Chapter 445 Oregon Laws 2001
AN ACT
SB 171
Relating to secured
transactions; creating new provisions; amending ORS 29.205, 56.041, 71.1010,
71.1050, 71.2010, 72.1030, 72.2100, 72.3260, 72.4010, 72.4020, 72.4030,
72.5020, 72.7160, 72.8010, 72A.1030, 72A.3030, 72A.3070, 72A.3090, 72A.3095,
74.2100, 77.2090, 77.5030, 78.1030, 78.1060, 78.1100, 78.3010, 78.3020,
78.5100, 79.8010, 83.610, 87.322, 87.755, 87.816, 90.425, 93.806, 95.270,
192.440, 205.246, 283.089, 285B.050, 305.182, 305.184, 353.380, 471.292,
547.510, 646.551, 657.394, 657.542, 708A.535, 722.264, 725.360, 725.910,
803.015, 803.097 and 830.740 and section 9, chapter 249, Oregon Laws 2001
(Enrolled House Bill 2386), and ORCP 81 A; repealing ORS 79.1010, 79.1020,
79.1030, 79.1040, 79.1050, 79.1060, 79.1070, 79.1080, 79.1090, 79.1100,
79.1120, 79.1130, 79.1150, 79.1160, 79.2010, 79.2020, 79.2030, 79.2040,
79.2050, 79.2060, 79.2070, 79.2080, 79.3010, 79.3015, 79.3020, 79.3030,
79.3040, 79.3050, 79.3060, 79.3070, 79.3080, 79.3090, 79.3100, 79.3110, 79.3120,
79.3130, 79.3132, 79.3140, 79.3150, 79.3160, 79.3170, 79.3180, 79.4010,
79.4016, 79.4020, 79.4023, 79.4025, 79.4030, 79.4040, 79.4050, 79.4060,
79.4070, 79.4080, 79.4090, 79.5010, 79.5020, 79.5030, 79.5040, 79.5050, 79.5060
and 79.5070; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
GENERAL PROVISIONS
(Short Title, Definitions and General Concepts)
SECTION 1.
9-101. Short title. This chapter
may be cited as Uniform Commercial Code-Secured Transactions.
SECTION 2.
9-102. Definitions and index of
definitions. (1) As used in this chapter:
(a) “Accession” means
goods that are physically united with other goods in such a manner that the
identity of the original goods is not lost.
(b) “Account,” except as
used in “account for,” means a right to payment of a monetary obligation,
whether or not earned by performance, (i) for property that has been or is to
be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for
services rendered or to be rendered, (iii) for a policy of insurance issued or
to be issued, (iv) for a secondary obligation incurred or to be incurred, (v)
for energy provided or to be provided, (vi) for the use or hire of a vessel
under a charter or other contract, (vii) arising out of the use of a credit or
charge card or information contained on or for use with the card, or (viii) as
winnings in a lottery or other game of chance operated or sponsored by a state,
governmental unit of a state, or person licensed or authorized to operate the
game by a state or governmental unit of a state. The term includes
health-care-insurance receivables. The term does not include (i) rights to
payment evidenced by chattel paper or an instrument, (ii) commercial tort
claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit
rights or letters of credit, or (vi) rights to payment for money or funds
advanced or sold, other than rights arising out of the use of a credit or
charge card or information contained on or for use with the card.
(c) “Account debtor”
means a person obligated on an account, chattel paper or general intangible.
The term does not include persons obligated to pay a negotiable instrument,
even if the instrument constitutes part of chattel paper.
(d) “Accounting,” except
as used in “accounting for,” means a record:
(A) Authenticated by a
secured party;
(B) Indicating the
aggregate unpaid secured obligations as of a date not more than 35 days earlier
or 35 days later than the date of the record; and
(C) Identifying the
components of the obligations in reasonable detail.
(e) “Agricultural lien”
means an interest, other than a security interest or a lien created under ORS
87.226, 87.700 to 87.740 or 87.750 to 87.777, in farm products:
(A) Which secures
payment or performance of an obligation for:
(i) Goods or services
furnished in connection with a debtor’s farming operation; or
(ii) Rent on real
property leased by a debtor in connection with its farming operation;
(B) Which is created by
statute in favor of a person that:
(i) In the ordinary
course of its business furnished goods or services to a debtor in connection
with a debtor’s farming operation; or
(ii) Leased real
property to a debtor in connection with the debtor’s farming operation; and
(C) Whose effectiveness
does not depend on the person’s possession of the personal property.
(f) “As-extracted
collateral” means:
(A) Oil, gas or other
minerals that are subject to a security interest that:
(i) Is created by a
debtor having an interest in the minerals before extraction; and
(ii) Attaches to the
minerals as extracted; or
(B) Accounts arising out
of the sale at the wellhead or minehead of oil, gas or other minerals in which
the debtor had an interest before extraction.
(g) “Authenticate”
means:
(A) To sign; or
(B) To execute or
otherwise adopt a symbol, or encrypt or similarly process a record in whole or
in part, with the present intent of the authenticating person to identify the
person and adopt or accept a record.
(h) “Bank” means an
organization that is engaged in the business of banking. The term includes
savings banks, savings and loan associations, credit unions and trust
companies.
(i) “Cash proceeds”
means proceeds that are money, checks, deposit accounts or the like.
(j) “Certificate of
title” means a certificate of title with respect to which a statute provides
for the security interest in question to be indicated on the certificate as a
condition or result of the security interest’s obtaining priority over the
rights of a lien creditor with respect to the collateral.
(k) “Chattel paper”
means a record or records that evidence both a monetary obligation and a
security interest in specific goods, a security interest in specific goods and
software used in the goods, a security interest in specific goods and license
of software used in the goods, a lease of specific goods, or a lease of
specific goods and license of software used in the goods. In this paragraph,
“monetary obligation” means a monetary obligation secured by the goods or owed
under a lease of the goods and includes a monetary obligation with respect to
software used in the goods. The term does not include (i) charters or other
contracts involving the use or hire of a vessel or (ii) records that evidence a
right to payment arising out of the use of a credit or charge card or
information contained on or for use with the card. If a transaction is
evidenced by records that include an instrument or series of instruments, the
group of records taken together constitutes chattel paper.
(L) “Collateral” means
the property subject to a security interest or agricultural lien. The term
includes:
(A) Proceeds to which a
security interest attaches;
(B) Accounts, chattel
paper, payment intangibles and promissory notes that have been sold; and
(C) Goods that are the
subject of a consignment.
(m) “Commercial tort
claim” means a claim arising in tort with respect to which:
(A) The claimant is an
organization; or
(B) The claimant is an
individual and the claim:
(i) Arose in the course
of the claimant’s business or profession; and
(ii) Does not include
damages arising out of personal injury to or the death of an individual.
(n) “Commodity account”
means an account maintained by a commodity intermediary in which a commodity
contract is carried for a commodity customer.
(o) “Commodity contract”
means a commodity futures contract, an option on a commodity futures contract,
a commodity option or another contract if the contract or option is:
(A) Traded on or subject
to the rules of a board of trade that has been designated as a contract market
for such a contract pursuant to federal commodities laws; or
(B) Traded on a foreign
commodity board of trade, exchange, or market, and is carried on the books of a
commodity intermediary for a commodity customer.
(p) “Commodity customer”
means a person for which a commodity intermediary carries a commodity contract
on its books.
(q) “Commodity
intermediary” means a person that:
(A) Is registered as a
futures commission merchant under federal commodities law; or
(B) In the ordinary
course of its business provides clearance or settlement services for a board of
trade that has been designated as a contract market pursuant to federal
commodities law.
(r) “Communicate” means:
(A) To send a written or
other tangible record;
(B) To transmit a record
by any means agreed upon by the persons sending and receiving the record; or
(C) In the case of
transmission of a record to or by a filing office, to transmit a record by any
means prescribed by filing-office rule.
(s) “Consignee” means a
merchant to which goods are delivered in a consignment.
(t) “Consignment” means
a transaction, regardless of its form, in which a person delivers goods to a
merchant for the purpose of sale and:
(A) The merchant:
(i) Deals in goods of that
kind under a name other than the name of the person making delivery;
(ii) Is not an
auctioneer; and
(iii) Is not generally
known by its creditors to be substantially engaged in selling the goods of
others;
(B) With respect to each
delivery, the aggregate value of the goods is $1,000 or more at the time of
delivery;
(C) The goods are not
consumer goods immediately before delivery; and
(D) The transaction does
not create a security interest that secures an obligation.
(u) “Consignor” means a
person that delivers goods to a consignee in a consignment.
(v) “Consumer debtor”
means a debtor in a consumer transaction.
(w) “Consumer goods”
means goods that are used or bought for use primarily for personal, family or
household purposes.
(x) “Consumer-goods
transaction” means a consumer transaction in which:
(A) An individual incurs
an obligation primarily for personal, family or household purposes; and
(B) A security interest
in consumer goods secures the obligation.
(y) “Consumer obligor”
means an obligor who is an individual and who incurred the obligation as part
of a transaction entered into primarily for personal, family or household
purposes.
(z) “Consumer
transaction” means a transaction in which (i) an individual incurs an
obligation primarily for personal, family or household purposes, (ii) a
security interest secures the obligation, and (iii) the collateral is held or
acquired primarily for personal, family or household purposes. The term
includes consumer-goods transactions.
(aa) “Continuation
statement” means an amendment of a financing statement which:
(A) Identifies, by its
file number, the initial financing statement to which it relates; and
(B) Indicates that it is
a continuation statement for, or that it is filed to continue the effectiveness
of, the identified financing statement.
(bb) “Debtor” means:
(A) A person having an
interest, other than a security interest or other lien, in the collateral,
whether or not the person is an obligor;
(B) A seller of
accounts, chattel paper, payment intangibles or promissory notes; or
(C) A consignee.
(cc) “Deposit account”
means a demand, time, savings, passbook or similar account maintained with a
bank. The term does not include investment property or accounts evidenced by an
instrument.
(dd) “Document” means a
document of title or a receipt of the type described in ORS 77.2010 (2).
(ee) “Electronic chattel
paper” means chattel paper evidenced by a record or records consisting of
information stored in an electronic medium.
(ff) “Encumbrance” means
a right, other than an ownership interest, in real property. The term includes
mortgages and other liens on real property.
(gg) “Equipment” means
goods other than inventory, farm products or consumer goods.
(hh) “Farm products”
means goods, other than standing timber, with respect to which the debtor is
engaged in a farming operation and which are:
(A) Crops grown,
growing, or to be grown, including:
(i) Crops produced on
trees, vines and bushes; and
(ii) Aquatic goods
produced in aquacultural operations;
(B) Livestock, born or
unborn, including aquatic goods produced in aquacultural operations;
(C) Supplies used or
produced in a farming operation; or
(D) Products of crops or
livestock in their unmanufactured states.
(ii) “Farming operation”
means raising, cultivating, propagating, fattening, grazing or any other
farming, livestock or aquacultural operation.
(jj) “File number” means
the number assigned to an initial financing statement pursuant to section 90
(1) of this 2001 Act.
(kk) “Filing office”
means an office designated in section 72 of this 2001 Act as the place to file
a financing statement.
(LL) “Filing-office
rule” means a rule adopted pursuant to section 97 of this 2001 Act.
(mm) “Financing
statement” means a record or records composed of an initial financing statement
and any filed record relating to the initial financing statement.
(nn) “Fixture filing”
means the filing of a financing statement covering goods that are or are to
become fixtures and satisfying section 73 (1) and (2) of this 2001 Act. The
term includes the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
(oo) “Fixtures” means
goods that have become so related to particular real property that an interest
in them arises under real property law. The term does not include portable
irrigation equipment including movable pipe, pumps, electrical pump panels, pump
columns, electrical wire, wheel lines, center pivots and handlines. The term
includes domestic pumps, domestic pump wire, domestic pump panels, domestic
pump columns, and buried irrigation equipment including buried pipe, buried
electrical wire and all buried well casings.
(pp) “General
intangible” means any personal property, including things in action, other than
accounts, chattel paper, commercial tort claims, deposit accounts, documents,
goods, instruments, investment property, letter-of-credit rights, letters of
credit, money and oil, gas or other minerals before extraction. The term
includes payment intangibles and software.
(qq) “Good faith” means
honesty in fact and the observance of reasonable commercial standards of fair
dealing.
(rr) “Goods” means all
things that are movable when a security interest attaches. The term includes
(i) fixtures, (ii) standing timber that is to be cut and removed under a
conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops
grown, growing or to be grown, even if the crops are produced on trees, vines
or bushes, and (v) manufactured homes. The term also includes a computer
program embedded in goods and any supporting information provided in connection
with a transaction relating to the program if (i) the program is associated
with the goods in such a manner that it customarily is considered part of the
goods, or (ii) by becoming the owner of the goods, a person acquires a right to
use the program in connection with the goods. The term does not include a
computer program embedded in goods that consist solely of the medium in which
the program is embedded. The term also does not include accounts, chattel
paper, commercial tort claims, deposit accounts, documents, general
intangibles, instruments, investment property, letter-of-credit rights, letters
of credit, money or oil, gas or other minerals before extraction.
(ss) “Governmental unit”
means a subdivision, agency, department, county, parish, municipality or other
unit of the government of the United States, a state or a foreign country. The
term includes an organization having a separate corporate existence if the
organization is eligible to issue debt on which interest is exempt from income
taxation under the laws of the United States.
(tt)
“Health-care-insurance receivable” means an interest in or claim under a policy
of insurance which is a right to payment of a monetary obligation for
health-care goods or services provided.
(uu) “Instrument” means
a negotiable instrument or any other writing that evidences a right to the
payment of a monetary obligation, is not itself a security agreement or lease,
and is of a type that in ordinary course of business is transferred by delivery
with any necessary indorsement or assignment. The term does not include (i)
investment property, (ii) letters of credit or (iii) writings that evidence a
right to payment arising out of the use of a credit or charge card or
information contained on or for use with the card.
(vv) “Inventory” means
goods, other than farm products, which:
(A) Are leased by a
person as lessor;
(B) Are held by a person
for sale or lease or to be furnished under a contract of service;
(C) Are furnished by a
person under a contract of service; or
(D) Consist of raw
materials, work in process, or materials used or consumed in a business.
(ww) “Investment
property” means a security, whether certificated or uncertificated, security
entitlement, securities account, commodity contract or commodity account.
(xx) “Jurisdiction of
organization,” with respect to a registered organization, means the
jurisdiction under whose law the organization is organized.
(yy) “Letter-of-credit
right” means a right to payment or performance under a letter of credit,
whether or not the beneficiary has demanded or is at the time entitled to
demand payment or performance. The term does not include the right of a
beneficiary to demand payment or performance under a letter of credit.
(zz) “Lien creditor”
means:
(A) A creditor that has
acquired a lien on the property involved by attachment, levy or the like;
(B) An assignee for
benefit of creditors from the time of assignment;
(C) A trustee in
bankruptcy from the date of the filing of the petition; or
(D) A receiver in equity
from the time of appointment.
(aaa) “Manufactured
home” means a structure, transportable in one or more sections, which, in the
traveling mode, is eight body feet or more in width or 40 body feet or more in
length, or, when erected on site, is 320 or more square feet, and which is built
on a permanent chassis and designed to be used as a dwelling with or without a
permanent foundation when connected to the required utilities, and includes the
plumbing, heating, air-conditioning and electrical systems contained therein.
The term includes any structure that meets all of the requirements of this
paragraph except the size requirements and with respect to which the
manufacturer voluntarily files a certification required by the United States
Secretary of Housing and Urban Development and complies with the standards
established under Title 42 of the United States Code.
(bbb) “Manufactured-home
transaction” means a secured transaction:
(A) That creates a
purchase-money security interest in a manufactured home, other than a
manufactured home held as inventory; or
(B) In which a
manufactured home, other than a manufactured home held as inventory, is the
primary collateral.
(ccc) “Mortgage” means a
consensual interest in real property, including fixtures, which secures payment
or performance of an obligation.
(ddd) “New debtor” means
a person that becomes bound as debtor under section 13 (4) of this 2001 Act by
a security agreement previously entered into by another person.
(eee) “New value” means
(i) money, (ii) money’s worth in property, services or new credit, or (iii)
release by a transferee of an interest in property previously transferred to
the transferee. The term does not include an obligation substituted for another
obligation.
(fff) “Noncash proceeds”
means proceeds other than cash proceeds.
(ggg) “Obligor” means a
person that, with respect to an obligation secured by a security interest in or
an agricultural lien on the collateral, (i) owes payment or other performance
of the obligation, (ii) has provided property other than the collateral to
secure payment or other performance of the obligation, or (iii) is otherwise
accountable in whole or in part for payment or other performance of the
obligation. The term does not include issuers or nominated persons under a
letter of credit.
(hhh) “Original debtor,”
except as used in section 30 (3) of this 2001 Act, means a person that, as
debtor, entered into a security agreement to which a new debtor has become
bound under section 13 (4) of this 2001 Act.
(iii) “Payment
intangible” means a general intangible under which the account debtor’s
principal obligation is a monetary obligation.
(jjj) “Person related
to,” with respect to an individual, means:
(A) The spouse of the
individual;
(B) A brother,
brother-in-law, sister or sister-in-law of the individual;
(C) An ancestor or
lineal descendant of the individual or the individual’s spouse; or
(D) Any other relative,
by blood or marriage, of the individual or the individual’s spouse who shares
the same home with the individual.
(kkk) “Person related
to,” with respect to an organization, means:
(A) A person directly or
indirectly controlling, controlled by, or under common control with the
organization;
(B) An officer or
director of, or a person performing similar functions with respect to, the
organization;
(C) An officer or
director of, or a person performing similar functions with respect to, a person
described in subparagraph (A) of this paragraph;
(D) The spouse of an
individual described in subparagraph (A), (B) or (C) of this paragraph; or
(E) An individual who is
related by blood or marriage to an individual described in subparagraph (A),
(B), (C) or (D) of this paragraph and shares the same home with the individual.
(LLL) “Proceeds,” except
as used in section 107 (2) of this 2001 Act, means the following property:
(A) Whatever is acquired
upon the sale, lease, license, exchange or other disposition of collateral;
(B) Whatever is
collected on, or distributed on account of, collateral;
(C) Rights arising out
of collateral;
(D) To the extent of the
value of collateral, claims arising out of the loss, nonconformity or
interference with the use of, defects or infringement of rights in, or damage
to, the collateral; or
(E) To the extent of the
value of collateral and to the extent payable to the debtor or the secured
party, insurance payable by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.
(mmm) “Promissory note”
means an instrument that evidences a promise to pay a monetary obligation, does
not evidence an order to pay, and does not contain an acknowledgment by a bank
that the bank has received for deposit a sum of money or funds.
(nnn) “Proposal” means a
record authenticated by a secured party which includes the terms on which the
secured party is willing to accept collateral in full or partial satisfaction
of the obligation it secures pursuant to sections 118, 119 and 120 of this 2001
Act.
(ooo) “Public-finance
transaction” means a secured transaction in connection with which:
(A) Debt securities are
issued;
(B) All or a portion of
the securities issued have an initial stated maturity of at least 20 years; and
(C) The debtor, obligor,
secured party, account debtor or other person obligated on collateral, assignor
or assignee of a secured obligation, or assignor or assignee of a security
interest is a state or a governmental unit of a state.
(ppp) “Pursuant to
commitment,” with respect to an advance made or other value given by a secured
party, means pursuant to the secured party’s obligation, whether or not a
subsequent event of default or other event not within the secured party’s
control has relieved or may relieve the secured party from its obligation.
(qqq) “Record,” except
as used in “for record,” “of record,” “record or legal title” and “record
owner,” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.
(rrr) “Registered
organization” means an organization organized solely under the law of a single
state or the United States and as to which the state or the United States is
required by statute or regulation to maintain a public record showing the
organization to have been organized.
(sss) “Secondary
obligor” means an obligor to the extent that:
(A) The obligor’s
obligation is secondary; or
(B) The obligor has a
right of recourse with respect to an obligation secured by collateral against
the debtor, another obligor, or property of either.
(ttt) “Secured party”
means:
(A) A person in whose
favor a security interest is created or provided for under a security
agreement, whether or not any obligation to be secured is outstanding;
(B) A person that holds
an agricultural lien;
(C) A consignor;
(D) A person to which
accounts, chattel paper, payment intangibles or promissory notes have been
sold;
(E) A trustee, indenture
trustee, agent, collateral agent or other representative in whose favor a
security interest or agricultural lien is created or provided for; or
(F) A person that holds
a security interest arising under ORS 72.4010, 72.5050, 72.7110 (3), 72A.5080
(5), 74.2100 or section 148 of this 2001 Act.
(uuu) “Security
agreement” means an agreement that creates or provides for a security interest.
(vvv) “Send,” in
connection with a record or notification, means:
(A) To deposit in the
mail, deliver for transmission, or transmit by any other usual means of
communication, with postage or cost of transmission provided for, addressed to
any address reasonable under the circumstances; or
(B) To cause the record
or notification to be received within the time that it would have been received
if properly sent under subparagraph (A) of this paragraph.
(www) “Software” means a
computer program and any supporting information provided in connection with a
transaction relating to the program. The term does not include a computer program
that is included in the definition of goods.
(xxx) “State” means a
state of the United States, the District of Columbia, Puerto Rico, the United
States Virgin Islands or any territory or insular possession subject to the
jurisdiction of the United States.
(yyy) “Supporting
obligation” means a letter-of-credit right or secondary obligation that
supports the payment or performance of an account, chattel paper, a document, a
general intangible, an instrument or investment property.
(zzz) “Tangible chattel
paper” means chattel paper evidenced by a record or records consisting of
information that is inscribed on a tangible medium.
(aaaa) “Termination
statement” means an amendment of a financing statement which:
(A) Identifies, by its
file number, the initial financing statement to which it relates; and
(B) Indicates either
that it is a termination statement or that the identified financing statement
is no longer effective.
(bbbb) “Transmitting
utility” means a person primarily engaged in the business of:
(A) Operating a
railroad, subway, street railway or trolley bus;
(B) Transmitting
communications electrically, electromagnetically or by light;
(C) Transmitting goods
by pipeline or sewer; or
(D) Transmitting or
producing and transmitting electricity, steam, gas or water.
(2) Definitions in
other sections. The following definitions in other sections apply to this
chapter:
“Applicant” ORS 75.1020
“Beneficiary” ORS 75.1020
“Broker” ORS 78.1020
“Certificated security” ORS 78.1020
“Check” ORS 73.0104
“Clearing corporation” ORS 78.1020
“Contract for sale” ORS 72.1060
“Customer” ORS 74.1040
“Entitlement holder” ORS 78.1020
“Financial asset” ORS 78.1020
“Holder in due course” ORS 73.0302
“Issuer” (with respect
to a letter of credit or
letter-of-credit right) ORS 75.1020
“Issuer” (with respect
to a security) ORS 78.2010
“Lease” ORS 72A.1030
“Lease agreement” ORS 72A.1030
“Lease contract” ORS 72A.1030
“Leasehold interest” ORS 72A.1030
“Lessee” ORS 72A.1030
“Lessee in ordinary course
of business” ORS 72A.1030
“Lessor” ORS 72A.1030
“Lessor’s residual
interest” ORS 72A.1030
“Letter of credit” ORS 75.1020
“Merchant” ORS 72.1040
“Negotiable instrument” ORS 73.0104
“Nominated person” ORS 75.1020
“Note” ORS 73.0104
“Proceeds of a letter
of credit” ORS 75.1140
“Prove” ORS 73.0103
“Sale” ORS 72.1060
“Securities intermediary” ORS 78.1020
“Security” ORS 78.1020
“Security certificate” ORS 78.1020
“Security entitlement” ORS 78.1020
“Uncertificated security” ORS 78.1020
(3) ORS chapter
71 definitions and principles. ORS chapter 71 contains general definitions
and principles of construction and interpretation applicable throughout this
chapter.
SECTION 3.
9-103. Purchase-money security
interest; application of payments; burden of establishing. (1) Definitions.
As used in this section:
(a) “Purchase-money
collateral” means goods or software that secures a purchase-money obligation
incurred with respect to that collateral; and
(b) “Purchase-money
obligation” means an obligation of an obligor incurred as all or part of the
price of the collateral or for value given to enable the debtor to acquire
rights in or the use of the collateral if the value is in fact so used.
(2) Purchase-money
security interest in goods. A security interest in goods is a
purchase-money security interest:
(a) To the extent that
the goods are purchase-money collateral with respect to that security interest;
(b) If the security
interest is in inventory that is or was purchase-money collateral, also to the
extent that the security interest secures a purchase-money obligation incurred
with respect to other inventory in which the secured party holds or held a
purchase-money security interest; and
(c) Also to the extent
that the security interest secures a purchase-money obligation incurred with
respect to software in which the secured party holds or held a purchase-money
security interest.
(3) Purchase-money
security interest in software. A security interest in software is a
purchase-money security interest to the extent that the security interest also
secures a purchase-money obligation incurred with respect to goods in which the
secured party holds or held a purchase-money security interest if:
(a) The debtor acquired
its interest in the software in an integrated transaction in which it acquired
an interest in the goods; and
(b) The debtor acquired
its interest in the software for the principal purpose of using the software in
the goods.
(4) Consignor’s
inventory purchase-money security interest. The security interest of a
consignor in goods that are the subject of a consignment is a purchase-money
security interest in inventory.
(5) Application of
payment in non-consumer-goods transaction. In a transaction other than a
consumer-goods transaction, if the extent to which a security interest is a
purchase-money security interest depends on the application of a payment to a
particular obligation, the payment must be applied:
(a) In accordance with
any reasonable method of application to which the parties agree;
(b) In the absence of
the parties’ agreement to a reasonable method, in accordance with any intention
of the obligor manifested at or before the time of payment; or
(c) In the absence of an
agreement to a reasonable method and a timely manifestation of the obligor’s
intention, in the following order:
(A) To obligations that
are not secured; and
(B) If more than one
obligation is secured, to obligations secured by purchase-money security
interests in the order in which those obligations were incurred.
(6) No loss of status
of purchase-money security interest in non-consumer-goods transaction. In a
transaction other than a consumer-goods transaction, a purchase-money security
interest does not lose its status as such, even if:
(a) The purchase-money
collateral also secures an obligation that is not a purchase-money obligation;
(b) Collateral that is
not purchase-money collateral also secures the purchase-money obligation; or
(c) The purchase-money
obligation has been renewed, refinanced, consolidated, or restructured.
(7) Burden of proof
in non-consumer-goods transaction. In a transaction other than a
consumer-goods transaction, a secured party claiming a purchase-money security
interest has the burden of establishing the extent to which the security
interest is a purchase-money security interest.
(8) Nonconsumer-goods
transactions; no inference. The limitation of the rules in subsections (5),
(6) and (7) of this section to transactions other than consumer-goods
transactions is intended to leave to the court the determination of the proper
rules in consumer-goods transactions. The court may not infer from that
limitation the nature of the proper rule in consumer-goods transactions and may
continue to apply established approaches.
SECTION 4.
9-104. Control of deposit account.
(1) Requirements for control. A secured party has control of a deposit
account if:
(a) The secured party is
the bank with which the deposit account is maintained;
(b) The debtor, secured
party and bank have agreed in an authenticated record that the bank will comply
with instructions originated by the secured party directing disposition of the
funds in the deposit account without further consent by the debtor; or
(c) The secured party
becomes the bank’s customer with respect to the deposit account.
(2) Debtor’s right to
direct disposition. A secured party that has satisfied subsection (1) of
this section has control, even if the debtor retains the right to direct the
disposition of funds from the deposit account.
SECTION 5.
9-105. Control of electronic chattel
paper. A secured party has control of electronic chattel paper if the
record or records comprising the chattel paper are created, stored and assigned
in such a manner that:
(1) A single
authoritative copy of the record or records exists which is unique,
identifiable and, except as otherwise provided in subsections (4), (5) and (6)
of this section, unalterable;
(2) The authoritative
copy identifies the secured party as the assignee of the record or records;
(3) The authoritative
copy is communicated to and maintained by the secured party or its designated
custodian;
(4) Copies or revisions
that add or change an identified assignee of the authoritative copy can be made
only with the participation of the secured party;
(5) Each copy of the
authoritative copy and any copy of a copy is readily identifiable as a copy
that is not the authoritative copy; and
(6) Any revision of the
authoritative copy is readily identifiable as an authorized or unauthorized
revision.
SECTION 6.
9-106. Control of investment
property. (1) Control under ORS 78.1060. A person has control of a
certificated security, uncertificated security or security entitlement as
provided in ORS 78.1060.
(2) Control of
commodity contract. A secured party has control of a commodity contract if:
(a) The secured party is
the commodity intermediary with which the commodity contract is carried; or
(b) The commodity
customer, secured party and commodity intermediary have agreed that the
commodity intermediary will apply any value distributed on account of the
commodity contract as directed by the secured party without further consent by
the commodity customer.
(3) Effect of control
of securities account or commodity account. A secured party having control
of all security entitlements or commodity contracts carried in a securities
account or commodity account has control over the securities account or
commodity account.
SECTION 7.
9-107. Control of letter-of-credit
right. A secured party has control of a letter-of-credit right to the
extent of any right to payment or performance by the issuer or any nominated
person if the issuer or nominated person has consented to an assignment of
proceeds of the letter of credit under ORS 75.1140 (3) or otherwise applicable
law or practice.
SECTION 8.
9-108. Sufficiency of description.
(1) Sufficiency of description. Except as otherwise provided in
subsections (3), (4) and (5) of this section, a description of personal or real
property is sufficient, whether or not it is specific, if it reasonably
identifies what is described.
(2) Examples of
reasonable identification. Except as otherwise provided in subsection (4)
of this section, a description of collateral reasonably identifies the
collateral if it identifies the collateral by:
(a) Specific listing;
(b) Category;
(c) Except as otherwise
provided in subsection (5) of this section, a type of collateral defined in the
Uniform Commercial Code;
(d) Quantity;
(e) Computational or
allocational formula or procedure; or
(f) Except as otherwise
provided in subsection (3) of this section, any other method, if the identity
of the collateral is objectively determinable.
(3) Supergeneric
description not sufficient. A description of collateral as “all the
debtor’s assets” or “all the debtor’s personal property” or using words of
similar import does not reasonably identify the collateral.
(4) Investment
property. Except as otherwise provided in subsection (5) of this section, a
description of a security entitlement, securities account or commodity account
is sufficient if it describes:
(a) The collateral by
those terms or as investment property; or
(b) The underlying
financial asset or commodity contract.
(5) When description
by type insufficient. A description only by type of collateral defined in
the Uniform Commercial Code is an insufficient description of:
(a) A commercial tort
claim; or
(b) In a consumer
transaction, consumer goods, a security entitlement, a securities account or a
commodity account.
(Applicability of Chapter)
SECTION 9.
9-109. Scope. (1) General
scope of chapter. Except as otherwise provided in subsections (3) and (4)
of this section, this chapter applies to:
(a) A transaction,
regardless of its form, that creates a security interest in personal property
or fixtures by contract;
(b) An agricultural
lien;
(c) A sale of accounts,
chattel paper, payment intangibles or promissory notes;
(d) A consignment;
(e) A security interest
arising under ORS 72.4010, 72.5050, 72.7110 (3), or 72A.5080 (5), as provided
in section 10 of this 2001 Act; and
(f) A security interest
arising under ORS 74.2100 or section 148 of this 2001 Act.
(2) Security interest
in secured obligation. The application of this chapter to a security
interest in a secured obligation is not affected by the fact that the
obligation is itself secured by a transaction or interest to which this chapter
does not apply.
(3) Extent to which
this chapter does not apply. This chapter does not apply to the extent
that:
(a) A statute,
regulation or treaty of the United States preempts this chapter;
(b) Another statute of
this state expressly governs the creation, perfection, priority or enforcement
of a security interest created by this state or a governmental unit of this
state;
(c) A statute of another
state, a foreign country, or a governmental unit of another state or a foreign
country, other than a statute generally applicable to security interests,
expressly governs creation, perfection, priority, or enforcement of a security
interest created by the state, country, or governmental unit; or
(d) The rights of a
transferee beneficiary or nominated person under a letter of credit are
independent and superior under ORS 75.1140.
(4) Inapplicability
of chapter. This chapter does not apply to:
(a) A landlord’s lien,
other than an agricultural lien;
(b) A lien, other than
an agricultural lien, given by statute or other rule of law for services or
materials, but section 53 of this 2001 Act applies with respect to priority of
the lien;
(c) An assignment of a
claim for wages, salary or other compensation of an employee;
(d) A sale of accounts,
chattel paper, payment intangibles or promissory notes as part of a sale of the
business out of which they arose;
(e) An assignment of
accounts, chattel paper, payment intangibles or promissory notes which is for
the purpose of collection only;
(f) An assignment of a
right to payment under a contract to an assignee that is also obligated to
perform under the contract;
(g) An assignment of a
single account, payment intangible or promissory note to an assignee in full or
partial satisfaction of a preexisting indebtedness;
(h) A transfer of an
interest in or an assignment of a claim under a policy of insurance, other than
an assignment by or to a health-care provider of a health-care-insurance
receivable and any subsequent assignment of the right to payment, but sections
35 and 42 of this 2001 Act apply with respect to proceeds and priorities in
proceeds;
(i) An assignment of a
right represented by a judgment, other than a judgment taken on a right to
payment that was collateral;
(j) A right of
recoupment or set-off, but:
(A) Section 60 of this
2001 Act applies with respect to the effectiveness of rights of recoupment or
set-off against deposit accounts; and
(B) Section 66 of this
2001 Act applies with respect to defenses or claims of an account debtor;
(k) The creation or
transfer of an interest in or lien on real property, including a lease or rents
thereunder, or a seller’s or purchaser’s interest in a land sale contract and
the proceeds thereof, except to the extent that provision is made for:
(A) Liens on real
property in sections 13 and 28 of this 2001 Act;
(B) Fixtures in section
54 of this 2001 Act;
(C) Fixture filings in
sections 72, 73, 83, 87 and 90 of this 2001 Act; and
(D) Security agreements
covering personal and real property in section 102 of this 2001 Act;
(L) An assignment of a
claim arising in tort, other than a commercial tort claim, but sections 35 and
42 of this 2001 Act apply with respect to proceeds and priorities in proceeds;
or
(m) An assignment, in a
consumer transaction, of a deposit account from which, under the terms of the
account agreement, third party payments may be made by means of a check, draft,
negotiable order of withdrawal or other order, but sections 35 and 42 of this
2001 Act apply with respect to proceeds and priorities in proceeds.
SECTION 10.
9-110. Security interests arising
under ORS 72.1010 to 72.7250 or ORS chapter 72A. A security interest
arising under ORS 72.4010, 72.5050, 72.7110 (3) or 72A.5080 (5) is subject to
this chapter. However, until the debtor obtains possession of the goods:
(1) The security
interest is enforceable, even if section 13 (2)(c) of this 2001 Act has not
been satisfied;
(2) Filing is not
required to perfect the security interest;
(3) The rights of the
secured party after default by the debtor are governed by ORS 72.1010 to
72.7250 or ORS chapter 72A; and
(4) The security
interest has priority over a conflicting security interest created by the debtor.
EFFECTIVENESS OF
SECURITY AGREEMENT;
ATTACHMENT OF SECURITY INTEREST;
RIGHTS OF PARTIES
TO SECURITY AGREEMENT
(Effectiveness and Attachment)
SECTION 11.
9-201. General effectiveness of
security agreement. (1) General effectiveness. Except as otherwise
provided in the Uniform Commercial Code, a security agreement is effective
according to its terms between the parties, against purchasers of the
collateral, and against creditors.
(2) Applicable
consumer laws and other law. A transaction subject to this chapter is
subject to any applicable rule of law which establishes a different rule for
consumers and is also subject to ORS 83.510 to 83.680 on retail installment
contracts and ORS chapter 725 on small loans.
(3) Other applicable
law controls. In case of conflict between this chapter and a rule of law,
statute or rule described in subsection (2) of this section, the rule of law,
statute or rule controls. Failure to comply with a statute or rule described in
subsection (2) of this section has only the effect the statute or rule
specifies.
(4) Further deference
to other applicable law. This chapter does not:
(a) Validate any rate,
charge, agreement or practice that violates a rule of law, statute or
regulation described in subsection (2) of this section; or
(b) Extend the
application of the rule of law, statute, or rule to a transaction not otherwise
subject to it.
SECTION 12.
9-202. Title to collateral
immaterial. Except as otherwise provided with respect to consignments or
sales of accounts, chattel paper, payment intangibles or promissory notes, the
provisions of this chapter with regard to rights and obligations apply whether
title to collateral is in the secured party or the debtor.
SECTION 13.
9-203. Attachment and enforceability
of security interest; proceeds; supporting obligations; formal requisites.
(1) Attachment. A security interest attaches to collateral when it
becomes enforceable against the debtor with respect to the collateral, unless
an agreement expressly postpones the time of attachment.
(2) Enforceability.
Except as otherwise provided in subsections (3) to (9) of this section, a
security interest is enforceable against the debtor and third parties with
respect to the collateral only if:
(a) Value has been
given;
(b) The debtor has
rights in the collateral or the power to transfer rights in the collateral to a
secured party; and
(c) One of the following
conditions is met:
(A) The debtor has
authenticated a security agreement that provides a description of the
collateral and, if the security interest covers timber to be cut, a description
of the land concerned;
(B) The collateral is
not a certificated security and is in the possession of the secured party under
section 33 of this 2001 Act pursuant to the debtor’s security agreement;
(C) The collateral is a
certificated security in registered form and the security certificate has been
delivered to the secured party under ORS 78.3010 pursuant to the debtor’s
security agreement; or
(D) The collateral is
deposit accounts, electronic chattel paper, investment property or
letter-of-credit rights, and the secured party has control under section 4, 5,
6 or 7 of this 2001 Act pursuant to the debtor’s security agreement.
(3) Other Uniform
Commercial Code provisions. Subsection (2) of this section is subject to
ORS 74.2100 on the security interest of a collecting bank, section 148 of this
2001 Act on the security interest of a letter-of-credit issuer or nominated
person, section 10 of this 2001 Act on a security interest arising under ORS 72.1010
to 72.7250 or ORS chapter 72A and section 16 of this 2001 Act on security
interests in investment property.
(4) When person
becomes bound by another person’s security agreement. A person becomes
bound as debtor by a security agreement entered into by another person if, by
operation of law other than this chapter or by contract:
(a) The security
agreement becomes effective to create a security interest in the person’s
property; or
(b) The person becomes
generally obligated for the obligations of the other person, including the
obligation secured under the security agreement, and acquires or succeeds to
all or substantially all of the assets of the other person.
(5) Effect of new
debtor becoming bound. If a new debtor becomes bound as debtor by a
security agreement entered into by another person:
(a) The agreement
satisfies subsection (2)(c) of this section with respect to existing or
after-acquired property of the new debtor to the extent the property is
described in the agreement; and
(b) Another agreement is
not necessary to make a security interest in the property enforceable.
(6) Proceeds and
supporting obligations. The attachment of a security interest in collateral
gives the secured party the rights to proceeds provided by section 35 of this
2001 Act and is also attachment of a security interest in a supporting
obligation for the collateral.
(7) Lien securing
right to payment. The attachment of a security interest in a right to
payment or performance secured by a security interest or other lien on personal
or real property is also attachment of a security interest in the security
interest, mortgage or other lien.
(8) Security
entitlement carried in securities account. The attachment of a security
interest in a securities account is also attachment of a security interest in
the security entitlements carried in the securities account.
(9) Commodity
contracts carried in commodity account. The attachment of a security
interest in a commodity account is also attachment of a security interest in the
commodity contracts carried in the commodity account.
SECTION 14.
9-204. After-acquired property;
future advances. (1) After-acquired collateral. Except as otherwise
provided in subsection (2) of this section, a security agreement may create or
provide for a security interest in after-acquired collateral.
(2) When
after-acquired property clause not effective. A security interest does not
attach under a term constituting an after-acquired property clause to:
(a) Consumer goods,
other than an accession when given as additional security, unless the debtor
acquires rights in them within 10 days after the secured party gives value; or
(b) A commercial tort
claim.
(3) Future advances
and other value. A security agreement may provide that collateral secures,
or that accounts, chattel paper, payment intangibles or promissory notes are
sold in connection with, future advances or other value, whether or not the
advances or value are given pursuant to commitment.
SECTION 15.
9-205. Use or disposition of collateral
permissible. (1) When security interest not invalid or fraudulent. A
security interest is not invalid or fraudulent against creditors solely
because:
(a) The debtor has the
right or ability to:
(A) Use, commingle or
dispose of all or part of the collateral, including returned or repossessed
goods;
(B) Collect, compromise,
enforce or otherwise deal with collateral;
(C) Accept the return of
collateral or make repossessions; or
(D) Use, commingle or
dispose of proceeds; or
(b) The secured party
fails to require the debtor to account for proceeds or replace collateral.
(2) Requirements of
possession not relaxed. This section does not relax the requirements of
possession if attachment, perfection or enforcement of a security interest
depends upon possession of the collateral by the secured party.
SECTION 16.
9-206. Security interest arising in
purchase or delivery of financial asset. (1) Security interest when
person buys through securities intermediary. 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
intermediary at the time of the purchase; and
(b) The securities
intermediary credits the financial asset to the buyer’s securities account
before the buyer pays the securities intermediary.
(2) Security interest
secures obligation to pay for financial asset. The security interest
described in subsection (1) of this section secures the person’s obligation to
pay for the financial asset.
(3) Security interest
in payment against delivery transaction. A security interest in favor of a
person that delivers a certificated security or other financial asset
represented by a writing attaches to the security or other financial asset if:
(a) The security or
other financial asset:
(A) In the ordinary
course of business is transferred by delivery with any necessary indorsement or
assignment; and
(B) Is delivered under
an agreement between persons in the business of dealing with such securities or
financial assets; and
(b) The agreement calls
for delivery against payment.
(4) Security interest
secures obligation to pay for delivery. The security interest described in
subsection (3) of this section secures the obligation to make payment for the
delivery.
(Rights and Duties)
SECTION 17.
9-207. Rights and duties of secured
party having possession or control of collateral. (1) Except as otherwise
provided in subsection (4) of this section, 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 rights against prior parties
unless otherwise agreed.
(2) Expenses, risks,
duties and rights when secured party in possession. Except as otherwise
provided in subsection (4) of this section, if a secured party has possession
of collateral:
(a) Reasonable expenses,
including the cost of insurance and payment of taxes or other charges, incurred
in the custody, preservation, use or operation of the collateral are chargeable
to the debtor and are secured by the collateral;
(b) The risk of
accidental loss or damage is on the debtor to the extent of a deficiency in any
effective insurance coverage;
(c) The secured party
shall keep the collateral identifiable, but fungible collateral may be
commingled; and
(d) The secured party
may use or operate the collateral:
(A) For the purpose of
preserving the collateral or its value;
(B) As permitted by an
order of a court having competent jurisdiction; or
(C) Except in the case
of consumer goods, in the manner and to the extent agreed by the debtor.
(3) Duties and rights
when secured party in possession or control. Except as otherwise provided
in subsection (4) of this section, a secured party having possession of
collateral or control of collateral under section 4, 5, 6 or 7 of this 2001
Act:
(a) May hold as
additional security any proceeds, except money or funds, received from the
collateral;
(b) Shall apply money or
funds received from the collateral to reduce the secured obligation, unless
remitted to the debtor; and
(c) May create a
security interest in the collateral.
(4) Buyer of certain
rights to payment. If the secured party is a buyer of accounts, chattel
paper, payment intangibles or promissory notes or a consignor:
(a) Subsection (1) of
this section does not apply unless the secured party is entitled under an
agreement:
(A) To charge back
uncollected collateral; or
(B) Otherwise to full or
limited recourse against the debtor or a secondary obligor based on the
nonpayment or other default of an account debtor or other obligor on the
collateral; and
(b) Subsections (2) and
(3) of this section do not apply.
SECTION 18.
9-208. Additional duties of secured
party having control of collateral. (1) Applicability of section.
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) Duties of secured
party after receiving demand from debtor. Within 10 days after receiving an
authenticated demand by the debtor:
(a) A secured party
having control of a deposit account under section 4 (1)(b) of this 2001 Act
shall send to the bank with which the deposit account is maintained an
authenticated statement that releases the bank from any further obligation to
comply with instructions originated by the secured party;
(b) A secured party
having control of a deposit account under section 4 (1)(c) of this 2001 Act
shall:
(A) Pay the debtor the
balance on deposit in the deposit account; or
(B) Transfer the balance
on deposit into a deposit account in the debtor’s name;
(c) A secured party,
other than a buyer, having control of electronic chattel paper under section 5
of this 2001 Act shall:
(A) Communicate the
authoritative copy of the electronic chattel paper to the debtor or its
designated custodian;
(B) If the debtor
designates a custodian that is the designated custodian with which the
authoritative copy of the electronic chattel paper is maintained for the
secured party, communicate to the custodian an authenticated record releasing
the designated custodian from any further obligation to comply with
instructions originated by the secured party and instructing the custodian to
comply with instructions originated by the debtor; and
(C) Take appropriate
action to enable the debtor or its designated custodian to make copies of or
revisions to the authoritative copy which add or change an identified assignee
of the authoritative copy without the consent of the secured party;
(d) A secured party
having control of investment property under ORS 78.1060 (4)(b) or section 6 (2)
of this 2001 Act shall send to the securities intermediary or commodity
intermediary with which the security entitlement or commodity contract is
maintained an authenticated record that releases the securities intermediary or
commodity intermediary from any further obligation to comply with entitlement
orders or directions originated by the secured party; and
(e) A secured party
having control of a letter-of-credit right under section 7 of this 2001 Act
shall send to each person having an unfulfilled obligation to pay or deliver
proceeds of the letter of credit to the secured party an authenticated release
from any further obligation to pay or deliver proceeds of the letter of credit
to the secured party.
SECTION 19.
9-209. Duties of secured party if
account debtor has been notified of assignment. (1) Applicability of
section. Except as otherwise provided in subsection (3) of this section,
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) Duties of secured
party after receiving demand from debtor. Within 10 days after receiving an
authenticated demand by the debtor, a secured party shall send to an account
debtor that has received notification of an assignment to the secured party as
assignee under section 68 (1) of this 2001 Act an authenticated record that
releases the account debtor from any further obligation to the secured party.
(3) Inapplicability
to sales. This section does not apply to an assignment constituting the
sale of an account, chattel paper or payment intangible.
SECTION 20.
9-210. Request for accounting;
request regarding list of collateral or statement of account. (1) Definitions.
As used in this section:
(a) “Request” means a
record of a type described in paragraph (b), (c) or (d) of this subsection.
(b) “Request for an
accounting” means a record authenticated by a debtor requesting that the
recipient provide an accounting of the unpaid obligations secured by collateral
and reasonably identifying the transaction or relationship that is the subject
of the request.
(c) “Request regarding a
list of collateral” means a record authenticated by a debtor requesting that
the recipient approve or correct a list of what the debtor believes to be the
collateral securing an obligation and reasonably identifying the transaction or
relationship that is the subject of the request.
(d) “Request regarding a
statement of account” means a record authenticated by a debtor requesting that
the recipient approve or correct a statement indicating what the debtor
believes to be the aggregate amount of unpaid obligations secured by collateral
as of a specified date and reasonably identifying the transaction or
relationship that is the subject of the request.
(2) Duty to respond
to requests. Subject to subsections (3), (4), (5) and (6) of this section,
a secured party, other than a buyer of accounts, chattel paper, payment
intangibles or promissory notes or a consignor, shall comply with a request
within 14 days after receipt:
(a) In the case of a
request for an accounting, by authenticating and sending to the debtor an
accounting; and
(b) In the case of a
request regarding a list of collateral or a request regarding a statement of
account, by authenticating and sending to the debtor an approval or correction.
(3) Request regarding
list of collateral; statement concerning type of collateral. A secured
party that claims a security interest in all of a particular type of collateral
owned by the debtor may comply with a request regarding a list of collateral by
sending to the debtor an authenticated record including a statement to that
effect within 14 days after receipt.
(4) Request regarding
list of collateral; no interest claimed. A person that receives a request
regarding a list of collateral, claims no interest in the collateral when it
receives the request, and claimed an interest in the collateral at an earlier
time shall comply with the request within 14 days after receipt by sending to
the debtor an authenticated record:
(a) Disclaiming any
interest in the collateral; and
(b) If known to the
recipient, providing the name and mailing address of any assignee of or
successor to the recipient’s interest in the collateral.
(5) Request for
accounting or regarding statement of account; no interest in obligation
claimed. A person that receives a request for an accounting or a request
regarding a statement of account, claims no interest in the obligations when it
receives the request, and claimed an interest in the obligations at an earlier
time shall comply with the request within 14 days after receipt by sending to
the debtor an authenticated record:
(a) Disclaiming any
interest in the obligations; and
(b) If known to the
recipient, providing the name and mailing address of any assignee of or
successor to the recipient’s interest in the obligations.
(6) Charges for
responses. A debtor is entitled without charge to one response to a request
under this section during any six-month period. The secured party may require
payment of a charge not exceeding $25 for each additional response.
PERFECTION AND PRIORITY
(Law Governing Perfection and Priority)
SECTION 21.
9-301. Law governing perfection and
priority of security interests. Except as otherwise provided in sections 23
to 26 of this 2001 Act, 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, while a debtor 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 collateral.
(2) While collateral is
located in a jurisdiction, the local law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority of a
possessory security interest in that collateral.
(3) Except as otherwise
provided in subsection (4) of this section, while negotiable documents, goods,
instruments, money or tangible chattel paper is located in a jurisdiction, the
local law of that jurisdiction governs:
(a) Perfection of a
security interest in the goods by filing a fixture filing;
(b) Perfection of a
security interest in timber to be cut; and
(c) The effect of
perfection or nonperfection and the priority of a nonpossessory security
interest in the collateral.
(4) The local law of the
jurisdiction in which the wellhead or minehead is located governs perfection,
the effect of perfection or nonperfection and the priority of a security
interest in as-extracted collateral.
SECTION 22.
9-302. Law governing perfection and
priority of agricultural liens. 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.
SECTION 23.
9-303. Law governing perfection and
priority of security interests in goods covered by a certificate of title.
(1) Applicability of section. 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) When goods
covered by certificate of title. Goods become covered by a certificate of
title when a valid application for the certificate of title and the applicable
fee are delivered to the appropriate authority. Goods cease to be covered by a
certificate of title at the earlier of the time the certificate of title ceases
to be effective under the law of the issuing jurisdiction or the time the goods
become covered subsequently by a certificate of title issued by another
jurisdiction.
(3) Applicable law.
The local law of the jurisdiction under whose certificate of title the goods
are covered governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in goods covered by a certificate of title
from the time the goods become covered by the certificate of title until the
goods cease to be covered by the certificate of title.
SECTION 24.
9-304. Law governing perfection and
priority of security interests in deposit accounts. (1) Law of bank’s
jurisdiction governs. 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 maintained with that bank.
(2) Bank’s
jurisdiction. The following rules determine a bank’s jurisdiction for
purposes of sections 21 to 62 of this 2001 Act:
(a) If an agreement
between the bank and the debtor governing the deposit account expressly
provides that a particular jurisdiction is the bank’s jurisdiction for purposes
of sections 21 to 62 of this 2001 Act, this chapter or the Uniform Commercial
Code, that jurisdiction is the bank’s jurisdiction.
(b) If paragraph (a) of
this subsection does not apply and an agreement between the bank and its
customer governing the deposit account expressly provides that the agreement is
governed by the law of a particular jurisdiction, that jurisdiction is the bank’s
jurisdiction.
(c) If neither paragraph
(a) nor paragraph (b) of this subsection applies and an agreement between the
bank and its customer governing the deposit account expressly provides that the
deposit account is maintained at an office in a particular jurisdiction, that
jurisdiction is the bank’s jurisdiction.
(d) If paragraphs (a) to
(c) of this subsection do not apply, the bank’s jurisdiction is the
jurisdiction in which the office identified in an account statement as the
office serving the customer’s account is located.
(e) If paragraphs (a) to
(d) of this subsection do not apply, the bank’s jurisdiction is the
jurisdiction in which the chief executive office of the bank is located.
SECTION 25.
9-305. Law governing perfection and
priority of security interests in investment property. (1) Governing
law: General rules. Except as otherwise provided in subsection (3) of this
section, 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 the certificated security represented thereby.
(b) The local law of the
issuer’s jurisdiction as specified in ORS 78.1100 (4) governs perfection, the
effect of perfection or nonperfection and the priority of a security interest
in an uncertificated security.
(c) The local law of the
securities intermediary’s jurisdiction as specified in ORS 78.1100 (5) governs
perfection, the effect of perfection or nonperfection and the priority of a
security interest in a security entitlement or securities account.
(d) The local law of the
commodity intermediary’s jurisdiction governs perfection, the effect of
perfection or nonperfection and the priority of a security interest in a
commodity contract or commodity account.
(2) Commodity
intermediary’s jurisdiction. The following rules determine a commodity
intermediary’s jurisdiction for purposes of sections 21 to 62 of this 2001 Act:
(a) If an agreement
between the commodity intermediary and commodity customer governing the
commodity account expressly provides that a particular jurisdiction is the
commodity intermediary’s jurisdiction for purposes of sections 21 to 62 of this
2001 Act, this chapter or the Uniform Commercial Code, that jurisdiction is the
commodity intermediary’s jurisdiction.
(b) If paragraph (a) of
this subsection does not apply and an agreement between the commodity
intermediary and commodity customer governing the commodity account expressly
provides that the agreement is governed by the law of a particular
jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.
(c) If neither paragraph
(a) nor paragraph (b) of this subsection applies and an agreement between the
commodity intermediary and commodity customer governing the commodity account
expressly provides that the commodity account is maintained at an office in a
particular jurisdiction, that jurisdiction is the commodity intermediary’s
jurisdiction.
(d) If paragraphs (a) to
(c) of this subsection do not apply, the commodity intermediary’s jurisdiction
is the jurisdiction in which the office identified in an account statement as
the office serving the commodity customer’s account is located.
(e) If paragraphs (a) to
(d) of this subsection do not apply, the commodity intermediary’s jurisdiction
is the jurisdiction in which the chief executive office of the commodity
intermediary is located.
(3) When perfection
governed by law of jurisdiction where debtor located. The local law of the
jurisdiction in which the debtor is located governs:
(a) Perfection of a
security interest in investment property by filing;
(b) Automatic perfection
of a security interest in investment property created by a broker or securities
intermediary; and
(c) Automatic perfection
of a security interest in a commodity contract or commodity account created by
a commodity intermediary.
SECTION 26.
9-306. Law governing perfection and
priority of security interests in letter-of-credit rights. (1) Governing
law: Issuer’s or nominated person’s jurisdiction. Subject to subsection (3)
of this section, 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 person’s jurisdiction is a
state.
(2) Issuer’s or
nominated person’s jurisdiction. For purposes of sections 21 to 62 of this
2001 Act, an issuer’s jurisdiction or nominated person’s jurisdiction is the
jurisdiction whose law governs the liability of the issuer or nominated person
with respect to the letter-of-credit right as provided in ORS 75.1160.
(3) When section not
applicable. This section does not apply to a security interest that is
perfected only under section 28 (4) of this 2001 Act.
SECTION 27.
9-307. Location of debtor. (1) “Place
of business.” As used in this section, “place of business” means a place
where a debtor conducts its affairs.
(2) Debtor’s
location: General rules. 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 debtor that is an
organization and has only one place of business is located at its place of
business.
(c) A debtor that is an
organization and has more than one place of business is located at its chief
executive office.
(3) Limitation of
applicability of subsection (2) of this section. Subsection (2) of this
section applies only if a debtor’s residence, place of business or chief
executive office, as applicable, is located in a jurisdiction whose law
generally requires information concerning the existence of a nonpossessory
security interest to be made generally available in a filing, recording or
registration system as a condition or result of the security interest’s
obtaining priority over the rights of a lien creditor with respect to the
collateral. If subsection (2) of this section does not apply, the debtor is
located in the District of Columbia.
(4) Continuation of
location: cessation of existence, etc. A person that ceases to exist, have
a residence or have a place of business continues to be located in the
jurisdiction specified by subsections (2) and (3) of this section.
(5) Location of
registered organization organized under state law. A registered
organization that is organized under the law of a state is located in that
state.
(6) Location of
registered organization organized under federal law; bank branches and
agencies. Except as otherwise provided in subsection (9) of this section, a
registered organization that is organized under the law of the United States
and a branch or agency of a bank that is not organized under the law of the
United States or a state are located:
(a) In the state that
the law of the United States designates, if the law designates a state of
location;
(b) In the state that
the registered organization, branch or agency designates, if the law of the
United States authorizes the registered organization, branch or agency to
designate its state of location; or
(c) In the District of
Columbia, if neither paragraph (a) nor paragraph (b) of this subsection
applies.
(7) Continuation of
location: change in status of registered organization. A registered
organization continues to be located in the jurisdiction specified by
subsection (5) or (6) of this section notwithstanding:
(a) The suspension,
revocation, forfeiture or lapse of the registered organization’s status as such
in its jurisdiction of organization; or
(b) The dissolution, winding
up or cancellation of the existence of the registered organization.
(8) Location of
United States. The United States is located in the District of Columbia.
(9) Location of
foreign bank branch or agency if licensed in only one state. A branch or
agency of a bank that is not organized under the law of the United States or a
state is located in the state in which the branch or agency is licensed, if all
branches and agencies of the bank are licensed in only one state.
(10) Location of
foreign air carrier. A foreign air carrier under the Federal Aviation Act
of 1958, as amended, is located at the designated office of the agent upon
which service of process may be made on behalf of the carrier.
(11) Section applies
only to sections 21 to 62 of this 2001 Act. This section applies only for
purposes of sections 21 to 62 of this 2001 Act.
(Perfection)
SECTION 28.
9-308. When security interest or
agricultural lien is perfected; continuity of perfection. (1) Perfection
of security interest. Except as otherwise provided in this section and
section 29 of this 2001 Act, a security interest is perfected if it has
attached and all of the applicable requirements for perfection in sections 30
to 36 of this 2001 Act have been satisfied. A security interest is perfected
when it attaches if the applicable requirements are satisfied before the
security interest attaches.
(2) Perfection of
agricultural lien. An agricultural lien is perfected if it has become
effective and all of the applicable requirements for perfection in section 30
of this 2001 Act have been satisfied. An agricultural lien is perfected when it
becomes effective if the applicable requirements are satisfied before the
agricultural lien becomes effective.
(3) Continuous
perfection; perfection by different methods. A security interest or
agricultural lien is perfected continuously if it is originally perfected by
one method under this chapter and is later perfected by another method under
this chapter, without an intermediate period when it was unperfected.
(4) Supporting
obligation. Perfection of a security interest in collateral also perfects a
security interest in a supporting obligation for the collateral.
(5) Lien securing
right to payment. Perfection of a security interest in a right to payment
or performance also perfects a security interest in a security interest,
mortgage or other lien on personal or real property securing the right.
(6) Security
entitlement carried in securities account. Perfection of a security
interest in a securities account also perfects a security interest in the
security entitlements carried in the securities account.
(7) Commodity
contract carried in commodity account. Perfection of a security interest in
a commodity account also perfects a security interest in the commodity
contracts carried in the commodity account.
SECTION 29.
9-309. Security interest perfected
upon attachment. The following security interests are perfected when they
attach:
(1) A purchase-money
security interest in consumer goods, except as otherwise provided in section 31
(2) of this 2001 Act with respect to consumer goods that are subject to a
statute or treaty described in section 31 (1) of this 2001 Act;
(2) An assignment of
accounts or payment intangibles which does not by itself or in conjunction with
other assignments to the same assignee transfer a significant part of the
assignor’s outstanding accounts or payment intangibles;
(3) A sale of a payment
intangible;
(4) A sale of a
promissory note;
(5) A security interest
created by the assignment of a health-care-insurance receivable to the provider
of the health-care goods or services;
(6) A security interest
arising under ORS 72.4010, 72.5050, 72.7110 (3), or 72A.5080 (5), until the
debtor obtains possession of the collateral;
(7) A security interest
of a collecting bank arising under ORS 74.2100;
(8) A security interest
of an issuer or nominated person arising under section 148 of this 2001 Act;
(9) A security interest
arising in the delivery of a financial asset under section 16 (3) of this 2001
Act;
(10) A security interest
in investment property created by a broker or securities intermediary;
(11) A security interest
in a commodity contract or a commodity account created by a commodity
intermediary;
(12) An assignment for
the benefit of all creditors of the transferor and subsequent transfers by the
assignee thereunder; and
(13) A security interest
created by an assignment of a beneficial interest in a decedent’s estate.
SECTION 30.
9-310. When filing required to
perfect security interest or agricultural lien; security interests and
agricultural liens to which filing provisions do not apply. (1) General
rule: perfection by filing. Except as otherwise provided in subsection (2)
of this section and section 32 (2) of this 2001 Act, a financing statement must
be filed to perfect all security interests and agricultural liens.
(2) Exceptions:
filing not necessary. The filing of a financing statement is not necessary
to perfect a security interest:
(a) That is perfected
under section 28 (4), (5), (6) or (7) of this 2001 Act;
(b) That is perfected
under section 29 of this 2001 Act when it attaches;
(c) In property subject
to a statute, regulation or treaty described in section 31 (1) of this 2001
Act;
(d) In goods in
possession of a bailee that are perfected under section 32 (4)(a) or (b) of
this 2001 Act;
(e) In certificated
securities, documents, goods or instruments that are perfected without filing
or possession under section 32 (5), (6) or (7) of this 2001 Act;
(f) In collateral in the
secured party’s possession under section 33 of this 2001 Act;
(g) In a certificated
security which is perfected by delivery of the security certificate to the
secured party under section 33 of this 2001 Act;
(h) In deposit accounts,
electronic chattel paper, investment property or letter-of-credit rights that
are perfected by control under section 34 of this 2001 Act;
(i) In proceeds that are
perfected under section 35 of this 2001 Act; or
(j) That are perfected
under section 36 of this 2001 Act.
(3) Assignment of
perfected security interest. If a secured party assigns a perfected
security interest or agricultural lien, a filing under this chapter is not
required to continue the perfected status of the security interest against
creditors of and transferees from the original debtor.
SECTION 31.
9-311. Perfection of security
interests in property subject to certain statutes, regulations and treaties.(1)
Security interest subject to other law. Except as otherwise provided in
subsection (4) of this section, 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 obtaining priority over the rights of a lien creditor with respect
to the property preempt section 30 (1) of this 2001 Act;
(b) ORS chapter 830 and
the Oregon Vehicle Code; or
(c) A
certificate-of-title statute of another jurisdiction which provides for a
security interest to be indicated on the certificate as a condition or result
of the security interest’s obtaining priority over the rights of a lien
creditor with respect to the property.
(2) Compliance with
other law. Compliance with the requirements of a statute, regulation or
treaty described in subsection (1) of this section for obtaining priority over
the rights of a lien creditor is equivalent to the filing of a financing
statement under this chapter. Except as otherwise provided in subsection (4) of
this section and sections 33 and 36 (4) and (5) of this 2001 Act for goods
covered by a certificate of title, a security interest in property subject to a
statute, regulation or treaty described in subsection (1) of this section may
be perfected only by compliance with those requirements, and a security
interest so perfected remains perfected notwithstanding a change in the use or
transfer of possession of the collateral.
(3) Duration and
renewal of perfection. Except as otherwise provided in subsection (4) of
this section and section 36 (4) and (5) of this 2001 Act, duration and renewal
of perfection of a security interest perfected by compliance with the
requirements prescribed by a statute, regulation or treaty described in
subsection (1) of this section are governed by the statute, regulation or
treaty. In other respects, the security interest is subject to this chapter.
(4) Inapplicability
to certain inventory. During any period in which collateral subject to a
statute specified in subsection (1)(b) of this section is inventory held for
sale or lease by a person or leased by that person as lessor and that person is
in the business of selling goods of that kind, this section does not apply to a
security interest in that collateral created by that person.
SECTION 32.
9-312. Perfection of security
interests in chattel paper, deposit accounts, documents, goods covered by
documents, instruments, investment property, letter-of-credit rights and money;
perfection by permissive filing; temporary perfection without filing or transfer
of possession. (1) Perfection by filing permitted. A security
interest in chattel paper, negotiable documents, instruments or investment
property may be perfected by filing. Except for goods in which filing is not
necessary or effective to perfect a security interest under this chapter, a
security interest in goods may be perfected by filing.
(2) Control or
possession of certain collateral. Except as otherwise provided in section
35 (3) and (4) of this 2001 Act for proceeds:
(a) A security interest
in a deposit account may be perfected only by control under section 34 of this
2001 Act;
(b) And except as
otherwise provided in section 28 (4) of this 2001 Act, a security interest in a
letter-of-credit right may be perfected only by control under section 34 of
this 2001 Act; and
(c) A security interest
in money may be perfected only by the secured party’s taking possession under
section 33 of this 2001 Act.
(3) Goods covered by
negotiable document. While goods are in the possession of a bailee that has
issued a negotiable document covering the goods:
(a) A security interest
in the goods may be perfected by perfecting a security interest in the
document; and
(b) A security interest
perfected in the document has priority over any security interest that becomes
perfected in the goods by another method during that time.
(4) Goods covered by
nonnegotiable document. While goods are in the possession of a bailee that
has issued a nonnegotiable document covering the goods, a security interest in
the goods may be perfected by:
(a) Issuance of a
document in the name of the secured party;
(b) The bailee’s receipt
of notification of the secured party’s interest; or
(c) Filing as to the
goods.
(5) Temporary
perfection: New value. A security interest in certificated securities,
negotiable documents or instruments is perfected without filing or the taking
of possession for a period of 20 days from the time it attaches to the extent
that it arises for new value given under an authenticated security agreement.
(6) Temporary
perfection: Goods or documents made available to debtor. A perfected
security interest in a negotiable document or goods in possession of a bailee,
other than one that has issued a negotiable document for the goods, remains
perfected for 20 days without filing if the secured party makes available to
the debtor the goods or documents representing the goods for the purpose of:
(a) Ultimate sale or
exchange; or
(b) Loading, unloading,
storing, shipping, transshipping, manufacturing, processing or otherwise
dealing with them in a manner preliminary to their sale or exchange.
(7) Temporary
perfection: Delivery of security certificate or instrument to debtor. A
perfected security interest in a certificated security or instrument remains
perfected for 20 days without filing if the secured party delivers the security
certificate or instrument to the debtor for the purpose of:
(a) Ultimate sale or
exchange; or
(b) Presentation,
collection, enforcement, renewal or registration of transfer.
(8) Expiration of
temporary perfection. After the 20-day period specified in subsection (5),
(6) or (7) of this section expires, perfection depends upon compliance with
this chapter.
SECTION 33.
9-313. When possession by or delivery
to secured party perfects security interest without filing. (1) Perfection
by possession or delivery. Except as otherwise provided in subsection (2)
of this section, a secured party may perfect a security interest in negotiable
documents, goods, instruments, money or tangible chattel paper by taking
possession of the collateral. A secured party may perfect a security interest
in certificated securities by taking delivery of the certificated securities
under ORS 78.3010.
(2) Goods covered by
certificate of title. With respect to goods covered by a certificate of
title issued by this state, a secured party may perfect a security interest in
the goods by taking possession of the goods only in the circumstances described
in section 36 (5) of this 2001 Act.
(3) Collateral in
possession of person other than debtor. With respect to collateral other
than certificated securities and goods covered by a document, a secured party
takes possession of collateral in the possession of a person other than the
debtor, the secured party or a lessee of the collateral from the debtor in the
ordinary course of the debtor’s business, when:
(a) The person in
possession authenticates a record acknowledging that it holds possession of the
collateral for the secured party’s benefit; or
(b) The person takes
possession of the collateral after having authenticated a record acknowledging
that it will hold possession of collateral for the secured party’s benefit.
(4) Time of
perfection by possession; continuation of perfection. If perfection of a
security interest depends upon possession of the collateral by a secured party,
perfection occurs no earlier than the time the secured party takes possession
and continues only while the secured party retains possession.
(5) Time of
perfection by delivery; continuation of perfection. A security interest in
a certificated security in registered form is perfected by delivery when
delivery of the certificated security occurs under ORS 78.3010 and remains
perfected by delivery until the debtor obtains possession of the security
certificate.
(6) Acknowledgment
not required. A person in possession of collateral is not required to
acknowledge that it holds possession for a secured party’s benefit.
(7) Effectiveness of
acknowledgment; no duties or confirmation. If a person acknowledges that it
holds possession for the secured party’s benefit:
(a) The acknowledgment
is effective under subsection (3) of this section or ORS 78.3010 (1), even if
the acknowledgment violates the rights of a debtor; and
(b) Unless the person
otherwise agrees or law other than this chapter otherwise provides, the person
does not owe any duty to the secured party and is not required to confirm the
acknowledgment to another person.
(8) Secured party’s
delivery to person other than debtor. A secured party having possession of
collateral does not relinquish possession by delivering the collateral to a
person other than the debtor or a lessee of the collateral from the debtor in
the ordinary course of the debtor’s business if the person was instructed
before the delivery or is instructed contemporaneously with the delivery:
(a) To hold possession
of the collateral for the secured party’s benefit; or
(b) To redeliver the
collateral to the secured party.
(9) Effect of
delivery under subsection (8) of this section; no duties or confirmation. A
secured party does not relinquish possession, even if a delivery under
subsection (8) of this section violates the rights of a debtor. A person to
which collateral is delivered under subsection (8) of this section does not owe
any duty to the secured party and is not required to confirm the delivery to
another person unless the person otherwise agrees or law other than this
chapter otherwise provides.
SECTION 34.
9-314. Perfection by control. (1)
Perfection by control. A security interest in investment property,
deposit accounts, letter-of-credit rights or electronic chattel paper may be
perfected by control of the collateral under section 4, 5, 6 or 7 of this 2001
Act.
(2) Specified
collateral: Time of perfection by control; continuation of perfection. A
security interest in deposit accounts, electronic chattel paper or
letter-of-credit rights is perfected by control under section 4, 5 or 7 of this
2001 Act when the secured party obtains control and remains perfected by control
only while the secured party retains control.
(3) Investment
property: Time of perfection by control; continuation of perfection. A
security interest in investment property is perfected by control under section
6 of this 2001 Act from the time the secured party obtains control and remains
perfected by control until:
(a) The secured party
does not have control; and
(b) One of the following
occurs:
(A) If the collateral is
a certificated security, the debtor has or acquires possession of the security
certificate;
(B) If the collateral is
an uncertificated security, the issuer has registered or registers the debtor
as the registered owner; or
(C) If the collateral is
a security entitlement, the debtor is or becomes the entitlement holder.
SECTION 35.
9-315. Secured party’s rights on
disposition of collateral and in proceeds. (1) Disposition of
collateral: Continuation of security interest or agricultural lien; proceeds.
Except as otherwise provided in this chapter and in ORS 72.4030 (2):
(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 disposition free of the security interest or agricultural lien;
and
(b) A security interest
attaches to any identifiable proceeds of collateral.
(2) When commingled
proceeds identifiable. Proceeds that are commingled with other property are
identifiable proceeds:
(a) If the proceeds are
goods, to the extent provided by section 56 of this 2001 Act; and
(b) If the proceeds are
not goods, to the extent that the secured party identifies the proceeds by a
method of tracing, including application of equitable principles, that is
permitted under law other than this chapter with respect to commingled property
of the type involved.
(3) Perfection of
security interest in proceeds. A security interest in proceeds is a
perfected security interest if the security interest in the original collateral
was perfected.
(4) Continuation of
perfection. A perfected security interest in proceeds becomes unperfected
on the 21st day after the security interest attaches to the proceeds unless:
(a) The following
conditions are satisfied:
(A) A filed financing
statement covers the original collateral;
(B) The proceeds are
collateral in which a security interest may be perfected by filing in the
office in which the financing statement has been filed; and
(C) The proceeds are not
acquired with cash proceeds;
(b) The proceeds are
identifiable cash proceeds; or
(c) The security
interest in the proceeds is perfected other than under subsection (3) of this
section when the security interest attaches to the proceeds or within 20 days
thereafter.
(5) When perfected
security interest in proceeds becomes unperfected. If a filed financing
statement covers the original collateral, a security interest in proceeds which
remains perfected under subsection (4)(a) of this section becomes unperfected
at the later of:
(a) When the
effectiveness of the filed financing statement lapses under section 86 of this
2001 Act or is terminated under section 84 of this 2001 Act; or
(b) The 21st day after
the security interest attaches to the proceeds.
SECTION 36.
9-316. Continued perfection of
security interest following change in governing law. (1) General rule:
Effect on perfection of change in governing law. A security interest
perfected pursuant to the law of the jurisdiction designated in section 21 (1)
or 25 (3) of this 2001 Act remains perfected until the earliest of:
(a) The time perfection
would have ceased under the law of that jurisdiction;
(b) The expiration of
four months after a change of the debtor’s location to another jurisdiction; or
(c) The expiration of
one year after a transfer of collateral to a person that thereby becomes a
debtor and is located in another jurisdiction.
(2) Security interest
perfected or unperfected under law of new jurisdiction. If a security
interest described in subsection (1) of this section becomes perfected under
the law of the other jurisdiction before the earliest time or event described
in that subsection, it remains perfected thereafter. If the security interest
does not become perfected under the law of the other jurisdiction before the
earliest time or event, it becomes unperfected and is deemed never to have been
perfected as against a purchaser of the collateral for value.
(3) Possessory
security interest in collateral moved to new jurisdiction. A possessory
security interest in collateral, other than goods covered by a certificate of
title and as-extracted collateral consisting of goods, remains continuously
perfected if:
(a) The collateral is
located in one jurisdiction and subject to a security interest perfected under
the law of that jurisdiction;
(b) Thereafter the
collateral is brought into another jurisdiction; and
(c) Upon entry into the
other jurisdiction, the security interest is perfected under the law of the
other jurisdiction.
(4) Goods covered by
certificate of title from this state. Except as otherwise provided in subsection
(5) of this section, a security interest in goods covered by a certificate of
title which is perfected by any method under the law of another jurisdiction
when the goods become covered by a certificate of title from this state remains
perfected until the security interest would have become unperfected under the
law of the other jurisdiction had the goods not become so covered.
(5) When subsection
(4) of this section security interest becomes unperfected against purchasers.
A security interest described in subsection (4) of this section becomes
unperfected as against a purchaser of the goods for value and is deemed never
to have been perfected as against a purchaser of the goods for value if the
applicable requirements for perfection under section 31 (2) or 33 of this 2001
Act are not satisfied before the earlier of:
(a) The time the
security interest would have become unperfected under the law of the other
jurisdiction had the goods not become covered by a certificate of title from
this state; or
(b) The expiration of
four months after the goods had become so covered.
(6) Change in
jurisdiction of bank, issuer, nominated person, securities intermediary or
commodity intermediary. A security interest in deposit accounts,
letter-of-credit rights or investment property which is perfected under the law
of the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s
jurisdiction, the securities intermediary’s jurisdiction or the commodity
intermediary’s jurisdiction, as applicable, remains perfected until the earlier
of:
(a) The time the
security interest would have become unperfected under the law of that
jurisdiction; or
(b) The expiration of
four months after a change of the applicable jurisdiction to another
jurisdiction.
(7) Subsection (6) of
this section security interest perfected or unperfected under law of new
jurisdiction. If a security interest described in subsection (6) of this
section becomes perfected under the law of the other jurisdiction before the
earlier of the time or the end of the period described in subsection (6) of
this section, it remains perfected thereafter. If the security interest does
not become perfected under the law of the other jurisdiction before the earlier
of that time or the end of that period, it becomes unperfected and is deemed
never to have been perfected as against a purchaser of the collateral for
value.
(Priority)
SECTION 37.
9-317. Interests that take priority
over or take free of security interest or agricultural lien. (1) Conflicting
security interests and rights of lien creditors. A security interest or
agricultural lien is subordinate to the rights of:
(a) A person entitled to
priority under section 42 of this 2001 Act; and
(b) Except as otherwise
provided in subsection (5) of this section, a person that becomes a lien
creditor before the earlier of the time:
(A) The security
interest or agricultural lien is perfected; or
(B) One of the
conditions specified in section 13 (2)(c) of this 2001 Act is met and a
financing statement covering the collateral is filed.
(2) Buyers that
receive delivery. Except as otherwise provided in subsection (5) of this
section, a buyer, other than a secured party, of tangible chattel paper,
documents, goods, instruments or a security certificate takes free of a
security interest or agricultural lien if the buyer gives value and receives
delivery of the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(3) Lessees that
receive delivery. Except as otherwise provided in subsection (5) of this
section, a lessee of goods takes free of a security interest or agricultural
lien if the lessee gives value and receives delivery of the collateral without
knowledge of the security interest or agricultural lien and before it is
perfected.
(4) Licensees and
buyers of certain collateral. A licensee of a general intangible or a
buyer, other than a secured party, of accounts, electronic chattel paper,
general intangibles or investment property other than a certificated security
takes free of a security interest if the licensee or buyer gives value without
knowledge of the security interest and before it is perfected.
(5) Purchase-money
security interest. Except as otherwise provided in sections 40 and 41 of
this 2001 Act, if a person files a financing statement with respect to a
purchase-money security interest before or within 20 days after the debtor
receives delivery of the collateral, the security interest takes priority over
the rights of a buyer, lessee or lien creditor which arise between the time the
security interest attaches and the time of filing.
SECTION 38.
9-318. No interest retained in right
to payment that is sold; rights and title of seller of account or chattel paper
with respect to creditors and purchasers. (1) Seller retains no
interest. 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) Deemed rights of
debtor if buyer’s security interest unperfected. For purposes of
determining the rights of creditors of, and purchasers for value of an account
or chattel paper from, a debtor that has sold an account or chattel paper,
while the buyer’s security interest is unperfected, the debtor is deemed to
have rights and title to the account or chattel paper identical to those the
debtor sold.
SECTION 39.
9-319. Rights and title of consignee
with respect to creditors and purchasers. (1) Consignee has consignor’s
rights. Except as otherwise provided in subsection (2) of this section, 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 identical
to those the consignor had or had power to transfer.
(2) Applicability of
other law. For purposes of determining the rights of a creditor of a
consignee, law other than this chapter determines the rights and title of a
consignee while goods are in the consignee’s possession if, under sections 21
to 62 of this 2001 Act, a perfected security interest held by the consignor
would have priority over the rights of the creditor.
SECTION 40.
9-320. Buyer of goods. (1) Buyer
in ordinary course of business. Except as otherwise provided in subsection
(5) of this section, 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 perfected and the buyer knows of its existence.
(2) Buyer of consumer
goods. Except as otherwise provided in subsection (5) of this section, a
buyer of goods from a person who used or bought the goods for use primarily for
personal, family or household purposes takes free of a security interest, even
if perfected, if the buyer buys:
(a) Without knowledge of
the security interest;
(b) For value;
(c) Primarily for the
buyer’s personal, family or household purposes; and
(d) Before the filing of
a financing statement covering the goods.
(3) Effectiveness of
filing for subsection (2) of this section. To the extent that it affects
the priority of a security interest over a buyer of goods under subsection (2)
of this section, the period of effectiveness of a filing made in the
jurisdiction in which the seller is located is governed by section 36 (1) and
(2) of this 2001 Act.
(4) Buyer in ordinary
course of business at wellhead or minehead. A buyer in ordinary course of
business buying oil, gas or other minerals at the wellhead or minehead or after
extraction takes free of an interest arising out of an encumbrance.
(5) Possessory
security interest not affected. Subsections (1) and (2) of this section do
not affect a security interest in goods in the possession of the secured party
under section 33 of this 2001 Act.
SECTION 41.
9-321. Licensee of general intangible
and lessee of goods in ordinary course of business. (1) “Licensee in
ordinary course of business.” As used 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 in the business of licensing general intangibles of that
kind. A person becomes a licensee in the ordinary course if the license to the
person comports with the usual or customary practices in the kind of business
in which the licensor is engaged or with the licensor’s own usual or customary
practices.
(2) Rights of
licensee in ordinary course of business. A licensee in ordinary course of
business takes its rights under a nonexclusive license free of a security
interest in the general intangible created by the licensor, even if the
security interest is perfected and the licensee knows of its existence.
(3) Rights of lessee
in ordinary course of business. A lessee in ordinary course of business
takes its leasehold interest free of a security interest in the goods created
by the lessor, even if the security interest is perfected and the lessee knows
of its existence.
SECTION 42.
9-322. Priorities among conflicting
security interests in and agricultural liens on same collateral. (1) General
priority rules. 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 priority
in time of filing or perfection. Priority dates from the earlier of the time a
filing covering the collateral is first made or the security interest or
agricultural lien is first perfected, if there is no period thereafter when
there is neither filing nor perfection.
(b) A perfected security
interest or agricultural lien has priority over a conflicting unperfected
security interest or agricultural lien.
(c) The first security
interest or agricultural lien to attach or become effective has priority if
conflicting security interests and agricultural liens are unperfected.
(2) Time of
perfection: Proceeds and supporting obligations. For the purposes of
subsection (1)(a) of this section:
(a) The time of filing
or perfection as to a security interest in collateral is also the time of
filing or perfection as to a security interest in proceeds; and
(b) The time of filing
or perfection as to a security interest in collateral supported by a supporting
obligation is also the time of filing or perfection as to a security interest
in the supporting obligation.
(3) Special priority
rules: proceeds and supporting obligations. Except as otherwise provided in
subsection (6) of this section, a security interest in collateral which
qualifies for priority over a conflicting security interest under section 47,
48, 49, 50 or 51 of this 2001 Act also has priority over a conflicting security
interest in:
(a) Any supporting
obligation for the collateral; and
(b) Proceeds of the
collateral if:
(A) The security
interest in proceeds is perfected;
(B) The proceeds are
cash proceeds or of the same type as the collateral; and
(C) In the case of
proceeds that are proceeds of proceeds, all intervening proceeds are cash
proceeds, proceeds of the same type as the collateral or an account relating to
the collateral.
(4) First-to-file
priority rule for certain collateral. Subject to subsection (5) of this
section and except as otherwise provided in subsection (6) of this section, if
a security interest in chattel paper, deposit accounts, negotiable documents,
instruments, investment property or letter-of-credit rights is perfected by a
method other than filing, conflicting perfected security interests in proceeds
of the collateral rank according to priority in time of filing.
(5) Applicability of
subsection (4) of this section. Subsection (4) of this section applies only
if the proceeds of the collateral are not cash proceeds, chattel paper,
negotiable documents, instruments, investment property or letter-of-credit
rights.
(6) Limitations on
subsections (1) to (5) of this section. Subsections (1) to (5) of this
section are subject to:
(a) Subsection (7) of
this section and the other provisions of sections 21 to 62 of this 2001 Act;
(b) ORS 74.2100 with
respect to a security interest of a collecting bank;
(c) Section 148 of this
2001 Act with respect to a security interest of an issuer or nominated person;
and
(d) Section 10 of this
2001 Act with respect to a security interest arising under ORS 72.1010 to
72.7250 or ORS chapter 72A.
(7) Priority under
agricultural lien statute. A perfected agricultural lien on collateral has
priority over a conflicting security interest in or agricultural lien on the
same collateral if the statute creating the agricultural lien so provides.
SECTION 43.
9-323. Future advances. (1) When
priority based on time of advance. Except as otherwise provided in
subsection (3) of this section, for purposes of determining the priority of a
perfected security interest under section 42 (1)(a) of this 2001 Act,
perfection of the security interest dates from the time an advance is made to
the extent that the security interest secures an advance that:
(a) Is made while the
security interest is perfected only:
(A) Under section 29 of
this 2001 Act when it attaches; or
(B) Temporarily under
section 32 (5), (6) or (7) of this 2001 Act; and
(b) Is not made pursuant
to a commitment entered into before or while the security interest is perfected
by a method other than under section 29 or 32 (5), (6) or (7) of this 2001 Act.
(2) Lien creditor.
Except as otherwise provided in subsection (3) of this section, a security
interest is subordinate to the rights of a person that becomes a lien creditor
to the extent that the security interest secures an advance made more than 45
days after the person becomes a lien creditor unless the advance is made:
(a) Without knowledge of
the lien; or
(b) Pursuant to a
commitment entered into without knowledge of the lien.
(3) Buyer of
receivables. Subsections (1) and (2) of this section do not apply to a
security interest held by a secured party that is a buyer of accounts, chattel
paper, payment intangibles or promissory notes or a consignor.
(4) Buyer of goods.
Except as otherwise provided in subsection (5) of this section, a buyer of
goods other than a buyer in ordinary course of business takes free of a
security interest to the extent that it secures advances made after the earlier
of:
(a) The time the secured
party acquires knowledge of the buyer’s purchase; or
(b) Forty-five days
after the purchase.
(5) Advances made
pursuant to commitment: Priority of buyer of goods. Subsection (4) of this
section does not apply if the advance is made pursuant to a commitment entered
into without knowledge of the buyer’s purchase and before the expiration of the
45-day period.
(6) Lessee of goods.
Except as otherwise provided in subsection (7) of this section, a lessee of
goods, other than a lessee in ordinary course of business, takes the leasehold
interest free of a security interest to the extent that it secures advances
made after the earlier of:
(a) The time the secured
party acquires knowledge of the lease; or
(b) Forty-five days
after the lease contract becomes enforceable.
(7) Advances made
pursuant to commitment: Priority of lessee of goods. Subsection (6) of this
section does not apply if the advance is made pursuant to a commitment entered
into without knowledge of the lease and before the expiration of the 45-day
period.
SECTION 44.
9-324. Priority of purchase-money
security interests. (1) General rule: Purchase-money priority.
Except as otherwise provided in subsection (7) of this section, 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 47 of this 2001 Act, 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 within 20 days thereafter.
(2) Inventory
purchase-money priority. Subject to subsection (3) of this section and
except as otherwise provided in subsection (7) of this section, 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
50 of this 2001 Act, and, except as otherwise provided in section 47 of this
2001 Act, 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;
(b) The purchase-money
secured party sends an authenticated notification to the holder of the
conflicting security interest;
(c) The holder of the
conflicting security interest receives the notification within five years
before the debtor receives possession of the inventory; and
(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.
(3) Holders of
conflicting inventory security interests to be notified. Subsection (2)(b)
to (d) of this section applies 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
(b) If the
purchase-money security interest is temporarily perfected without filing or
possession under section 32 (6) of this 2001 Act, before the beginning of the
20-day period thereunder.
(4) Livestock
purchase-money priority. Subject to subsection (5) of this section and
except as otherwise provided in subsection (7) of this section, 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 47 of this 2001 Act, 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;
(b) The purchase-money
secured party sends an authenticated notification to the holder of the
conflicting security interest;
(c) The holder of the
conflicting security interest receives the notification within six months
before the debtor receives possession of the livestock; and
(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.
(5) Holders of
conflicting livestock security interests to be notified. Subsection (4)(b)
to (d) of this section applies 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
(b) If the
purchase-money security interest is temporarily perfected without filing or
possession under section 32 (6) of this 2001 Act, before the beginning of the
20-day period thereunder.
(6) Software purchase-money
priority. Except as otherwise provided in subsection (7) of this section, 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 47 of this 2001 Act, 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.
(7) Conflicting
purchase-money security interests. If more than one security interest
qualifies for priority in the same collateral under subsection (1), (2), (4) or
(6) of this section:
(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
(b) In all other cases,
section 42 (1) of this 2001 Act applies to the qualifying security interests.
SECTION 45.
9-325. Priority of security interests
in transferred collateral. (1) Subordination of security interest in
transferred collateral. Except as otherwise provided in subsection (2) of
this section, 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;
(b) The security
interest created by the other person was perfected when the debtor acquired the
collateral; and
(c) There is no period
thereafter when the security interest is unperfected.
(2) Limitation of
subsection (1) of this section subordination. Subsection (1) of this
section subordinates a security interest only if the security interest:
(a) Otherwise would have
priority solely under section 42 (1) or 43 of this 2001 Act; or
(b) Arose solely under
ORS 72.7110 (3) or 72A.5080 (5).
SECTION 46.
9-326. Priority of security interests
created by new debtor. (1) Subordination of security interest created by
new debtor. Subject to subsection (2) of this section, a security interest
created by a new debtor which is perfected by a filed financing statement that
is effective solely under section 79 of this 2001 Act in collateral in which a
new debtor has or acquires rights is subordinate to a security interest in the
same collateral which is perfected other than by a filed financing statement
that is effective solely under section 79 of this 2001 Act.
(2) Priority under
other provisions; multiple original debtors. The other provisions of
sections 21 to 62 of this 2001 Act determine the priority among conflicting
security interests in the same collateral perfected by filed financing
statements that are effective solely under section 79 of this 2001 Act.
However, if the security agreements to which a new debtor became bound as
debtor were not entered into by the same original debtor, the conflicting security
interests rank according to priority in time of the new debtor’s having become
bound.
SECTION 47.
9-327. Priority of security interests
in deposit account. The following rules govern priority among conflicting
security interests in the same deposit account:
(1) A security interest
held by a secured party having control of the deposit account under section 4
of this 2001 Act has priority over a conflicting security interest held by a
secured party that does not have control.
(2) Except as otherwise
provided in subsections (3) and (4) of this section, security interests
perfected by control under section 34 of this 2001 Act rank according to
priority in time of obtaining control.
(3) Except as otherwise
provided in subsection (4) of this section, a security interest held by the
bank with which the deposit account is maintained has priority over a
conflicting security interest held by another secured party.
(4) A security interest
perfected by control under section 4 (1)(c) of this 2001 Act has priority over
a security interest held by the bank with which the deposit account is
maintained.
SECTION 48.
9-328. Priority of security interests
in investment property. 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 6
of this 2001 Act has priority over a security interest held by a secured party
that does not have control of the investment property.
(2) Except as otherwise
provided in subsections (3) and (4) of this section, conflicting security
interests held by secured parties each of which has control under section 6 of
this 2001 Act rank according to priority in time of:
(a) If the collateral is
a security, obtaining control;
(b) If the collateral is
a security entitlement carried in a securities account and:
(A) If the secured party
obtained control under ORS 78.1060 (4)(a), the secured party’s becoming the
person for which the securities account is maintained;
(B) If the secured party
obtained control under ORS 78.1060 (4)(b), the securities intermediary’s
agreement to comply with the secured party’s entitlement orders with respect to
security entitlements carried or to be carried in the securities account; or
(C) If the secured party
obtained control through another person under ORS 78.1060 (4)(c), the time on
which priority would be based under this subsection if the other person were
the secured party; or
(c) If the collateral is
a commodity contract carried with a commodity intermediary, the satisfaction of
the requirement for control specified in section 6 (2)(b) of this 2001 Act with
respect to commodity contracts carried or to be carried with the commodity
intermediary.
(3) A security interest
held by a securities intermediary in a security entitlement or a securities
account maintained with the securities intermediary has priority over a
conflicting security interest held by another secured party.
(4) A security interest
held by a commodity intermediary in a commodity contract or a commodity account
maintained with the commodity intermediary has priority over a conflicting
security interest held by another secured party.
(5) A security interest
in a certificated security in registered form which is perfected by taking
delivery under section 33 (1) of this 2001 Act and not by control under section
34 of this 2001 Act has priority over a conflicting security interest perfected
by a method other than control.
(6) Conflicting security
interests created by a broker, securities intermediary, or commodity
intermediary which are perfected without control under section 6 of this 2001
Act rank equally.
(7) In all other cases,
priority among conflicting security interests in investment property is
governed by sections 42 and 43 of this 2001 Act.
SECTION 49.
9-329. Priority of security interests
in letter-of-credit right. 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 7 of this 2001 Act has priority to the extent of its control over a
conflicting security interest held by a secured party that does not have
control.
(2) Security interests
perfected by control under section 34 of this 2001 Act rank according to
priority in time of obtaining control.
SECTION 50. 9-330.
Priority of purchaser of chattel paper or instrument. (1) Purchaser’s
priority: Security interest claimed merely as proceeds. 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
and takes possession of the chattel paper or obtains control of the chattel
paper under section 5 of this 2001 Act; and
(b) The chattel paper
does not indicate that it has been assigned to an identified assignee other
than the purchaser.
(2) Purchaser’s
priority: Other security interests. A purchaser of chattel paper has
priority over a security interest in the chattel paper which is claimed other
than merely as proceeds of inventory subject to a security interest if the
purchaser gives new value and takes possession of the chattel paper or obtains
control of the chattel paper under section 5 of this 2001 Act in good faith, in
the ordinary course of the purchaser’s business, and without knowledge that the
purchase violates the rights of the secured party.
(3) Chattel paper
purchaser’s priority in proceeds. Except as otherwise provided in section
47 of this 2001 Act, a purchaser having priority in chattel paper under
subsection (1) or (2) of this section also has priority in proceeds of the
chattel paper to the extent that:
(a) Section 42 of this
2001 Act provides for priority in the proceeds; or
(b) The proceeds consist
of the specific goods covered by the chattel paper or cash proceeds of the
specific goods, even if the purchaser’s security interest in the proceeds is
unperfected.
(4) Instrument
purchaser’s priority. Except as otherwise provided in section 51 (1) of
this 2001 Act, a purchaser of an instrument has priority over a security
interest in the instrument perfected by a method other than possession if the
purchaser gives value and takes possession of the instrument in good faith and
without knowledge that the purchase violates the rights of the secured party.
(5) Holder of
purchase-money security interest gives new value. For purposes of
subsections (1) and (2) of this section, the holder of a purchase-money
security interest in inventory gives new value for chattel paper constituting
proceeds of the inventory.
(6) Indication of
assignment gives knowledge. For purposes of subsections (2) and (4) of this
section, if chattel paper or an instrument indicates that it has been assigned
to an identified secured party other than the purchaser, a purchaser of the
chattel paper or instrument has knowledge that the purchase violates the rights
of the secured party.
SECTION 51.
9-331. Priority of rights of
purchasers of instruments, documents and securities under ORS chapters 73, 77
and 78; priority of interests in financial assets and security entitlements
under ORS chapter 78. (1) Rights under ORS chapters 73, 77 and 78 not
limited. This chapter does not limit the rights of a holder in due course
of a negotiable instrument, a holder to which a negotiable document of title
has been duly negotiated or a protected purchaser of a security. These holders
or purchasers take priority over an earlier security interest, even if
perfected, to the extent provided in ORS chapters 73, 77 and 78.
(2) Protection under
ORS chapter 78. This chapter does not limit the rights of or impose
liability on a person to the extent that the person is protected against the
assertion of a claim under ORS chapter 78.
(3) Filing not
notice. Filing under this chapter does not constitute notice of a claim or
defense to the holders, or purchasers, or persons described in subsections (1)
and (2) of this section.
SECTION 52.
9-332. Transfer of money; transfer of
funds from deposit account. (1) Transferee of money. A transferee of
money takes the money free of a security interest unless the transferee acts in
collusion with the debtor in violating the rights of the secured party.
(2) Transferee of
funds from deposit account. A transferee of funds from a deposit account
takes the funds free of a security interest in the deposit account unless the
transferee acts in collusion with the debtor in violating the rights of the
secured party.
SECTION 53.
9-333. Priority of certain liens
arising by operation of law. (1) “Possessory lien.” As used 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
business;
(b) Which is created by
statute or rule of law in favor of the person; and
(c) Whose effectiveness
depends on the person’s possession of the goods.
(2) Priority of
possessory lien. A possessory lien on goods has priority over a security
interest in the goods unless the lien is created by a statute that expressly
provides otherwise.
SECTION 54.
9-334. Priority of security interests
in fixtures and crops. (1) Security interest in fixtures under this
chapter. 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) Security interest
in fixtures under real-property law. This chapter does not prevent creation
of an encumbrance upon fixtures under real property law.
(3) General rule:
subordination of security interest in fixtures. In cases not governed by
subsections (4) to (8) of this section, a security interest in fixtures is
subordinate to a conflicting interest of an encumbrancer or owner of the
related real property other than the debtor.
(4) Fixtures
purchase-money priority. Except as otherwise provided in subsection (8) of
this section, a perfected security interest in fixtures has priority over a
conflicting interest of an encumbrancer or owner of the real property if the
debtor has an interest of record in or is in possession of the real property
and:
(a) The security
interest is a purchase-money security interest;
(b) The interest of the
encumbrancer or owner arises before the goods become fixtures; and
(c) The security
interest is perfected by a fixture filing before the goods become fixtures or
within 20 days thereafter.
(5) Priority of
security interest in fixtures over interests in real property. A perfected
security interest in fixtures has priority over a conflicting interest of an
encumbrancer or owner of the real property if:
(a) The debtor has an
interest of record in the real property or is in possession of the real
property and the security interest:
(A) Is perfected by a
fixture filing before the interest of the encumbrancer or owner is of record;
and
(B) Has priority over
any conflicting interest of a predecessor in title of the encumbrancer or
owner;
(b) Before the goods
become fixtures, the security interest is perfected by any method permitted by
this chapter and the fixtures are readily removable:
(A) Factory or office
machines;
(B) Equipment that is
not primarily used or leased for use in the operation of the real property; or
(C) Replacements of
domestic appliances that are consumer goods;
(c) The conflicting
interest is a lien on the real property obtained by legal or equitable
proceedings after the security interest was perfected by any method permitted
by this chapter; or
(d) The security
interest is:
(A) Created in a
manufactured home in a manufactured-home transaction; and
(B) Perfected pursuant
to a statute described in section 31 (1)(b) of this 2001 Act.
(6) Priority based on
consent, disclaimer, or right to remove. A security interest in fixtures,
whether or not perfected, has priority over a conflicting interest of an
encumbrancer or owner of the real property if:
(a) The encumbrancer or
owner has, in an authenticated record, consented to the security interest or
disclaimed an interest in the goods as fixtures; or
(b) The debtor has a
right to remove the goods as against the encumbrancer or owner.
(7) Continuation of
priority under subsection (6)(b) of this section. The priority of the
security interest under subsection (6)(b) of this section continues for a
reasonable time if the debtor’s right to remove the goods as against the
encumbrancer or owner terminates.
(8) Priority of
construction mortgage. A mortgage is a construction mortgage to the extent
that it secures an obligation incurred for the construction of an improvement
on land, including the acquisition cost of the land, if a recorded record of
the mortgage so indicates. Except as otherwise provided in subsections (5) and
(6) of this section, a security interest in fixtures is subordinate to a
construction mortgage if a record of the mortgage is recorded before the goods
become fixtures and the goods become fixtures before the completion of the
construction. A mortgage has this priority to the same extent as a construction
mortgage to the extent that it is given to refinance a construction mortgage.
(9) Priority of
security interest in crops. A perfected security interest in crops growing
on real property has priority over a conflicting interest of an encumbrancer or
owner of the real property if the debtor has an interest of record in or is in
possession of the real property.
SECTION 55.
9-335. Accessions. (1) Creation
of security interest in accession. A security interest may be created in an
accession and continues in collateral that becomes an accession.
(2) Perfection of
security interest. If a security interest is perfected when the collateral
becomes an accession, the security interest remains perfected in the
collateral.
(3) Priority of
security interest. Except as otherwise provided in subsections (4) and (7)
of this section, the other provisions of sections 21 to 62 of this 2001 Act
determine the priority of a security interest in an accession.
(4) Compliance with
certificate-of-title statute. Except as otherwise provided in subsection
(7) of this section, a security interest in an accession is subordinate to a
security interest in the whole which is perfected by compliance with the
requirements of a certificate-of-title statute under section 31 (2) of this
2001 Act.
(5) Removal of
accession after default. After default, subject to sections 99 to 126 of
this 2001 Act, a secured party may remove an accession from other goods if the
security interest in the accession has priority over the claims of every person
having an interest in the whole.
(6) Reimbursement
following removal. A secured party that removes an accession from other
goods under subsection (5) of this section shall promptly reimburse any holder
of a security interest or other lien on, or owner of, the whole or of the other
goods, other than the debtor, for the cost of repair of any physical injury to
the whole or the other goods. The secured party need not reimburse the holder
or owner for any diminution in value of the whole or the other goods caused by
the absence of the accession removed or by any necessity for replacing it. A
person entitled to reimbursement may refuse permission to remove until the
secured party gives adequate assurance for the performance of the obligation to
reimburse.
(7) A security interest
in an accession has priority over a security interest in the whole which is
perfected by compliance with the requirements of a certificate-of-title statute
under section 31 (2) of this 2001 Act if the security interest in the accession
is a purchase money security interest that is perfected when the debtor
receives possession of the accession or within 20 days thereafter.
SECTION 56.
9-336. Commingled goods. (1) “Commingled
goods.” As used in this section, “commingled goods” means goods that are
physically united with other goods in such a manner that their identity is lost
in a product or mass.
(2) No security
interest in commingled goods as such. A security interest does not exist in
commingled goods as such. However, a security interest may attach to a product
or mass that results when goods become commingled goods.
(3) Attachment of
security interest to product or mass. If collateral becomes commingled
goods, a security interest attaches to the product or mass.
(4) Perfection of
security interest. If a security interest in collateral is perfected before
the collateral becomes commingled goods, the security interest that attaches to
the product or mass under subsection (3) of this section is perfected.
(5) Priority of
security interest. Except as otherwise provided in subsection (6) of this
section, the other provisions of sections 21 to 62 of this 2001 Act determine
the priority of a security interest that attaches to the product or mass under
subsection (3) of this section.
(6) Conflicting
security interests in product or mass. If more than one security interest
attaches to the product or mass under subsection (3) of this section, the
following rules determine priority:
(a) A security interest
that is perfected under subsection (4) of this section has priority over a
security interest that is unperfected at the time the collateral becomes
commingled goods.
(b) If more than one
security interest is perfected under subsection (4) of this section, the security
interests rank equally in proportion to the value of the collateral at the time
it became commingled goods.
SECTION 57.
9-337. Priority of security interests
in goods covered by certificate of title. If, while a security interest in
goods is perfected by any method under the law of another jurisdiction, this
state issues a certificate of title that does not show that the goods are
subject to the security interest or contain a statement that they may be
subject to security interests not shown on the certificate:
(1) A buyer of the
goods, other than a person in the business of selling goods of that kind, takes
free of the security interest if the buyer gives value and receives delivery of
the goods after issuance of the certificate and without knowledge of the security
interest; and
(2) The security
interest is subordinate to a conflicting security interest in the goods that
attaches, and is perfected under section 31 (2) of this 2001 Act, after
issuance of the certificate and without the conflicting secured party’s
knowledge of the security interest.
SECTION 58.
9-338. Priority of security interest
or agricultural lien perfected by filed financing statement providing certain
incorrect information. Except for information on the jurisdiction of
organization for an organization that is not a registered organization, if a
security interest or agricultural lien is perfected by a filed financing
statement providing information described in section 87 (2)(e) of this 2001 Act
which is incorrect at the time the financing statement is filed:
(1) The security
interest or agricultural lien is subordinate to a conflicting perfected
security interest in the collateral to the extent that the holder of the
conflicting security interest gives value in reasonable reliance upon the
incorrect information; and
(2) A purchaser, other
than a secured party, of the collateral takes free of the security interest or
agricultural lien to the extent that, in reasonable reliance upon the incorrect
information, the purchaser gives value and, in the case of chattel paper,
documents, goods, instruments or a security certificate, receives delivery of
the collateral.
SECTION 59.
9-339. Priority subject to
subordination. This chapter does not preclude subordination by agreement by
a person entitled to priority.
(Rights of Bank)
SECTION 60.
9-340. Effectiveness of right of
recoupment or set-off against deposit account. (1) Exercise of
recoupment or set-off. Except as otherwise provided in subsection (3) of
this section, a bank with which a deposit account is maintained may exercise
any right of recoupment or set-off against a secured party that holds a
security interest in the deposit account.
(2) Recoupment or
set-off not affected by security interest. Except as otherwise provided in
subsection (3) of this section, the application of this chapter to a security
interest in a deposit account does not affect a right of recoupment or set-off
of the secured party as to a deposit account maintained with the secured party.
(3) When set-off
ineffective. The exercise by a bank of a set-off against a deposit account
is ineffective against a secured party that holds a security interest in the
deposit account which is perfected by control under section 4 (1)(c) of this
2001 Act, if the set-off is based on a claim against the debtor.
SECTION 61.
9-341. Bank’s rights and duties with
respect to deposit account. Except as otherwise provided in section 60 (3)
of this 2001 Act, and unless the bank otherwise agrees in an authenticated
record, a bank’s rights and duties with respect to a deposit account maintained
with the bank are not terminated, suspended, or modified by:
(1) The creation,
attachment or perfection of a security interest in the deposit account;
(2) The bank’s knowledge
of the security interest; or
(3) The bank’s receipt
of instructions from the secured party.
SECTION 62.
9-342. Bank’s right to refuse to
enter into or disclose existence of control agreement. This chapter does
not require a bank to enter into an agreement of the kind described in section
4 (1)(b) of this 2001 Act, even if its customer so requests or directs. A bank
that has entered into such an agreement is not required to confirm the
existence of the agreement to another person unless requested to do so by its
customer.
RIGHTS OF THIRD PARTIES
SECTION 63.
9-401. Alienability of debtor’s
rights. (1) Other law governs alienability; exceptions. Except as
otherwise provided in subsection (2) of this section and sections 68, 69, 70
and 71 of this 2001 Act, whether a debtor’s rights in collateral may be
voluntarily or involuntarily transferred is governed by law other than this
chapter.
(2) Agreement does
not prevent transfer. An agreement between the debtor and secured party
which prohibits a transfer of the debtor’s rights in collateral or makes the
transfer a default does not prevent the transfer from taking effect.
SECTION 64.
9-402. Secured party not obligated on
contract of debtor or in tort. The existence of a security interest,
agricultural lien, or authority given to a debtor to dispose of or use
collateral, without more, does not subject a secured party to liability in
contract or tort for the debtor’s acts or omissions.
SECTION 65.
9-403. Agreement not to assert
defenses against assignee. (1) “Value.” As used in this section,
“value” has the meaning provided in ORS 73.0303 (1).
(2) Agreement not to
assert claim or defense. Except as otherwise provided in this section, an
agreement between an account debtor and an assignor not to assert against an
assignee any claim or defense that the account debtor may have against the
assignor is enforceable by an assignee that takes an assignment:
(a) For value;
(b) In good faith;
(c) Without notice of a
claim of a property or possessory right to the property assigned; and
(d) Without notice of a
defense or claim in recoupment of the type that may be asserted against a
person entitled to enforce a negotiable instrument under ORS 73.0305 (1).
(3) When subsection
(2) of this section not applicable. Subsection (2) of this section does not
apply to defenses of a type that may be asserted against a holder in due course
of a negotiable instrument under ORS 73.0305 (2).
(4) Omission of
required statement in consumer transaction. In a consumer transaction, if a
record evidences the account debtor’s obligation, law other than this chapter
requires that the record include a statement to the effect that the rights of
an assignee are subject to claims or defenses that the account debtor could
assert against the original obligee, and the record does not include such a
statement:
(a) The record has the
same effect as if the record included such a statement; and
(b) The account debtor
may assert against an assignee those claims and defenses that would have been
available if the record included such a statement.
(5) Rule for
individual under other law. This section is subject to law other than this
chapter which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal, family, or
household purposes.
(6) Other law not
displaced. Except as otherwise provided in subsection (4) of this section,
this section does not displace law other than this chapter which gives effect
to an agreement by an account debtor not to assert a claim or defense against
an assignee.
SECTION 66.
9-404. Rights acquired by assignee;
claims and defenses against assignee. (1) Assignee’s rights subject to
terms, claims and defenses; exceptions. Unless an account debtor has made
an enforceable agreement not to assert defenses or claims and subject to
subsections (2) to (5) of this section, the rights of an assignee are subject
to:
(a) All terms of the
agreement between the account debtor and assignor and any defense or claim in
recoupment arising from the transaction that gave rise to the contract; and
(b) Any other defense or
claim of the account debtor against the assignor which accrues before the
account debtor receives a notification of the assignment authenticated by the
assignor or the assignee.
(2) Account debtor’s
claim reduces amount owed to assignee. Subject to subsection (3) of this
section and except as otherwise provided in subsection (4) of this section, the
claim of an account debtor against an assignor may be asserted against an
assignee under subsection (1) of this section only to reduce the amount the
account debtor owes.
(3) Rule for
individual under other law. This section is subject to law other than this
chapter which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal, family or
household purposes.
(4) Omission of
required statement in consumer transaction. In a consumer transaction, if a
record evidences the account debtor’s obligation, law other than this chapter
requires that the record include a statement to the effect that the account
debtor’s recovery against an assignee with respect to claims and defenses
against the assignor may not exceed amounts paid by the account debtor under
the record, and the record does not include such a statement, the extent to
which a claim of an account debtor against the assignor may be asserted against
an assignee is determined as if the record included such a statement.
(5) Inapplicability
to health-care-insurance receivable. This section does not apply to an
assignment of a health-care-insurance receivable.
SECTION 67.
9-405. Modification of assigned
contract. (1) Effect of modification on assignee. A modification of
or substitution for an assigned contract is effective against an assignee if
made in good faith. The assignee acquires corresponding rights under the
modified or substituted contract. The assignment may provide that the
modification or substitution is a breach of contract by the assignor. This subsection
is subject to subsections (2) to (4) of this section.
(2) Applicability of
subsection (1) of this section. Subsection (1) of this section applies to
the extent that:
(a) The right to payment
or a part thereof under an assigned contract has not been fully earned by
performance; or
(b) The right to payment
or a part thereof has been fully earned by performance and the account debtor
has not received notification of the assignment under section 68 (1) of this
2001 Act.
(3) Rule for
individual under other law. This section is subject to law other than this
chapter which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal, family or
household purposes.
(4) Inapplicability
to health-care-insurance receivable. This section does not apply to an
assignment of a health-care-insurance receivable.
SECTION 68.
9-406. Discharge of account debtor;
notification of assignment; identification and proof of assignment;
restrictions on assignment of accounts, chattel paper, payment intangibles and
promissory notes ineffective. (1) Discharge of account debtor; effect of
notification. Subject to subsections (2) to (9) of this section, an account
debtor on an account, chattel paper or a payment intangible may discharge its
obligation by paying the assignor until, but not after, the account debtor
receives a notification, authenticated by the assignor or the assignee, that
the amount due or to become due has been assigned and that payment is to be made
to the assignee. After receipt of the notification, the account debtor may
discharge its obligation by paying the assignee and may not discharge the
obligation by paying the assignor.
(2) When notification
ineffective. Subject to subsection (8) of this section, notification is
ineffective under subsection (1) of this section:
(a) If it does not
reasonably identify the rights assigned;
(b) To the extent that
an agreement between an account debtor and a seller of a payment intangible
limits the account debtor’s duty to pay a person other than the seller and the
limitation is effective under law other than this chapter; or
(c) At the option of an
account debtor, if the notification notifies the account debtor to make less
than the full amount of any installment or other periodic payment to the
assignee, even if:
(A) Only a portion of
the account, chattel paper or payment intangible has been assigned to that
assignee;
(B) A portion has been
assigned to another assignee; or
(C) The account debtor
knows that the assignment to that assignee is limited.
(3) Proof of
assignment. Subject to subsection (8) of this section, if requested by the
account debtor, an assignee shall seasonably furnish reasonable proof that the
assignment has been made. Unless the assignee complies, the account debtor may
discharge its obligation by paying the assignor, even if the account debtor has
received a notification under subsection (1) of this section.
(4) Term restricting
assignment generally ineffective. Except as otherwise provided in
subsection (5) of this section and ORS 72A.3030 and section 69 of this 2001
Act, and subject to subsection (8) of this section, a term in an agreement
between an account debtor and an assignor or in a promissory note is ineffective
to the extent that it:
(a) Prohibits, restricts
or requires the consent of the account debtor or person obligated on the
promissory note to the assignment or transfer of, or the creation, attachment,
perfection or enforcement of a security interest in, the account, chattel paper,
payment intangible or promissory note; or
(b) Provides that the
assignment or transfer or the creation, attachment, perfection or enforcement
of the security interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination or remedy under
the account, chattel paper, payment intangible or promissory note.
(5) Inapplicability
of subsection (4) of this section to certain sales. Subsection (4) of this
section does not apply to the sale of a payment intangible or promissory note.
(6) Legal
restrictions on assignment generally ineffective. Except as otherwise
provided in ORS 72A.3030 and section 69 of this 2001 Act and subject to
subsections (8) and (9) of this section, a rule of law, statute or regulation
that prohibits, restricts or requires the consent of a government, governmental
body or official, or account debtor to the assignment or transfer of, or
creation of a security interest in, an account or chattel paper is ineffective
to the extent that the rule of law, statute or regulation:
(a) Prohibits, restricts
or requires the consent of the government, governmental body or official, or
account debtor to the assignment or transfer of, or the creation, attachment,
perfection or enforcement of a security interest in the account or chattel
paper; or
(b) Provides that the
assignment or transfer or the creation, attachment, perfection or enforcement
of the security interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination or remedy under
the account or chattel paper.
(7) Subsection (2)(c)
of this section not waivable. Subject to subsection (8) of this section, an
account debtor may not waive or vary its option under subsection (2)(c) of this
section.
(8) Rule for
individual under other law. This section is subject to law other than this
chapter which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal, family or
household purposes.
(9) Inapplicability.
(a) This section does not apply to the assignment of a health-care-insurance
receivable.
(b) Subsections (4) and
(6) of this section do not apply to the assignment or transfer of, or the
creation of a security interest in, a claim or right to receive compensation
for injuries or sickness as described in 26 U.S.C. 104(a)(2), provided that
such transaction constitutes a sale of such claim or right. The limitation in
this paragraph is intended to leave to the court the determination of the
proper rules in such cases. The court may not infer from that limitation the
nature of the proper rule in such cases and may continue to apply established
approaches.
(c) Subsections (4) and
(6) of this section do not apply to the following:
(A) The assignment or
transfer of, or the creation of a security interest in, a claim or right to
receive compensation for injuries or sickness as described in 26 U.S.C.
104(a)(1);
(B) The assignment or
transfer of, or the creation of a security interest in, a claim or right to
receive benefits under a special needs trust as described in 42 U.S.C.
1396p(d)(4); or
(C) The assignment or
transfer of, or the creation, attachment, perfection or enforcement of a
security interest in, the benefits, rights, privileges or options accruing
under an annuity policy, to the extent that the annuity policy provides for
such a restriction and the restriction is permitted under ORS 743.049.
(d) Subsection (6) of
this section does not apply to the assignment or transfer of, or the creation,
attachment, perfection or enforcement of a security interest in, a right when
the transfer of the right is prohibited or restricted by ORS 147.325, 461.250
(7) or 656.234, to the extent that ORS 147.325, 461.250 (7) or 656.234 is inconsistent
with subsection (6) of this section.
(10) Section prevails
over inconsistent law. Except to the extent otherwise provided in
subsection (9) of this section, this section prevails over any inconsistent
provision of an existing or future statute unless the provision refers
expressly to this section and states that the provision prevails over this
section.
SECTION 69.
9-407. Restrictions on creation or
enforcement of security interest in leasehold interest or in lessor’s residual
interest. (1) Term restricting assignment generally ineffective.
Except as otherwise provided in subsection (2) of this section, a term in a
lease agreement is ineffective to the extent that it:
(a) Prohibits, restricts
or requires the consent of a party to the lease to the assignment or transfer
of, or the creation, attachment, perfection or enforcement of a security
interest in, an interest of a party under the lease contract or in the lessor’s
residual interest in the goods; or
(b) Provides that the
assignment or transfer or the creation, attachment, perfection or enforcement
of the security interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination or remedy under
the lease.
(2) Effectiveness of
certain terms. Except as otherwise provided in ORS 72A.3030 (7), a term
described in subsection (1)(b) of this section is effective to the extent that
there is:
(a) A transfer by the
lessee of the lessee’s right of possession or use of the goods in violation of
the term; or
(b) A delegation of a
material performance of either party to the lease contract in violation of the
term.
(3) Security interest
not material impairment. The creation, attachment, perfection or
enforcement of a security interest in the lessor’s interest under the lease
contract or the lessor’s residual interest in the goods is not a transfer that
materially impairs the lessee’s prospect of obtaining return performance or
materially changes the duty of or materially increases the burden or risk imposed
on the lessee within the purview of ORS 72A.3030 (4) unless, and then only to
the extent that, enforcement actually results in a delegation of material
performance of the lessor.
SECTION 70.
9-408. Restrictions on assignment of
promissory notes, health-care-insurance receivables, and certain general
intangibles ineffective. (1) Term restricting assignment generally
ineffective. Except as otherwise provided in subsection (2) of this
section, a term in a promissory note or in an agreement between an account
debtor and a debtor which relates to a health-care-insurance receivable or a
general intangible, including a contract, permit, license or franchise, and
which term prohibits, restricts or requires the consent of the person obligated
on the promissory note or the account debtor to, the assignment or transfer of,
or creation, attachment or perfection of a security interest in, the promissory
note, health-care-insurance receivable or general intangible, is ineffective to
the extent that the term:
(a) Would impair the
creation, attachment or perfection of a security interest; or
(b) Provides that the
assignment or transfer or the creation, attachment or perfection of the
security interest may give rise to a default, breach, right of recoupment,
claim, defense, termination, right of termination or remedy under the
promissory note, health-care-insurance receivable or general intangible.
(2) Applicability of
subsection (1) of this section to sales of certain rights to payment.
Subsection (1) of this section applies to a security interest in a payment
intangible or promissory note only if the security interest arises out of a
sale of the payment intangible or promissory note.
(3) Legal
restrictions on assignment generally ineffective. A rule of law, statute or
regulation that prohibits, restricts or requires the consent of a government,
governmental body or official, person obligated on a promissory note or account
debtor to the assignment or transfer of, or creation of a security interest in,
a promissory note, health-care-insurance receivable or general intangible,
including a contract, permit, license or franchise between an account debtor
and a debtor, is ineffective to the extent that the rule of law, statute or
regulation:
(a) Would impair the
creation, attachment or perfection of a security interest; or
(b) Provides that the
assignment or transfer or the creation, attachment or perfection of the
security interest may give rise to a default, breach, right of recoupment,
claim, defense, termination, right of termination or remedy under the
promissory note, health-care-insurance receivable or general intangible.
(4) Limitation on
ineffectiveness under subsections (1) and (3) of this section. To the
extent that a term in a promissory note or in an agreement between an account
debtor and a debtor which relates to a health-care-insurance receivable or
general intangible or a rule of law, statute or regulation described in
subsection (3) of this section would be effective under law other than this
chapter but is ineffective under subsection (1) or (3) of this section, the
creation, attachment or perfection of a security interest in the promissory
note, health-care-insurance receivable or general intangible:
(a) Is not enforceable
against the person obligated on the promissory note or the account debtor;
(b) Does not impose a
duty or obligation on the person obligated on the promissory note or the
account debtor;
(c) Does not require the
person obligated on the promissory note or the account debtor to recognize the
security interest, pay or render performance to the secured party, or accept
payment or performance from the secured party;
(d) Does not entitle the
secured party to use or assign the debtor’s rights under the promissory note,
health-care-insurance receivable or general intangible, including any related
information or materials furnished to the debtor in the transaction giving rise
to the promissory note, health-care-insurance receivable or general intangible;
(e) Does not entitle the
secured party to use, assign, possess or have access to any trade secrets or
confidential information of the person obligated on the promissory note or the
account debtor; and
(f) Does not entitle the
secured party to enforce the security interest in the promissory note,
health-care-insurance receivable or general intangible.
(5) Inapplicability.
(a) Subsections (1) and (3) of this section do not apply to the assignment or
transfer of, or the creation of a security interest in, a claim or right to
receive compensation for injuries or sickness as described in 26 U.S.C.
104(a)(2), provided that such transaction constitutes a sale of such claim or
right. The limitation in this paragraph is intended to leave to the court the
determination of the proper rules in such cases. The court may not infer from
that limitation the nature of the proper rule in such cases and may continue to
apply established approaches.
(b) Subsections (1) and
(3) of this section do not apply to the following:
(A) The assignment or
transfer of, or the creation of a security interest in, a claim or right to
receive compensation for injuries or sickness as described in 26 U.S.C.
104(a)(1);
(B) The assignment or
transfer of, or the creation of a security interest in, a claim or right to
receive benefits under a special needs trust as described in 42 U.S.C.
1396p(d)(4); or
(C) The assignment or
transfer of, or the creation, attachment, perfection or enforcement of a
security interest in, the benefits, rights, privileges or options accruing
under an annuity policy, to the extent that the annuity policy provides for
such a restriction and the restriction is permitted under ORS 743.049.
(c) Subsection (3) of
this section does not apply to the assignment or transfer of, or the creation,
attachment, perfection or enforcement of a security interest in, a right when
the transfer of the right is prohibited or restricted by ORS 147.325, 461.250
(7) or 656.234, to the extent that ORS 147.325, 461.250 (7) or 656.234 is
inconsistent with subsection (3) of this section.
(6) Section prevails
over inconsistent law. Except to the extent otherwise provided in
subsection (5) of this section, this section prevails over any inconsistent
provision of an existing or future statute unless the provision refers
expressly to this section and states that the provision prevails over this
section.
SECTION 71. 9-409.
Restrictions on assignment of letter-of-credit rights ineffective. (1) Term
or law restricting assignment generally ineffective. A term in a letter of
credit or a rule of law, statute, regulation, custom or practice applicable to
the letter of credit which prohibits, restricts or requires the consent of an
applicant, issuer or nominated person to a beneficiary’s assignment of or
creation of a security interest in a letter-of-credit right is ineffective to
the extent that the term or rule of law, statute, regulation, custom or
practice:
(a) Would impair the
creation, attachment or perfection of a security interest in the
letter-of-credit right; or
(b) Provides that the
assignment or the creation, attachment or perfection of the security interest
may give rise to a default, breach, right of recoupment, claim, defense,
termination, right of termination or remedy under the letter-of-credit right.
(2) Limitation on
ineffectiveness under subsection (1) of this section. To the extent that a
term in a letter of credit is ineffective under subsection (1) of this section
but would be effective under law other than this chapter or a custom or
practice applicable to the letter of credit, to the transfer of a right to draw
or otherwise demand performance under the letter of credit, or to the
assignment of a right to proceeds of the letter of credit, the creation,
attachment or perfection of a security interest in the letter-of-credit right:
(a) Is not enforceable
against the applicant, issuer, nominated person or transferee beneficiary;
(b) Imposes no duties or
obligations on the applicant, issuer, nominated person or transferee
beneficiary; and
(c) Does not require the
applicant, issuer, nominated person or transferee beneficiary to recognize the
security interest, pay or render performance to the secured party, or accept
payment or other performance from the secured party.
FILING
(Filing Office; Contents and
Effectiveness of Financing Statement)
SECTION 72.
9-501. Filing office. (1) Filing
offices. Except as otherwise provided in subsection (2) of this section, if
the local law of this state governs perfection of a security interest or
agricultural lien, the office in which to file a financing statement to perfect
the security interest or agricultural lien is:
(a) The office
designated for the filing or recording of a record of a mortgage on the related
real property, if:
(A) The collateral is
as-extracted collateral or timber to be cut; or
(B) The financing
statement is filed as a fixture filing and the collateral is goods that are or
are to become fixtures; or
(b) The office of the
Secretary of State, in all other cases, including a case in which the
collateral is goods that are or are to become fixtures and the financing
statement is not filed as a fixture filing.
(2) Filing office for
transmitting utilities. The office in which to file a financing statement
to perfect a security interest in collateral, including fixtures, of a
transmitting utility is the office of the Secretary of State. The financing
statement also constitutes a fixture filing as to the collateral indicated in
the financing statement which is or is to become fixtures.
SECTION 73.
9-502. Contents of financing
statement; record of mortgage as financing statement; time of filing financing
statement. (1) Sufficiency of financing statement. Subject to
subsection (2) of this section, a financing statement is sufficient only if it:
(a) Provides the name of
the debtor;
(b) Provides the name of
the secured party or a representative of the secured party; and
(c) Indicates the
collateral covered by the financing statement.
(2) Real-property-related
financing statements. Except as otherwise provided in section 72 (2) of
this 2001 Act, to be sufficient, a financing statement that covers as-extracted
collateral or timber to be cut, or which is filed as a fixture filing and
covers goods that are or are to become fixtures, must satisfy subsection (1) of
this section and also:
(a) Indicate that it
covers this type of collateral;
(b) Indicate that it is
to be filed for record in the real property records;
(c) Provide a
description of the real property to which the collateral is related sufficient
to give constructive notice of a mortgage under the law of this state if the
description were contained in a record of the mortgage of the real property;
and
(d) If the debtor does
not have an interest of record in the real property, provide the name of a
record owner.
(3) Record of
mortgage as financing statement. A record of a mortgage is effective, from
the date of recording, as a financing statement filed as a fixture filing or as
a financing statement covering as-extracted collateral or timber to be cut only
if:
(a) The record indicates
the goods or accounts that it covers;
(b) The goods are or are
to become fixtures related to the real property described in the record or the
collateral is related to the real property described in the record and is
as-extracted collateral or timber to be cut;
(c) The record satisfies
the requirements for a financing statement in this section other than an
indication that it is to be filed in the real property records; and
(d) The record is duly
recorded.
(4) Filing before
security agreement or attachment. A financing statement may be filed before
a security agreement is made or a security interest otherwise attaches.
SECTION 74.
9-503. Name of debtor and secured
party. (1) Sufficiency of debtor’s name. A financing statement
sufficiently provides the name of the debtor:
(a) If the debtor is a
registered organization, only if the financing statement provides the name of
the debtor indicated on the public record of the debtor’s jurisdiction of
organization which shows the debtor to have been organized;
(b) If the debtor is a
decedent’s estate, only if the financing statement provides the name of the
decedent and indicates that the debtor is an estate;
(c) If the debtor is a
trust or a trustee acting with respect to property held in trust, only if the
financing statement:
(A) Provides the name
specified for the trust in its organic documents or, if no name is specified,
provides the name of the settlor and additional information sufficient to
distinguish the debtor from other trusts having one or more of the same
settlors; and
(B) Indicates, in the
debtor’s name or otherwise, that the debtor is a trust or is a trustee acting
with respect to property held in trust; and
(d) In other cases:
(A) If the debtor has a
name, only if it provides the individual or organizational name of the debtor;
and
(B) If the debtor does
not have a name, only if it provides the names of the partners, members,
associates or other persons comprising the debtor.
(2) Additional
debtor-related information. A financing statement that provides the name of
the debtor in accordance with subsection (1) of this section is not rendered
ineffective by the absence of:
(a) A trade name or
other name of the debtor; or
(b) Unless required
under subsection (1)(d)(B) of this section, names of partners, members,
associates or other persons comprising the debtor.
(3) Debtor’s trade
name insufficient. A financing statement that provides only the debtor’s
trade name does not sufficiently provide the name of the debtor.
(4) Representative
capacity. Failure to indicate the representative capacity of a secured
party or representative of a secured party does not affect the sufficiency of a
financing statement.
(5) Multiple debtors
and secured parties. A financing statement may provide the name of more
than one debtor and the name of more than one secured party.
SECTION 75.
9-504. Indication of collateral.
A financing statement sufficiently indicates the collateral that it covers if
the financing statement provides:
(1) A description of the
collateral pursuant to section 8 of this 2001 Act; or
(2) An indication that
the financing statement covers all assets or all personal property.
SECTION 76.
9-505. Filing and compliance with
other statutes and treaties for consignments, leases, other bailments and other
transactions. (1) Use of terms other than “debtor” and “secured party.”
A consignor, lessor or other bailor of goods, a licensor or a buyer of a
payment intangible or promissory note may file a financing statement, or may
comply with a statute or treaty described in section 31 (1) of this 2001 Act,
using the terms “consignor,” “consignee,” “lessor,” “lessee,” “bailor,”
“bailee,” “licensor,” “licensee,” “owner,” “registered owner,” “buyer,”
“seller” or words of similar import, instead of the terms “secured party” and
“debtor.”
(2) Effect of
financing statement under subsection (1) of this section. Sections 72 to 98
of this 2001 Act apply to the filing of a financing statement under subsection
(1) of this section and, as appropriate, to compliance that is equivalent to
filing a financing statement under section 31 (2) of this 2001 Act, but the
filing or compliance is not of itself a factor in determining whether the
collateral secures an obligation. If it is determined for another reason that
the collateral secures an obligation, a security interest held by the
consignor, lessor, bailor, licensor, owner or buyer which attaches to the
collateral is perfected by the filing or compliance.
SECTION 77.
9-506. Effect of errors or omissions.
(1) Minor errors and omissions. A financing statement substantially
satisfying the requirements of sections 72 to 98 of this 2001 Act is effective,
even if it has minor errors or omissions, unless the errors or omissions make
the financing statement seriously misleading.
(2) Financing
statement seriously misleading. Except as otherwise provided in subsection
(3) of this section, a financing statement that fails sufficiently to provide
the name of the debtor in accordance with section 74 (1) of this 2001 Act is
seriously misleading.
(3) Financing
statement not seriously misleading. Except as otherwise provided in
subsection (4) of this section, if a search of the records of the filing office
under the debtor’s correct name, using the filing office’s standard search
logic, if any, would disclose a financing statement that fails sufficiently to
provide the name of the debtor in accordance with section 74 (1) of this 2001
Act, the name provided does not make the financing statement seriously
misleading.
(4) If the filing
office’s standard search logic so changes that a search of the records of the
filing office under the debtor’s correct name, using the changed search logic,
would not disclose a financing statement previously deemed not to be seriously
misleading by reason of subsection (3) of this section, the financing statement
is effective except against a purchaser of the collateral which gives value in
reasonable reliance upon a search using the changed search logic.
(5) “Debtor’s correct
name.” For purposes of section 79 (2) of this 2001 Act, the “debtor’s
correct name” in subsections (3) and (5) of this section means the correct name
of the new debtor.
SECTION 78.
9-507. Effect of certain events on
effectiveness of financing statement. (1) Disposition. A filed
financing statement remains effective with respect to collateral that is sold,
exchanged, leased, licensed or otherwise disposed of and in which a security
interest or agricultural lien continues, even if the secured party knows of or
consents to the disposition.
(2) Information
becoming seriously misleading. Except as otherwise provided in subsection
(3) of this section and sections 77 (4) and 79 of this 2001 Act, a financing
statement is not rendered ineffective if, after the financing statement is
filed, the information provided in the financing statement becomes seriously
misleading under section 77 of this 2001 Act.
(3) Change in
debtor’s name. If a debtor so changes its name that a filed financing
statement becomes seriously misleading under section 77 of this 2001 Act:
(a) The financing
statement is effective to perfect a security interest in collateral acquired by
the debtor before, or within four months after, the change; and
(b) The financing
statement is not effective to perfect a security interest in collateral
acquired by the debtor more than four months after the change, unless an
amendment to the financing statement which renders the financing statement not
seriously misleading is filed within four months after the change.
SECTION 79.
9-508. Effectiveness of financing
statement if new debtor becomes bound by security agreement. (1) Financing
statement naming original debtor. Except as otherwise provided in this
section, a filed financing statement naming an original debtor is effective to
perfect a security interest in collateral in which a new debtor has or acquires
rights to the extent that the financing statement would have been effective had
the original debtor acquired rights in the collateral.
(2) Financing
statement becoming seriously misleading. If the difference between the name
of the original debtor and that of the new debtor causes a filed financing
statement that is effective under subsection (1) of this section to be
seriously misleading under section 77 of this 2001 Act:
(a) The financing
statement is effective to perfect a security interest in collateral acquired by
the new debtor before, and within four months after, the new debtor becomes
bound under section 13 (4) of this 2001 Act; and
(b) The financing
statement is not effective to perfect a security interest in collateral
acquired by the new debtor more than four months after the new debtor becomes
bound under section 13 (4) of this 2001 Act unless an initial financing
statement providing the name of the new debtor is filed before the expiration
of that time.
(3) When section not
applicable. This section does not apply to collateral as to which a filed
financing statement remains effective against the new debtor under section 78
(1) of this 2001 Act.
SECTION 80.
9-509. Persons entitled to file a
record. (1) Person entitled to file record. A person may file an
initial financing statement, amendment that adds collateral covered by a
financing statement, or amendment that adds a debtor to a financing statement
only if:
(a) The debtor
authorizes the filing in an authenticated record or pursuant to subsection (2)
or (3) of this section; or
(b) The person holds an
agricultural lien that has become effective at the time of filing and the
financing statement covers only collateral in which the person holds an
agricultural lien.
(2) Security
agreement as authorization. By authenticating or becoming bound as debtor
by a security agreement, a debtor or new debtor authorizes the filing of an
initial financing statement, and an amendment, covering:
(a) The collateral
described in the security agreement; and
(b) Property that
becomes collateral under section 35 (1)(b) of this 2001 Act, whether or not the
security agreement expressly covers proceeds.
(3) Acquisition of collateral
as authorization. By acquiring collateral in which a security interest or
agricultural lien continues under section 35 (1)(a) of this 2001 Act, a debtor
authorizes the filing of an initial financing statement, and an amendment,
covering the collateral and property that becomes collateral under section 35
(1)(b) of this 2001 Act.
(4) Person entitled
to file certain amendments. A person may file an amendment other than an
amendment that adds collateral covered by a financing statement or an amendment
that adds a debtor to a financing statement only if:
(a) The secured party of
record authorizes the filing; or
(b) The amendment is a
termination statement for a financing statement as to which the secured party
of record has failed to file or send a termination statement as required by
section 84 (1) or (3) of this 2001 Act, the debtor authorizes the filing, and
the termination statement indicates that the debtor authorized it to be filed.
(5) Multiple secured
parties of record. If there is more than one secured party of record for a
financing statement, each secured party of record may authorize the filing of
an amendment under subsection (4) of this section.
SECTION 81.
9-510. Effectiveness of filed record.
(1) Filed record effective if authorized. A filed record is effective
only to the extent that it was filed by a person that may file it under section
80 of this 2001 Act.
(2) Authorization by
one secured party of record. A record authorized by one secured party of
record does not affect the financing statement with respect to another secured
party of record.
(3) Continuation
statement not timely filed. A continuation statement that is not filed
within the six-month period prescribed by section 86 (4) of this 2001 Act is
ineffective.
SECTION 82.
9-511. Secured party of record.
(1) Secured party of record. A secured party of record with respect to a
financing statement is a person whose name is provided as the name of the
secured party or a representative of the secured party in an initial financing
statement that has been filed. If an initial financing statement is filed under
section 85 (1) of this 2001 Act, the assignee named in the initial financing
statement is the secured party of record with respect to the financing
statement.
(2) Amendment naming
secured party of record. If an amendment of a financing statement which
provides the name of a person as a secured party or a representative of a
secured party is filed, the person named in the amendment is a secured party of
record. If an amendment is filed under section 85 (2) of this 2001 Act, the
assignee named in the amendment is a secured party of record.
(3) Amendment
deleting secured party of record. A person remains a secured party of
record until the filing of an amendment of the financing statement which
deletes the person.
SECTION 83.
9-512. Amendment of financing
statement. (1) Amendment of
information in financing statement. Subject to section 80 of this 2001 Act,
a person may add or delete collateral covered by, continue or terminate the
effectiveness of, or, subject to subsection (5) of this section, otherwise
amend the information provided in, a financing statement by filing an amendment
that:
(a) Identifies, by its
file number, the initial financing statement to which the amendment relates;
and
(b) If the amendment
relates to an initial financing statement filed or recorded in a filing office
described in section 72 (1)(a) of this 2001 Act, provides the information
specified in section 73 (2) of this 2001 Act.
(2) Period of effectiveness
not affected. Except as otherwise provided in section 86 of this 2001 Act,
the filing of an amendment does not extend the period of effectiveness of the
financing statement.
(3) Effectiveness of
amendment adding collateral. A financing statement that is amended by an
amendment that adds collateral is effective as to the added collateral only
from the date of the filing of the amendment.
(4) Effectiveness of
amendment adding debtor. A financing statement that is amended by an
amendment that adds a debtor is effective as to the added debtor only from the
date of the filing of the amendment.
(5) Certain
amendments ineffective. An amendment is ineffective to the extent it:
(a) Purports to delete
all debtors and fails to provide the name of a debtor to be covered by the
financing statement; or
(b) Purports to delete
all secured parties of record and fails to provide the name of a new secured
party of record.
SECTION 84.
9-513. Termination statement. (1)
Consumer goods. A secured party shall cause the secured party of record
for a financing statement to file a termination statement for the financing
statement if the financing statement covers consumer goods and:
(a) There is no
obligation secured by the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or otherwise give value; or
(b) The debtor did not
authorize the filing of the initial financing statement.
(2) Time for
compliance with subsection (1) of this section. To comply with subsection
(1) of this section, a secured party shall cause the secured party of record to
file the termination statement:
(a) Within one month
after there is no obligation secured by the collateral covered by the financing
statement and no commitment to make an advance, incur an obligation or
otherwise give value; or
(b) If earlier, within
20 days after the secured party receives an authenticated demand from a debtor.
(3) Other collateral.
In cases not governed by subsection (1) of this section, within 20 days after a
secured party receives an authenticated demand from a debtor, the secured party
shall cause the secured party of record for a financing statement to send to
the debtor a termination statement for the financing statement or file the
termination statement in the filing office if:
(a) Except in the case
of a financing statement covering accounts or chattel paper that has been sold
or goods that are the subject of a consignment, there is no obligation secured
by the collateral covered by the financing statement and no commitment to make
an advance, incur an obligation, or otherwise give value;
(b) The financing
statement covers accounts or chattel paper that has been sold but as to which
the account debtor or other person obligated has discharged its obligation;
(c) The financing
statement covers goods that were the subject of a consignment to the debtor but
are not in the debtor’s possession; or
(d) The debtor did not
authorize the filing of the initial financing statement.
(4) Effect of filing
termination statement. Except as otherwise provided in section 81 of this
2001 Act, upon the filing of a termination statement with the filing office,
the financing statement to which the termination statement relates ceases to be
effective. Except as otherwise provided in section 81 of this 2001 Act, for
purposes of sections 90 (7), 93 (1) and 94 (3) of this 2001 Act, the filing
with the filing office of a termination statement relating to a financing
statement that indicates that the debtor is a transmitting utility also causes
the effectiveness of the financing statement to lapse.
SECTION 85.
9-514. Assignment of powers of
secured party of record. (1) Assignment reflected on initial financing
statement. Except as otherwise provided in subsection (3) of this section,
an initial financing statement may reflect an assignment of all of the secured
party’s power to authorize an amendment to the financing statement by providing
the name and mailing address of the assignee as the name and address of the
secured party.
(2) Assignment of
filed financing statement. Except as otherwise provided in subsection (3)
of this section, a secured party of record may assign of record all or part of
its power to authorize an amendment to a financing statement by filing in the
filing office an amendment of the financing statement which:
(a) Identifies, by its
file number, the initial financing statement to which it relates;
(b) Provides the name of
the assignor; and
(c) Provides the name
and mailing address of the assignee.
(3) Assignment of
record of mortgage. An assignment of record of a security interest in a
fixture covered by a record of a mortgage which is effective as a financing
statement filed as a fixture filing under section 73 (3) of this 2001 Act may
be made only by an assignment of record of the mortgage in the manner provided
by law of this state other than the Uniform Commercial Code.
SECTION 86.
9-515. Duration and effectiveness of
financing statement; effect of lapsed financing statement; renewal notice. (1)
Five-year effectiveness. Except as otherwise provided in subsections
(2), (5), (6) and (7) of this section, a filed financing statement is effective
for a period of five years after the date of filing.
(2) Public-finance or
manufactured-home transaction. Except as otherwise provided in subsections
(5), (6) and (7) of this section, an initial financing statement filed in
connection with a public-finance transaction or manufactured-home transaction
is effective for a period of 30 years after the date of filing if it indicates
that it is filed in connection with a public-finance transaction or
manufactured-home transaction.
(3) Lapse and
continuation of financing statement. The effectiveness of a filed financing
statement lapses on the expiration of the period of its effectiveness unless
before the lapse a continuation statement is filed pursuant to subsection (4)
of this section. Upon lapse, a financing statement ceases to be effective and
any security interest or agricultural lien that was perfected by the financing
statement becomes unperfected, unless the security interest is perfected
otherwise. If the security interest or agricultural lien becomes unperfected
upon lapse, it is deemed never to have been perfected as against a purchaser of
the collateral for value.
(4) When continuation
statement may be filed. A continuation statement may be filed only within
six months before the expiration of the five-year period specified in
subsection (1) of this section or the 30-year period specified in subsection
(2) of this section, whichever is applicable.
(5) Effect of filing
continuation statement. Except as otherwise provided in section 81 of this
2001 Act, upon timely filing of a continuation statement, the effectiveness of
the initial financing statement continues for a period of five years commencing
on the day on which the financing statement would have become ineffective in
the absence of the filing. Upon the expiration of the five-year period, the
financing statement lapses in the same manner as provided in subsection (3) of
this section, unless, before the lapse, another continuation statement is filed
pursuant to subsection (4) of this section. Succeeding continuation statements
may be filed in the same manner to continue the effectiveness of the initial
financing statement.
(6) Transmitting
utility financing statement. If a debtor is a transmitting utility and a
filed financing statement so indicates, the financing statement is effective
until a termination statement is filed.
(7) Record of
mortgage as financing statement. A record of a mortgage that is effective
as a financing statement filed as a fixture filing under section 73 (3) of this
2001 Act remains effective as a financing statement filed as a fixture filing
until the mortgage is released or satisfied of record or its effectiveness
otherwise terminates as to the real property.
SECTION 86a.
Not less than three months or more than
six months before the expiration of any financing statement, effective
financing statement as defined in ORS 79.6020 or continuation thereof, the
Secretary of State shall mail a renewal notice to the secured party or assignee
of record, if any, at the address indicated on the financing statement,
effective financing statement, assignment thereof or amendment thereto. The
renewal notice shall include:
(1) The file number and
expiration date of the financing statement or effective financing statement;
(2) The name of the
debtor; and
(3) A statement that the
financing statement or effective financing statement may be continued by filing
a continuation statement or initial financing statement under section 191 or
192 of this 2001 Act.
SECTION 87.
9-516. What constitutes filing;
effectiveness of filing. (1) What constitutes filing. Except as
otherwise provided in subsection (2) of this section, communication of a record
to and receipt by a filing office and tender of the filing fee or acceptance of
the record by the filing office constitutes filing.
(2) Refusal to accept
record; filing does not occur. Filing does not occur with respect to a
record that a filing office refuses to accept because:
(a) The record is not
communicated by a method or medium of communication authorized by the filing
office;
(b) An amount equal to
or greater than the applicable filing fee is not tendered;
(c) The filing office is
unable to index the record because:
(A) In the case of an
initial financing statement, the record does not provide a name for the debtor;
(B) In the case of an
amendment or correction statement, the record:
(i) Does not identify
the initial financing statement as required by section 83 or 89 of this 2001
Act, as applicable; or
(ii) Identifies an
initial financing statement whose effectiveness has lapsed under section 86 of
this 2001 Act and the filing office is that described in section 72 (1)(b) of
this 2001 Act;
(C) In the case of an
initial financing statement that provides the name of a debtor identified as an
individual or an amendment that provides a name of a debtor identified as an
individual which was not previously provided in the financing statement to
which the record relates, the record does not identify the debtor’s last name;
or
(D) In the case of a
record filed or recorded in the filing office described in section 72 (1)(a) of
this 2001 Act, the record does not provide a sufficient description of the real
property to which it relates;
(d) In the case of an
initial financing statement or an amendment that adds a secured party of
record, the record does not provide a name and mailing address for the secured
party of record;
(e) In the case of an
initial financing statement or an amendment that provides a name of a debtor
which was not previously provided in the financing statement to which the
amendment relates, the record does not:
(A) Provide a mailing
address for the debtor, unless the initial financing statement or amendment is
included in a mortgage and the filing office is that described in section 72
(1)(a) of this 2001 Act;
(B) Indicate whether the
debtor is an individual or an organization, unless the initial financing
statement or amendment is included in a mortgage and the filing office is that
described in section 72 (1)(a) of this 2001 Act; or
(C) If the filing office
is that described in section 72 (1)(b) this 2001 Act and the financing
statement indicates that the debtor is an organization, provide:
(i) A type of
organization for the debtor;
(ii) A jurisdiction of
organization for the debtor or, as an alternative when the debtor is not a
registered organization, an indication that the debtor is not a registered
organization; or
(iii) An organizational
identification number for the debtor or indicate that the debtor has none;
(f) In the case of an
assignment reflected in an initial financing statement under section 85 (1) of
this 2001 Act or an amendment filed under section 85 (2) of this 2001 Act, the
record does not provide a name and mailing address for the assignee; or
(g) In the case of a
continuation statement, the record is not filed within the six-month period
prescribed by section 86 (4) of this 2001 Act and the filing office is that
described in section 72 (1)(b) of this 2001 Act.
(3) Rules applicable
to subsection (2) of this section. For purposes of subsection (2) of this
section:
(a) A record does not
provide information if the filing office is unable to read or decipher the
information; and
(b) A record that does
not indicate that it is an amendment or identify an initial financing statement
to which it relates, as required by section 83, 85 or 89 of this 2001 Act, is
an initial financing statement.
(4) Refusal to accept
record; record effective as filed record. A record that is communicated to
and received by the filing office with tender of the filing fee under
subsection (1) of this section, but which the filing office refuses to accept
for a reason other than one set forth in subsection (2) of this section, is
effective as a filed record except as against a purchaser of the collateral
which gives value in reasonable reliance upon the absence of the record from
the files.
SECTION 88.
9-517. Effect of indexing errors.
The failure of the filing office to index a record correctly does not affect
the effectiveness of the filed record.
SECTION 89.
9-518. Claim concerning inaccurate or
wrongfully filed record. (1) Correction statement. A person may file
in the filing office a correction statement with respect to a record indexed
there under the person’s name if the person believes that the record is
inaccurate or was wrongfully filed.
(2) Sufficiency of
correction statement. A correction statement must:
(a) Identify the record
to which it relates by the file number assigned to the initial financing
statement to which the record relates;
(b) Indicate that it is
a correction statement;
(c) Provide the basis
for the person’s belief that the record is inaccurate and indicate the manner
in which the person believes the record should be amended to cure any
inaccuracy or provide the basis for the person’s belief that the record was
wrongfully filed; and
(d) Indicate the name of
the debtor and the secured party.
(3) Record not
affected by correction statement. The filing of a correction statement does
not affect the effectiveness of an initial financing statement or other filed
record.
(Duties and Operation of Filing Office)
SECTION 90.
9-519. Numbering, maintaining and
indexing records; communicating information provided in records. (1) Filing
office duties. For each record filed in a filing office, the filing office
shall:
(a) Assign a unique
number to the filed record;
(b) Create a record that
bears the number assigned to the filed record and the date and time of filing;
(c) Maintain the filed
record for public inspection; and
(d) Index the filed
record in accordance with subsections (3), (4) and (5) of this section.
(2) File number.
Except as otherwise provided in subsection (9) of this section, a file number
assigned after January 1, 2004, must include a digit that:
(a) Is mathematically
derived from or related to the other digits of the file number; and
(b) Aids the filing
office in determining whether a number communicated as the file number includes
a single-digit or transpositional error.
(3) Indexing:
general. Except as otherwise provided in subsections (4) and (5) of this
section, the filing office shall:
(a) Index an initial
financing statement according to the name of the debtor and index all filed
records relating to the initial financing statement in a manner that associates
with one another an initial financing statement and all filed records relating
to the initial financing statement; and
(b) Index a record that
provides a name of a debtor which was not previously provided in the financing
statement to which the record relates also according to the name that was not
previously provided.
(4) Indexing:
real-property-related financing statement. If a financing statement is
filed as a fixture filing or covers as-extracted collateral or timber to be
cut, it must be filed for record and the filing office shall index it:
(a) Under the names of
the debtor and of each owner of record shown on the financing statement as if
they were the mortgagors under a mortgage of the real property described; and
(b) To the extent that
the law of this state provides for indexing of records of mortgages under the
name of the mortgagee, under the name of the secured party as if the secured
party were the mortgagee thereunder, or, if indexing is by description, as if
the financing statement were a record of a mortgage of the real property
described.
(5) Indexing:
Real-property-related assignment. If a financing statement is filed as a
fixture filing or covers as-extracted collateral or timber to be cut, the
filing office shall index an assignment filed under section 85 (1) of this 2001
Act or an amendment filed under section 85 (2) of this 2001 Act:
(a) Under the name of
the assignor as grantor; and
(b) To the extent that
the law of this state provides for indexing a record of the assignment of a
mortgage under the name of the assignee, under the name of the assignee.
(6) Retrieval and
association capability. The filing office shall maintain a capability:
(a) To retrieve a record
by the name of the debtor and by the file number assigned to the initial
financing statement to which the record relates; and
(b) To associate and
retrieve with one another an initial financing statement and each filed record
relating to the initial financing statement.
(7) Removal of
debtor’s name. The filing office may not remove a debtor’s name from the
index until one year after the effectiveness of a financing statement naming
the debtor lapses under section 86 of this 2001 Act with respect to all secured
parties of record.
(8) Timeliness of
filing office performance. Except as otherwise provided in subsection (9)
of this section, the filing office shall perform the acts required by
subsections (1) to (5) of this section at the time and in the manner prescribed
by filing-office rule, but not later than two business days after the filing
office receives the record in question or, if the record is delivered by mail,
not later than four business days after the filing office receives the record.
(9) Subsections (2) and
(8) of this section do not apply to a filing office described in section 72
(1)(a) of this 2001 Act.
SECTION 91.
9-520. Acceptance and refusal to
accept record. (1) Mandatory refusal to accept record. A filing
office shall refuse to accept a record for filing for a reason set forth in
section 87 (2) of this 2001 Act and may refuse to accept a record for filing
only for a reason set forth in section 87 (2) of this 2001 Act.
(2) Communication
concerning refusal. If a filing office refuses to accept a record for
filing, it shall communicate to the person that presented the record the fact
of and reason for the refusal and the date and time the record would have been
filed had the filing office accepted it. The communication must be made at the
time and in the manner prescribed by filing-office rule but, in the case of a
filing office described in section 72 (1)(b) of this 2001 Act, in no event more
than two business days after the filing office receives the record or, if the
record is delivered by mail, four business days after the filing office
receives the record.
(3) When filed
financing statement effective. A filed financing statement satisfying
section 73 (1) and (2) of this 2001 Act is effective, even if the filing office
is required to refuse to accept it for filing under subsection (1) of this
section. However, section 58 of this 2001 Act applies to a filed financing
statement providing information described in section 87 (2)(e) of this 2001 Act
which is incorrect at the time the financing statement is filed.
(4) Separate
application to multiple debtors. If a record communicated to a filing
office provides information that relates to more than one debtor, sections 72
to 98 of this 2001 Act apply as to each debtor separately.
SECTION 92.
9-521. Uniform form of written
financing statement and amendment. (1) Initial financing statement form.
A filing office that accepts written records may not refuse to accept a written
initial financing statement in the form and format set forth in the final
official text of the 1999 revisions to Article 9 of the Uniform Commercial Code
promulgated by The American Law Institute and the National Conference of
Commissioners on Uniform State Laws, except for a reason set forth in section
87 (2) of this 2001 Act.
(2) Amendment form.
A filing office that accepts written records may not refuse to accept a written
record in the form and format set forth in the final official text of the 1999
revisions to Article 9 of the Uniform Commercial Code promulgated by The
American Law Institute and the National Conference of Commissioners on Uniform
State Laws, except for a reason set forth in section 87 (2) of this 2001 Act.
SECTION 93.
9-522. Maintenance and destruction of
records. (1) Post-lapse maintenance and retrieval of information.
The filing office shall maintain a record of the information provided in a
filed financing statement for at least one year after the effectiveness of the
financing statement has lapsed under section 86 of this 2001 Act with respect
to all secured parties of record. The record must be retrievable by using the
name of the debtor and by using the file number assigned to the initial financing
statement to which the record relates.
(2) Destruction of
written records. Except to the extent that a statute governing disposition
of public records provides otherwise, the filing office immediately may destroy
any written record evidencing a financing statement. However, if the filing
office destroys a written record, it shall maintain another record of the
financing statement which complies with subsection (1) of this section.
SECTION 94.
9-523. Information from filing
office; sale or license of records. (1) Acknowledgment of filing written
record. If a person that files a written record requests an acknowledgment
of the filing, the filing office shall send an image of the record showing the
number assigned to the record pursuant to section 90 (1)(a) of this 2001 Act
and the date and time of the filing of the record to the person indicated on
the financing statement or amendment as the person to whom the acknowledgment
should be sent or, if no person is so indicated, to the secured party or the person
filing the written record. However, if the person furnishes a copy of the
record to the filing office, the filing office may instead:
(a) Note upon the copy
the number assigned to the record pursuant to section 90 (1)(a) of this 2001
Act and the date and time of the filing of the record; and
(b) Send the copy to the
person indicated on the financing statement or amendment as the person to whom
the acknowledgment should be sent or, if no person is so indicated, to the
secured party or the person filing the written record.
(2) Acknowledgment of
filing other record. If a person files a record other than a written
record, the filing office shall communicate an acknowledgment to the person
indicated on the financing statement or amendment as the person to whom the
acknowledgment should be sent or, if no person is so indicated, to the secured
party or the person filing the record. The acknowledgment shall provide:
(a) The information in
the record;
(b) The number assigned
to the record pursuant to section 90 (1)(a) of this 2001 Act; and
(c) The date and time of
the filing of the record.
(3) Communication of
requested information. The filing office shall communicate or otherwise
make available in a record the following information to any person that requests
it:
(a) Whether there is on
file on a date and time specified by the filing office, but not a date earlier
than five business days before the filing office receives the request, any
financing statement that:
(A) Designates a
particular debtor or, if the request so states, designates a particular debtor
at the address specified in the request;
(B) Has not lapsed under
section 86 of this 2001 Act with respect to all secured parties of record; and
(C) If the request so
states, has lapsed under section 86 of this 2001 Act and a record of which is
maintained by the filing office under section 93 (1) of this 2001 Act;
(b) The date and time of
filing of each financing statement;
(c) The information
provided in each financing statement; and
(d) All notices of
federal lien or certificates or notices affecting a lien, if any, filed under
ORS 87.806 to 87.831 for a particular person whose name is identical to the
particular debtor named in the financing statement.
(4) Medium for
communicating information. In complying with its duty under subsection (3)
of this section, the filing office may communicate information in any medium.
However, if requested, the filing office shall communicate information by
issuing a record that can be admitted into evidence in the courts of this state
without extrinsic evidence of its authenticity.
(5) Timeliness of
filing office performance. The filing office described in section 72 (1)(b)
of this 2001 Act shall perform the acts required by subsections (1) to (4) of
this section at the time and in the manner prescribed by filing-office rule,
but not later than two business days after the filing office receives the
request or, if the request is delivered by mail, not later than four business
days after the filing office receives the request.
(6) Public
availability of records. At least every two weeks, the filing office
described in section 72 (1)(b) of this 2001 Act shall offer to sell or license
to the public on a nonexclusive basis, in bulk, copies of all records filed in
it under sections 72 to 98 of this 2001 Act. The filing office shall offer the
copies of any record in the medium in which the filing office maintains the
record. The filing office may offer the copies in additional media.
SECTION 95.
9-524. Delay by filing office.
Delay by the filing office beyond a time limit prescribed by sections 72 to 98
of this 2001 Act is excused if:
(1) The delay is caused
by interruption of communication or computer facilities, war, emergency
conditions, failure of equipment or other circumstances beyond control of the
filing office; and
(2) The filing office
exercises reasonable diligence under the circumstances.
SECTION 96.
9-525. Fees. (1) Initial
financing statement or other record: General rule. Except as otherwise
provided in subsection (4) of this section, the nonrefundable fee for filing
and indexing a record under sections 72 to 98 of this 2001 Act is $10.
(2) Number of names.
The number of names required to be indexed does not affect the amount of the
fee in subsection (1) of this section.
(3) Response to
information request. The nonrefundable fee for responding to a request for
information from the filing office, including for communicating whether there
is on file any financing statement naming a particular debtor, is:
(a) $10 for each
distinct debtor name to be searched;
(b) In addition to the
fee in paragraph (a) of this subsection, $5 for copies of Uniform Commercial
Code documents relating to each distinct debtor name to be searched; and
(c) $5 for each request
by document number for copies of Uniform Commercial Code documents.
(4) Record of
mortgage. This section does not require a fee with respect to a record
filed or recorded in the filing office described in section 72 (1)(a) of this
2001 Act. However, the recording and satisfaction fees that otherwise would be
applicable to the record apply.
(5) The Secretary of
State shall adopt rules prescribing fees for providing summaries and
compilations that are not debtor specific and for providing copies of records,
as described in section 94 (6) of this 2001 Act, that are not debtor specific.
SECTION 97.
9-526. Filing-office rules. (1) Adoption
of filing-office rules. The Secretary of State shall adopt and publish
rules applicable to its filing procedures, processes and operations to
implement this chapter. The filing-office rules must be:
(a) Consistent with this
chapter; and
(b) Adopted and
published in accordance with ORS 183.310 to 183.550.
(2) Harmonization of
rules. To keep the filing-office rules and practices of the filing office
in harmony with the rules and practices of filing offices in other
jurisdictions that enact substantially sections 72 to 98 of this 2001 Act, and
to keep the technology used by the filing office compatible with the technology
used by filing offices in other jurisdictions that enact substantially sections
72 to 98 of this 2001 Act, the Secretary of State, so far as is consistent with
the purposes, policies and provisions of this chapter, in adopting, amending
and repealing filing-office rules, shall:
(a) Consult with filing
offices in other jurisdictions that enact substantially sections 72 to 98 of
this 2001 Act;
(b) Consult the most
recent version of the Model Rules promulgated by the International Association
of Corporate Administrators or any successor organization; and
(c) Take into
consideration the rules and practices of, and the technology used by, filing
offices in other jurisdictions that enact substantially sections 72 to 98 of
this 2001 Act.
SECTION 98.
9-527. Duty to report. The
Secretary of State shall report to the Legislative Assembly on or before
January 15 of each odd-numbered year regarding the operation of the filing
office. The report must contain a statement of the extent to which the
filing-office rules are not in harmony with the most recent version of the
Model Rules promulgated by the International Association of Corporate
Administrators, or any successor organization, and the reasons for these
variations.
DEFAULT
(Default and Enforcement of Security Interest)
SECTION 99.
9-601. Rights after default; judicial
enforcement; consignor or buyer of accounts, chattel paper, payment intangibles
or promissory notes. (1) Rights of secured party after default.
After default, a secured party has the rights provided in sections 99 to 126 of
this 2001 Act and, except as otherwise provided in section 100 of this 2001
Act, those provided by agreement of the parties. A secured party:
(a) May reduce a claim
to judgment, foreclose, or otherwise enforce the claim, security interest or
agricultural lien by any available judicial procedure; and
(b) If the collateral is
documents, may proceed either as to the documents or as to the goods they
cover.
(2) Rights and duties
of secured party in possession or control. A secured party in possession of
collateral or control of collateral under section 4, 5, 6 or 7 of this 2001 Act
has the rights and duties provided in section 17 of this 2001 Act.
(3) Rights
cumulative; simultaneous exercise. The rights under subsections (1) and (2)
of this section are cumulative and may be exercised simultaneously.
(4) Rights of debtor
and obligor. Except as otherwise provided in subsection (7) of this section
and section 103 of this 2001 Act, after default, a debtor and an obligor have
the rights provided in sections 99 to 126 of this 2001 Act and by agreement of
the parties.
(5) Lien of levy
after judgment. If a secured party has reduced its claim to judgment, the
lien of any levy that may be made upon the collateral by virtue of an execution
based upon the judgment relates back to the earliest of:
(a) The date of
perfection of the security interest or agricultural lien in the collateral;
(b) The date of filing a
financing statement covering the collateral; or
(c) Any date specified
in a statute under which the agricultural lien was created.
(6) Execution sale.
A sale pursuant to an execution is a foreclosure of the security interest or
agricultural lien by judicial procedure within the meaning of this section. A
secured party may purchase at the sale and thereafter hold the collateral free
of any other requirements of this chapter.
(7) Consignor or
buyer of certain rights to payment. Except as otherwise provided in section
105 (3) of this 2001 Act, sections 99 to 126 of this 2001 Act impose no duties
upon a secured party that is a consignor or is a buyer of accounts, chattel
paper, payment intangibles or promissory notes.
SECTION 100.
9-602. Waiver and variance of rights
and duties. Except as otherwise provided in section 122 of this 2001 Act, to
the extent that they give rights to a debtor or obligor and impose duties on a
secured party, the debtor or obligor may not waive or vary the rules stated in
the following listed sections:
(1) Section 17 (2)(d)(C)
of this 2001 Act, which deals with use and operation of the collateral by the
secured party;
(2) Section 20 of this
2001 Act, which deals with requests for an accounting and requests concerning a
list of collateral and statement of account;
(3) Section 105 (3) of
this 2001 Act, which deals with collection and enforcement of collateral;
(4) Sections 106 (1) and
113 (3) of this 2001 Act to the extent that they deal with application or
payment of noncash proceeds of collection, enforcement or disposition;
(5) Sections 106 (1) and
113 (4) of this 2001 Act to the extent that they require accounting for or
payment of surplus proceeds of collateral;
(6) Section 107 of this
2001 Act to the extent that it imposes upon a secured party that takes
possession of collateral without judicial process the duty to do so without
breach of the peace;
(7) Sections 108 (2),
109, 111 and 112 of this 2001 Act, which deal with disposition of collateral;
(8) Section 113 (6) of
this 2001 Act, which deals with calculation of a deficiency or surplus when a
disposition is made to the secured party, a person related to the secured party
or a secondary obligor;
(9) Section 114 of this
2001 Act, which deals with explanation of the calculation of a surplus or
deficiency;
(10) Sections 118, 119
and 120 of this 2001 Act, which deal with acceptance of collateral in
satisfaction of obligation;
(11) Section 121 of this
2001 Act, which deals with redemption of collateral;
(12) Section 122 of this
2001 Act, which deals with permissible waivers; and
(13) Sections 123 and
124 of this 2001 Act, which deal with the secured party’s liability for failure
to comply with this chapter.
SECTION 101.
9-603. Agreement on standards
concerning rights and duties. (1) Agreed standards. The parties may
determine by agreement the standards measuring the fulfillment of the rights of
a debtor or obligor and the duties of a secured party under a rule stated in
section 100 of this 2001 Act if the standards are not manifestly unreasonable.
(2) Agreed standards
inapplicable to breach of peace. Subsection (1) of this section does not
apply to the duty under section 107 of this 2001 Act to refrain from breaching
the peace.
SECTION 102.
9-604. Procedure if security
agreement covers real property or fixtures. (1) Enforcement: personal
and real property. If a security agreement covers both personal and real
property, a secured party may proceed:
(a) Under sections 99 to
126 of this 2001 Act as to the personal property without prejudicing any rights
with respect to the real property; or
(b) As to both the
personal property and the real property in accordance with the rights with
respect to the real property, in which case the other provisions of sections 99
to 126 of this 2001 Act do not apply.
(2) Enforcement:
fixtures. Subject to subsection (3) of this section, if a security
agreement covers goods that are or become fixtures, a secured party may
proceed:
(a) Under sections 99 to
126 of this 2001 Act; or
(b) In accordance with
the rights with respect to real property, in which case the other provisions of
sections 99 to 126 of this 2001 Act do not apply.
(3) Removal of
fixtures. Subject to the other provisions of sections 99 to 126 of this
2001 Act, if a secured party holding a security interest in fixtures has
priority over all owners and encumbrancers of the real property, the secured
party, after default, may remove the collateral from the real property.
(4) Injury caused by
removal. A secured party that removes collateral shall promptly reimburse
any encumbrancer or owner of the real property, other than the debtor, for the
cost of repair of any physical injury caused by the removal. The secured party
need not reimburse the encumbrancer or owner for any diminution in value of the
real property caused by the absence of the goods removed or by any necessity of
replacing them. A person entitled to reimbursement may refuse permission to
remove until the secured party gives adequate assurance for the performance of
the obligation to reimburse.
SECTION 103.
9-605. Unknown debtor or secondary
obligor. A secured party does not owe a duty based on its status as secured
party:
(1) To a person that is
a debtor or obligor, unless the secured party knows:
(a) That the person is a
debtor or obligor;
(b) The identity of the
person; and
(c) How to communicate with
the person; or
(2) To a secured party
or lienholder that has filed a financing statement against a person, unless the
secured party knows:
(a) That the person is a
debtor; and
(b) The identity of the
person.
SECTION 104.
9-606. Time of default for
agricultural lien. For purposes of sections 99 to 126 of this 2001 Act, a
default occurs in connection with an agricultural lien at the time the secured
party becomes entitled to enforce the lien in accordance with the statute under
which it was created.
SECTION 105.
9-607. Collection and enforcement by
secured party. (1) Collection and enforcement generally. If so
agreed, and in any event after default, a secured party:
(a) May notify an
account debtor or other person obligated on collateral to make payment or
otherwise render performance to or for the benefit of the secured party;
(b) May take any
proceeds to which the secured party is entitled under section 35 of this 2001
Act;
(c) May enforce the
obligations of an account debtor or other person obligated on collateral and
exercise the rights of the debtor with respect to the obligation of the account
debtor or other person obligated on collateral to make payment or otherwise
render performance to the debtor, and with respect to any property that secures
the obligations of the account debtor or other person obligated on the
collateral;
(d) If it holds a
security interest in a deposit account perfected by control under section 4
(1)(a) of this 2001 Act, may apply the balance of the deposit account to the
obligation secured by the deposit account; and
(e) If it holds a
security interest in a deposit account perfected by control under section 4
(1)(b) or (c) of this 2001 Act, may instruct the bank to pay the balance of the
deposit account to or for the benefit of the secured party.
(2) Nonjudicial
enforcement of mortgage. If necessary to enable a secured party to exercise
under subsection (1)(c) of this section the right of a debtor to enforce a
mortgage nonjudicially, the secured party may record in the office in which a
record of the mortgage is recorded the secured party’s sworn affidavit, with a
copy of the security agreement attached thereto. The affidavit shall be in
recordable form and state that:
(a) A default has
occurred; and
(b) The secured party is
entitled to enforce the mortgage nonjudicially.
(3) Commercially
reasonable collection and enforcement. A secured party shall proceed in a
commercially reasonable manner if the secured party:
(a) Undertakes to
collect from or enforce an obligation of an account debtor or other person
obligated on collateral; and
(b) Is entitled to
charge back uncollected collateral or otherwise to full or limited recourse
against the debtor or a secondary obligor.
(4) Expenses of
collection and enforcement. A secured party may deduct from the collections
made pursuant to subsection (3) of this section reasonable expenses of
collection and enforcement, including reasonable attorney fees and legal
expenses incurred by the secured party.
(5) Duties to secured
party not affected. This section does not determine whether an account
debtor, bank or other person obligated on collateral owes a duty to a secured
party.
SECTION 106.
9-608. Application of proceeds of
collection or enforcement; liability for deficiency and right to surplus.
(1) Application of proceeds, surplus and deficiency if obligation secured.
If a security interest or agricultural lien secures payment or performance of
an obligation, the following rules apply:
(a) A secured party
shall apply or pay over for application the cash proceeds of collection or
enforcement under section 105 of this 2001 Act in the following order to:
(A) The reasonable
expenses of collection and enforcement and, to the extent provided for by
agreement and not prohibited by law, reasonable attorney fees and legal
expenses incurred by the secured party;
(B) The satisfaction of
obligations secured by the security interest or agricultural lien under which
the collection or enforcement is made; and
(C) The satisfaction of
obligations secured by any subordinate security interest in or other lien on
the collateral subject to the security interest or agricultural lien under
which the collection or enforcement is made if the secured party receives an
authenticated demand for proceeds before distribution of the proceeds is
completed.
(b) If requested by a
secured party, a holder of a subordinate security interest or other lien shall
furnish reasonable proof of the interest or lien within a reasonable time.
Unless the holder complies, the secured party need not comply with the holder’s
demand under paragraph (a)(C) of this subsection.
(c) A secured party need
not apply or pay over for application noncash proceeds of collection and
enforcement under section 105 of this 2001 Act unless the failure to do so
would be commercially unreasonable. A secured party that applies or pays over
for application noncash proceeds shall do so in a commercially reasonable
manner.
(d) A secured party
shall account to and pay a debtor for any surplus, and the obligor is liable
for any deficiency.
(2) No surplus or
deficiency in sales of certain rights to payment. If the underlying
transaction is a sale of accounts, chattel paper, payment intangibles or
promissory notes, the debtor is not entitled to any surplus and the obligor is
not liable for any deficiency.
SECTION 107.
9-609. Secured party’s right to take
possession after default. (1) Possession; rendering equipment unusable;
disposition on debtor’s premises. After default, a secured party:
(a) May take possession
of the collateral; and
(b) Without removal, may
render equipment unusable and dispose of collateral on a debtor’s premises
under section 108 of this 2001 Act.
(2) Judicial and
nonjudicial process. A secured party may proceed under subsection (1) of
this section:
(a) Pursuant to judicial
process; or
(b) Without judicial
process, if it proceeds without breach of the peace.
(3) Assembly of
collateral. If so agreed, and in any event after default, a secured party
may require the debtor to assemble the collateral and make it available to the
secured party at a place to be designated by the secured party which is
reasonably convenient to both parties.
SECTION 108.
9-610. Disposition of collateral
after default. (1) Disposition after default. After default, a
secured party may sell, lease, license or otherwise dispose of any or all of
the collateral in its present condition or following any commercially
reasonable preparation or processing.
(2) Commercially
reasonable disposition. Every aspect of a disposition of collateral,
including the method, manner, time, place and other terms, must be commercially
reasonable. If commercially reasonable, a secured party may dispose of
collateral by public or private proceedings, by one or more contracts, as a
unit or in parcels, and at any time and place and on any terms.
(3) Purchase by
secured party. A secured party may purchase collateral:
(a) At a public
disposition; or
(b) At a private
disposition only if the collateral is of a kind that is customarily sold on a
recognized market or the subject of widely distributed standard price
quotations.
(4) Warranties on
disposition. A contract for sale, lease, license or other disposition
includes the warranties relating to title, possession, quiet enjoyment and the
like which by operation of law accompany a voluntary disposition of property of
the kind subject to the contract.
(5) Disclaimer of
warranties. A secured party may disclaim or modify warranties under
subsection (4) of this section:
(a) In a manner that
would be effective to disclaim or modify the warranties in a voluntary
disposition of property of the kind subject to the contract of disposition; or
(b) By communicating to
the purchaser a record evidencing the contract for disposition and including an
express disclaimer or modification of the warranties.
(6) Record sufficient
to disclaim warranties. A record is sufficient to disclaim warranties under
subsection (5) of this section if it indicates “There is no warranty relating
to title, possession, quiet enjoyment or the like in this disposition” or uses
words of similar import.
SECTION 109.
9-611. Notification before
disposition of collateral. (1) “Notification date.” As used in this
section, “notification date” means the earlier of the date on which:
(a) A secured party
sends to the debtor and any secondary obligor an authenticated notification of
disposition; or
(b) The debtor and any
secondary obligor waive the right to notification.
(2) Notification of
disposition required. Except as otherwise provided in subsection (4) of
this section, a secured party that disposes of collateral under section 108 of
this 2001 Act shall send to the persons specified in subsection (3) of this
section a reasonable authenticated notification of disposition.
(3) Persons to be
notified. To comply with subsection (2) of this section, the secured party
shall send an authenticated notification of disposition to:
(a) The debtor;
(b) Any secondary
obligor; and
(c) If the collateral is
other than consumer goods:
(A) Any other person
from which the secured party has received, before the notification date, an
authenticated notification of a claim of an interest in the collateral;
(B) Any other secured
party or lienholder that, 10 days before the notification date, held a security
interest in or other lien on the collateral perfected by the filing of a
financing statement that:
(i) Identified the
collateral;
(ii) Was indexed under
the debtor’s name as of that date; and
(iii) Was filed in the
office in which to file a financing statement against the debtor covering the
collateral as of that date; and
(C) Any other secured
party that, 10 days before the notification date, held a security interest in
the collateral perfected by compliance with a statute, regulation or treaty
described in section 31 (1) of this 2001 Act.
(4) Subsection (2) of
this section inapplicable: Perishable collateral; recognized market.
Subsection (2) of this section does not apply if the collateral is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market.
(5) Compliance with
subsection (3)(c)(B) of this section. A secured party complies with the
requirement for notification prescribed by subsection (3)(c)(B) of this section
if:
(a) Not later than 20
days or earlier than 30 days before the notification date, the secured party
requests, in a commercially reasonable manner, information concerning financing
statements indexed under the debtor’s name in the office indicated in subsection
(3)(c)(B) of this section; and
(b) Before the
notification date, the secured party:
(A) Did not receive a
response to the request for information; or
(B) Received a response
to the request for information and sent an authenticated notification of
disposition to each secured party or other lienholder named in that response
whose financing statement covered the collateral.
SECTION 110.
9-612. Timeliness of notification
before disposition of collateral. (1) Reasonable time is question of
fact. Except as otherwise provided in subsection (2) of this section, a
notification of disposition sent after default and 15 days or more before the
earliest time of disposition, as set forth in the notification, is sent within
a reasonable time before the disposition.
(2) Ten-day period
sufficient in nonconsumer transaction. In a transaction other than a
consumer transaction, a notification of disposition sent after default and 10
days or more before the earliest time of disposition set forth in the
notification is sent within a reasonable time before the disposition.
SECTION 111.
9-613. Contents and form of
notification before disposition of collateral: General. Except in a
consumer-goods transaction, the following rules apply:
(1) The contents of a
notification of disposition are sufficient if the notification:
(a) Indicates the name
of the debtor and the name, address and telephone number of the secured party;
(b) Describes the
collateral that is the subject of the intended disposition;
(c) States the method of
intended disposition;
(d) States that the
debtor is entitled to an accounting of the unpaid indebtedness and states the
charge, if any, for an accounting; and
(e) States the time and
place of a public disposition or the time after which any other disposition is
to be made.
(2) Whether the contents
of a notification that lacks any of the information specified in subsection (1)
of this section are nevertheless sufficient is a question of fact.
(3) The contents of a
notification providing substantially the information specified in subsection
(1) of this section are sufficient, even if the notification includes:
(a) Information not
specified by subsection (1) of this section; or
(b) Minor errors that
are not seriously misleading.
(4) A particular
phrasing of the notification is not required.
(5) The following form
of notification and the form appearing in section 112 (3) of this 2001 Act,
when completed, provide sufficient information:
____________________________________________________________________________
NOTIFICATION OF DISPOSITION OF COLLATERAL
To: (Name of
debtor, obligor or other person to which the notification is sent.)
From: (Name, address
and telephone number of secured party.)
Name of Debtor(s): (Include
only if debtor(s) are not an addressee.)
For a public
disposition:
We will sell or lease or
license, as applicable the (describe collateral) to the highest
qualified bidder in public as follows:
Day and date: ______
Time: ______
Place: ______
For a private
disposition:
We will sell or lease or
license, as applicable the (describe collateral) privately sometime
after (day and date).
You are entitled to an
accounting of the unpaid indebtedness secured by the property that we intend to
sell or lease or license, as applicable for a charge of $___. You may request an accounting by calling us at (telephone number).
____________________________________________________________________________
SECTION 112.
9-614. Contents and form of
notification before disposition of collateral: consumer-goods transaction.
In a consumer-goods transaction, the following rules apply:
(1) A notification of
disposition must provide the following information:
(a) The information
specified in section 111 (1) of this 2001 Act;
(b) A description of any
liability for a deficiency of the person to which the notification is sent;
(c) A telephone number
from which the amount that must be paid to the secured party to redeem the
collateral under section 121 of this 2001 Act is available; and
(d) A telephone number
or mailing address from which additional information concerning the disposition
and the obligation secured is available.
(2) A particular
phrasing of the notification is not required.
(3) The following form
of notification, when completed, provides sufficient information:
____________________________________________________________________________
(Name and address of
secured party)
(Date)
NOTICE OF OUR PLAN TO SELL PROPERTY
(Name and address
of any obligor who is also a debtor)
Subject: (Identification
of Transaction)
We have your (describe
collateral), because you broke promises in our agreement.
For a public
disposition:
We will sell (describe
collateral) at public sale. A sale could include a lease or license. The
sale will be held as follows:
Day and date: ________________
Time: _______________
Place: ________________
You may attend the sale
and bring bidders if you want.
For a private
disposition:
We will sell (describe
collateral) at private sale sometime after (date). A sale could
include a lease or license.
The money that we get
from the sale, after paying our costs, will reduce the amount you owe. If we
get less money than you owe, you (will or will not, as applicable) still
owe us the difference. If we get more money than you owe, you will get the
extra money, unless we must pay it to someone else.
You can get the property
back at any time before we sell it by paying us the full amount you owe (not
just the past due payments), including our expenses. To learn the exact amount
you must pay, call us at (telephone number).
If you want us to
explain to you in writing how we have figured the amount that you owe us, you
may call us at (telephone number) or write us at (secured party’s
address) and request a written explanation. We will charge you $_______ for the explanation if we sent you another written explanation of the
amount you owe us within the last six months.
If you need more
information about the sale call us at (telephone number) or write us at
(secured party’s address).
We are sending this
notice to the following other people who have an interest in (describe
collateral) or who owe money under your agreement:
(Names of all other
debtors and obligors, if any.)
______________________________________________________________________________
(4) A notification in
the form of subsection (3) of this section is sufficient, even if the form
includes additional information.
(5) A notification in
the form of subsection (3) of this section is sufficient, even if it includes
minor errors in information not required by subsection (1) of this section,
unless the error is seriously misleading.
(6) If a notification
under this section is not in the form of subsection (3) of this section, law
other than this chapter determines the effect of including information not
required by subsection (1) of this section.
SECTION 113.
9-615. Application of proceeds of
disposition; liability for deficiency and right to surplus. (1) Application
of proceeds. A secured party shall apply or pay over for application the
cash proceeds of disposition under section 108 of this 2001 Act in the
following order to:
(a) The reasonable
expenses of retaking, holding, preparing for disposition, processing and
disposing, and, to the extent provided for by agreement and not prohibited by
law, reasonable attorney fees and legal expenses incurred by the secured party;
(b) The satisfaction of
obligations secured by the security interest or agricultural lien under which
the disposition is made;
(c) The satisfaction of
obligations secured by any subordinate security interest in or other
subordinate lien on the collateral if:
(A) The secured party
receives from the holder of the subordinate security interest or other lien an
authenticated demand for proceeds before distribution of the proceeds is
completed; and
(B) In a case in which a
consignor has an interest in the collateral, the subordinate security interest
or other lien is senior to the interest of the consignor; and
(d) A secured party that
is a consignor of the collateral if the secured party receives from the
consignor an authenticated demand for proceeds before distribution of the
proceeds is completed.
(2) Proof of
subordinate interest. If requested by a secured party, a holder of a
subordinate security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasonable time. Unless the holder does so, the
secured party need not comply with the holder’s demand under subsection (1)(c)
of this section.
(3) Application of
noncash proceeds. A secured party need not apply or pay over for
application noncash proceeds of disposition under section 108 of this 2001 Act
unless the failure to do so would be commercially unreasonable. A secured party
that applies or pays over for application noncash proceeds shall do so in a
commercially reasonable manner.
(4) Surplus or
deficiency if obligation secured. If the security interest under which a
disposition is made secures payment or performance of an obligation, after
making the payments and applications required by subsection (1) of this section
and permitted by subsection (3) of this section:
(a) Unless subsection
(1)(d) of this section requires the secured party to apply or pay over cash
proceeds to a consignor, the secured party shall account to and pay a debtor
for any surplus; and
(b) The obligor is
liable for any deficiency.
(5) No surplus or
deficiency in sales of certain rights to payment. If the underlying
transaction is a sale of accounts, chattel paper, payment intangibles or
promissory notes:
(a) The debtor is not
entitled to any surplus; and
(b) The obligor is not
liable for any deficiency.
(6) Calculation of
surplus or deficiency in disposition to person related to secured party.
The surplus or deficiency following a disposition is calculated based on the
amount of proceeds that would have been realized in a disposition complying
with sections 99 to 126 of this 2001 Act to a transferee other than the secured
party, a person related to the secured party, or a secondary obligor if:
(a) The transferee in
the disposition is the secured party, a person related to the secured party, or
a secondary obligor; and
(b) The amount of
proceeds of the disposition is significantly below the range of proceeds that a
complying disposition to a person other than the secured party, a person
related to the secured party, or a secondary obligor would have brought.
(7) Cash proceeds
received by junior secured party. A secured party that receives cash
proceeds of a disposition in good faith and without knowledge that the receipt
violates the rights of the holder of a security interest or other lien that is
not subordinate to the security interest or agricultural lien under which the
disposition is made:
(a) Takes the cash
proceeds free of the security interest or other lien;
(b) Is not obligated to
apply the proceeds of the disposition to the satisfaction of obligations
secured by the security interest or other lien; and
(c) Is not obligated to
account to or pay the holder of the security interest or other lien for any
surplus.
SECTION 114.
9-616. Explanation of calculation of
surplus or deficiency. (1) Definitions. As used in this section:
(a) “Explanation” means
a writing that:
(A) States the amount of
the surplus or deficiency;
(B) Provides an
explanation in accordance with subsection (3) of this section of how the
secured party calculated the surplus or deficiency;
(C) States, if
applicable, that future debits, credits, charges, including additional credit
service charges or interest, rebates and expenses may affect the amount of the
surplus or deficiency; and
(D) Provides a telephone
number or mailing address from which additional information concerning the
transaction is available.
(b) “Request” means a
record:
(A) Authenticated by a
debtor or consumer obligor;
(B) Requesting that the
recipient provide an explanation; and
(C) Sent after
disposition of the collateral under section 108 of this 2001 Act.
(2) Explanation of
calculation. In a consumer-goods transaction in which the debtor is entitled
to a surplus or a consumer obligor is liable for a deficiency under section 113
of this 2001 Act, the secured party shall:
(a) Send an explanation
to the debtor or consumer obligor, as applicable, after the disposition and:
(A) Before or when the
secured party accounts to the debtor and pays any surplus or first makes
written demand on the consumer obligor after the disposition for payment of the
deficiency; and
(B) Within 14 days after
receipt of a request; or
(b) In the case of a
consumer obligor who is liable for a deficiency, within 14 days after receipt
of a request, send to the consumer obligor a record waiving the secured party’s
right to a deficiency.
(3) Required
information. To comply with subsection (1)(a)(B) of this section, a writing
must provide the following information in the following order:
(a) The aggregate amount
of obligations secured by the security interest under which the disposition was
made, and, if the amount reflects a rebate of unearned interest or credit
service charge, an indication of that fact, calculated as of a specified date:
(A) If the secured party
takes or receives possession of the collateral after default, not more than 35
days before the secured party takes or receives possession; or
(B) If the secured party
takes or receives possession of the collateral before default or does not take
possession of the collateral, not more than 35 days before the disposition;
(b) The amount of
proceeds of the disposition;
(c) The aggregate amount
of the obligations after deducting the amount of proceeds;
(d) The amount, in the
aggregate or by type, and types of expenses, including expenses of retaking,
holding, preparing for disposition, processing and disposing of the collateral,
and attorney fees secured by the collateral which are known to the secured
party and relate to the current disposition;
(e) The amount, in the
aggregate or by type, and types of credits, including rebates of interest or
credit service charges, to which the obligor is known to be entitled and which
are not reflected in the amount in paragraph (a) of this subsection; and
(f) The amount of the
surplus or deficiency.
(4) Substantial
compliance. A particular phrasing of the explanation is not required. An
explanation complying substantially with the requirements of subsection (1) of
this section is sufficient, even if it includes minor errors that are not
seriously misleading.
(5) Charges for
responses. A debtor or consumer obligor is entitled without charge to one
response to a request under this section during any six-month period in which
the secured party did not send to the debtor or consumer obligor an explanation
pursuant to subsection (2)(a) of this section. The secured party may require
payment of a charge not exceeding $25 for each additional response.
SECTION 115.
9-617. Rights of transferee of
collateral. (1) Effects of disposition. A secured party’s
disposition of collateral after default:
(a) Transfers to a
transferee for value all of the debtor’s rights in the collateral;
(b) Discharges the
security interest under which the disposition is made; and
(c) Discharges any
subordinate security interest or other subordinate lien.
(2) Rights of
good-faith transferee. A transferee that acts in good faith takes free of
the rights and interests described in subsection (1) of this section, even if
the secured party fails to comply with this chapter or the requirements of any
judicial proceeding.
(3) Rights of other
transferee. If a transferee does not take free of the rights and interests
described in subsection (1) of this section, the transferee takes the
collateral subject to:
(a) The debtor’s rights
in the collateral;
(b) The security
interest or agricultural lien under which the disposition is made; and
(c) Any other security
interest or other lien.
SECTION 116.
9-618. Rights and duties of certain
secondary obligors. (1) Rights and duties of secondary obligor. A
secondary obligor acquires the rights and becomes obligated to perform the
duties of the secured party after the secondary obligor:
(a) Receives an
assignment of a secured obligation from the secured party;
(b) Receives a transfer
of collateral from the secured party and agrees to accept the rights and assume
the duties of the secured party; or
(c) Is subrogated to the
rights of a secured party with respect to collateral.
(2) Effect of
assignment, transfer or subrogation. An assignment, transfer or subrogation
described in subsection (1) of this section:
(a) Is not a disposition
of collateral under section 108 of this 2001 Act; and
(b) Relieves the secured
party of further duties under this chapter.
SECTION 117.
9-619. Transfer of record or legal
title. (1) “Transfer statement.” As used in this section, “transfer
statement” means a record authenticated by a secured party stating:
(a) That the debtor has
defaulted in connection with an obligation secured by specified collateral;
(b) That the secured
party has exercised its post-default remedies with respect to the collateral;
(c) That, by reason of
the exercise, a transferee has acquired the rights of the debtor in the
collateral; and
(d) The name and mailing
address of the secured party, debtor and transferee.
(2) Effect of
transfer statement. A transfer statement entitles the transferee to the
transfer of record of all rights of the debtor in the collateral specified in
the statement in any official filing, recording, registration or
certificate-of-title system covering the collateral. If a transfer statement is
presented with the applicable fee and request form to the official or office
responsible for maintaining the system, the official or office shall:
(a) Accept the transfer
statement;
(b) Promptly amend its
records to reflect the transfer; and
(c) If applicable, issue
a new appropriate certificate of title in the name of the transferee.
(3) Transfer not a
disposition; no relief of secured party’s duties. A transfer of the record
or legal title to collateral to a secured party under subsection (2) of this
section or otherwise is not of itself a disposition of collateral under this
chapter and does not of itself relieve the secured party of its duties under
this chapter.
SECTION 118.
9-620. Acceptance of collateral in
full or partial satisfaction of obligation; compulsory disposition of
collateral. (1) Conditions to acceptance in satisfaction. Except as
otherwise provided in subsection (7) of this section, a secured party may
accept collateral in full or partial satisfaction of the obligation it secures
only if:
(a) The debtor consents
to the acceptance under subsection (3) of this section;
(b) The secured party
does not receive, within the time set forth in subsection (4) of this section,
a notification of objection to the proposal authenticated by:
(A) A person to which
the secured party was required to send a proposal under section 119 of this
2001 Act; or
(B) Any other person,
other than the debtor, holding an interest in the collateral subordinate to the
security interest that is the subject of the proposal;
(c) If the collateral is
consumer goods, the collateral is not in the possession of the debtor when the
debtor consents to the acceptance; and
(d) Subsection (5) of
this section does not require the secured party to dispose of the collateral or
the debtor waives the requirement pursuant to section 122 of this 2001 Act.
(2) Purported
acceptance ineffective. A purported or apparent acceptance of collateral
under this section is ineffective unless:
(a) The secured party
consents to the acceptance in an authenticated record or sends a proposal to
the debtor; and
(b) The conditions of
subsection (1) of this section are met.
(3) Debtor’s consent.
For purposes of this section:
(a) A debtor consents to
an acceptance of collateral in partial satisfaction of the obligation it
secures only if the debtor agrees to the terms of the acceptance in a record
authenticated after default; and
(b) A debtor consents to
an acceptance of collateral in full satisfaction of the obligation it secures
only if the debtor agrees to the terms of the acceptance in a record authenticated
after default or the secured party:
(A) Sends to the debtor
after default a proposal that is unconditional or subject only to a condition
that collateral not in the possession of the secured party be preserved or
maintained;
(B) In the proposal,
proposes to accept collateral in full satisfaction of the obligation it
secures; and
(C) Does not receive a
notification of objection authenticated by the debtor within 20 days after the
proposal is sent.
(4) Effectiveness of
notification. To be effective under subsection (1)(b) of this section, a
notification of objection must be received by the secured party:
(a) In the case of a
person to which the proposal was sent pursuant to section 119 of this 2001 Act,
within 20 days after notification was sent to that person; and
(b) In other cases:
(A) Within 20 days after
the last notification was sent pursuant to section 119 of this 2001 Act; or
(B) If a notification
was not sent, before the debtor consents to the acceptance under subsection (3)
of this section.
(5) Mandatory
disposition of consumer goods. A secured party that has taken possession of
collateral shall dispose of the collateral pursuant to section 108 of this 2001
Act within the time specified in subsection (6) of this section if:
(a) Sixty percent of the
cash price has been paid in the case of a purchase-money security interest in
consumer goods; or
(b) Sixty percent of the
principal amount of the obligation secured has been paid in the case of a
non-purchase-money security interest in consumer goods.
(6) Compliance with
mandatory disposition requirement. To comply with subsection (5) of this
section, the secured party shall dispose of the collateral:
(a) Within 180 days
after taking possession; or
(b) Within any longer
period to which the debtor and all secondary obligors have agreed in an
agreement to that effect entered into and authenticated after default.
(7) No partial
satisfaction in consumer transaction. In a consumer transaction, a secured
party may not accept collateral in partial satisfaction of the obligation it
secures.
SECTION 119.
9-621. Notification of proposal to
accept collateral. (1) Persons to which proposal to be sent. A
secured party that desires to accept collateral in full or partial satisfaction
of the obligation it secures shall send its proposal to:
(a) Any person from
which the secured party has received, before the debtor consented to the
acceptance, an authenticated notification of a claim of an interest in the
collateral;
(b) Any other secured
party or lienholder that, 10 days before the debtor consented to the
acceptance, held a security interest in or other lien on the collateral
perfected by the filing of a financing statement that:
(A) Identified the
collateral;
(B) Was indexed under
the debtor’s name as of that date; and
(C) Was filed in the
office or offices in which to file a financing statement against the debtor
covering the collateral as of that date; and
(c) Any other secured
party that, 10 days before the debtor consented to the acceptance, held a
security interest in the collateral perfected by compliance with a statute,
regulation or treaty described in section 31 (1) of this 2001 Act.
(2) Proposal to be
sent to secondary obligor in partial satisfaction. A secured party that
desires to accept collateral in partial satisfaction of the obligation it
secures shall send its proposal to any secondary obligor in addition to the
persons described in subsection (1) of this section.
SECTION 120.
9-622. Effect of acceptance of
collateral. (1) Effect of acceptance. A secured party’s acceptance
of collateral in full or partial satisfaction of the obligation it secures:
(a) Discharges the
obligation to the extent consented to by the debtor;
(b) Transfers to the
secured party all of a debtor’s rights in the collateral;
(c) Discharges the
security interest or agricultural lien that is the subject of the debtor’s
consent and any subordinate security interest or other subordinate lien; and
(d) Terminates any other
subordinate interest.
(2) Discharge of subordinate
interest notwithstanding noncompliance. A subordinate interest is
discharged or terminated under subsection (1) of this section, even if the
secured party fails to comply with this chapter.
SECTION 121.
9-623. Right to redeem collateral.
(1) Persons that may redeem. A debtor, any secondary obligor or any
other secured party or lienholder may redeem collateral.
(2) Requirements for
redemption. To redeem collateral, a person shall tender:
(a) Fulfillment of all
obligations secured by the collateral; and
(b) The reasonable
expenses and attorney fees described in section 113 (1)(a) of this 2001 Act.
(3) When redemption
may occur. A redemption may occur at any time before a secured party:
(a) Has collected
collateral under section 105 of this 2001 Act;
(b) Has disposed of
collateral or entered into a contract for its disposition under section 108 of
this 2001 Act; or
(c) Has accepted
collateral in full or partial satisfaction of the obligation it secures under
section 120 of this 2001 Act.
SECTION 122.
9-624. Waiver. (1) Waiver of
disposition notification. A debtor or secondary obligor may waive the right
to notification of disposition of collateral under section 109 of this 2001 Act
only by an agreement to that effect entered into and authenticated after
default.
(2) Waiver of
mandatory disposition. A debtor may waive the right to require disposition
of collateral under section 118 (5) of this 2001 Act only by an agreement to
that effect entered into and authenticated after default.
(3) Waiver of
redemption right. Except in a consumer-goods transaction, a debtor or
secondary obligor may waive the right to redeem collateral under section 121 of
this 2001 Act only by an agreement to that effect entered into and
authenticated after default.
(Noncompliance With Chapter)
SECTION 123.
9-625. Remedies for secured party’s
failure to comply with article. (1) Judicial orders concerning
noncompliance. If it is established that a secured party is not proceeding
in accordance with this chapter, a court may order or restrain collection,
enforcement or disposition of collateral on appropriate terms and conditions.
(2) Damages for
noncompliance. Subject to subsections (3), (4) and (6) of this section, a
person is liable for damages in the amount of any loss caused by a failure to
comply with this chapter. Loss caused by a failure to comply may include loss
resulting from the debtor’s inability to obtain, or increased costs of,
alternative financing.
(3) Persons entitled
to recover damages; statutory damages in consumer-goods transaction. Except
as otherwise provided in section 126 of this 2001 Act:
(a) A person that, at
the time of the failure, was a debtor, was an obligor, or held a security
interest in or other lien on the collateral may, in an individual action only,
recover damages under subsection (2) of this section for its loss;
(b) If the collateral is
consumer goods, a person that was a debtor or a secondary obligor at the time a
secured party failed to comply with sections 99 to 126 of this 2001 Act may, in
an individual action only, recover an amount not less than $1,000; and
(c) The court may award
reasonable attorney fees to the prevailing party in an action under this
subsection.
(4) Recovery when
deficiency eliminated or reduced. A debtor whose deficiency is eliminated
under section 124 of this 2001 Act may recover damages for the loss of any
surplus. However, a debtor or secondary obligor whose deficiency is eliminated
or reduced under section 124 of this 2001 Act may not otherwise recover under
subsection (2) of this section for noncompliance with the provisions of
sections 99 to 126 of this 2001 Act relating to collection, enforcement,
disposition or acceptance.
(5) Statutory
damages: Noncompliance with specified provisions. Regarding a transaction
that is a consumer transaction or in which the collateral is consumer goods, in
addition to any damages recoverable under subsection (2) of this section, the
debtor, consumer obligor, or person named as a debtor in a filed record, as
applicable, may, in an individual action only, recover $500 for each instance
from a person that:
(a) Fails to comply with
section 18 of this 2001 Act;
(b) Fails to comply with
section 19 of this 2001 Act;
(c) After the effective
date of this 2001 Act, files a record that the person is not entitled to file
under section 80 (1) of this 2001 Act if the record is not released or
terminated within 10 days after receipt by the secured party of an
authenticated request from the debtor that explains the basis for the request;
(d) Fails to cause the
secured party of record to file or send a termination statement as required by
section 84 (1) or (3) of this 2001 Act; or
(e) Fails to comply with
section 114 (2) of this 2001 Act and whose failure is part of a pattern, or
consistent with a practice, of noncompliance.
(6) Statutory
damages: Noncompliance with section 20 of this 2001 Act. A debtor or
consumer obligor may recover damages under subsection (2) of this section and,
in addition, $500 in each case from a person that, without reasonable cause,
fails to comply with a request under section 20 of this 2001 Act. A recipient
of a request under section 20 of this 2001 Act which never claimed an interest
in the collateral or obligations that are the subject of a request under
section 20 of this 2001 Act has a reasonable excuse for failure to comply with
the request within the meaning of this subsection.
(7) Limitation of
security interest: Noncompliance with section 20 of this 2001 Act. If a
secured party fails to comply with a request regarding a list of collateral or
a statement of account under section 20 of this 2001 Act, the secured party may
claim a security interest only as shown in the list or statement included in
the request as against a person that is reasonably misled by the failure.
SECTION 124.
9-626. Action in which deficiency or
surplus is in issue. (1) Applicable rules if amount of deficiency or
surplus in issue. In an action arising from a transaction, other than a
consumer transaction, in which the amount of a deficiency or surplus is in
issue, the following rules apply:
(a) A secured party need
not prove compliance with the provisions of sections 99 to 126 of this 2001 Act
relating to collection, enforcement, disposition, or acceptance unless the
debtor or a secondary obligor places the secured party’s compliance in issue.
(b) If the secured
party’s compliance is placed in issue, the secured party has the burden of
establishing that the collection, enforcement, disposition or acceptance was
conducted in accordance with sections 99 to 126 of this 2001 Act.
(c) Except as otherwise
provided in section 126 of this 2001 Act, if a secured party fails to prove
that the collection, enforcement, disposition or acceptance was conducted in
accordance with the provisions of sections 99 to 126 of this 2001 Act relating
to collection, enforcement, disposition or acceptance, the liability of a
debtor or a secondary obligor for a deficiency is limited to an amount by which
the sum of the secured obligation, expenses and attorney fees exceeds the
greater of:
(A) The proceeds of the
collection, enforcement, disposition or acceptance; or
(B) The amount of
proceeds that would have been realized had the noncomplying secured party
proceeded in accordance with the provisions of sections 99 to 126 of this 2001
Act relating to collection, enforcement, disposition or acceptance.
(d) For purposes of
paragraph (c)(B) of this subsection, the amount of proceeds that would have
been realized is equal to the sum of the secured obligation, expenses and
attorney fees unless the secured party proves that the amount is less than that
sum.
(e) If a deficiency or
surplus is calculated under section 113 (6) of this 2001 Act, the debtor or
obligor has the burden of establishing that the amount of proceeds of the
disposition is significantly below the range of prices that a complying
disposition to a person other than the secured party, a person related to the
secured party, or a secondary obligor would have brought.
(2) Nonconsumer
transactions; no inference. The limitation of the rules in subsection (1)
of this section to transactions other than consumer transactions is intended to
leave to the court the determination of the proper rules in consumer
transactions. The court may not infer from that limitation the nature of the
proper rule in consumer transactions and may continue to apply established
approaches.
SECTION 125.
9-627. Determination of whether
conduct was commercially reasonable. (1) Greater amount obtainable under
other circumstances; no preclusion of commercial reasonableness. The fact
that a greater amount could have been obtained by a collection, enforcement,
disposition or acceptance at a different time or in a different method from
that selected by the secured party is not of itself sufficient to preclude the
secured party from establishing that the collection, enforcement, disposition
or acceptance was made in a commercially reasonable manner.
(2) Dispositions that
are commercially reasonable. A disposition of collateral is made in a
commercially reasonable manner if the disposition is made:
(a) In the usual manner
on any recognized market;
(b) At the price current
in any recognized market at the time of the disposition; or
(c) Otherwise in
conformity with reasonable commercial practices among dealers in the type of
property that was the subject of the disposition.
(3) Approval by court
or on behalf of creditors. A collection, enforcement, disposition or
acceptance is commercially reasonable if it has been approved:
(a) In a judicial
proceeding;
(b) By a bona fide
creditors’ committee;
(c) By a representative
of creditors; or
(d) By an assignee for
the benefit of creditors.
(4) Approval under
subsection (3) of this section not necessary; absence of approval has no
effect. Approval under subsection (3) of this section need not be obtained,
and lack of approval does not mean that the collection, enforcement,
disposition or acceptance is not commercially reasonable.
SECTION 126.
9-628. Nonliability and limitation on
liability of secured party; liability of secondary obligor. (1) Limitation
of liability of secured party for noncompliance with this chapter. Unless a
secured party knows that a person is a debtor or obligor, knows the identity of
the person and knows how to communicate with the person:
(a) The secured party is
not liable to the person, or to a secured party or lienholder that has filed a
financing statement against the person, for failure to comply with this
chapter; and
(b) The secured party’s
failure to comply with this chapter does not affect the liability of the person
for a deficiency.
(2) Limitation of
liability based on status as secured party. A secured party is not liable
because of its status as secured party:
(a) To a person that is
a debtor or obligor, unless the secured party knows:
(A) That the person is a
debtor or obligor;
(B) The identity of the
person; and
(C) How to communicate
with the person; or
(b) To a secured party
or lienholder that has filed a financing statement against a person, unless the
secured party knows:
(A) That the person is a
debtor; and
(B) The identity of the
person.
(3) Limitation of
liability if reasonable belief that transaction not a consumer-goods
transaction or consumer transaction. A secured party is not liable to any
person, and a person’s liability for a deficiency is not affected, because of
any act or omission arising out of the secured party’s reasonable belief that a
transaction is not a consumer-goods transaction or a consumer transaction or
that goods are not consumer goods, if the secured party’s belief is based on
its reasonable reliance on:
(a) A debtor’s
representation concerning the purpose for which collateral was to be used,
acquired or held; or
(b) An obligor’s
representation concerning the purpose for which a secured obligation was
incurred.
(4) Limitation of
liability for statutory damages. A secured party is not liable to any
person under section 123 (3)(b) of this 2001 Act for its failure to comply with
section 114 of this 2001 Act.
(5) Limitation of
multiple liability for statutory damages. A secured party is not liable
under section 123 (3)(b) of this 2001 Act more than once with respect to any
one secured obligation.
SECTION 127.
Sections 1 to 126 of this 2001 Act are
added to and made a part of ORS chapter 79.
SECTION 128.
Notwithstanding any other provision of
law, ORS 79.6020 to 79.7010 shall not be considered to have been added to or
made a part of ORS chapter 79 for the purpose of statutory compilation or for
the application of definitions, penalties or administrative provisions
applicable to statute sections in that chapter.
CONFORMING AMENDMENTS
SECTION 129.
ORS 71.1010 is amended to read:
71.1010. This chapter, ORS 72.1010 to 72.7250 and ORS
chapters 72A, 73, 74, 74A, 75, 77, [and] 78 and [ORS 79.1010 to 79.5070 and 79.8010] 79 may be cited as Uniform Commercial Code.
SECTION 130.
ORS 71.1050 is amended to read:
71.1050. (1) Except as provided hereafter in this section,
when a transaction bears a reasonable relation to this state and also to
another state or nation the parties may agree that the law either of this state
or of such other state or nation shall govern their rights and duties. Failing
such agreement the Uniform Commercial Code applies to transactions bearing an
appropriate relation to this state.
(2) Where one of the following provisions specifies the
applicable law, that provision governs and a contrary agreement is effective
only to the extent permitted by the law (including the conflict of laws rules)
so specified:
(a) Rights of creditors against sold goods as specified in
ORS 72.4020.
(b) Applicability of ORS chapter 72A on leases.
(c) Applicability of ORS chapter 74 as specified in ORS
74.1020.
(d) Applicability of ORS chapter 74A as specified in ORS
74A.5070.
(e) Applicability of ORS chapter 75 as specified in ORS
75.1160.
(f) Applicability of ORS chapter 78 as specified in ORS
78.1100.
(g) [Perfection
provisions of ORS 79.1030.] Sections
21 to 27 of this 2001 Act governing perfection, the effect of perfection or
nonperfection, and the priority of security interests and agricultural liens.
SECTION 131.
ORS 71.2010 is amended to read:
71.2010. Subject to additional definitions contained in
other sections of the Uniform Commercial Code which are applicable to a
specific series of sections, and unless the context otherwise requires, in the
Uniform Commercial Code:
(1) “Action” in the sense of a judicial proceeding includes
recoupment, counterclaim, setoff, suit in equity and any other proceedings in
which rights are determined.
(2) “Aggrieved party” means a party entitled to resort to a
remedy.
(3) “Agreement” means the bargain of the parties in fact as
found in their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as provided in ORS
71.2050 and 72.2080. Whether an agreement has legal consequences is determined
by the provisions of the Uniform Commercial Code, if applicable; otherwise by
the law of contracts as specified in ORS 71.1030.
(4) “Bank” means any person engaged in the business of
banking.
(5) “Bearer” means the person in possession of an
instrument, document of title or security payable to bearer or indorsed in
blank.
(6) “Bill of lading” means a document evidencing the
receipt of goods for shipment issued by a person engaged in the business of
transporting or forwarding goods, and includes an airbill. “Airbill” means a
document serving for air transportation as a bill of lading does for marine or
rail transportation, and includes an air consignment note or air waybill.
(7) “Branch” includes a separately incorporated foreign
branch of a bank.
(8) “Burden of establishing” a fact means the burden of
persuading the triers of fact that the existence of the fact is more probable
than its nonexistence.
(9) “Buyer in ordinary course of business” means a person [who] that buys goods in good faith,
[and] without knowledge that the sale
[to the person is in violation of] violates the [ownership] rights [or
security interest] of [a third party]
another person in the goods, and [buys] in the ordinary
course from a [seller] person, other than a pawnbroker, in
the business of selling goods of that kind.
[but does not include a pawnbroker. All
persons who sell minerals or the like (including oil and gas) at wellhead or
minehead shall be deemed to be sellers] A person buys goods in the ordinary course if the sale to the person
comports with the usual or customary practices in the kind of business in which
the seller is engaged or with the seller’s own usual or customary practices. A
person that sells oil, gas or other minerals at the wellhead or minehead is a
person in the business of selling goods of that kind. [“Buying”] A buyer in
ordinary course of business may [be]
buy for cash, [or] by exchange of
other property, or on secured or
unsecured credit, and [includes receiving] may acquire goods or documents of title under a preexisting
contract for sale [but does not include a
transfer in bulk or as security for or in total or partial satisfaction of a
money debt]. Only a buyer that takes
possession of the goods or has a right to recover the goods from the seller
under ORS 72.1010 to 72.7250 may be a buyer in ordinary course of business. A
person that acquires goods in a transfer in bulk or as security for or in total
or partial satisfaction of a money debt is not a buyer in ordinary course of
business.
(10) “Conspicuous”: A term or clause is conspicuous when it
is so written that a reasonable person against whom it is to operate ought to
have noticed it. A printed heading in capitals (as: NONNEGOTIABLE BILL OF
LADING) is conspicuous. Language in the body of a form is “conspicuous” if it
is in larger or other contrasting type or color. But in a telegram any stated
term is “conspicuous.” Whether a term or clause is “conspicuous” or not is for
decision by the court.
(11) “Contract” means the total legal obligation which
results from the parties’ agreement as affected by the Uniform Commercial Code
and any other applicable rules of law.
(12) “Creditor” includes a general creditor, a secured
creditor, a lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in
equity and an executor or administrator of an insolvent debtor’s or assignor’s
estate.
(13) “Defendant” includes a person in the position of
defendant in a cross action or counterclaim.
(14) “Delivery” with respect to instruments, documents of
title, chattel paper or certificated securities means voluntary transfer of
possession.
(15) “Document of title” includes bill of lading, dock
warrant, dock receipt, warehouse receipt or order for the delivery of goods,
and also any other document which in the regular course of business or
financing is treated as adequately evidencing that the person in possession of
it is entitled to receive, hold and dispose of the document and the goods it
covers. To be a document of title a document must purport to be issued by or
addressed to a bailee and purport to cover goods in the bailee’s possession
which are either identified or are fungible portions of an identified mass.
(16) “Fault” means wrongful act, omission or breach.
(17) “Fungible” with respect to goods or securities means
goods or securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible shall be deemed
fungible for the purposes of the Uniform Commercial Code to the extent that
under a particular agreement or document unlike units are treated as
equivalents.
(18) “Genuine” means free of forgery or counterfeiting.
(19) “Good faith” means honesty in fact in the conduct or
transaction concerned.
(20) “Holder” means:
(a) With respect to a negotiable instrument, the person in
possession of the negotiable instrument if:
(A) The instrument is payable to bearer; or
(B) The instrument is payable to an identified person, and
the identified person is in possession.
(b) With respect to a document of title, the person in
possession of the document of title if the goods are deliverable to bearer or
to the order of the person in possession.
(21) To “honor” is to pay or to accept and pay, or where a
credit so engages to purchase or discount a draft complying with the terms of
the credit.
(22) “Insolvency proceedings” includes any assignment for
the benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate of the person involved.
(23) A person is “insolvent” who either has ceased to pay
the person’s debts in the ordinary course of business or cannot pay the
person’s debts as they become due or is insolvent within the meaning of the
federal bankruptcy law.
(24) “Money” means a medium of exchange authorized or
adopted by a domestic or foreign government and includes a monetary unit of
account established by an intergovernmental organization or by agreement
between two or more nations.
(25) A person has “notice” of fact when:
(a) The person has actual knowledge of it;
(b) The person has received a notice or notification of it;
or
(c) From all the facts and circumstances known to the
person at the time in question the person has reason to know that it exists.
A person “knows” or has
“knowledge” of a fact when the person has actual knowledge of it. “Discover” or
“learn” or a word or phrase of similar import refers to knowledge rather than
to reason to know. The time and circumstances under which a notice or notification
may cease to be effective are not determined by the Uniform Commercial Code.
(26) A person “notifies” or “gives” a notice or
notification to another by taking such steps as may be reasonably required to
inform the other in ordinary course whether or not such other actually comes to
know of it. A person “receives” a notice or notification when:
(a) It comes to the person’s attention; or
(b) It is duly delivered at the place of business through
which the contract was made or at any other place held out by the person as the
place for receipt of such communications.
(27) Notice, knowledge or a notice or notification received
by an organization is effective for a particular transaction from the time when
it is brought to the attention of the individual conducting that transaction,
and in any event from the time when it would have been brought to the individual’s
attention if the organization had exercised due diligence.
(28) “Organization” includes a corporation, government or
governmental subdivision or agency, business trust, estate, trust, partnership
or association, two or more persons having a joint or common interest, or any
other legal or commercial entity.
(29) “Party,” as distinct from “third party,” means a
person who has engaged in a transaction or made an agreement within the Uniform
Commercial Code.
(30) “Person” includes an individual or an organization.
(31) “Presumption” or “presumed” means that the trier of
fact must find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(32) “Purchase” includes taking by sale, discount,
negotiation, mortgage, pledge, lien,
security interest, issue or reissue, gift or any other voluntary
transaction creating an interest in property.
(33) “Purchaser” means a person who takes by purchase.
(34) “Remedy” means any remedial right to which an
aggrieved party is entitled with or without resort to a tribunal.
(35) “Representative” includes an agent, an officer of a
corporation or association, and a trustee, executor or administrator of an
estate, or any other person empowered to act for another.
(36) “Rights” includes remedies.
(37)(a) “Security interest” means an interest in personal
property or fixtures which secures payment or performance of an obligation. [The retention or reservation of title by a
seller of goods notwithstanding shipment or delivery to the buyer is limited in
effect to a reservation of a “security interest.”] The term also includes
any interest of a consignor and a
buyer of accounts, [or] chattel paper, [which] a payment intangible or a promissory note
in a transaction that is subject to ORS [79.1010 to 79.5070 and 79.8010]
chapter 79. The special property interest of a buyer of goods on
identification of such goods to a contract for sale under ORS 72.4010 is not a
“security interest,” but a buyer may also acquire a “security interest” by
complying with ORS [79.1010 to 79.5070
and 79.8010] chapter 79. [Unless a lease or consignment is intended as
security, reservation of title thereunder is not a “security interest” but a
consignment is in any event subject to the provisions on consignment sales.]
Except as otherwise provided in ORS
72.5050, the right of a seller or lessor of goods under ORS 72.1010 to 72.7250
or ORS chapter 72A to retain or acquire possession of the goods is not a
“security interest,” but a seller or lessor may also acquire a “security
interest” by complying with ORS chapter 79. The retention or reservation of
title by a seller of goods notwithstanding shipment or delivery to the buyer
(ORS 72.4010) is limited in effect to a reservation of a “security interest.”
Whether a transaction creates a lease or security interest is determined by the
facts of each case; however, a transaction creates a security interest if the
consideration the lessee is to pay the lessor for the right to possession and
use of the goods is an obligation for the term of the lease not subject to
termination by the lessee and:
(A) The original term of the lease is equal to or greater
than the remaining economic life of the goods;
(B) The lessee is bound to renew the lease for the
remaining economic life of the goods or is bound to become the owner of the
goods;
(C) The lessee has an option to renew the lease for the
remaining economic life of the goods for no additional consideration or nominal
additional consideration upon compliance with the lease agreement; or
(D) The lessee has an option to become the owner of the
goods for no additional consideration or nominal additional consideration upon
compliance with the lease agreement.
(b) A transaction does not create a security interest
merely because it provides that:
(A) The present value of the consideration the lessee is
obligated to pay the lessor for the right to possession and use of the goods is
substantially equal to or is greater than the fair market value of the goods at
the time the lease is entered into;
(B) The lessee assumes risk of loss of the goods, or agrees
to pay taxes, insurance, filing, recording or registration fees, or service or
maintenance costs with respect to the goods;
(C) The lessee has an option to renew the lease or to
become the owner of the goods;
(D) The lessee has an option to renew the lease for a fixed
rent that is equal to or greater than the reasonably predictable fair market
rent for the use of the goods for the term of the renewal at the time the
option is to be performed; or
(E) The lessee has an option to become the owner of the
goods for a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the option is to be
performed.
(c) For purposes of this subsection:
(A) “Additional consideration” is not nominal if, when the
option to renew the lease is granted to the lessee, the rent is stated to be
the fair market rent for the use of the goods for the term of the renewal
determined at the time the option is to be performed, or when the option to
become the owner of the goods is granted to the lessee the price is stated to
be the fair market value of the goods determined at the time the option is to
be performed. “Additional consideration” is nominal if it is less than the
lessee’s reasonably predictable cost of performing under the lease agreement if
the option is not exercised;
(B) “Present value” means the amount as of a date certain
of one or more sums payable in the future, discounted to the date certain. The
discount is determined by the interest rate specified by the parties if the
rate is not manifestly unreasonable at the time the transaction is entered
into, otherwise, the discount is determined by a commercially reasonable rate
that takes into account the facts and circumstances of each case at the time
the transaction was entered into; and
(C) “Reasonably predictable” and “remaining economic life
of the goods” are to be determined with reference to the facts and
circumstances at the time the transaction is entered into.
(38) “Send” in connection with any writing or notice means
to deposit in the mail or deliver for transmission by any other usual means of
communication with postage or cost of transmission provided for and properly
addressed and in the case of an instrument to an address specified thereon or
otherwise agreed, or if there be none to any address reasonable under the
circumstances. The receipt of any writing or notice within the time at which it
would have arrived if properly sent has the effect of a proper sending.
(39) “Signed” includes any symbol executed or adopted by a
party with present intention to authenticate a writing.
(40) “Surety” includes guarantor.
(41) “Telegram” includes a message transmitted by radio,
teletype, cable, any mechanical method of transmission, or the like.
(42) “Term” means that portion of an agreement which
relates to a particular matter.
(43) “Unauthorized” signature or indorsement means one made
without actual, implied or apparent authority and includes a forgery.
(44) “Value.” Except as otherwise provided with respect to
negotiable instruments and bank collections in ORS 74.2090 and 74.2100, a
person gives “value” for rights if the person acquires them:
(a) In return for a binding commitment to extend credit or
for the extension of immediately available credit whether or not drawn upon and
whether or not a chargeback is provided for in the event of difficulties in
collection;
(b) As security for or in total or partial satisfaction of
a preexisting claim;
(c) By accepting delivery pursuant to a preexisting
contract for purchase; or
(d) Generally, in return for any consideration sufficient
to support a simple contract.
(45) “Warehouse receipt” means a receipt issued by a person
engaged in the business of storing goods for hire.
(46) “Written” or “writing” includes printing, typewriting
or any other intentional reduction to tangible form.
SECTION 132.
ORS 72.1030 is amended to read:
72.1030. (1) In ORS 72.1010 to 72.7250 unless the context
otherwise requires:
(a) “Buyer” means a person who buys or contracts to buy
goods.
(b) “Good faith” in the case of a merchant means honesty in
fact and the observance of reasonable commercial standards of fair dealing in
the trade.
(c) “Livestock” means equines, cattle, sheep, goats,
llamas, alpacas and swine.
(d) “Receipt” of goods means taking physical possession of
them.
(e) “Seller” means a person who sells or contracts to sell
goods.
(2) Other definitions applying to ORS 72.1010 to 72.7250,
and the sections in which they appear are:
(a) “Acceptance,” as defined in ORS 72.6060.
(b) “Banker’s credit,” as defined in ORS 72.3250.
(c) “Between merchants,” as defined in ORS 72.1040.
(d) “Cancellation,” as defined in ORS 72.1060 (4).
(e) “Commercial unit,” as defined in ORS 72.1050.
(f) “Confirmed credit,” as defined in ORS 72.3250.
(g) “Conforming to contract,” as defined in ORS 72.1060.
(h) “Contract for sale,” as defined in ORS 72.1060.
(i) “Cover,” as defined in ORS 72.7120.
(j) “Entrusting,” as defined in ORS 72.4030.
(k) “Financing agency,” as defined in ORS 72.1040.
(L) “Future goods,” as defined in ORS 72.1050.
(m) “Goods,” as defined in ORS 72.1050.
(n) “Identification,” as defined in ORS 72.5010.
(o) “Installment contract,” as defined in ORS 72.6120.
(p) “Letter of credit,” as defined in ORS 72.3250.
(q) “Lot,” as defined in ORS 72.1050.
(r) “Merchant,” as defined in ORS 72.1040.
(s) “Overseas,” as defined in ORS 72.3230.
(t) “Person in position of seller,” as defined in ORS
72.7070.
(u) “Present sale,” as defined in ORS 72.1060.
(v) “Sale,” as defined in ORS 72.1060.
(w) “Sale on approval,” as defined in ORS 72.3260.
(x) “Sale or return,” as defined in ORS 72.3260.
(y) “Termination,” as defined in ORS 72.1060.
(3) The following definitions in other series of sections
apply to ORS 72.1010 to 72.7250:
(a) “Check,” as defined in ORS 73.0104.
(b) “Consignee,” as defined in ORS 77.1020.
(c) “Consignor,” as defined in ORS 77.1020.
(d) “Consumer goods,” as defined in [ORS 79.1090] section 2 of
this 2001 Act.
(e) “Dishonor,” as defined in ORS 73.0502.
(f) “Draft,” as defined in ORS 73.0104.
(4) In addition, ORS chapter 71 contains general
definitions and principles of construction and interpretation applicable
throughout ORS 72.1010 to 72.7250.
SECTION 133.
ORS 72.2100 is amended to read:
72.2100. (1) A party may perform the duty of the party
through a delegate unless otherwise agreed or unless the other party has a
substantial interest in having the original promisor perform or control the
acts required by the contract. No delegation of performance relieves the party
delegating of any duty to perform or any liability for breach.
(2) [Unless] Except as otherwise provided in section 68
of this 2001 Act, unless otherwise agreed, all rights of either seller or buyer can be assigned except where
the assignment would materially change the duty of the other party, or increase
materially the burden or risk imposed on the other party by the contract, or
impair materially the chance of the other party obtaining return performance. A
right to damages for breach of the whole contract or a right arising out of the
assignor’s due performance of the entire obligation of the assignor can be
assigned despite agreement otherwise.
(3) The creation,
attachment, perfection or enforcement of a security interest in the seller’s
interest under a contract is not a transfer that materially changes the duty of
or increases materially the burden or risk imposed on the buyer or impairs materially
the buyer’s chance of obtaining return performance within the purview of
subsection (2) unless, and then only to the extent that, enforcement actually
results in a delegation of material performance of the seller. Even in that
event, the creation, attachment, perfection and enforcement of the security
interest remain effective, but (i) the seller is liable to the buyer for
damages caused by the delegation to the extent that the damages could not
reasonably be prevented by the buyer, and (ii) a court having jurisdiction may
grant other appropriate relief, including cancellation of the contract for sale
or an injunction against enforcement of the security interest or consummation
of the enforcement.
[(3)] (4) Unless the circumstances indicate the
contrary a prohibition of assignment of “the contract” is to be construed as
barring only the delegation to the assignee of the assignor’s performance.
[(4)] (5) An assignment of “the contract” or
of “all my rights under the contract” or an assignment in similar general terms
is an assignment of rights and unless the language or the circumstances (as in
an assignment for security) indicate the contrary, it is a delegation of
performance of the duties of the assignor and its acceptance by the assignee constitutes
a promise by the assignee to perform those duties. This promise is enforceable
by either the assignor or the other party to the original contract.
[(5)] (6) The other party may treat any
assignment which delegates performance as creating reasonable grounds for
insecurity and may without prejudice to the rights of the other party against
the assignor demand assurances from the assignee as provided in ORS 72.6090.
SECTION 134.
ORS 72.3260 is amended to read:
72.3260. (1) Unless otherwise agreed, if delivered goods
may be returned by the buyer even though they conform to the contract, the
transaction is:
(a) A “sale on approval” if the goods are delivered
primarily for use; and
(b) A “sale or return” if the goods are delivered primarily
for resale.
(2) [Except as
provided in subsection (3) of this section,] Goods held on approval are not
subject to the claims of the buyer’s creditors until acceptance; goods held on
sale or return are subject to such claims while in the buyer’s possession.
[(3) Where goods are
delivered to a person for sale and such person maintains a place of business at
which the person deals in goods of the kind involved, under a name other than
the name of the person making delivery, then with respect to claims of
creditors of the person conducting the business the goods are deemed to be on
sale or return. The provisions of this subsection are applicable even though an
agreement purports to reserve title to the person making delivery until payment
or resale or uses such words as “on consignment” or “on memorandum.” However,
this subsection is not applicable if the person making delivery:]
[(a) Complies with an
applicable law providing for a consignor’s interest or the like to be evidenced
by a sign; or]
[(b) Establishes that
the person conducting the business is generally known by the creditors of the
person to be substantially engaged in selling the goods of others; or]
[(c) Complies with
the filing provisions of ORS 79.1010 to 79.5070 and 79.8010 on secured
transactions.]
[(4)] (3) Any “or return” term of a contract
for sale is to be treated as a separate contract for sale within ORS 72.2010
relating to the statute of frauds and as contradicting the sale aspect of the
contract within the provisions of ORS 72.2020 on parole or extrinsic evidence.
[(5) This section
shall determine priorities in goods between consignors and unsecured creditors
of the person to whom the goods are delivered for sale. This section does not
apply to the determination of priorities in goods between consignors and
secured creditors of the person to whom the goods are delivered for sale.
Priorities in goods between consignors and secured creditors of the person to
whom the goods are delivered for sale shall be determined exclusively under ORS
79.3015.]
SECTION 135.
ORS 72.4010 is amended to read:
72.4010. Each provision of ORS 72.1010 to 72.7250 with
regard to the rights, obligations and remedies of the seller, the buyer,
purchasers or other third parties applies irrespective of title to the goods except
where the provision refers to such title. In so far as situations are not
covered by the other provisions of ORS 72.1010 to 72.7250 and matters
concerning title become material the following rules apply:
(1) Title to goods cannot pass under a contract for sale
prior to their identification to the contract as provided in ORS 72.5010, and
unless otherwise explicitly agreed the buyer acquires by their identification a
special property as limited by the Uniform Commercial Code. Any retention or
reservation by the seller of the title (property) in goods shipped or delivered
to the buyer is limited in effect to a reservation of a security interest.
Subject to these provisions and to the provisions of ORS [79.1010 to 79.5070 and 79.8010]
chapter 79 on secured transactions, title to goods passes from the seller
to the buyer in any manner and on any conditions explicitly agreed on by the
parties.
(2) Unless otherwise explicitly agreed title passes to the
buyer at the time and place at which the seller completes performance with
reference to the physical delivery of the goods, despite any reservation of a
security interest and even though a document of title is to be delivered at a
different time or place; and in particular and despite any reservation of a security
interest by the bill of lading:
(a) If the contract requires or authorizes the seller to
send the goods to the buyer but does not require the seller to deliver them at
destination, title passes to the buyer at the time and place of shipment; but
(b) If the contract requires delivery at destination, title
passes on tender there.
(3) Unless otherwise explicitly agreed where delivery is to
be made without moving the goods:
(a) If the seller is to deliver a document of title, title
passes at the time when and the place where the seller delivers such documents;
or
(b) If the goods are at the time of contracting already
identified and no documents are to be delivered, title passes at the time and
place of contracting.
(4) When livestock has been delivered under a contract of
sale and is transported by private, common or contract carrier, if on the
accompanying brand inspection certificate or memorandum of brand inspection
certificate the seller has noted that as consideration for the sale of the
livestock a draft, check, certificate of deposit or note has been given, title
does not pass until the instrument is paid.
(5) A rejection or other refusal by the buyer to receive or
retain the goods, whether or not justified, or a justified revocation of
acceptance revests title to the goods in the seller. Such revesting occurs by
operation of law and is not a “sale.”
SECTION 136.
ORS 72.4020 is amended to read:
72.4020. (1) Except as provided in subsections (2) and (3)
of this section, rights of unsecured creditors of the seller with respect to
goods which have been identified to a contract for sale are subject to the
buyer’s rights to recover the goods pursuant to ORS 72.5020 and 72.7160.
(2) A creditor of the seller may treat a sale or an
identification of goods to a contract for sale as void if as against the
creditor a retention of possession by the seller is fraudulent under any rule
of law of the state where the goods are situated, except that retention of
possession in good faith and current course of trade by a merchant-seller for a
commercially reasonable time after a sale or identification is not fraudulent.
(3) Nothing in ORS 72.1010 to 72.7250 shall be deemed to
impair the rights of creditors of the seller:
(a) Under the provisions of ORS [79.1010 to 79.5070 and 79.8010] chapter 79 on secured transactions; or
(b) Where identification to the contract or delivery is
made not in current course of trade but in satisfaction of or as security for a
preexisting claim for money, security or the like and is made under
circumstances which under any rule of law of the state where the goods are
situated would apart from ORS 72.1010 to 72.7250 constitute the transaction a
fraudulent transfer or voidable preference.
SECTION 137.
ORS 72.4030 is amended to read:
72.4030. (1) A purchaser of goods acquires all title which
the transferor had or had power to transfer except that a purchaser of a
limited interest acquires rights only to the extent of the interest purchased.
A person with voidable title has power to transfer a good title to a good faith
purchaser for value. When goods have been delivered under a transaction of
purchase the purchaser has such power even though:
(a) The transferor was deceived as to the identity of the
purchaser; or
(b) The delivery was in exchange for a check which is later
dishonored; or
(c) It was agreed that the transaction was to be a “cash
sale”; or
(d) The delivery was procured through fraud punishable as
larcenous under the criminal law.
(2) Notwithstanding any other provision of this section,
when livestock has been delivered under a transaction of purchase, is
transported by private, common or contract carrier and on the accompanying
brand inspection certificate or memorandum of brand inspection certificate the
seller has noted that as consideration for the transaction of purchase a draft,
check, certificate of deposit or note was given, if the draft, check,
certificate of deposit or note is later dishonored, the buyer does not have
power to transfer good title to a good faith purchaser for value.
(3) Any entrusting of possession of goods to a merchant who
deals in goods of that kind gives the merchant power to transfer all rights of
the entruster to a buyer in ordinary course of business.
(4) “Entrusting” includes any delivery and any acquiescence
in retention of possession regardless of any condition expressed between the
parties to the delivery or acquiescence and regardless of whether the
procurement of the entrusting of the possessor’s disposition of the goods have
been such as to be larcenous under the criminal law.
(5) The rights of other purchasers of goods and of lien
creditors are governed by ORS [79.1010 to
79.5070 and 79.8010] chapter 79
on secured transactions and ORS chapter 77 on documents of title.
SECTION 138.
ORS 72.5020 is amended to read:
72.5020. (1) Subject to [subsection] subsections
(2) and (3) of this section and even
though the goods have not been shipped,
a buyer who has paid a part or all of the price of goods in which the buyer has
a special property under the provisions of [the
immediately preceding section] ORS
72.5010 may on making and keeping good a tender of any unpaid portion of
their price recover them from the seller if:
(a) In the case of goods
bought for personal, family or household purposes, the seller repudiates or
fails to deliver as required by the contract; or
(b) In all cases, the seller becomes
insolvent within 10 days after receipt of the first installment on their price.
(2) The buyer’s
right to recover the goods under subsection (1)(a) of this section vests upon
acquisition of a special property, even if the seller had not then repudiated
or failed to deliver.
[(2)] (3) If the identification creating the
special property of the buyer has been made by the buyer the buyer acquires the
right to recover the goods only if they conform to the contract for sale.
SECTION 139.
ORS 72.7160 is amended to read:
72.7160. (1) Specific performance may be decreed where the
goods are unique or in other proper circumstances.
(2) The decree for specific performance may include such
terms and conditions as to payment of the price, damages or other relief as the
court may deem just.
(3) The buyer has a right of replevin for goods identified
to the contract if after reasonable effort the buyer is unable to effect cover
for such goods or the circumstances reasonably indicate that such effort will
be unavailing or if the goods have been shipped under reservation and
satisfaction of the security interest in them has been made or tendered. In the case of goods bought for personal,
family or household purposes, the buyer’s right of replevin vests upon
acquisition of a special property, even if the seller had not then repudiated
or failed to deliver.
SECTION 140.
ORS 72.8010 is amended to read:
72.8010. As used in ORS 72.8010 to 72.8200, unless the
context requires otherwise:
(1) “Consumer good” means a new consumer good as defined in
[ORS 79.1090 (1)] section 2 of this 2001 Act and
includes, but is not limited to, a new motor vehicle, new manufactured
dwelling, new modular home, new machine, new appliance or new like product used
or bought for use primarily for personal family or household purposes. However,
“consumer good” does not include a soft good or a consumable.
(2) “Buyer” or “retail buyer” means any person who buys a
consumer good from a person engaged in the business of manufacturing,
distributing or selling consumer goods at retail.
(3) “Manufacturer” means any person who manufactures,
assembles or produces consumer goods.
(4) “Distributor” means any person who stands between the
manufacturer and the retail seller in purchases, consignments or contracts for
sale of consumer goods.
(5) “Retail seller,” “seller” or “retailer” means a person
who engages in the business of selling consumer goods to retail buyers.
(6) “Soft good” means any pliable product substantially
composed of woven material, natural or synthetic yarn or fiber, textile or
similar product.
(7) “Consumable” means any product which is intended for
consumption by individuals, or use by individuals for purposes of personal care
or in the performance of services ordinarily rendered within the household, and
which usually is consumed or expended in the course of such consumption or use.
(8) “Implied warranty of merchantability” of a consumer
good or “implied warranty that a consumer good is merchantable” is a warranty
that the consumer good:
(a) Passes without objection in the trade under the
contract description;
(b) Is fit for the ordinary purposes for which the good is
used;
(c) Is adequately contained, packaged and labeled; and
(d) Conforms to the promises or affirmations of fact made
on the container or label.
(9) “Implied warranty of fitness” means that when the
retailer, distributor or manufacturer has reason to know any particular purpose
for which the consumer good is required, and further, that the buyer is relying
on the skill and judgment of the seller to select and furnish a suitable good,
then there is an implied warranty that the good shall be fit for such purpose.
SECTION 141.
ORS 72A.1030 is amended to read:
72A.1030. (1) As used in this chapter, unless the context
otherwise requires:
(a) “Buyer in ordinary course of business” means a person
who in good faith and without knowledge that the sale to the person is in
violation of the ownership rights or security interest or leasehold interest of
a third party in the goods buys in ordinary course from a person in the
business of selling goods of that kind but does not include a pawnbroker.
“Buying” may be for cash or by exchange of other property or on secured or
unsecured credit and includes receiving goods or documents of title under a
preexisting contract for sale but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
(b) “Cancellation” occurs when either party puts an end to
the lease contract for default by the other party.
(c) “Commercial unit” means such a unit of goods as by
commercial usage is a single whole for purposes of lease and division of which
materially impairs its character or value on the market or in use. A
“commercial unit” may be a single article, as a machine, or a set of articles,
as a suite of furniture or a line of machinery, or a quantity, as a gross or
carload, or any other unit treated in use or in the relevant market as a single
whole.
(d) “Conforming goods” or “performance under a lease
contract” means goods or performance that are in accordance with the
obligations under the lease contract.
(e) “Consumer lease” means a lease that a lessor regularly
engaged in the business of leasing or selling makes to a lessee who is an
individual and who takes under the lease primarily for a personal, family or
household purpose, if the total payments to be made under the lease contract,
excluding payments for options to renew or buy, do not exceed $25,000.
(f) “Fault” means wrongful act, omission, breach or
default.
(g) “Finance lease” means a lease in which the lessor does
not select, manufacture or supply the goods, the lessor acquires the goods or
the right to possession and use of the goods in connection with the lease, and
either:
(A) The lessee receives a copy of the contract evidencing
the lessor’s purchase of the goods on or before signing the lease contract;
(B) The lessee’s approval of the contract evidencing the
lessor’s purchase of the goods is a condition to effectiveness of the lease
contract;
(C) The lessor informs the lessee in writing of the
identity of the supplier unless the lessee has selected the supplier and
directed the lessor to purchase the goods from the supplier;
(D) The lessor informs the lessee in writing that the
lessee may have rights under the contract evidencing the lessor’s purchase of
the goods and the lessor advises the lessee in writing to contact the supplier
for a description of any such rights; or
(E) The lease contract discloses all warranties and other
rights provided to the lessee by the lessor and supplier in connection with the
lease contract and informs the lessee that there are no warranties or other
rights provided to the lessee by the lessor and supplier other than those
disclosed in the lease contract.
(h) “Goods” means all things that are movable at the time
of identification to the lease contract, or are fixtures as provided in ORS 72A.3090,
but “goods” does not include money, documents, instruments, accounts, chattel
paper, general intangibles or minerals or the like, including oil and gas,
before extraction. “Goods” also includes the unborn young of animals.
(i) “Installment lease contract” means a lease contract
that authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a clause “each
delivery is a separate lease” or its equivalent.
(j) “Lease” means a transfer of the right to possession and
use of goods for a term in return for consideration, but a sale, including a
sale on approval or a sale or return, or retention or creation of a security
interest is not a lease. Unless the context clearly indicates otherwise,
“lease” includes a sublease.
(k) “Lease agreement” means the bargain, with respect to
the lease, of the lessor and the lessee in fact as found in the language or by
implication from other circumstances including course of dealing or usage of
trade or course of performance as provided in this chapter. Unless the context
clearly indicates otherwise, “lease agreement” includes a sublease agreement.
(L) “Lease contract” means the total legal obligation that
results from the lease agreement as affected by this chapter and any other
applicable rules of law. Unless the context clearly indicates otherwise, “lease
contract” includes a sublease contract.
(m) “Leasehold interest” means the interest of the lessor
or the lessee under a lease contract.
(n) “Lessee” means a person who acquires the right to
possession and use of goods under a lease. Unless the context clearly indicates
otherwise, “lessee” includes a sublessee.
(o) “Lessee in ordinary course of business” means a person
who in good faith and without knowledge that the lease to the person is in
violation of the ownership rights or security interest or leasehold interest of
a third party in the goods leases in ordinary course from a person in the
business of selling or leasing goods of that kind but does not include a
pawnbroker. “Leasing” may be for cash or by exchange of other property or on
secured or unsecured credit and includes receiving goods or documents of title
under a preexisting lease contract but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
(p) “Lessor” means a person who transfers the right to
possession and use of goods under a lease. Unless the context clearly indicates
otherwise, “lessor” includes a sublessor.
(q) “Lessor’s residual interest” means the lessor’s
interest in the goods after expiration, termination or cancellation of the
lease contract.
(r) “Lien” means a charge against or interest in goods to
secure payment of a debt or performance of an obligation, but “lien” does not
include a security interest.
(s) “Lot” means a parcel or a single article that is the
subject matter of a separate lease or delivery, whether or not it is sufficient
to perform the lease contract.
(t) “Merchant lessee” means a lessee that is a merchant
with respect to goods of the kind subject to the lease.
(u) “Present value” means the amount as of a date certain
of one or more sums payable in the future, discounted to the date certain. The
discount is determined by the interest rate specified by the parties if the
rate was not manifestly unreasonable at the time the transaction was entered
into; otherwise, the discount is determined by a commercially reasonable rate
that takes into account the facts and circumstances of each case at the time
the transaction was entered into.
(v) “Purchase” includes taking by sale, lease, mortgage,
security interest, pledge, gift or any other voluntary transaction creating an
interest in goods.
(w) “Sublease” means a lease of goods the right to
possession and use of which was acquired by the lessor as a lessee under an
existing lease.
(x) “Supplier” means a person from whom a lessor buys or
leases goods to be leased under a finance lease.
(y) “Supply contract” means a contract under which a lessor
buys or leases goods to be leased.
(z) “Termination” occurs when either party pursuant to a
power created by agreement or law puts an end to the lease contract otherwise
than for default.
(2) Other definitions applying to this chapter and the
sections in which they appear are:
(a) “Accessions” as defined in ORS 72A.3100.
(b) “Account” as defined in [ORS 79.1060] section 2 of
this 2001 Act.
(c) “Between merchants” as defined in ORS 72.1040.
(d) “Buyer” as defined in ORS 72.1030.
(e) “Chattel paper” as defined in [ORS 79.1050] section 2 of
this 2001 Act.
(f) “Construction mortgage” as defined in ORS 72A.3090.
(g) “Consumer goods” as defined in [ORS 79.1090] section 2 of
this 2001 Act.
(h) “Document” as defined in [ORS 79.1050] section 2 of
this 2001 Act.
(i) “Encumbrance” as defined in ORS 72A.3090.
(j) “Entrusting” as defined in ORS 72.4030.
(k) “Fixture filing” as defined in ORS 72A.3090.
(L) “Fixtures” as defined in ORS 72A.3090.
(m) “General [intangibles] intangible” as defined in [ORS 79.1060] section 2 of this 2001 Act.
(n) “Good faith” as defined in ORS 72.1030.
(o) “Instrument” as defined in [ORS 79.1050] section 2 of
this 2001 Act.
(p) “Merchant” as defined in ORS 72.1040.
(q) “Mortgage” as defined in [ORS 79.1050] section 2 of
this 2001 Act.
(r) “Purchase money lease” as defined in ORS 72A.3090.
(s) “Pursuant to commitment” as defined in [ORS 79.1050] section 2 of this 2001 Act.
(t) “Receipt” as defined in ORS 72.1030.
(u) “Sale” as defined in ORS 72.1060.
(v) “Sale on approval” as defined in ORS 72.3260.
(w) “Sale or return” as defined in ORS 72.3260.
(x) “Seller” as defined in ORS 72.1030.
(3) In addition, ORS chapter 71 contains general
definitions and principles of construction and interpretation applicable
throughout this chapter.
SECTION 142.
ORS 72A.3030 is amended to read:
72A.3030. (1) As used in this section, “creation of a
security interest” includes the sale of a lease contract that is subject to [ORS 79.1020 (1)(b)] section 9 (1)(c) of this 2001 Act.
(2) Except as provided in [subsections] subsection
(3) [and (4)] of this section and section 69 of this 2001 Act, a
provision in a lease agreement that prohibits the voluntary or involuntary
transfer, including a transfer by sale, sublease, creation or enforcement of a
security interest, or attachment, levy or other judicial process, of an
interest of a party under the lease contract or of the lessor’s residual
interest in the goods, or that makes such a transfer an event of default, gives
rise to the rights and remedies provided in subsection [(5)] (4) of this
section, but a transfer that is prohibited or is an event of default under the
lease agreement is otherwise effective.
[(3) A provision in a
lease agreement that prohibits the creation or enforcement of a security
interest in an interest of a party under the lease contract or in the lessor’s
residual interest in the goods, or makes such a transfer an event of default,
is not enforceable unless, and then only to the extent that, there is an actual
transfer by the lessee of the lessee’s right of possession or use of the goods
in violation of the provision or an actual delegation of a material performance
of either party to the lease contract in violation of the provision. Neither
the granting nor the enforcement of a security interest in the lessor’s
interest under the lease contract or the lessor’s residual interest in the
goods is a transfer that materially impairs the prospect of obtaining return
performance by, materially changes the duty of, or materially increases the
burden or risk imposed on, the lessee within the purview of subsection (5) of
this section unless, and then only to the extent that, there is an actual
delegation of a material performance of the lessor.]
[(4)] (3) A provision in a lease agreement is
not enforceable if the provision prohibits a transfer of a right to damages for
default with respect to the whole lease contract or of a right to payment
arising out of the transferor’s due performance of the transferor’s entire
obligation or makes such a transfer an event of default. A transfer that is not
enforceable under this section is not a transfer that materially impairs the
prospect of obtaining return performance by, materially changes the duty of, or
materially increases the burden or risk imposed on, the other party to the
lease contract under subsection [(5)] (4) of this section.
[(5)] (4) Subject to [subsections] subsection
(3) [and (4)] of this section and section 69 of this 2001 Act:
(a) If a transfer is made that is made an event of default
under a lease agreement, the party to the lease contract not making the
transfer has the rights and remedies described in ORS 72A.5010 (2), unless the
party waives the default or otherwise agrees; or
(b) If paragraph (a) of this subsection is not applicable
and a transfer is made that is prohibited under a lease agreement or that
materially impairs the prospect of obtaining return performance by, materially
changes the duty of, or materially increases the burden or risk imposed on, the
other party to the lease contract, then, unless the party not making the
transfer agrees at any time to the transfer in the lease contract or otherwise,
and except as limited by contract:
(A) The transferor is liable to the party not making the
transfer for damages caused by the transfer to the extent that the damages
could not reasonably be prevented by the party not making the transfer; and
(B) A court having jurisdiction may grant other appropriate
relief, including cancellation of the lease contract or an injunction.
[(6)] (5) A transfer of “the lease” or of
“all my rights under the lease” or a transfer in similar general terms is a
transfer of rights, and unless the language or the circumstances indicate the
contrary, as in a transfer for security, the transfer is a delegation of duties
by the transferor to the transferee. Acceptance by the transferee constitutes a
promise by the transferee to perform those duties. The promise is enforceable
by either the transferor or the other party to the lease contract.
[(7)] (6) Unless otherwise agreed by the
lessor and the lessee, a delegation of performance does not relieve the
transferor as against the other party of any duty to perform or of any
liability for default.
[(8)] (7) In a consumer lease, to prohibit
the transfer of an interest of a party under the lease contract or to make a
transfer an event of default, the language must be specific, by a writing, and
conspicuous.
SECTION 143.
ORS 72A.3070 is amended to read:
72A.3070. (1) Except as otherwise provided in ORS 72A.3060,
a creditor of a lessee takes subject to the lease contract.
(2) Except as otherwise provided in [subsections] subsection (3)
[and (4)] of this section and in ORS
72A.3060 and 72A.3080, a creditor of a lessor takes subject to the lease
contract unless[:]
[(a)] the
creditor holds a lien that attached to the goods before the lease contract
became enforceable[;].
[(b) The creditor
holds a security interest in the goods and the lessee did not give value and
receive delivery of the goods without knowledge of the security interest; or]
[(c) The creditor
holds a security interest in the goods which was perfected under ORS 79.3030
before the lease contract became enforceable.]
[(3) A lessee in the
ordinary course of business takes the leasehold interest free of a security
interest in the goods created by the lessor even though the security interest
is perfected under ORS 79.3030 and the lessee knows of its existence.]
[(4) A lessee other
than a lessee in the ordinary course of business takes the leasehold interest
free of a security interest to the extent that it secures future advances made
after the secured party acquires knowledge of the lease or more than 45 days
after the lease contract becomes enforceable, whichever occurs first, unless
the future advances are made pursuant to a commitment entered into without
knowledge of the lease and before the expiration of the 45-day period.]
(3) Except as
otherwise provided in sections 37, 41 and 43 of this 2001 Act, a lessee takes a
leasehold interest subject to a security interest held by a creditor of the
lessor.
SECTION 144.
ORS 72A.3090 is amended to read:
72A.3090. (1) As used in this section:
(a) Goods are “fixtures” when they become so related to
particular real estate that an interest in them arises under real estate law;
(b) A “fixture filing” is the filing, in the office where a
record of a mortgage on the real
estate would be filed or recorded, of a financing statement covering goods that
are or are to become fixtures and conforming to the requirements of [ORS 79.4020 (5)] section 73 (1) and (2) of this 2001 Act;
(c) A lease is a “purchase money lease” unless the lessee
has possession or use of the goods or the right to possession or use of the
goods before the lease agreement is enforceable;
(d) A mortgage is a “construction mortgage” to the extent
it secures an obligation incurred for the construction of an improvement on
land including the acquisition cost of the land, if the recorded writing so
indicates; and
(e) “Encumbrance” includes real estate mortgages and other
liens on real estate and all other rights in real estate that are not ownership
interests.
(2) Under this chapter a lease may be of goods that are
fixtures or may continue in goods that become fixtures, but no lease exists
under this chapter of ordinary building materials incorporated into an
improvement on land.
(3) This chapter does not prevent creation of a lease of
fixtures pursuant to real estate law.
(4) The perfected interest of a lessor of fixtures has
priority over a conflicting interest of an encumbrancer or owner of the real
estate if:
(a) The lease is a purchase money lease, the conflicting
interest of the encumbrancer or owner arises before the goods become fixtures,
the interest of the lessor is perfected by a fixture filing before the goods
become fixtures or within 20 days thereafter, and the lessee has an interest of
record in the real estate or is in possession of the real estate; or
(b) The interest of the lessor is perfected by a fixture
filing before the interest of the encumbrancer or owner is of record, the
lessor’s interest has priority over any conflicting interest of a predecessor
in title of the encumbrancer or owner, and the lessee has an interest of record
in the real estate or is in possession of the real estate.
(5) The interest of a lessor of fixtures, whether or not
perfected, has priority over the conflicting interest of an encumbrancer or
owner of the real estate if:
(a) The fixtures are readily removable factory or office
machines, readily removable equipment that is not primarily used or leased for
use in the operation of the real estate, or readily removable replacements of
domestic appliances that are goods subject to a consumer lease, and before the
goods become fixtures the lease contract is enforceable;
(b) The conflicting interest is a lien on the real estate
obtained by legal or equitable proceedings after the lease contract is
enforceable;
(c) The encumbrancer or owner has consented in writing to
the lease or has disclaimed an interest in the goods as fixtures; or
(d) The lessee has a right to remove the goods as against
the encumbrancer or owner. If the lessee’s right to remove terminates, the
priority of the interest of the lessor continues for a reasonable time.
(6) Notwithstanding subsection (4)(a) of this section but
otherwise subject to subsections (4) and (5) of this section, the interest of a
lessor of fixtures, including the lessor’s residual interest, is subordinate to
the conflicting interest of an encumbrancer of the real estate under a
construction mortgage recorded before the goods become fixtures if the goods
become fixtures before the completion of the construction. To the extent given
to refinance a construction mortgage, the conflicting interest of an
encumbrancer of the real estate under a mortgage has this priority to the same
extent as the encumbrancer of the real estate under the construction mortgage.
(7) In cases not within subsections (1) to (6) of this
section, priority between the interest of a lessor of fixtures, including the
lessor’s residual interest, and the conflicting interest of an encumbrancer or
owner of the real estate who is not the lessee is determined by the priority
rules governing conflicting interests in real estate.
(8) If the interest of a lessor of fixtures, including the
lessor’s residual interest, has priority over all conflicting interests of all
owners and encumbrancers of the real estate, the lessor or the lessee may on
default, expiration, termination or cancellation of the lease agreement, but
subject to the lease agreement and this chapter, or if necessary to enforce the
lessor’s or lessee’s other rights and remedies under this chapter, remove the
goods from the real estate, free and clear of all conflicting interests of all
owners and encumbrancers of the real estate, but the lessor or lessee must
reimburse any encumbrancer or owner of the real estate who is not the lessee
and who has not otherwise agreed for the cost of repair of any physical injury,
but not for any diminution in value of the real estate caused by the absence of
the goods removed or by any necessity of replacing them. A person entitled to
reimbursement may refuse permission to remove until the party seeking removal
gives adequate security for the performance of this obligation.
(9) Even though the lease agreement does not create a
security interest, the interest of a lessor of fixtures, including the lessor’s
residual interest, is perfected by filing a financing statement as a fixture
filing for leased goods that are or are to become fixtures in accordance with
the relevant provisions of ORS chapter 79.
SECTION 145.
ORS 72A.3095 is amended to read:
72A.3095. (1) A financing statement filed as a fixture
filing under ORS 72A.3090 shall be recorded and indexed as a mortgage on the
real estate.
(2) [ORS 79.4070]
Section 94 of this 2001 Act does not
apply to a financing statement recorded and indexed as a mortgage under this
section.
SECTION 146.
ORS 74.2100 is amended to read:
74.2100. (1) A collecting bank has a security interest in
an item and in any accompanying documents or in the proceeds of either:
(a) In case of an item deposited in an account, to the
extent to which credit given for the item has been withdrawn or applied;
(b) In case of an item for which it has given credit
available for withdrawal as of right, to the extent of the credit given,
whether or not the credit is drawn upon or there is a right of charge-back; or
(c) If it makes an advance on or against the item.
(2) If credit given for several items received at one time
or pursuant to a single agreement is withdrawn or applied in part, the security
interest remains upon all the items, any accompanying documents or the proceeds
of either. For the purpose of this action, credits first given are first
withdrawn.
(3) Receipt by a collecting bank of a final settlement for
an item is a realization on its security interest in the item, accompanying
documents and proceeds. So long as the bank does not receive final settlement
for the item or give up possession of the item or accompanying documents for
purposes other than collection, the security interest continues to that extent
and is subject to ORS chapter 79, but:
(a) No security agreements are necessary to make the
security interest enforceable under [ORS
79.2030 (1)(a)] section 13 (2)(c)(A)
of this 2001 Act;
(b) No filing is required to perfect the security interest;
and
(c) The security interest has priority over conflicting
perfected security interests in the item, accompanying documents or proceeds.
SECTION 147.
Section 148 of this 2001 Act is added to
and made a part of ORS chapter 75.