Title 41, Uniform Commercial Code

A person may file an initial financing statement or a continuation statement under sections 41-09-132 through 41-09-139 if: 1. The secured party of record authorizes the filing; and 2. The filing is necessary under sections 41-09-132 through 41-09-139: a. To continue the effectiv…

This Act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before this Act takes effect, this chapter as it existed before amendment determines priority.

1. Except as otherwise provided in subsection 2, a security agreement may create or provide for a security interest in after-acquired collateral. 2. Subject to subsection 4, a security interest does not attach under a term constituting an after-acquired property clause to: a. Con…

1. A security interest is not invalid or fraudulent against creditors solely because: a. The debtor has the right or ability to: (1) Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods; (2) Collect, compromise, enforce, or otherwis…

1. A security interest in favor of a securities intermediary attaches to a person's security entitlement if: a. The person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities inte…

1. Except as otherwise provided in subsection 4, a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve r…

1. This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations, or otherwise give value. 2. Within ten days after receiving a signed demand by the debtor: a. A secured party having co…

1. Except as otherwise provided in subsection 3, this section applies if: a. There is no outstanding secured obligation; and b. The secured party is not committed to make advances, incur obligations, or otherwise give value. 2. Within ten days after receiving a signed demand by t…

1. In this section: a. "Request" means a record of a type described in subdivision b, c, or d. b. "Request for an accounting" means a record signed by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably ident…

Except as otherwise provided in sections 41-09-23 through 41-09-26.2, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral: 1. Except as otherwise provided in this section, whi…

While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.

1. This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor. 2. Goods become covered by a certificate of title when a valid a…

1. The local law of a bank's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account or certificate of deposit maintained with that bank even if the transaction does not bear any relation to the bank…

1. Except as otherwise provided in subsection 3, the following rules apply: a. While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in t…

1. Subject to subsection 3, the local law of the issuer's jurisdiction or a nominated person's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer's jurisdiction or nominated…

1. Except as provided in subsection 4, if chattel paper is evidenced only by an authoritative electronic copy of the chattel paper or is evidenced by an authoritative electronic copy and an authoritative tangible copy, the local law of the chattel paper's jurisdiction governs per…

1. Except as provided in subsection 2, the local law of the controllable electronic record's jurisdiction specified in subsections 3 and 4 of section 41-12-07 governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a controllable …

1. In this section, "place of business" means a place where a debtor conducts its affairs. 2. Except as otherwise provided in this section, the following rules determine a debtor's location: a. A debtor who is an individual is located at the individual's principal residence. b. A…

1. Except as otherwise provided in this section and section 41-09-29, a security interest is perfected if it has attached and all of the applicable requirements for perfection in sections 41-09-30 through 41-09-36 have been satisfied. A security interest is perfected when it atta…

The following security interests are perfected when they attach: 1. A purchase-money security interest in consumer goods, except as otherwise provided in subsection 2 of section 41-09-31 with respect to consumer goods that are subject to a statute or treaty described in subsectio…

1. Except as otherwise provided in subsection 2 and subsection 2 of section 41-09-32, a financing statement must be filed to perfect all security interests and agricultural liens. 2. The filing of a financing statement is not necessary to perfect a security interest: a. That is p…

1. Except as otherwise provided in subsection 4, the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to: a. A statute, regulation, or treaty of the United States whose requirements for a security interest's obtainin…

1. Except as otherwise provided in subsection 2, a secured party may perfect a security interest in certificated certificates of deposit, goods, instruments, negotiable tangible documents, or tangible money by taking possession of the collateral. A secured party may perfect a sec…

1. A security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, uncertificated certificates of deposit, electronic documents, electronic money, investment property, or letter-of-credit rights may be perfected b…

1. A secured party may perfect a security interest in chattel paper by taking possession of each authoritative tangible copy of the record evidencing the chattel paper and obtaining control of each authoritative electronic copy of the electronic record evidencing the chattel pape…

1. Except as otherwise provided in this chapter and in subsection 2 of section 41-02-48: a. A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the dispos…

1. A security interest perfected pursuant to the law of the jurisdiction designated in subsection 1 of section 41-09-21, subsection 3 of section 41-09-25, subsection 4 of section 41-09-26.1, or subsection 2 of section 41-09-26.2 remains perfected until the earliest of: a. The tim…

1. A security interest or an agricultural lien is subordinate to the rights of: a. A person entitled to priority under section 41-09-42; and b. Except as otherwise provided in subsection 5, a person that becomes a lien creditor before the earlier of the time: (1) The security int…

1. A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold. 2. For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper fro…

1. Except as otherwise provided in subsection 2, for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods iden…

1. Except as otherwise provided in subsection 5, a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the security interest is perfect…

1. In this section, "licensee in ordinary course of business" means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person…

1. Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules: a. Conflicting perfected security interests and agricultural liens rank according to priori…

1. Except as otherwise provided in subsection 3, for purposes of determining the priority of a perfected security interest under subdivision a of subsection 1 of section 41-09-42, perfection of the security interest dates from the time an advance is made to the extent that the se…

1. Except as otherwise provided in subsection 7, a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in section 41-09-47, a perfected securit…

1. Except as otherwise provided in subsection 2, a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if: a. The debtor acquired the collateral subject to the security interest created by the other person; …

1. Subject to subsection 2, a security interest that is created by a new debtor in collateral in which the new debtor has or acquired rights and perfected by a filed financing statement that would be ineffective to perfect the security interest but for the application of section …

A security interest in a controllable account, controllable electronic record, or controllable payment intangible held by a secured party having control of the account, electronic record, or payment intangible has priority over a conflicting security interest held by a secured pa…

The following rules govern priority among conflicting security interests in the same deposit account or uncertificated certificate of deposit: 1. A security interest held by a secured party having control of the deposit account or uncertificated certificate of deposit under secti…

The following rules govern priority among conflicting security interests in the same investment property: 1. A security interest held by a secured party having control of investment property under section 41-09-06 has priority over a security interest held by a secured party that…

The following rules govern priority among conflicting security interests in the same letter-of-credit right: 1. A security interest held by a secured party having control of the letter-of-credit right under section 41-09-07 has priority to the extent of its control over a conflic…

1. A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if: a. In good faith and in the ordinary course of the purchaser's business, the purchaser gives new value, t…

1. A transferee of tangible money takes the money free of a security interest if the transferee receives possession of the money without acting in collusion with the debtor in violating the rights of the secured party. 2. A transferee of funds from a deposit account takes the fun…

1. In this section, "possessory lien" means an interest, other than a security interest or an agricultural lien: a. Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's b…

1. A security interest under this chapter may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this chapter in ordinary building materials incorporated into an improvement on land. 2. This chapter does n…

1. A security interest may be created in an accession and continues in collateral that becomes an accession. 2. If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral. 3. Except as otherwise provided…