is necess…

(1) A person who delivers goods under a consignment which is not a security interest and who would be required to file under this division by paragraph (3)(c) of Section 2326 has priority over a secured party who is or becomes a creditor of the consignee and who would have a perf…

Except as otherwise provided by this code a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. Nothing in this division validates any COL070307 charge or practice illegal under any statute or reg…

Each provision of this division with regard to rights, obligations and remedies applies whether title to collateral is in the secured party or in the debtor.

Requisites. (1) Subject to the provisions of Section 4208 on the security interest of a collecting bank and Section 9113 on a security interest arising under the division on sales, a security interest is not enforceable against the debtor or third parties with respect to the coll…

COL070307 (1) Except as provided in subdivision (2) a security agreement may provide that any or all obligations covered by the security agreement are to be secured by afteracquired collateral. (2) No security interest attaches under an afteracquired property clause to consumer g…

Permissible. A security interest is not invalid or fraudulent against creditors by reason of liberty in the debtor to use, commingle or dispose of all or part of the collateral (including returned or repossessed goods) or to collect or compromise accounts or chattel paper, or to …

Modification of Sales Warranties Where Security Agreement Exists. (1) Subject to any statute or decision which establishes a different rule for buyers or lessees of consumer goods, an agreement by a buyer or lessee that he will not assert against an assignee any claim or defense …

Possession. (1) A secured party must use reasonable care in the custody and preservation of collateral in his possession. In the case of an instrument or chattel paper reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed…

(1) A debtor may sign a statement indicating what he believes to be the aggregate amount of unpaid indebtedness as of a specified date and may send it to the secured party with a request that the statement be ap- proved or corrected and returned to the debtor. When the security a…

Interests: Lien Creditor. (1) Except as otherwise provided in subdivision (2), an unperfected security interest is subordinate to the rights of (a) Persons entitled to priority under Section 9312; (b) A person who becomes a lien creditor before the security interest is perfected;…

Security Interests to Which Filing Provisions of This Division Do Not Apply. (1) A financing statement must be filed to perfect all security interests except the following; (a) A security interest in collateral in possession of the secured party under Section 9305; (b) A security…

Perfection. (1) A security interest is perfected when it has attached and when all of the applicable steps required for perfection have been taken. Such steps are specified in Sections 9302, 9304, 9305, and 9306. If such steps are taken before the security interest attaches, it i…

and Goods Covered by Documents; Perfection by Permissive Filing; Temporary Perfection Without Filing or Transfer of Possession. (1) A security interest in chattel paper or negotiable documents may be perfected by filing. A security interest in money or instruments (other than ins…

Without Filing. A security interest in letters of credit and advices of credit (paragraph (2) (a) of Section 5116) goods, instruments, money, negotiable documents or chattel paper may be perfected by the secured party's taking possession of the collateral. If such collateral othe…

Collateral. (1) Proceeds includes whatever is received upon the sale, exchange, collection or other disposition of collateral or proceeds. Insurance payable by reason of loss or damage to the collateral is proceeds, except to the extent that it is payable to a person other than a…

(1) A buyer in ordinary course of business (subdivision (9) of Section 1201) takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence. (2) A buyer other than a buyer in ordinary course …

A purchaser of chattel paper or an instrument who gives new value and takes possession of it in the ordinary course of his business has priority over a security interest in the chattel paper or instrument: (a) Which is perfected under Section 9304 (permissive filing and temporary…

COL070307 Nothing in this division limits the rights of a holder in due course of a negotiable instrument (Section 3302) or a holder to whom a negotiable document of title has been duly negotiated (Section 7501) or a bona fide purchaser of a security (Section 8301) and such holde…

When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfe…

The debtor's rights in collateral may be voluntarily or involuntarily transferred (by way of sale, creation of a security interest, attachment, levy, garnishment or other judicial process) notwithstanding a provision in the security agreement prohibiting any transfer but a provis…

Collateral. (1) The rules of priority stated in other sections of this chapter and in the following sections shall govern where applicable: Section 4208 with respect to the security interest of collecting banks in items being collected, accompanying documents and proceeds; Sectio…

(1) A security interest in goods which attaches before they are installed in or affixed to other goods takes priority as to the goods installed or affixed (called in this section accessions) over the claims of all persons to the whole except as stated in subdivision (3) and subje…

(1) If a security interest in goods was perfected and subsequently the goods or a part thereof have become part of a product or mass, the security interest continues in the product or mass if: (a) The goods are so manufactured, processed, assembled or commingled that their identi…

Nothing in this division prevents subordination by agreement by any person entitled to priority.

The mere existence of a security interest or authority given to the debtor to dispose of or use collateral does not impose contract or tort liability upon the secured party for the debtor's acts or omissions.

Notification of Assignment; Term Prohibiting Assignment Ineffective; Identification and Proof of Assignment. COL070307 (1) Unless an account debtor has made an enforceable agreement not to assert defenses or claims arising out of a sale as provided in Section 9206 the rights of a…

(1) The proper place to file in order to perfect a security interest is with the Department of Revenue and Taxation. (2) The rules stated in Section 9103 determine whether filing is necessary in this territory.

Mortgage as Financing Statement: (1) A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed by the debtor, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mail…

Filing; Duties of Filing Officer. (1) Presentation for filing of a financing statement, tender of the filing fee and acceptance of the statement by the filing officer constitutes filing under this division. (2) Except as provided in subdivision (6), a filed financing statement is…

(1) Whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party of record must on written demand by the debtor send the debtor a statement that he no longer claims a security interest under t…

(1) A secured party of record may by a writing release his security interest in all or a part of the collateral covered by a filed financing statement. A statement of release is sufficient if it is signed by the se- cured party of record, contains a statement describing the colla…

Officer; Fees; Statement of Assignment. (1) If a secured party assigns or transfers his security interest in any collateral as to which a financing statement has been filed, a statement of such assignment may be filed. Such statement shall be signed by the secured party, describe…

(1) If the person filing any financing statement, amendment, termination statement, statement of assignment, continuation statement, or statement of release, furnishes the filing officer a copy thereof, the filing officer shall upon request note upon the copy of a financing state…

In lieu of filing all financing statements, termination statements, partial releases, assignments, or other related papers falling under this code, the filing officer may record such papers. He may employ a system of microphotography. All film used in the microphotography process…

Should the filing officer choose to record rather than file all financing statements and related papers, he shall mark each financing statement with a consecutive file number. All other related papers affecting such financing statement shall thereafter bear the same file number. …

Upon recording the financing statement or other related papers, the originals or copy of the same shall be returned to the parties entitled thereto.

A consignor or lessor of goods may file a financing statement using the terms Aconsignor,@ consignee,@ lessor,@ Alessee@ or the like instead of the terms specified in Section 9402. The provisions of this part shall apply as appropriate to such a financing statement but its filing…

Real and Personal Property. (1) When a debtor is in default under a security agreement, a secured party has the rights and remedies provided in this chapter and except as limited by subdivision (3) those provided in the security agree- ment. He may reduce his claim to judgment, f…

(1) When so agreed and in any event on default the secured party is entitled to notify an account debtor or the obligor on an instrument to make payment to him whether or not the assignor was theretofore making collections on the collateral, and also to take control of any procee…

Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action. If the security agreement so …