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The UCC, or Uniform Commercial Code, works with commercial transactions in the United States. It’s a complicated, yet helpful and clear, document, permitting security on both ends of the transaction. There are many articles in the UCC and more laws within them. One of those laws is UCC 9-601 - but what is stated in this section?
UCC 9-601 covers Rights After Defaults; Judicial Enforcement; Consignor Or Buyer Of Accounts, Chattel Paper, Payment Intangibles, Or Promissory Notes. It deals with the rights after these specific events come to pass.
If you’re interested in learning more about the definition of UCC 9-601, you’re in the right place. No matter your goal in life, it’s always valuable to learn more about these intricate and critical UCC laws. Read on to learn more about the official definition of UCC 9-601 and the terms you will see inside it.
What is UCC 9-601?
UCC 9-601 is in Article 9 of the UCC. It deals with the Rights After Defaults; Judicial Enforcement; Consignor Or Buyer Of Accounts, Chattel Paper, Payment Intangibles, Or Promissory Notes.
Here is the official definition of UCC 9-601, according to the Cornell Law School Legal Information Institute:
(a) .Rights of secured party after default..
After default, a secured party has the rights provided in this part and, except as otherwise provided in Section 9-602, those provided by agreement of the parties. A secured party:
(1) may reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure; and
(2) if the collateral is documents, may proceed either as to the documents or as to the goods they cover.
(b) .Rights and duties of secured party in possession or control..
A secured party in possession of collateral or control of collateral under Section 9-104, 9-105, 9-106, or 9-107 has the rights and duties provided in Section 9-207.
(c) .Rights cumulative; simultaneous exercise..
The rights under subsections (a) and (b) are cumulative and may be exercised simultaneously.
(d) .Rights of debtor and obligor..
Except as otherwise provided in subsection (g) and Section 9-605, after default, a debtor and an obligor have the rights provided in this part and by agreement of the parties.
(e) .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:
(1) the date of perfection of the security interest or agricultural lien in the collateral;
(2) the date of filing a financing statement covering the collateral; or
(3) any date specified in a statute under which the agricultural lien was created.
(f) .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 article.
(g) .Consignor or buyer of certain rights to payment..
Except as otherwise provided in Section 9-607(c), this part imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.
Critical Words In UCC 9-601
Several critical terms appear in UCC 9-601. It’s helpful to know what they mean, or you could have trouble interpreting sections of the law. Let’s dive into a few of the most common words in the UCC 9-601 and what they mean.
In the Uniform Commercial Code, the secured party is the person who has the legal claim to the product. When a security agreement occurs, the product is officially there if the loan defaults. With proper registration, the security interest will become the debtor's if there is a default.
For example, let’s say a tractor goes up as the option for security interest when a lender offers to provide the borrower with funds. If the lender secures the interest through the government, the security interest will become there if the person defaults on the loan.
Default is another term in the Uniform Commercial Code and UCC 9-601. In this context, default means a person fails to meet the obligations in the original security agreement.
A default is less than ideal news for the borrower, but it’s good news for the person who provided the cash. If they are the secured party, they get first access to the security interest and thus don't have to worry about losing their money.
A debtor is a portion of the party agreeing and signing under the Uniform Commercial Code. A debtor is one of several things: a consignee; a seller of accounts, chattel paper, payments intangibles, and more; or they are an individual who has a non-security interest.
Someone who loans a person money makes them a debtor. They put up the valuable item for a security interest collateral.
An obligation is a course or action to which an individual is morally or legally bound. In the UCC, the involved party is typically legally bound to complete something in various stages of the debtor repayment process.
Each party in any deal under the UCC must complete tasks. Obligation is what you are supposed to do for proper enactment of the Uniform Commercial Code.
Under the Uniform Commercial Code, a concierge is a person who delivers goods to a person who is in a consignment. The person who receives the goods is referred to as a consignee.
Many rights deal with the consignor and the consignee. They are a valuable part of these agreements.
The term 'simultaneous exercise’ comes up a few times. This term is simple - it means that, in some cases, two laws or statements may be enacted at once.
Reference Legal Explanations
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"What is UCC 9-601". Legal Explanations. Accessed on December 2, 2023. https://legal-explanations.com/blog/what-is-ucc-9-601/.
"What is UCC 9-601". Legal Explanations, https://legal-explanations.com/blog/what-is-ucc-9-601/. Accessed 2 December, 2023
What is UCC 9-601. Legal Explanations. Retrieved from https://legal-explanations.com/blog/what-is-ucc-9-601/.