Chapter 26 : Introduction to UCC Article 9 (Secured Transactions)

Introduction

• Many transactions completed on a credit basis

• Some involved unsecured debt

• Some transactions require security interests in goods belonging to debtor

Applicability

• Article 9 generally applies to secured transactions relating to:

  • Personal property or fixtures

  • Agricultural liens

  • A sale of accounts

  • Chattel paper : a writing that evidences a monetary obligation and security interest in goods or a lease of goods

  • Intangible personal property (including patents and copyrights)

  • Consignments (transactions wherein goods are delivered to merchants for sale)

• Article 9 does not apply:

  • Non agricultural landlord’s liens, a sale of accounts chattel paper, paper intangibles, or promissory notes as part of the sale of a business out of which they arose

  • Assignments of accounts, chattel paper, payment intangibles or promissory notes for the purposes of collection

    • The assignment of delinquent accounts to collection

  • The creation or transfer of interests in or liens on real property

    • E.g. Mortgages on real property aren’t covered

Basic Terminology

Creating a Security Interest

Perfecting a Security Interest

Duration of a Perfected Security Interest

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