Also known as: UCC Article 9 · Article 9 · U.C.C. Art. 9 · UCC Art. 9 · secured transactions · UCC 9
Written by attorneys · grounded in primary & secondary sources — see below
A statutory framework that governs the creation, attachment, perfection, priority, and enforcement of security interests in personal property and fixtures. The framework applies to transactions that create security interests by contract and to certain sales of accounts and consignments. It excludes landlord liens, wage assignments, and other enumerated interests.
Select any source to read its text and confirm it supports the definition.
Union Steel holds a note secured by a mortgage on Umar Usmani's commercial building. Union Steel sells the note to Ultimate Solutions as collateral for a separate loan. Ultimate Solutions files a financing statement describing its interest in the note. Because the transfer of the obligation as collateral triggers Article 9, Ultimate Solutions perfects its security interest in both the note and the mortgage.
Ulysses Usher buys equipment from Upstream Petroleum on credit and grants a security interest. When Ulysses defaults, Upstream seizes the equipment without prior notice or hearing under a contractual self-help clause. The seizure occurs under state procedures that mirror those invalidated for lack of predeprivation process. Article 9 enforcement rights therefore yield to constitutional constraints on pre-judgment deprivation of property.
Article 9 applies if the transaction creates a security interest in personal property by contract. A court examines whether the secured-financing aspects predominate over other elements such as franchise licensing. When the grant of an interest in equipment and receivables to secure an advance is explicit, the financing provisions control and bring the deal within Article 9.
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No. Article 9 expressly excludes a landlord's lien other than an agricultural lien. The exclusion applies even when the lease grants the lien to secure unpaid rent. A perfected Article 9 security interest in the same inventory therefore prevails over the excluded landlord lien under general priority principles.
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No. Article 9 excludes an assignment of a claim for wages, salary, or other compensation of an employee. The exclusion covers direct payroll deductions used to repay a personal loan. The assignee therefore acquires no Article 9 security interest in the wages.
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A right to payment for services to be rendered qualifies as an account even if performance has not yet occurred. Estimate line items on invoices that reflect scheduled maintenance under a multi-year contract therefore constitute accounts. A security interest can attach to those rights.
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A person obligated on a negotiable instrument is not an account debtor. The statutory definition expressly excludes persons obligated to pay a negotiable instrument even when the instrument evidences chattel paper. The obligor on the note therefore falls outside the account-debtor category.
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