Also known as:authoritative copies · official copy
Written by attorneys · grounded in primary & secondary sources — see below
A single unique, identifiable, and unalterable record evidencing chattel paper. The record identifies the purchaser as assignee and is communicated to and maintained by the purchaser or its designated custodian, with any copies or amendments adding or changing the assignee requiring the purchaser's consent and all non-authoritative copies readily identifiable as such.
Sources & Authorities
How it applies
Common Examples
2
Priority Without Assignment Notation
Audrey Ashton purchased a portfolio of retail installment contracts from Alliance Holdings. She paid new value in the ordinary course of business, took possession of the original paper contracts, and obtained control of the electronic records. None of the authoritative copies indicated any prior assignment. Audrey therefore obtained priority over a competing security interest claimed merely as proceeds of inventory.
Knowledge From Assignment Indication
Alexis Archer bought chattel paper from Aether Technologies. The authoritative copies stated that the paper had been assigned to Alpine Mining. Because the copies indicated an assignment to an identified secured party other than Alexis, she is treated as having knowledge that the purchase violated Alpine's rights.
Put it into practice
Test Yourself
10
Practice Questions5
· 8 primary sources
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Course Outlines
Common questions
Frequently Asked
4
How does a secured party perfect a security interest in chattel paper that exists in both paper and electronic form?+
The secured party must take possession of each authoritative tangible copy and obtain control of each authoritative electronic copy. Perfection is effective only from the time both requirements are satisfied and continues only while both are maintained.
Supporting sources
What happens if the debtor retains edit access to electronic chattel paper records after a sale to a purchaser?+
The purchaser fails to obtain control because control requires exclusive power to prevent changes. Retained debtor access prevents perfection even if a custodian holds the paper originals.
Supporting sources
When does a purchaser of chattel paper obtain priority over an inventory lender's proceeds claim?+
The purchaser must give new value, act in good faith and in the ordinary course of business, take possession of each authoritative tangible copy and control of each authoritative electronic copy, and ensure the authoritative copies do not indicate assignment to an identified assignee other than the purchaser.
Supporting sources
Does receipt of a floorplan agreement in an unrelated prior transaction defeat good faith under the chattel paper priority rule?+
No. The rule does not require a UCC search or further inquiry when the authoritative copies contain no assignment notation. Prior receipt of the agreement does not impute knowledge that defeats priority.
Supporting sources
Secured TransactionsRights of third parties; perfected and unperfected security interests; rules of priority (§ 9-301, et seq.) · Protection of buyers of goods and chattel paper (§§ 9-320, 9-330), including protection of holders and purchasers of negotiable instruments (§ 9-331)UBEFoundational