§9-1324. Priority of purchase-money security interests

1,103 words·~5 min read·/me/title-11-uniform-commercial-code/9-1324

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(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 9‑1327 , a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or:

(a). In the case of goods covered by Title 29‑A, chapter 7 , within 30 days thereafter; or [PL 2003, c. 652, Pt. A, §2 (NEW); PL 2003, c. 652, Pt. A, §7 (AFF).]

(b). In all other cases, within 20 days thereafter. [PL 2003, c. 652, Pt. A, §2 (NEW); PL 2003, c. 652, Pt. A, §7 (AFF).]

[PL 2003, c. 652, Pt. A, §2 (AMD); PL 2003, c. 652, Pt. A, §7 (AFF).]

(2). Subject to subsection

(3)and except as otherwise provided in subsection

(7), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in section 9‑1330 , and, except as otherwise provided in section 9‑1327 , also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:

(a). The purchase-money security interest is perfected when the debtor receives possession of the inventory; [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). The purchase-money secured party sends a signed notification to the holder of the conflicting security interest; [PL 2023, c. 669, Pt. A, §122 (AMD); PL 2023, c. 669, Pt. E, §1 (AFF).]

(c). The holder of the conflicting security interest receives the notification within 5 years before the debtor receives possession of the inventory; and [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(d). The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 2023, c. 669, Pt. A, §122 (AMD); PL 2023, c. 669, Pt. E, §1 (AFF).]

(3). Subsection (2), paragraphs

(b)to

(d)apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory:

(a). If the purchase-money security interest is perfected by filing, before the date of the filing; or [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). If the purchase-money security interest is temporarily perfected without filing or possession under section 9‑1312, subsection

(6)before the beginning of the 20-day period thereunder. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(4). Subject to subsection

(5)and except as otherwise provided in subsection

(7), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in section 9‑1327 , a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if:

(a). The purchase-money security interest is perfected when the debtor receives possession of the livestock; [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). The purchase-money secured party sends a signed notification to the holder of the conflicting security interest; [PL 2023, c. 669, Pt. A, §123 (AMD); PL 2023, c. 669, Pt. E, §1 (AFF).]

(c). The holder of the conflicting security interest receives the notification within 6 months before the debtor receives possession of the livestock; and [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(d). The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 2023, c. 669, Pt. A, §123 (AMD); PL 2023, c. 669, Pt. E, §1 (AFF).]

(5). Subsection (4), paragraphs

(b)to

(d)apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock:

(a). If the purchase-money security interest is perfected by filing, before the date of the filing; or [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). If the purchase-money security interest is temporarily perfected without filing or possession under section 9‑1312, subsection

(6), before the beginning of the 20-day period thereunder. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(6). Except as otherwise provided in subsection

(7), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as otherwise provided in section 9‑1327 , a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section.

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(7). If more than one security interest qualifies for priority in the same collateral under subsection

(1),

(2),

(4)or

(6):

(a). A security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

(b). In all other cases, section 9‑1322, subsection

(1)applies to the qualifying security interests. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]

[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]