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2023 Regular Session
HOUSE BILL NO. 239
BY REPRESENTATIVE BROWN
(On Recommendation of the Louisiana State Law Institute)
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
COMMERCIAL REGULATIONS: Provides relative to certain assets and transactions
subject to the Uniform Commercial Code
1 AN ACT
2To amend and reenact R.S. 10:1-201(b)(10), (15), (21)(C), (24), (27), (36), and (37),
3 1-204(introductory paragraph), 1-301(g)(8), 3-104(a)(introductory paragraph) and
4 (3), 3-105(a), 3-401, 3-604(a), 4A-103(a)(1)(introductory paragraph), 4A-201,
5 4A-202(b) and (c), 4A-203(a)(1), 4A-207(b)(2) and (c)(introductory paragraph) and
6 (2), 4A-208(b)(2), 4A-210(a), 4A-211(a) and (d), 4A-305(b) through (d), 5-104,
7 5-116, 7-102(a)(11), 7-106(b)(introductory paragraph) and (4), 8-102(a)(6)(i) and
8 (b), 8-106(d)(3), 8-303(b), 9-102(a)(2), (3), (4)(A), (7), (11), (31), (42), (47), (61),
9 (66), (75), and (79) and (b), 9-104(a)(2) and (3), 9-105, 9-107.1, 9-107.2,
10 9-203(b)(3)(A), (C), and (D), 9-204(b)(introductory paragraph),
11 9-207(c)(introductory paragraph), 9-208(b)(introductory paragraph), (1), and (3)
12 through (7), 9-209(b), 9-210(a)(2) through (4), (b), (c), (d)(introductory paragraph),
13 and (e)(introductory paragraph), 9-301(introductory paragraph) and (3)(introductory
14 paragraph), 9-304(a), 9-305(a)(introductory paragraph), 9-310(b)(8), 9-312(a), (b)(3)
15 through (5), and (e), 9-313(a), (c), and (d), 9-314(a) through (c),
16 9-316(a)(introductory paragraph) and (f)(introductory paragraph), 9-317(b) and (d),
17 9-323(d)(introductory paragraph) and (f)(introductory paragraph),
18 9-324(b)(introductory paragraph) and (2) and (d)(introductory paragraph) and (2),
19 9-330(a), (b), and (f), 9-331(a) and (b), 9-332, 9-334(f)(1), 9-341(introductory
20 paragraph), 9-404(a)(introductory paragraph) and (2), 9-406(a), (b)(introductory
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1 paragraph), (c), (d)(introductory paragraph), and (g), 9-408(g), 9-412(a), 9-509(a)(1)
2 and (b)(introductory paragraph), 9-513(b)(introductory paragraph) and (2) and
3 (c)(introductory paragraph), 9-601(b), 9-605, 9-608(a)(1)(C), 9-611(a)(1), (b),
4 (c)(introductory paragraph) and (3)(A), and (e)(introductory paragraph) and (2)(B),
5 9-613, 9-614, 9-615(a)(3)(A) and (4), 9-616(a)(1)(introductory paragraph) and (B)
6 and (2)(A), (b)(1)(A), and (c)(introductory paragraph), 9-619(a)(introductory
7 paragraph), 9-620(a)(2)(introductory paragraph), (b)(1), (c)(1) and (2)(introductory
8 paragraph) and (C), and (f)(introductory paragraph) and (2), 9-621(a)(1), 9-624,
9 9-628(a)(introductory paragraph) and (b)(introductory paragraph), and 9-629(a)(1)
10 and (2) and to enact R.S. 10:1-201(b)(16.1), 1-301(g)(9), 7-106(c) through (i),
11 8-103(h), 8-106(h) and (i), 8-110(g), 9-102(7.1), (7.2), (27.1), (27.2), (31.1), (54.1),
12 and (79.1), 9-104(a)(4), 9-105.1, 9-107.3, 9-107.4, 9-203(b)(3)(E), 9-204(b.1),
13 9-208(b)(8) and (9), 9-305(a)(5), 9-306.1, 9-306.2, 9-310(b)(8.1), 9-312(b)(6),
14 9-314.1, 9-317(f) through (i), 9-326.1, 9-406(l), 9-408(h), 9-628(f), Chapter 12 of
15 Title 10 of the Louisiana Revised Statutes of 1950, to be comprised of R.S.
16 10:12-101 through 12-107, and Chapter 13 of Title 10 of the Louisiana Revised
17 Statutes of 1950, to be comprised of R.S. 10:13-101 through 13-306, relative to
18 transactions involving existing and new classes of assets; to provide for new types
19 of digital assets; to provide for security interests in digital assets; to provide for
20 tethered digital assets; to provide take-free rules for digital assets; to provide relative
21 to governing law for digital assets; to provide relative to tangible and electronic
22 money; to provide relative to chattel paper; to provide relative to hybrid transactions;
23 to provide for the negotiability of certain instruments; to provide for updates in
24 terminology; to provide for transition rules; to provide for technical corrections; and
25 to provide for related matters.
26Be it enacted by the Legislature of Louisiana:
27 Section 1. R.S. 10:1-201(b)(10), (15), (21)(C), (24), (27), (36), and (37),
281-204(introductory paragraph), 1-301(g)(8), 3-104(a)(introductory paragraph) and (3),
293-105(a), 3-401, 3-604(a), 4A-103(a)(1)(introductory paragraph), 4A-201, 4A-202(b) and
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1(c), 4A-203(a)(1), 4A-207(b)(2) and (c)(introductory paragraph) and (2), 4A-208(b)(2),
24A-210(a), 4A-211(a) and (d), 4A-305(b) through (d), 5-104, 5-116, 7-102(a)(11),
37-106(b)(introductory paragraph) and (4), 8-102(a)(6)(i) and (b), 8-106(d)(3), 8-303(b),
49-102(a)(2), (3), (4)(A), (7), (11), (31), (42), (47), (61), (66), (75), and (79) and (b),
59-104(a)(2) and (3), 9-105, 9-107.1, 9-107.2, 9-203(b)(3)(A), (C), and (D),
69-204(b)(introductory paragraph), 9-207(c)(introductory paragraph), 9-208(b)(introductory
7paragraph), (1), and (3) through (7), 9-209(b), 9-210(a)(2) through (4), (b), (c),
8(d)(introductory paragraph), and (e)(introductory paragraph), 9-301(introductory paragraph)
9and (3)(introductory paragraph), 9-304(a), 9-305(a)(introductory paragraph), 9-310(b)(8),
109-312(a), (b)(3) and (4), and (e), 9-313(a), (c), and (d), 9-314(a) through (c),
119-316(a)(introductory paragraph) and (f)(introductory paragraph), 9-317(b) and (d),
129-323(d)(introductory paragraph) and (f)(introductory paragraph), 9-324(b)(introductory
13paragraph) and (2) and (d)(introductory paragraph) and (2), 9-330(a), (b), and (f), 9-331(a)
14and (b), 9-332, 9-334(f)(1), 9-341(introductory paragraph), 9-404(a)(introductory paragraph)
15and (2), 9-406(a), (b)(introductory paragraph), (c), (d)(introductory paragraph), and (g),
169-408(g), 9-412(a), 9-509(a)(1) and (b)(introductory paragraph), 9-513(b)(introductory
17paragraph) and (2) and (c)(introductory paragraph), 9-601(b), 9-605, 9-608(a)(1)(C),
189-611(a)(1), (b), (c)(introductory paragraph) and (3)(A), and (e)(introductory paragraph) and
19(2)(B), 9-613, 9-614, 9-615(a)(3)(A) and (4), 9-616(a)(1)(introductory paragraph) and (B)
20and (2)(A), (b)(1)(A), and (c)(introductory paragraph), 9-619(a)(introductory paragraph),
219-620(a)(2)(introductory paragraph), (b)(1), (c)(1) and (2)(introductory paragraph) and (C),
22and (f)(introductory paragraph) and (2), 9-621(a)(1), 9-624, 9-628(a)(introductory
23paragraph) and (b)(introductory paragraph), and 9-629(a)(1) and (2) are hereby amended and
24reenacted and R.S. 10:1-201(b)(16.1), 1-301(g)(9), 7-106(c) through (i), 8-103(h), 8-106(h)
25and (i), 8-110(g), 9-102(7.1), (7.2), (27.1), (27.2), (31.1), (54.1), and (79.1), 9-104(a)(4),
269-105.1, 9-107.3, 9-107.4, 9-203(b)(3)(E), 9-204(b.1), 9-208(b)(8) and (9), 9-305(a)(5),
279-306.1, 9-306.2, 9-310(b)(8.1), 9-312(b)(5) and (6), 9-314.1, 9-317(f) through (i), 9-326.1,
289-406(l), 9-408(h), 9-628(f), Chapter 12 of Title 10 of the Louisiana Revised Statutes of
291950, to be comprised of R.S. 10:12-101 through 12-107, and Chapter 13 of Title 10 of the
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1Louisiana Revised Statutes of 1950, to be comprised of R.S. 10:13-101 through 13-306, are
2hereby enacted to read as follows:
3 §1-201. General definitions
4 * * *
5 (b) Subject to definitions contained in other Chapters of this Title that apply
6 to particular Chapters or parts thereof:
7 * * *
8 (10) "Conspicuous," with reference to a term, means so written, displayed,
9 or presented that, based on the totality of the circumstances, a reasonable person
10 against which it is to operate ought to have noticed it. Whether a term is
11 "conspicuous" or not is a question of law for the court. Conspicuous terms include
12 the following:
13 (A) a heading in capitals equal to or greater in size than the surrounding text,
14 or in contrasting type, font, or color to the surrounding text of the same or lesser size;
15 and
16 (B) language in the body of a record or display in larger type than the
17 surrounding text, or in contrasting type, font, or color to the surrounding text of the
18 same size, or set off from surrounding text of the same size by symbols or other
19 marks that call attention to the language.
20 * * *
21 (15) "Delivery", with respect to an electronic document of title means
22 voluntary transfer of control and with respect to an instrument, a tangible document
23 of title, or an authoritative tangible copy of a record evidencing chattel paper, means
24 voluntary transfer of possession.
25 * * *
26 (16.1) "Electronic" means relating to technology having electrical, digital,
27 magnetic, wireless, optical, electromagnetic, or similar capabilities.
28 * * *
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1 (21) "Holder" means:
2 * * *
3 (C) the person in control, other than pursuant to R.S. 10:7-106(g), of a
4 negotiable electronic document of title.
5 * * *
6 (24) "Money" means a medium of exchange that is currently authorized or
7 adopted by a domestic or foreign government. The term includes a monetary unit
8 of account established by an intergovernmental organization or by agreement
9 between two or more countries. The term does not include an electronic record that
10 is a medium of exchange recorded and transferable in a system that existed and
11 operated for the medium of exchange before the medium of exchange was authorized
12 or adopted by the government.
13 * * *
14 (27) "Person" means an individual, or any legal or commercial entity,
15 including a corporation, business trust, partnership, limited liability company,
16 association, joint venture, government, governmental subdivision, agency, or
17 instrumentality, or public corporation. The term includes a protected series, however
18 denominated, of an entity if the protected series is established under law other than
19 this Title that limits, or limits if conditions specified under the law are satisfied, the
20 ability of a creditor of the entity or of any other protected series of the entity to
21 satisfy a claim from assets of the protected series.
22 * * *
23 (36) "Send", in connection with a record or notice notification, means:
24 (A) to deposit in the mail, or deliver for transmission, or transmit by any
25 other usual means of communication, with postage or cost of transmission provided
26 for, and properly addressed and, in the case of an instrument, to an address specified
27 thereon or otherwise agreed, or if there be none addressed to any address reasonable
28 under the circumstances; or
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1 (B) in any other way to cause to be received any record or notice within the
2 time it would have arrived if properly sent to cause the record or notification to be
3 received within the time it would have been received if properly sent under
4 Subparagraph A of this Paragraph.
5 (37) "Signed" includes using any symbol executed or adopted with present
6 intention to adopt or accept a writing. "Sign" means, with present intent to
7 authenticate or adopt a record:
8 (A) execute or adopt a tangible symbol; or
9 (B) attach to or logically associate with the record an electronic symbol,
10 sound, or process.
11 "Signed", "signing", and "signature" have corresponding meanings.
12 * * *
13 §1-204. Value
14 Except as otherwise provided in Chapters 3, 4, and 5, and 12, a person gives
15 value for rights if the person acquires them:
16 * * *
17 §1-301. Territorial applicability; parties' power to choose applicable law
18 * * *
19 (g) To the extent that this Title governs a transaction, if one of the following
20 provisions of this Title specifies the applicable law, that provision governs and a
21 contrary agreement is effective only to the extent permitted by the law so specified:
22 * * *
23 (8) R.S. 10:9-301 through 9-307.;
24 (9) R.S. 10:12-107.
25 §3-104. Negotiable instrument
26 (a) Except as provided in Subsections (c) and (d) of this Section, "negotiable
27 instrument" means an unconditional promise or order to pay a fixed amount of
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1 money, with or without interest or other charges described in the promise or order,
2 if it:
3 * * *
4 (3) does not state any other undertaking or instruction by the person
5 promising or ordering payment to do any act in addition to the payment of money,
6 but the promise or order may contain (i) an undertaking or power to give, maintain,
7 or protect collateral to secure payment, (ii) an authorization or power to the holder
8 to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the
9 benefit of any law intended for the advantage or protection of an obligor, (iv) a term
10 that specifies the law that governs the promise or order, or (v) an undertaking to
11 resolve in a specified forum a dispute concerning the promise or order.
12 * * *
13 §3-105. Issue of instrument
14 (a) "Issue" means:
15 (1) the first delivery of an instrument by the maker or drawer, whether to a
16 holder or nonholder, for the purpose of giving rights on the instrument to any person;
17 or
18 (2) if agreed by the payee, the first transmission by the drawer to the payee
19 of an image of an item and information derived from the item that enables the
20 depositary bank to collect the item by transferring or presenting under federal law
21 an electronic check.
22 * * *
23 §3-401. Signature necessary for liability on instrument
24 (a) A person is not liable on an instrument unless (i) the person signed the
25 instrument, or (ii) the person is represented by an agent or representative who signed
26 the instrument and the signature is binding on the represented person under R.S.
27 10:3-402.
28 (b) A signature may be made (i) manually or by means of a device or
29 machine, and (ii) by the use of any name, including a trade or assumed name, or by
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1 a word, mark, or symbol executed or adopted by a person with present intention to
2 authenticate a writing.
3 §3-604. Discharge by cancellation or renunciation
4 (a) A person entitled to enforce an instrument, with or without consideration,
5 may discharge the obligation of a party to pay the instrument (i) by an intentional
6 voluntary act, such as surrender of the instrument to the party, destruction,
7 mutilation, or cancellation of the instrument, cancellation or striking out of the
8 party's signature, or the addition of words to the instrument indicating discharge, or
9 (ii) by agreeing not to sue or otherwise renouncing rights against the party by a
10 signed writing. The obligation of a party to pay a check is not discharged solely by
11 destruction of the check in connection with a process in which information is
12 extracted from the check and an image of the check is made and, subsequently, the
13 information and image are transmitted for payment.
14 * * *
15 §4A-103. Payment Order - Definitions
16 (a) In this Chapter:
17 (1) "Payment order" means an instruction of a sender to a receiving bank,
18 transmitted orally, electronically, or in writing or in a record, to pay, or to cause
19 another bank to pay, a fixed or determinable amount of money to a beneficiary if:
20 * * *
21 §4A-201. Security procedure
22 "Security procedure" means a procedure established by agreement of a
23 customer and a receiving bank for the purpose of (i) verifying that a payment order
24 or communication amending or cancelling a payment order is that of the customer,
25 or (ii) detecting error in the transmission or the content of the payment order or
26 communication. A security procedure may impose an obligation on the receiving
27 bank or the customer and may require the use of algorithms or other codes,
28 identifying words or, numbers, symbols, sounds, biometrics, encryption, callback
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1 procedures, or similar security devices. Comparison of a signature on a payment
2 order or communication with an authorized specimen signature of the customer or
3 requiring a payment order to be sent from a known email address, IP address, or
4 telephone number is not by itself a security procedure.
5 §4A-202. Authorized and verified payment orders
6 * * *
7 (b) If a bank and its customer have agreed that the authenticity of payment
8 orders issued to the bank in the name of the customer as sender will be verified
9 pursuant to a security procedure, a payment order received by the receiving bank is
10 effective as the order of the customer, whether or not authorized, if (i) the security
11 procedure is a commercially reasonable method of providing security against
12 unauthorized payment orders, and (ii) the bank proves that it accepted the payment
13 order in good faith and in compliance with the bank's obligations under the security
14 procedure and any written agreement or instruction of the customer, evidenced by
15 a record, restricting acceptance of payment orders issued in the name of the
16 customer. The bank is not required to follow an instruction that violates a written
17 an agreement with the customer, evidenced by a record, or notice of which is not
18 received at a time and in a manner affording the bank a reasonable opportunity to act
19 on it before the payment order is accepted.
20 (c) Commercial reasonableness of a security procedure is a question of law
21 to be determined by considering the wishes of the customer expressed to the bank,
22 the circumstances of the customer known to the bank, including the size, type, and
23 frequency of payment orders normally issued by the customer to the bank, alternative
24 security procedures offered to the customer, and security procedures in general use
25 by customers and receiving bank banks similarly situated. A security procedure is
26 deemed to be commercially reasonable if (i) the security procedure was chosen by
27 the customer after the bank offered, and the customer refused, a security procedure
28 that was commercially reasonable for that customer, and (ii) the customer expressly
29 agreed in writing a record to be bound by any payment order, whether or not
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1 authorized, issued in its name and accepted by the bank in compliance with the
2 bank's obligations under the security procedure chosen by the customer.
3 * * *
4 §4A-203. Unenforceability of certain verified payment orders
5 (a) If an accepted payment order is not, under R.S. 10:4A-202(a), an
6 authorized order of a customer identified as sender, but is effective as an order of the
7 customer pursuant to R.S. 10:4A-202(b), the following rules apply:
8 (1) By express written agreement evidenced by a record, the receiving bank
9 may limit the extent to which it is entitled to enforce or retain payment of the
10 payment order.
11 * * *
12 §4A-207. Misdescription of beneficiary
13 * * *
14 (b) If a payment order received by the beneficiary's bank identifies the
15 beneficiary both by name and by an identifying or bank account number and the
16 name and number identify different persons, the following rules apply:
17 * * *
18 (2) If the beneficiary's bank pays the person identified by the name or knows
19 that the name and number identify different persons, no person has rights as
20 beneficiary except the person paid by the beneficiary's bank if that person was
21 entitled to receive payment from the originator of the funds transfer. If no person
22 has rights as beneficiary, acceptance of the order cannot occur.
23 (c) If (i) a payment order described in Subsection (b) of this Section is
24 accepted, (ii) the originator's payment order described the beneficiary inconsistently
25 by name and number, and (iii) the beneficiary's bank pays the person identified by
26 number as permitted by Subsection (b)(1) of this Section, the following rules apply:
27 * * *
28 (2) If the originator is not a bank and proves that the person identified by
29 number was not entitled to receive payment from the originator, the originator is not
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1 obliged to pay its order unless the originator's bank proves that the originator, before
2 acceptance of the originator's order, had notice that payment of a payment order
3 issued by the originator might be made by the beneficiary's bank on the basis of an
4 identifying or bank account number even if it identifies a person different from the
5 named beneficiary. Proof of notice may be made by any admissible evidence. The
6 originator's bank satisfies the burden of proof if it proves that the originator, before
7 the payment order was accepted, signed a writing record stating the information to
8 which the notice relates.
9 * * *
10 §4A-208. Misdescription of intermediary bank or beneficiary's bank
11 * * *
12 (b) This Subsection applies to a payment order identifying an intermediary
13 bank or the beneficiary's bank both by name and an identifying number if the name
14 and number identify different persons.
15 * * *
16 (2) If the sender is not a bank and the receiving bank proves that the sender,
17 before the payment order was accepted, had notice that the receiving bank might rely
18 on the number as the proper identification of the intermediary or beneficiary's bank
19 even if it identifies a person different from the bank identified by name, the rights
20 and obligations of the sender and the receiving bank are governed by Subsection
21 (b)(1) of this Section, as though the sender were a bank. Proof of notice may be
22 made by any admissible evidence. The receiving bank satisfies the burden of proof
23 if it proves that the sender, before the payment order was accepted, signed a writing
24 record stating the information to which the notice relates.
25 * * *
26 §4A-210. Rejection of payment order
27 (a) A payment order is rejected by the receiving bank by a notice of rejection
28 transmitted to the sender orally, electronically, or in writing a record. A notice of
29 rejection need not use any particular words and is sufficient if it indicates that the
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1 receiving bank is rejecting the order or will not execute or pay the order. Rejection
2 is effective when the notice is given if transmission is by means that is reasonable
3 in the circumstances. If notice of rejection is given by a means that is not
4 reasonable, rejection is effective when the notice is received. If an agreement of the
5 sender and receiving bank establishes the means to be used to reject a payment order,
6 (i) any means complying with the agreement is reasonable and (ii) any means not
7 complying is not reasonable unless no significant delay in receipt of the notice
8 resulted from the use of the noncomplying means.
9 * * *
10 §4A-211. Cancellation and amendment of payment order
11 (a) A communication of the sender of a payment order cancelling or
12 amending the order may be transmitted to the receiving bank orally, electronically,
13 or in writing a record. If a security procedure is in effect between the sender and the
14 receiving bank, the communication is not effective to cancel or amend the order
15 unless the communication is verified pursuant to the security procedure or the bank
16 agrees to the cancellation or amendment.
17 * * *
18 (d) An unaccepted payment order is cancelled by operation of law at the
19 close of the fifth funds-transfer business day of the receiving bank after the execution
20 date of or payment date of the order.
21 * * *
22 §4A-305. Liability for late or improper execution or failure to execute payment
23 order
24 * * *
25 (b) If execution of a payment order by a receiving bank in breach of R.S.
26 10:4A-303 R.S. 10:4A-302 results in (i) noncompletion of the funds transfer, (ii)
27 failure to use an intermediary bank designated by the originator, or (iii) issuance of
28 a payment order that does not comply with the terms of the payment order of the
29 originator, the bank is liable to the originator for its expenses in the funds transfer
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1 and for incidental expenses and interest losses, to the extent not covered by
2 Subsection (a) of this Section, resulting from the improper execution. Except as
3 provided in Subsection (c) of this Section, additional damages are not recoverable.
4 (c) In addition to the amounts payable under Subsections (a) and (b) of this
5 Section, damages, including consequential damages, are recoverable to the extent
6 provided in an express written agreement of the receiving bank, evidenced by a
7 record.
8 (d) If a receiving bank fails to execute a payment order it was obliged by
9 express agreement to execute, the receiving bank is liable to the sender for its
10 expenses in the transaction and for incidental expenses and interest losses resulting
11 from the failure to execute. Additional damages, including consequential damages,
12 are recoverable to the extent provided in an express written agreement of the
13 receiving bank, evidenced by a record, but are not otherwise recoverable.
14 * * *
15 §5-104. Formal requirements
16 A letter of credit, confirmation, advice, transfer, amendment, or cancellation
17 may be issued in any form that is a signed record and is authenticated (i) by a
18 signature or (ii) in accordance with the agreement of the parties or the standard
19 practice referred to in R.S. 10:5-108(e).
20 * * *
21 §5-116. Choice of law and forum
22 (a) The liability of an issuer, nominated person, or adviser for action or
23 omission is governed by the law of the jurisdiction chosen by an agreement in the
24 form of a record signed or otherwise authenticated by the affected parties in the
25 manner provided in R.S. 10:5-104 or by a provision in the person's letter of credit,
26 confirmation, or other undertaking. The jurisdiction whose law is chosen need not
27 bear any relation to the transaction.
28 (b) Unless Subsection (a) of this Section applies, the liability or an issuer,
29 nominated person, or adviser for action or omission is governed by the law of the
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1 jurisdiction in which the person is located. The person is considered to be located
2 at the address indicated in the person's undertaking. If more than one address is
3 indicated, the person is considered to be located at the address from which the
4 person's undertaking was issued.
5 (c) For the purpose of jurisdiction, choice of law, and recognition of
6 interbranch letters of credit, but not enforcement of a judgment, all branches of a
7 bank are considered separate juridical entities and a bank is considered to be located
8 at the place where its relevant branch is considered to be located under this
9 Subsection (d) of this Section.
10 (d) A branch of a bank is considered to be located at the address indicated
11 in the branch's undertaking. If more than one address is indicated, the branch is
12 considered to be located at the address from which the undertaking was issued.
13 (c)(e) Except as otherwise provided in this Subsection, the liability of an
14 issuer, nominated person, or adviser is governed by any rules of custom or practice,
15 such as the Uniform Customs and Practice for Documentary Credits, to which the
16 letter of credit, confirmation, or other undertaking is expressly made subject. If (i)
17 this Chapter would govern the liability of an issuer, nominated person, or adviser
18 under Subsection (a) or (b) of this Section; (ii) the relevant undertaking incorporates
19 rules of custom or practice; and (iii) there is conflict between this Chapter and those
20 rules as applied to that undertaking, those rules govern except to the extent of any
21 conflict with the nonvariable provisions specified in R.S. 10:5-103(c).
22 (d)(f) If there is conflict between this Chapter and Chapter 3, 4, 4A, or 9 of
23 this Title, this Chapter governs.
24 (e)(g) The forum for settling disputes arising out of an undertaking within
25 this Chapter may be chosen in the manner and with the binding effect that governing
26 law may be chosen in accordance with Subsection (a) of this Section.
27 * * *
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1 §7-102. Definitions and index of definitions
2 (a) In this Chapter, unless the context otherwise requires:
3 * * *
4 (11) "Sign" means, with present intent to authenticate or adopt a record:
5 (A) To execute or adopt a tangible symbol; or
6 (B) To attach to or logically associate with the record an electronic sound,
7 symbol, or process. [Reserved.]
8 * * *
9 §7-106. Control of electronic document of title
10 * * *
11 (b) A system satisfies Subsection (a) of this Section, and a person is deemed
12 to have has control of an electronic document of title, if the document is created,
13 stored, and assigned transferred in such a manner that:
14 * * *
15 (4) Copies or amendments that add or change an identified assignee
16 transferee of the authoritative copy can be made only with the consent of the person
17 asserting control;
18 * * *
19 (c) A system satisfies Subsection (a) of this Section, and a person has control
20 of an electronic document of title, if an authoritative electronic copy of the
21 document, a record attached to or logically associated with the electronic copy, or
22 a system in which the electronic copy is recorded:
23 (1) enables the person readily to identify each electronic copy as either an
24 authoritative copy or a nonauthoritative copy;
25 (2) enables the person readily to identify itself in any way, including by
26 name, identifying number, cryptographic key, office, or account number, as the
27 person to which each authoritative electronic copy was issued or transferred; and
28 (3) gives the person exclusive power, subject to Subsection (d) of this
29 Section, to:
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1 (A) prevent others from adding or changing the person to which each
2 authoritative electronic copy has been issued or transferred; and
3 (B) transfer control of each authoritative electronic copy.
4 (d) Subject to Subsection (e) of this Section, a power is exclusive under
5 Subsection (c)(3)(A) and (B) of this Section even if:
6 (1) the authoritative electronic copy, a record attached to or logically
7 associated with the authoritative electronic copy, or a system in which the
8 authoritative electronic copy is recorded limits the use of the document of title or has
9 a protocol that is programmed to cause a change, including a transfer or loss of
10 control; or
11 (2) the power is shared with another person.
12 (e) A power of a person is not shared with another person under Subsection
13 (d)(2) of this Section and the person's power is not exclusive if:
14 (1) the person can exercise the power only if the power also is exercised by
15 the other person; and
16 (2) the other person:
17 (A) can exercise the power without exercise of the power by the person; or
18 (B) is the transferor to the person of an interest in the document of title.
19 (f) If a person has the powers specified in Subsection (c)(3)(A) and (B) of
20 this Section, the powers are presumed to be exclusive.
21 (g) A person has control of an electronic document of title if another person,
22 other than the transferor to the person of an interest in the document:
23 (1) has control of the document and acknowledges that it has control on
24 behalf of the person; or
25 (2) obtains control of the document after having acknowledged that it will
26 obtain control of the document on behalf of the person.
27 (h) A person that has control under this Section is not required to
28 acknowledge that it has control on behalf of another person.
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1 (i) If a person acknowledges that it has or will obtain control on behalf of
2 another person, unless the person otherwise agrees or law other than this Chapter or
3 Chapter 9 otherwise provides, the person does not owe any duty to the other person
4 and is not required to confirm the acknowledgment to any other person.
5 * * *
6 §8-102. Definitions and index of definitions
7 (a) In this Chapter:
8 * * *
9 (6) "Communicate" means to:
10 (i) send a signed writing record; or
11 * * *
12 (b) Other The following definitions applying to in this Article Chapter and
13 the sections in which they appear are other Chapters apply to this Chapter:
14 Appropriate person R.S. 10:8-107
15 Control R.S. 10:8-106
16 "Controllable account" R.S. 10:9-102
17 "Controllable electronic record"R.S. 10:12-102
18 "Controllable payment intangible"R.S. 10:9-102
19 Delivery R.S. 10:8-301
20 Investment company security R.S. 10:8-103
21 Issuer R.S. 10:8-201
22 Overissue R.S. 10:8-210
23 Protected purchaser R.S. 10:8-303
24 Securities account R.S. 10:8-501
25 * * *
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1 §8-103. Rules for determining whether certain obligations and interests are
2 securities or financial assets
3 * * *
4 (h) A controllable account, controllable electronic record, or controllable
5 payment intangible is not a financial asset unless R.S. 10:8-102(a)(9)(iii) applies.
6 * * *
7 §8-106. Control
8 * * *
9 (d) A purchaser has "control" of a security entitlement if:
10 * * *
11 (3) another person has control of the security entitlement on behalf of the
12 purchaser or, having previously acquired control of the security entitlement,
13 acknowledges that it has control on behalf of the purchaser. person, other than the
14 transferor to the purchaser of an interest in the security entitlement:
15 (A) has control of the security entitlement and acknowledges that it has
16 control on behalf of the purchaser; or
17 (B) obtains control of the security entitlement after having acknowledged
18 that it will obtain control of the security entitlement on behalf of the purchaser.
19 * * *
20 (h) A person that has control under this Section is not required to
21 acknowledge that it has control on behalf of a purchaser.
22 (i) If a person acknowledges that it has or will obtain control on behalf of a
23 purchaser, unless the person otherwise agrees or law other than this Chapter or
24 Chapter 9 otherwise provides, the person does not owe any duty to the purchaser and
25 is not required to confirm the acknowledgment to any other person.
26 * * *
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1 §8-110. Applicability; choice of law
2 * * *
3 (g) The local law of the issuer's jurisdiction or the securities intermediary's
4 jurisdiction governs a matter or transaction specified in subsection (a) or (b) of this
5 Section even if the matter or transaction does not bear any relation to the jurisdiction.
6 * * *
7 §8-303. Protected purchaser
8 * * *
9 (b) In addition to acquiring the rights of a purchaser, a A protected purchaser
10 also acquires its interest in the security free of any adverse claim.
11 * * *
12 §9-102. Definitions and index of definitions
13 (a) Chapter 9 definitions. In this Chapter:
14 * * *
15 (2) "Account," , except as used in "account for," , "account statement",
16 "account to", "commodity account" in Paragraph (14) of this Subsection, "customer's
17 account", "deposit account" in Paragraph (29) of this Subsection, "on account of",
18 and "statement of account", means a right to payment of a monetary obligation,
19 whether or not earned by performance, (i) for property that has been or is to be sold,
20 leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to
21 be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary
22 obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi)
23 for the use or hire of a vessel under a charter or other contract, (vii) arising out of the
24 use of a credit or charge card or information contained on or for use with the card,
25 or (viii) as winnings in a lottery or other game of chance operated or sponsored by
26 a state, governmental unit of a state, or person licensed or authorized to operate the
27 game by a state or governmental unit of a state. The term includes controllable
28 accounts and health-care-insurance receivables. The term further includes any right
29 to payment that is payable out of or measured by production of oil, gas, or other
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1 minerals, or is otherwise attributable to a mineral right, whether or not the payment
2 is classified as rent under the Mineral Code, except that the term does not include
3 bonuses, delay rentals, royalties, or shut-in payments payable to a landowner or
4 mineral servitude owner under a mineral lease, nor does the term include other
5 payments to them that are classified as rent under the Mineral Code. The term does
6 not include (i) rights to payment evidenced by chattel paper or an instrument chattel
7 paper, (ii) tort claims, (iii) deposit accounts, (iv) investment property, (v)
8 letter-of-credit rights or letters of credit, (vi) rights to payment for money or funds
9 advanced or sold, other than rights arising out of the use of a credit or charge card
10 or information contained on or for use with the card, (vii) life insurance policies or
11 rights to payment or claims thereunder, or (viii) judgments or rights to payment
12 represented thereby, or (ix) rights to payment evidenced by an instrument.
13 (3) "Account debtor" means a person obligated on an account, chattel paper,
14 or general intangible. The term does not include persons obligated to pay a
15 negotiable instrument, even if the negotiable instrument constitutes part of evidences
16 chattel paper.
17 (4) "Accounting", except as used in "accounting for", means a record:
18 (A) authenticated signed by a secured party;
19 * * *
20 (7) "Authenticate" means:
21 (A) to sign; or
22 (B) with present intent to adopt or accept a record, to attach to or logically
23 associate with the record an electronic sound, symbol, or process. [Reserved.]
24 (7.1) "Assignee", except as used in "assignee for benefit of creditors", means
25 a person (i) in whose favor a security interest that secures an obligation is created or
26 provided for under a security agreement, whether or not the obligation is outstanding
27 or (ii) to which an account, chattel paper, payment intangible, or promissory note has
28 been sold. The term includes a person to which a security interest has been
29 transferred by a secured party.
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1 (7.2) "Assignor" means a person that (i) under a security agreement creates
2 or provides for a security interest that secures an obligation or (ii) sells an account,
3 chattel paper, payment intangible, or promissory note. The term includes a secured
4 party that has transferred a security interest to another person.
5 * * *
6 (11) "Chattel paper" means: a record or records that evidence both a
7 monetary obligation and a security interest in specific goods, a security interest in
8 specific goods and software used in the goods, a security interest in specific goods
9 and license of software used in the goods, a lease of specific goods, or a lease of
10 specific goods and license of software used in the goods. In this Paragraph,
11 "monetary obligation" means a monetary obligation secured by the goods or owed
12 under a lease of the goods and includes a monetary obligation with respect to
13 software used in the goods. The term does not include (i) charters or other contracts
14 involving the use or hire of a vessel or (ii) records that evidence a right to payment
15 arising out of the use of a credit or charge card or information contained on or for use
16 with the card. If a transaction is evidenced by records that include an instrument or
17 series of instruments, the group of records taken together constitutes chattel paper.
18 (A) a right to payment of a monetary obligation secured by specific goods,
19 if the right to payment and security agreement are evidenced by a record; or
20 (B) a right to payment of a monetary obligation owed by a lessee under a
21 lease agreement with respect to specific goods and a monetary obligation owed by
22 the lessee in connection with the transaction giving rise to the lease, if:
23 (i) the right to payment and lease agreement are evidenced by a record; and
24 (ii) the predominant purpose of the transaction giving rise to the lease was
25 to give the lessee the right to possession and use of the goods.
26 The term does not include a right to payment arising out of a charter or other
27 contract involving the use or hire of a vessel or a right to payment arising out of the
28 use of a credit or charge card or information contained on or for use with the card.
29 * * *
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1 (27.1) "Controllable account" means an account evidenced by a controllable
2 electronic record that provides that the account debtor undertakes to pay the person
3 that has control under R.S. 10:12-105 of the controllable electronic record.
4 (27.2) "Controllable payment intangible" means a payment intangible
5 evidenced by a controllable electronic record that provides that the account debtor
6 undertakes to pay the person that has control under R.S. 10:12-105 of the
7 controllable electronic record.
8 * * *
9 (31) "Electronic chattel paper" means chattel paper evidenced by a record
10 or records consisting of information stored in an electronic medium. [Reserved.]
11 (31.1) "Electronic money" means money in an electronic form.
12 * * *
13 (42) "General intangible" means any personal property, including things in
14 action, other than accounts, chattel paper, tort claims, deposit accounts, documents,
15 goods, instruments, investment property, letter-of-credit rights, letters of credit, life
16 insurance policies, and money. The term includes controllable electronic records,
17 payment intangibles and software.
18 * * *
19 (47) "Instrument" means a negotiable instrument or any other writing that
20 evidences a right to the payment of a monetary obligation, is not itself a security
21 agreement or lease, and is of a type that in ordinary course of business is transferred
22 by delivery with any necessary indorsement or assignment. The term includes a
23 collateral mortgage note and a negotiable certificate of deposit. The term does not
24 include (i) investment property, (ii) letters of credit, or (iii) writings that evidence a
25 right to payment arising out of the use of a credit or charge card or information
26 contained on or for use with the card, or (iv) writings that evidence chattel paper.
27 * * *
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1 (54.1) "Money" has the meaning in R.S. 10:1-201(b)(24), but does not
2 include (i) a deposit account or (ii) money in an electronic form that cannot be
3 subjected to control under R.S. 10:9-105.1.
4 * * *
5 (61) "Payment intangible" means a general intangible under which the
6 account debtor's principal obligation is a monetary obligation. The term includes a
7 controllable payment intangible.
8 * * *
9 (66) "Proposal" means a record authenticated signed by a secured party
10 which includes the terms on which the secured party is willing to accept collateral
11 in full or partial satisfaction of the obligation it secures pursuant to R.S. 10:9-620,
12 9-621, and 9-622.
13 * * *
14 (75) "Send", in connection with a record or notification, means:
15 (A) to deposit in the mail, deliver for transmission, or transmit by any other
16 usual means of communication, with postage or cost of transmission provided for,
17 addressed to any address reasonable under the circumstances; or
18 (B) to cause the record or notification to be received within the time that it
19 would have been received if properly sent under Subparagraph (A). [Reserved.]
20 * * *
21 (79) "Tangible chattel paper" means chattel paper evidenced by a record or
22 records consisting of information that is inscribed on a tangible medium.
23 [Reserved.]
24 (79.1) "Tangible money" means money in a tangible form.
25 * * *
26 (b) Definitions in other Chapters. "Control" as provided in R.S. 10:7-106
27 and the following definitions in other Chapters apply to this Chapter:
28 "Applicant" R.S. 10:5-102.
29 "Beneficiary" R.S. 10:5-102.
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1 "Broker" R.S. 10:8-102.
2 "Certificated security" R.S. 10:8-102.
3 "Check" R.S. 10:3-104.
4 "Clearing corporation" R.S. 10:8-102.
5 "Controllable electronic record" R.S. 10:12-102.
6 "Customer" R.S. 10:4-104.
7 "Entitlement holder" R.S. 10:8-102.
8 "Financial asset" R.S. 10:8-102.
9 "Holder in due course" R.S. 10:3-302.
10 "Issuer" (with respect to a letter of credit
11 or letter-of-credit right) R.S. 10:5-102.
12 "Issuer" (with respect to a security) R.S. 10:8-201.
13 "Issuer" (with respect to documents of title) R.S. 10:7-102.
14 "Letter of credit" R.S. 10:5-102.
15 "Negotiable instrument" R.S. 10:3-104.
16 "Nominated person" R.S. 10:5-102.
17 "Note" R.S. 10:3-104.
18 "Proceeds of a letter of credit" R.S. 10:5-114.
19 "Protected purchaser" R.S. 10:8-303.
20 "Prove" R.S. 10:3-103.
21 "Qualifying purchaser" R.S. 10:12-102.
22 "Securities account" R.S. 10:8-501.
23 "Securities intermediary" R.S. 10:8-102.
24 "Security" R.S. 10:8-102.
25 "Security certificate" R.S. 10:8-102.
26 "Security entitlement" R.S. 10:8-102.
27 "Uncertificated security" R.S. 10:8-102.
28 * * *
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1 §9-104. Control of deposit account
2 (a) Requirements for control. A secured party has control of a deposit
3 account if:
4 * * *
5 (2) the debtor, secured party, and bank have agreed in an authenticated a
6 signed record that the bank will comply with instructions originated by the secured
7 party directing disposition of the funds in the deposit account without further consent
8 by the debtor; or
9 (3) the secured party becomes the bank's customer with respect to the deposit
10 account.; or
11 (4) another person, other than the debtor:
12 (A) has control of the deposit account and acknowledges that it has control
13 on behalf of the secured party; or
14 (B) obtains control of the deposit account after having acknowledged that it
15 will obtain control of the deposit account on behalf of the secured party.
16 * * *
17 §9-105. Control of electronic copy of record evidencing chattel paper
18 (a) General rule: control of electronic chattel paper. A secured party has
19 control of electronic chattel paper if a system employed for evidencing the transfer
20 of interests in the chattel paper reliably establishes the secured party as the person
21 to which the chattel paper was assigned.
22 (b) Specific facts giving control. A system satisfies Subsection (a) if the
23 record or records comprising the chattel paper are created, stored, and assigned in
24 such a manner that:
25 (1) a single authoritative copy of the record or records exists which is
26 unique, identifiable and, except as otherwise provided in Paragraphs (4), (5), and (6),
27 unalterable;
28 (2) the authoritative copy identifies the secured party as the assignee of the
29 record or records;
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1 (3) the authoritative copy is communicated to and maintained by the secured
2 party or its designated custodian;
3 (4) copies or amendments that add or change an identified assignee of the
4 authoritative copy can be made only with the consent of the secured party;
5 (5) each copy of the authoritative copy and any copy of a copy is readily
6 identifiable as a copy that is not the authoritative copy; and
7 (6) any amendment of the authoritative copy is readily identifiable as
8 authorized or unauthorized.
9 (a) General rule: control of electronic copy of record evidencing chattel
10 paper. A purchaser has control of an authoritative electronic copy of a record
11 evidencing chattel paper if a system employed for evidencing the assignment of
12 interests in the chattel paper reliably establishes the purchaser as the person to which
13 the authoritative electronic copy was assigned.
14 (b) Single authoritative copy. A system satisfies Subsection (a) of this
15 Section if the record or records evidencing the chattel paper are created, stored, and
16 assigned in a manner that:
17 (1) a single authoritative copy of the record or records exists which is
18 unique, identifiable, and, except as otherwise provided in Paragraphs (4), (5), and (6)
19 of this Subsection, unalterable;
20 (2) the authoritative copy identifies the purchaser as the assignee of the
21 record or records;
22 (3) the authoritative copy is communicated to and maintained by the
23 purchaser or its designated custodian;
24 (4) copies or amendments that add or change an identified assignee of the
25 authoritative copy can be made only with the consent of the purchaser;
26 (5) each copy of the authoritative copy and any copy of a copy is readily
27 identifiable as a copy that is not the authoritative copy; and
28 (6) any amendment of the authoritative copy is readily identifiable as
29 authorized or unauthorized.
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1 (c) One or more authoritative copies. A system satisfies Subsection (a) of
2 this Section, and a purchaser has control of an authoritative electronic copy of a
3 record evidencing chattel paper, if the electronic copy, a record attached to or
4 logically associated with the electronic copy, or a system in which the electronic
5 copy is recorded:
6 (1) enables the purchaser readily to identify each electronic copy as either
7 an authoritative copy or a nonauthoritative copy;
8 (2) enables the purchaser readily to identify itself in any way, including by
9 name, identifying number, cryptographic key, office, or account number, as the
10 assignee of the authoritative electronic copy; and
11 (3) gives the purchaser exclusive power, subject to Subsection (d) of this
12 Section, to:
13 (A) prevent others from adding or changing an identified assignee of the
14 authoritative electronic copy; and
15 (B) transfer control of the authoritative electronic copy.
16 (d) Meaning of exclusive. Subject to Subsection (e) of this Section, a power
17 is exclusive under Subsection (c)(3)(A) and (B) of this Section even if:
18 (1) the authoritative electronic copy, a record attached to or logically
19 associated with the authoritative electronic copy, or a system in which the
20 authoritative electronic copy is recorded limits the use of the authoritative electronic
21 copy or has a protocol programmed to cause a change, including a transfer or loss of
22 control; or
23 (2) the power is shared with another person.
24 (e) When power not shared with another person. A power of a purchaser is
25 not shared with another person under Subsection (d)(2) of this Section and the
26 purchaser's power is not exclusive if:
27 (1) the purchaser can exercise the power only if the power also is exercised
28 by the other person; and
29 (2) the other person:
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1 (A) can exercise the power without exercise of the power by the purchaser;
2 or
3 (B) is the transferor to the purchaser of an interest in the chattel paper.
4 (f) Presumption of exclusivity of certain powers. If a purchaser has the
5 powers specified in Subsection (c)(3)(A) and (B) of this Section, the powers are
6 presumed to be exclusive.
7 (g) Obtaining control through another person. A purchaser has control of an
8 authoritative electronic copy of a record evidencing chattel paper if another person,
9 other than the transferor to the purchaser of an interest in the chattel paper:
10 (1) has control of the authoritative electronic copy and acknowledges that it
11 has control on behalf of the purchaser; or
12 (2) obtains control of the authoritative electronic copy after having
13 acknowledged that it will obtain control of the electronic copy on behalf of the
14 purchaser.
15 §9-105.1. Control of electronic money
16 (a) General rule: control of electronic money. A person has control of
17 electronic money if:
18 (1) the electronic money, a record attached to or logically associated with the
19 electronic money, or a system in which the electronic money is recorded gives the
20 person:
21 (A) power to avail itself of substantially all the benefit from the electronic
22 money; and
23 (B) exclusive power, subject to Subsection (b) of this Section, to:
24 (i) prevent others from availing themselves of substantially all the benefit
25 from the electronic money; and
26 (ii) transfer control of the electronic money to another person or cause
27 another person to obtain control of other electronic money as a result of the transfer
28 of the electronic money; and
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1 (2) the electronic money, a record attached to or logically associated with the
2 electronic money, or a system in which the electronic money is recorded enables the
3 person readily to identify itself in any way, including by name, identifying number,
4 cryptographic key, office, or account number, as having the powers under Paragraph
5 (1) of this Subsection.
6 (b) Meaning of exclusive. Subject to Subsection (c) of this Section, a power
7 is exclusive under Subsection (a)(1)(B)(i) and (ii) of this Section even if:
8 (1) the electronic money, a record attached to or logically associated with the
9 electronic money, or a system in which the electronic money is recorded limits the
10 use of the electronic money or has a protocol programmed to cause a change,
11 including a transfer or loss of control; or
12 (2) the power is shared with another person.
13 (c) When power not shared with another person. A power of a person is not
14 shared with another person under Subsection (b)(2) of this Section and the person's
15 power is not exclusive if:
16 (1) the person can exercise the power only if the power also is exercised by
17 the other person; and
18 (2) the other person:
19 (A) can exercise the power without exercise of the power by the person; or
20 (B) is the transferor to the person of an interest in the electronic money.
21 (d) Presumption of exclusivity of certain powers. If a person has the powers
22 specified in Subsection (a)(1)(B)(i) and (ii) of this Section, the powers are presumed
23 to be exclusive.
24 (e) Control through another person. A person has control of electronic
25 money if another person, other than the transferor to the person of an interest in the
26 electronic money:
27 (1) has control of the electronic money and acknowledges that it has control
28 on behalf of the person; or
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1 (2) obtains control of the electronic money after having acknowledged that
2 it will obtain control of the electronic money on behalf of the person.
3 * * *
4 §9-107.1. Control over life insurance policy
5 (a) Requirements for control. A secured party has control over a life
6 insurance policy:
7 (1) if the secured party is the insurer that issued the policy; or
8 (2) if the secured party is not also the insurer, the insurer authenticates signs
9 a record acknowledging notice of the granting of a security interest to the secured
10 party in the policy.; or
11 (3) another person, other than the debtor:
12 (A) has control of the life insurance policy and acknowledges that it has
13 control on behalf of the secured party; or
14 (B) obtains control of the life insurance policy after having acknowledged
15 that it will obtain control of the life insurance policy on behalf of the secured party.
16 (b) Additional requirement: consent of beneficiary. If the beneficiary of a
17 life insurance policy taken as collateral is not the insured or his estate, a security
18 interest does not attach with respect to rights under the policy until the policy
19 beneficiary authenticates signs a record evidencing the beneficiary's consent to the
20 security interest. This requirement does not apply when the beneficiary may be
21 changed upon the sole request of the insured or when the policy itself provides that
22 it may be pledged or assigned without the beneficiary's consent.
23 §9-107.2. Control conditioned on default
24 A secured party that has satisfied R.S. 10:9-104, 9-105, 9-105.1, 9-106, 9-
25 107, or 9-107.1, or 9-107.3 has control with respect to such collateral even if the
26 secured party has agreed not to exercise such control until a default by the debtor or
27 obligor or other unfulfilled condition is met.
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1 §9-107.3. Control of controllable electronic record, controllable account, or
2 controllable payment intangible
3 (a) Control under R.S. 10:12-105. A secured party has control of a
4 controllable electronic record as provided in R.S. 10:12-105.
5 (b) Control of controllable account and controllable payment intangible. A
6 secured party has control of a controllable account or controllable payment
7 intangible if the secured party has control of the controllable electronic record that
8 evidences the controllable account or controllable payment intangible.
9 §9-107.4. No requirement to acknowledge or confirm; no duties
10 (a) No requirement to acknowledge. A person that has control under R.S.
11 10:9-104, 9-105, 9-105.1, or 9-107.1 is not required to acknowledge that it has
12 control on behalf of another person.
13 (b) No duties or confirmation. If a person acknowledges that it has or will
14 obtain control on behalf of another person, unless the person otherwise agrees or law
15 other than this Chapter otherwise provides, the person does not owe any duty to the
16 other person and is not required to confirm the acknowledgment to any other person.
17 * * *
18 §9-203. Attachment and enforceability of security interest; proceeds; supporting
19 obligations; formal requisites
20 * * *
21 (b) Enforceability. Except as otherwise provided in Subsections (c) through
22 (i) of this Section, a security interest is enforceable against the debtor and third
23 parties with respect to the collateral only if:
24 * * *
25 (3) one of the following conditions is met:
26 (A) the debtor has authenticated signed a security agreement that provides
27 a description of the collateral and, if the security interest covers a life insurance
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1 policy, the condition specified in R.S. 10:9-107.1(b) is met, and, if the security
2 interest covers timber to be cut, a description of the land concerned;
3 * * *
4 (C) the collateral is a certificated security in registered form and the security
5 certificate has been delivered to the secured party under R.S. 10:8-301 pursuant to
6 the debtor's security agreement; or
7 (D) the collateral is controllable accounts, controllable electronic records,
8 controllable payment intangibles, deposit accounts, electronic chattel paper,
9 electronic documents, electronic money, investment property, letter-of-credit rights,
10 electronic documents, or a life insurance policy, and the secured party has control
11 under R.S. 10:7-106, 9-104, 9-105, 9-105.1, 9-106, 9-107, or 9-107.1, or 9-107.3
12 pursuant to the debtor's security agreement; or
13 (E) the collateral is chattel paper and the secured party has possession and
14 control under R.S. 10:9-314.1 pursuant to the debtor's security agreement.
15 * * *
16 §9-204. After-acquired property; future advances
17 * * *
18 (b) When after-acquired property clause not effective. A Subject to
19 subsection (b.1) of this Section, a security interest does not attach under a term
20 constituting an after-acquired property clause to:
21 * * *
22 (b.1) Limitation on Subsection (b). Subsection (b) of this Section does not
23 prevent a security interest from attaching:
24 (1) to consumer goods as proceeds under R.S. 10:9¬ 315(a) or commingled
25 goods under R.S. 10:9 336(c);
26 (2) to a tort claim as proceeds under R.S. 10:9¬ 315(a);
27 (3) under an after-acquired property clause to property that is proceeds of
28 consumer goods or a tort claim; or
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1 (4) to a judgment as proceeds under R.S. 10:9-315(a).
2 * * *
3 Louisiana Official Revision Comments - 2023
4 (a) Section 9-204 is nonuniform in two respects. First, Paragraph (b.1)(4)
5 is added in Louisiana. Revised national U.C.C. Article 9's subsection (b.1) is a new
6 clarification that existing subsection (b) does not prevent a security interest from
7 attaching to the types of collateral listed in subsection (b.1) as proceeds, even though
8 subsection (b) prevents an after-acquired property clause in a security agreement
9 from reaching those types of listed collateral as original collateral. Louisiana
10 Chapter 9 is nonuniform in including judgments as eligible original collateral, by
11 means of R.S. 10:9-109(d)(9) omitting the exclusion in national U.C.C. Article 9 of
12 an assignment of a right represented by a judgment as original collateral. See
13 Louisiana Official Revisions Comment - 2001 to R.S. 10:9-109, Comment (j), and
14 R.S. 10:9-411. In light of this nonuniform inclusion of judgments as eligible original
15 collateral, another nonuniform provision of Louisiana Chapter 9, subsection (b) of
16 this Section, prevents an after-acquired property clause from reaching a judgment as
17 original collateral. Paragraph (b.1)(4) is added to clarify that a security interest may
18 attach to a judgment as proceeds under R.S. 10:9-203(f) and 315(a), similar to tort
19 claims, notwithstanding that subsection (b) may operate to prevent attachment as
20 original collateral.
21 (b) Second, paragraphs (b.1)(2) and (3) vary from revised national U.C.C.
22 Article 9 by including all tort claims rather than only commercial tort claims. This
23 is consistent with existing nonuniform provisions of Louisiana Chapter 9 that include
24 all tort claims, and not merely commercial tort claims, within its scope. See R.S.
25 10:9-109(d) (omitting the exclusion in national U.C.C. Article 9 of claims arising in
26 tort other than commercial tort claims).
27 * * *
28 §9-207. Rights and duties of secured party having possession or control of collateral
29 * * *
30 (c) Duties and rights when secured party in possession or control. Unless
31 otherwise agreed by the parties and except as otherwise provided in Subsection (d),
32 a secured party having possession of collateral or control of collateral under R.S.
33 10:7-106, 9-104, 9-105, 9-105.1, 9-106, 9-107, or 9-107.1, 9-107.3:
34 * * *
35 §9-208. Additional duties of secured party having control of collateral
36 * * *
37 (b) Duties of secured party after receiving demand from debtor. Within ten
38 days after receiving an authenticated a signed demand by the debtor:
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1 (1) a secured party having control of a deposit account under R.S.
2 10:9-104(a)(2) shall send to the bank with which the deposit account is maintained
3 an authenticated statement a signed record that releases the bank from any further
4 obligation to comply with instructions originated by the secured party;
5 * * *
6 (3) a secured party, other than a buyer, having control of electronic chattel
7 paper under R.S. 10:9-105 shall:
8 (A) communicate the authoritative copy of the electronic chattel paper to the
9 debtor or its designated custodian;
10 (B) if the debtor designates a custodian that is the designated custodian with
11 which the authoritative copy of the electronic chattel paper is maintained for the
12 secured party, communicate to the custodian an authenticated record releasing the
13 designated custodian from any further obligation to comply with instructions
14 originated by the secured party and instructing the custodian to comply with
15 instructions originated by the debtor; and
16 (C) take appropriate action to enable the debtor or its designated custodian
17 to make copies of or revisions to the authoritative copy which add or change an
18 identified assignee of the authoritative copy without the consent of the secured party;
19 (3) a secured party, other than a buyer, having control under R.S. 10:9-105
20 of an authoritative electronic copy of a record evidencing chattel paper shall transfer
21 control of the electronic copy to the debtor or a person designated by the debtor;
22 (4) a secured party having control of investment property under R.S.
23 10:8-106(d)(2) or 9-106(b) shall send to the securities intermediary or commodity
24 intermediary with which the security entitlement or commodity contract is
25 maintained an authenticated a signed record that releases the securities intermediary
26 or commodity intermediary from any further obligation to comply with entitlement
27 orders or directions originated by the secured party;
28 (5) a secured party having control of a letter-of-credit right under R.S. 10:9-
29 107 shall send to each person having an unfulfilled obligation to pay or deliver
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1 proceeds of the letter of credit to the secured party an authenticated a signed release
2 from any further obligation to pay or deliver proceeds of the letter of credit to the
3 secured party;
4 (6) a secured party having control of an electronic document shall:
5 (A) give control of the electronic document to the debtor or its designated
6 custodian;
7 (B) if the debtor designates a custodian that is the designated custodian with
8 which the authoritative copy of the electronic document is maintained for the secured
9 party, communicate to the custodian an authenticated record releasing the designated
10 custodian from any further obligation to comply with instructions originated by the
11 secured party and instructing the custodian to comply with instructions originated by
12 the debtor; and
13 (C) take appropriate action to enable the debtor or its designated custodian
14 to make copies of or revisions to the authoritative copy which add or change an
15 identified assignee of the authoritative copy without the consent of the secured party;
16 and
17 (6) a secured party having control under R.S. 10:7-106 of an authoritative
18 electronic copy of an electronic document of title shall transfer control of the
19 electronic copy to the debtor or a person designated by the debtor;
20 (7) a secured party having control under R.S. 10:9-105.1 of electronic money
21 shall transfer control of the electronic money to the debtor or a person designated by
22 the debtor;
23 (8) a secured party having control under R.S. 10:12-105 of a controllable
24 electronic record, other than a buyer of a controllable account or controllable
25 payment intangible evidenced by the controllable electronic record, shall transfer
26 control of the controllable electronic record to the debtor or a person designated by
27 the debtor; and
28 (7) (9) a secured party having control of a life insurance policy under R.S.
29 10:9-107.1(a)(2) shall send to the insurer that issued the policy an authenticated a
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1 signed record that releases both the security interest and the insurer's
2 acknowledgment.
3 §9-209. Duties of secured party if account debtor has been notified of assignment
4 * * *
5 (b) Duties of secured party after receiving demand from debtor. Within ten
6 days after receiving an authenticated a signed demand by the debtor, a secured party
7 shall send to an account debtor that has received notification under R.S. 10:9-406(a)
8 or 12-106(b) of an assignment to the secured party as assignee under R.S.
9 10:9-406(a) an authenticated a signed record that releases the account debtor from
10 any further obligation to the secured party.
11 * * *
12 §9-210. Request for accounting; request regarding list of collateral or statement of
13 account
14 (a) Definitions. In this Section:
15 * * *
16 (2) "Request for an accounting" means a record authenticated signed by a
17 debtor requesting that the recipient provide an accounting of the unpaid obligations
18 secured by collateral and reasonably identifying the transaction or relationship that
19 is the subject of the request.
20 (3) "Request regarding a list of collateral" means a record authenticated
21 signed by a debtor requesting that the recipient approve or correct a list of what the
22 debtor believes to be the collateral securing an obligation and reasonably identifying
23 the transaction or relationship that is the subject of the request.
24 (4) "Request regarding a statement of account" means a record authenticated
25 signed by a debtor requesting that the recipient approve or correct a statement
26 indicating what the debtor believes to be the aggregate amount of unpaid obligations
27 secured by collateral as of a specified date and reasonably identifying the transaction
28 or relationship that is the subject of the request.
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1 (b) Duty to respond to requests. Subject to Subsections (c), (d), (e), and (f)
2 of this Section, a secured party, other than a buyer of accounts, chattel paper,
3 payment intangibles, or promissory notes or a consignor, shall comply with a request
4 within fourteen days after receipt:
5 (1) in the case of a request for an accounting, by authenticating signing and
6 sending to the debtor an accounting; and
7 (2) in the case of a request regarding a list of collateral or a request regarding
8 a statement of account, by authenticating signing and sending to the debtor an
9 approval or correction.
10 (c) Request regarding list of collateral; statement concerning type of
11 collateral. A secured party that claims a security interest in all of a particular type
12 of collateral owned by the debtor may comply with a request regarding a list of
13 collateral by sending to the debtor an authenticated a signed record including a
14 statement to that effect within fourteen days after receipt.
15 (d) Request regarding list of collateral; no interest claimed. A person that
16 receives a request regarding a list of collateral, claims no interest in the collateral
17 when it receives the request, and claimed an interest in the collateral at an earlier
18 time shall comply with the request within fourteen days after receipt by sending to
19 the debtor an authenticated a signed record:
20 * * *
21 (e) Request for accounting or regarding statement of account; no interest in
22 obligation claimed. A person that receives a request for an accounting or a request
23 regarding a statement of account, claims no interest in the obligations when it
24 receives the request, and claimed an interest in the obligations at an earlier time shall
25 comply with the request within fourteen days after receipt by sending to the debtor
26 an authenticated a signed record:
27 * * *
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1 §9-301. Law governing perfection and priority of security interests
2 Except as otherwise provided in R.S. 10:9-303 through 9-306 9-306.2, the
3 following rules determine the law governing perfection, the effect of perfection or
4 nonperfection, and the priority of a security interest in collateral:
5 * * *
6 (3) Except as otherwise provided in Paragraphs (4) and (5) of this Section,
7 while tangible negotiable tangible documents, goods, instruments, or tangible
8 money, or tangible chattel paper is located in a jurisdiction, the local law of that
9 jurisdiction governs:
10 * * *
11 §9-304. Law governing perfection and priority of security interests in deposit
12 accounts
13 (a) Law of bank's jurisdiction governs. The local law of a bank's jurisdiction
14 governs perfection, the effect of perfection or nonperfection, and the priority of a
15 security interest in a deposit account maintained with that bank even if the
16 transaction does not bear any relation to the bank's jurisdiction.
17 * * *
18 §9-305. Law governing perfection and priority of security interests in investment
19 property
20 (a) Governing law: general rules. Except as otherwise provided in
21 Subsection (c) of this Section, the following rules apply:
22 * * *
23 (5) Paragraphs (2), (3), and (4) of this Subsection apply even if the
24 transaction does not bear any relation to the jurisdiction.
25 * * *
26 §9-306.1. Law governing perfection and priority of security interests in chattel
27 paper
28 (a) Chattel paper evidenced by authoritative electronic copy. Except as
29 provided in Subsection (d) of this Section, if chattel paper is evidenced only by an
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1 authoritative electronic copy of the chattel paper or is evidenced by an authoritative
2 electronic copy and an authoritative tangible copy, the local law of the chattel paper's
3 jurisdiction governs perfection, the effect of perfection or nonperfection, and the
4 priority of a security interest in the chattel paper, even if the transaction does not
5 bear any relation to the chattel paper's jurisdiction.
6 (b) Chattel paper's jurisdiction. The following rules determine the chattel
7 paper's jurisdiction under this Section:
8 (1) If the authoritative electronic copy of the record evidencing chattel paper,
9 or a record attached to or logically associated with the electronic copy and readily
10 available for review, expressly provides that a particular jurisdiction is the chattel
11 paper's jurisdiction for purposes of this Part, this Chapter, or this Title, that
12 jurisdiction is the chattel paper's jurisdiction.
13 (2) If Paragraph (1) of this Subsection does not apply and the rules of the
14 system in which the authoritative electronic copy is recorded are readily available
15 for review and expressly provide that a particular jurisdiction is the chattel paper's
16 jurisdiction for purposes of this Part, this Chapter, or this Title, that jurisdiction is the
17 chattel paper's jurisdiction.
18 (3) If Paragraphs (1) and (2) of this Subsection do not apply and the
19 authoritative electronic copy, or a record attached to or logically associated with the
20 electronic copy and readily available for review, expressly provides that the chattel
21 paper is governed by the law of a particular jurisdiction, that jurisdiction is the
22 chattel paper's jurisdiction.
23 (4) If Paragraphs (1), (2), and (3) of this Subsection do not apply and the
24 rules of the system in which the authoritative electronic copy is recorded are readily
25 available for review and expressly provide that the chattel paper or the system is
26 governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper's
27 jurisdiction.
28 (5) If Paragraphs (1) through (4) of this Subsection do not apply, the chattel
29 paper's jurisdiction is the jurisdiction in which the debtor is located.
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1 (c) Chattel paper evidenced by authoritative tangible copy. If an
2 authoritative tangible copy of a record evidences chattel paper and the chattel paper
3 is not evidenced by an authoritative electronic copy, while the authoritative tangible
4 copy of the record evidencing chattel paper is located in a jurisdiction, the local law
5 of that jurisdiction governs:
6 (1) perfection of a security interest in the chattel paper by possession under
7 R.S. 10:9-314.1; and
8 (2) the effect of perfection or nonperfection and the priority of a security
9 interest in the chattel paper.
10 (d) When perfection governed by law of jurisdiction where debtor located.
11 The local law of the jurisdiction in which the debtor is located governs perfection of
12 a security interest in chattel paper by filing.
13 §9-306.2. Law governing perfection and priority of security interests in controllable
14 accounts, controllable electronic records, and controllable payment
15 intangibles
16 (a) Governing law: general rules. Except as provided in Subsection (b) of
17 this Section, the local law of the controllable electronic record's jurisdiction specified
18 in R.S. 10:12-107(c) and (d) governs perfection, the effect of perfection or
19 nonperfection, and the priority of a security interest in a controllable electronic
20 record and a security interest in a controllable account or controllable payment
21 intangible evidenced by the controllable electronic record.
22 (b) When perfection governed by law of jurisdiction where debtor located.
23 The local law of the jurisdiction in which the debtor is located governs:
24 (1) perfection of a security interest in a controllable account, controllable
25 electronic record, or controllable payment intangible by filing; and
26 (2) automatic perfection of a security interest in a controllable payment
27 intangible created by a sale of the controllable payment intangible.
28 * * *
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1 §9-310. When filing required to perfect security interest or agricultural lien; security
2 interests and agricultural liens to which filing provisions do not apply
3 * * *
4 (b) Exceptions: filing not necessary. The filing of a financing statement is
5 not necessary to perfect a security interest:
6 * * *
7 (8) in controllable accounts, controllable electronic records, controllable
8 payment intangibles, deposit accounts, electronic chattel paper, electronic
9 documents, investment property, letter-of-credit rights, or life insurance policies
10 when the security interest is perfected by control under R.S. 10:9-314;
11 (8.1) in chattel paper which is perfected by possession and control under R.S.
12 10:9-314.1;
13 * * *
14 §9-312. Perfection of security interests in chattel paper, controllable accounts,
15 controllable electronic records, controllable payment intangibles, deposit
16 accounts, negotiable documents, goods covered documents, instruments,
17 investment property, letter-of-credit rights, money, life insurance policies,
18 and collateral mortgage notes; perfection by permissive filing; temporary
19 perfection without filing or transfer of possession
20 (a) Perfection by filing permitted. A security interest in chattel paper,
21 controllable accounts, controllable electronic records, controllable payment
22 intangibles, negotiable documents, instruments other than collateral mortgage notes,
23 or investment property may be perfected by filing.
24 (b) Control or possession of certain collateral. Except as otherwise provided
25 in R.S. 10:9-315(c) and (d) for proceeds:
26 * * *
27 (3) a security interest in tangible money may be perfected only by the
28 secured party's taking possession under R.S. 10:9-313;
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1 (4) a security interest in electronic money may be perfected only by control
2 under R.S. 10:9-314;
3 (5) a security interest in a collateral mortgage note may be perfected only by
4 the secured party's taking possession under R.S. 10:9-313; and
5 (5)(6) a security interest in a life insurance policy may be perfected only by
6 control under R.S. 10:9-314.
7 * * *
8 (e) Temporary perfection: new value. A security interest in certificated
9 securities, negotiable documents, or instruments other than collateral mortgage notes
10 is perfected without filing or the taking of possession or control for a period of
11 twenty days from the time it attaches to the extent that it arises for new value given
12 under an authenticated a signed security agreement.
13 * * *
14 §9-313. When possession by or delivery to secured party perfects security interest
15 without filing
16 (a) Perfection by possession or delivery. Except as otherwise provided in
17 Subsection (b) of this Section, a secured party may perfect a security interest in
18 tangible negotiable documents, goods, instruments including collateral mortgage
19 notes, negotiable tangible documents, or tangible money, or tangible chattel paper
20 by taking possession of the collateral. A secured party may perfect a security interest
21 in certificated securities by taking delivery of the certificated securities under R.S.
22 10:8-301.
23 * * *
24 (c) Collateral in possession of person other than debtor. With respect to
25 collateral other than certificated securities and goods covered by a document, a
26 secured party takes possession of collateral in the possession of a person other than
27 the debtor, the secured party, or a lessee of the collateral from the debtor in the
28 ordinary course of the debtor's business, when:
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1 (1) the person in possession authenticates signs a record acknowledging that
2 it holds possession of the collateral for the secured party's benefit; or
3 (2) the person takes possession of the collateral after having authenticated
4 signed a record acknowledging that it will hold possession of the collateral for the
5 secured party's benefit.
6 (d) Time of perfection by possession; continuation of perfection. If
7 perfection of a security interest depends upon possession of the collateral by a
8 secured party, perfection occurs no not earlier than the time the secured party takes
9 possession and continues only while the secured party retains possession.
10 * * *
11 §9-314. Perfection by control
12 (a) Perfection by control. A security interest in investment property, deposit
13 accounts, letter-of-credit rights, electronic chattel paper, electronic documents
14 controllable accounts, controllable electronic records, controllable payment
15 intangibles, deposit accounts, electronic documents, electronic money, investment
16 property, letter-of-credit rights, or a life insurance policy may be perfected by control
17 of the collateral under R.S. 10:7-106, 9-104, 9-105, 9-105.1, 9-106, 9-107, or 9-
18 107.1, 9-107.3.
19 (b) Specified collateral: time of perfection by control; continuation of
20 perfection. A security interest in controllable accounts, controllable electronic
21 records, controllable payment intangibles, deposit accounts, electronic chattel paper,
22 electronic documents, electronic money, a life insurance policy, or letter-of-credit
23 rights is perfected by control under R.S. 10:7-106, 9-104, 9-105, 9-105.1, 9-107, or
24 9-107.1, or 9-107.3 when not earlier than the time the secured party obtains control
25 and remains perfected by control only while the secured party retains control.
26 (c) Investment property: time of perfection by control; continuation of
27 perfection. A security interest in investment property is perfected by control under
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1 R.S. 10:9-106 from not earlier than the time the secured party obtains control and
2 remains perfected by control until:
3 * * *
4 §9-314.1. Perfection by possession and control of chattel paper
5 (a) Perfection by possession and control. A secured party may perfect a
6 security interest in chattel paper by taking possession of each authoritative tangible
7 copy of the record evidencing the chattel paper and obtaining control of each
8 authoritative electronic copy of the electronic record evidencing the chattel paper.
9 (b) Time of perfection; continuation of perfection. A security interest is
10 perfected under Subsection (a) of this Section not earlier than the time the secured
11 party takes possession and obtains control and remains perfected under Subsection
12 (a) of this Section only while the secured party retains possession and control.
13 (c) Application of R.S. 10:9-313 to perfection by possession of chattel paper.
14 R.S. 10:9-313(c) and (f) through (i) applies to perfection by possession of an
15 authoritative tangible copy of a record evidencing chattel paper.
16 * * *
17 §9-316. Continued perfection of security interest following change in governing law
18 (a) General rule: effect on perfection of change in governing law. A security
19 interest perfected pursuant to the law of the jurisdiction designated in R.S.
20 10:9-301(1), or 9-305(c), 9-306.1(d), or 9-306.2(b) remains perfected until the
21 earliest of:
22 * * *
23 (f) Change in jurisdiction of chattel paper, controllable electronic record,
24 bank, issuer, nominated person, securities intermediary, or commodity intermediary.
25 A security interest in chattel paper, controllable accounts, controllable electronic
26 records, controllable payment intangibles, deposit accounts, letter-of-credit rights,
27 or investment property which is perfected under the law of the chattel paper's
28 jurisdiction, the controllable electronic record's jurisdiction, the bank's jurisdiction,
29 the issuer's jurisdiction, a nominated person's jurisdiction, the securities
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1 intermediary's jurisdiction, or the commodity intermediary's jurisdiction, as
2 applicable, remains perfected until the earlier of:
3 * * *
4 §9-317. Interests that take priority over or take free of security interest or
5 agricultural lien
6 * * *
7 (b) Buyers that receive delivery. Except as otherwise provided in Subsection
8 (e) of this Section, a buyer, other than a secured party, of tangible chattel paper,
9 tangible documents, goods, instruments, tangible documents, or certificated security
10 takes free of a security interest or agricultural lien if the buyer gives value and
11 receives delivery of the collateral before it is perfected.
12 * * *
13 (d) Licensees and buyers of certain collateral. A Subject to Subsections (f)
14 through (i) of this Section, a licensee of a general intangible or a buyer, other than
15 a secured party, of collateral other than tangible chattel paper, electronic money,
16 tangible documents, goods, instruments, tangible documents, or a certificated
17 security takes free of a security interest if the licensee or buyer gives value before it
18 is perfected.
19 * * *
20 (f) Buyers of chattel paper. A buyer, other than a secured party, of chattel
21 paper takes free of a security interest if, before it is perfected, the buyer gives value
22 and:
23 (1) receives delivery of each authoritative tangible copy of the record
24 evidencing the chattel paper; and
25 (2) if each authoritative electronic copy of the record evidencing the chattel
26 paper can be subjected to control under R.S. 10:9-105, obtains control of each
27 authoritative electronic copy.
28 (g) Buyers of electronic documents. A buyer of an electronic document
29 takes free of a security interest if, before it is perfected, the buyer gives value and,
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1 if each authoritative electronic copy of the document can be subjected to control
2 under R.S. 10:7-106, obtains control of each authoritative electronic copy.
3 (h) Buyers of controllable electronic records. A buyer of a controllable
4 electronic record takes free of a security interest if, before it is perfected, the buyer
5 gives value and obtains control of the controllable electronic record.
6 (i) Buyers of controllable accounts and controllable payment intangibles. A
7 buyer, other than a secured party, of a controllable account or a controllable payment
8 intangible takes free of a security interest if, before it is perfected, the buyer gives
9 value and obtains control of the controllable account or controllable payment
10 intangible.
11 Louisiana Official Revision Comments - 2023
12 In new subsections (f), (g), (h), and (i) of revised Chapter 9, the revised
13 national U.C.C. Article 9's requirement of being "without knowledge" is omitted,
14 conforming to existing Louisiana subsections (b), (c), and (d). This change is
15 consistent with the Louisiana public records doctrine, which is predicated on filing
16 and not on knowledge. The Louisiana rule is that actual knowledge by third parties
17 of an unrecorded interest is immaterial; proper filing is alone dispositive. See
18 Louisiana Official Revision Comments - 2001. This change also promotes judicial
19 efficiency by facilitating proof in contested cases.
20 * * *
21 §9-323. Future advances
22 * * *
23 (d) Buyer of goods. Except as otherwise provided in Subsection (e) of this
24 Section, a buyer of goods other than a buyer in ordinary course of business takes free
25 of a security interest to the extent that it secures advances made after the earlier of:
26 * * *
27 (f) Lessee of goods. Except as otherwise provided in Subsection (g) of this
28 Section, a lessee of goods, other than a lessee in ordinary course of business, takes
29 the leasehold interest free of a security interest to the extent that it secures advances
30 made after the earlier of:
31 * * *
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1 §9-324. Priority of purchase-money security interests
2 * * *
3 (b) Inventory purchase-money priority. Subject to Subsection (c) of this
4 Section and except as otherwise provided in Subsection (g) of this Section, a
5 perfected purchase-money security interest in inventory has priority over a
6 conflicting security interest in the same inventory, has priority over a conflicting
7 security interest in chattel paper or an instrument constituting proceeds of the
8 inventory and in proceeds of the chattel paper, if so provided in R.S. 10:9-330, and,
9 except as otherwise provided in R.S. 10:9-327, also has priority in identifiable cash
10 proceeds of the inventory to the extent the identifiable cash proceeds are received on
11 or before the delivery of the inventory to a buyer, if:
12 * * *
13 (2) the purchase-money secured party sends an authenticated a signed
14 notification to the holder of the conflicting security interest;
15 * * *
16 (d) Livestock purchase-money priority. Subject to Subsection (e) of this
17 Section and except as otherwise provided in Subsection (g) of this Section, a
18 perfected purchase-money security interest in livestock that are farm products has
19 priority over a conflicting security interest in the same livestock, and, except as
20 otherwise provided in R.S. 10:9-327, a perfected security interest in their identifiable
21 proceeds and identifiable products in their unmanufactured states also has priority,
22 if:
23 * * *
24 (2) the purchase-money secured party sends an authenticated a signed
25 notification to the holder of the conflicting security interest;
26 * * *
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1 §9-326.1. Priority of security interest in controllable account, controllable electronic
2 record, and controllable payment intangible
3 A security interest in a controllable account, controllable electronic record,
4 or controllable payment intangible held by a secured party having control of the
5 account, electronic record, or payment intangible has priority over a conflicting
6 security interest held by a secured party that does not have control.
7 * * *
8 §9-330. Priority of purchase purchaser of chattel paper or instrument
9 (a) Purchaser's priority: security interest claimed merely as proceeds. A
10 purchaser of chattel paper has priority over a security interest in the chattel paper
11 which is claimed merely as proceeds of inventory subject to a security interest if:
12 (1) in good faith and in the ordinary course of the purchaser's business, the
13 purchaser gives new value and takes possession of each authoritative tangible copy
14 of the record evidencing the chattel paper, or and obtains control of under R.S. 10:9-
15 105 of each authoritative electronic copy of the record evidencing the chattel paper
16 under R.S. 10:9-105; and
17 (2) the chattel paper does authoritative copies of the record evidencing the
18 chattel paper do not indicate that it the chattel paper has been assigned to an
19 identified assignee other than the purchaser.
20 (b) Purchaser's priority: other security interests. A purchaser of chattel paper
21 has priority over a security interest in the chattel paper which is claimed other than
22 merely as proceeds of inventory subject to a security interest if the purchaser gives
23 new value, and takes possession of each authoritative tangible copy of the record
24 evidencing the chattel paper, or and obtains control of under R.S. 10:9-105 of each
25 authoritative electronic copy of the record evidencing the chattel paper under R.S.
26 10:9-105 in good faith, in the ordinary course of the purchaser's business, and
27 without knowledge that the purchase violates the rights of the secured party.
28 * * *
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1 (f) Indication of assignment gives knowledge. For purposes of Subsections
2 (b) and (d) of this Section, if the authoritative copies of the record evidencing chattel
3 paper or an instrument indicates indicate that it the chattel paper or instrument has
4 been assigned to an identified secured party other than the purchaser, a purchaser of
5 the chattel paper or instrument has knowledge that the purchase violates the rights
6 of the secured party.
7 §9-331. Priority of rights of purchasers of controllable accounts, controllable
8 electronic records, controllable payment intangibles, instruments, documents,
9 instruments and securities under other Chapters; priority of interests in
10 financial assets and security entitlements under Chapter Chapters 8 and 12
11 (a) Rights under Chapters 3, 7, and 8, and 12 not limited. This Chapter does
12 not limit the rights of a holder in due course of a negotiable instrument, a holder to
13 which a negotiable document of title has been duly negotiated, or a protected
14 purchaser of a security, or a qualifying purchaser of a controllable account,
15 controllable electronic record, or controllable payment intangible. These holders or
16 purchasers take priority over an earlier security interest, even if perfected, to the
17 extent provided in Chapters 3, 7, and 8, and 12.
18 (b) Protection under Chapter 8 Chapters 8 and 12. This Chapter does not
19 limit the rights of or impose liability on a person to the extent that the person is
20 protected against the assertion of an adverse claim under Chapter 8 or 12.
21 * * *
22 §9-332. Transfer of money; transfer of funds from deposit account
23 (a) Transferee of tangible money. A transferee of tangible money takes the
24 money free of a security interest unless the transferee acts if the transferee receives
25 possession of the money without acting in collusion with the debtor in violating the
26 rights of the secured party.
27 (b) Transferee of funds from deposit account. A transferee of funds from a
28 deposit account takes the funds free of a security interest in the deposit account
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1 unless the transferee acts if the transferee receives the funds without acting in
2 collusion with the debtor in violating the rights of the secured party.
3 (c) Transferee of electronic money. A transferee of electronic money takes
4 the money free of a security interest if the transferee obtains control of the money
5 without acting in collusion with the debtor in violating the rights of the secured
6 party.
7 * * *
8 §9-334. Priority of security interests in fixtures and crops
9 * * *
10 (f) Priority based on consent, disclaimer, or right to remove. A security
11 interest in fixtures, whether or not perfected, has priority over a conflicting interest
12 of an encumbrancer or owner of the real property if:
13 (1) the encumbrancer or owner has, in an authenticated a signed record,
14 consented to the security interest or disclaimed an interest in the goods as fixtures;
15 or
16 * * *
17 §9-341. Bank's rights and duties with respect to deposit account
18 Except as otherwise provided in R.S. 10:9-340(c), and unless the bank
19 otherwise agrees in an authenticated a signed record, a bank's rights and duties with
20 respect to a deposit account maintained with the bank are not terminated, suspended,
21 or modified by:
22 * * *
23 §9-404. Rights acquired by assignee; claims and defenses against assignee
24 (a) Assignee's rights subject to terms, claims, and defenses; exceptions.
25 Unless an account debtor has made an enforceable agreement not to assert defenses
26 or claims, and subject to Subsections (b) through (e) of this Section, the rights of an
27 assignee are subject to:
28 * * *
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1 (2) any other defense or claim of the account debtor against the assignor
2 which accrues before the account debtor receives a notification of the assignment
3 authenticated signed by the assignor or the assignee.
4 * * *
5 §9-406. Discharge of account debtor; notification of assignment; identification and
6 proof of assignment; restrictions on assignment of accounts, chattel paper,
7 payment intangibles, and promissory notes ineffective
8 (a) Discharge of account debtor; effect of notification. Subject to
9 Subsections (b) through (i) and (l) of this Section and R.S. 10:9-411, an account
10 debtor on an account, chattel paper, or a payment intangible may discharge its
11 obligation by paying the assignor until, but not after, the account debtor receives a
12 notification, authenticated by the assignor or the assignee, that the amount due or to
13 become due has been assigned and that payment is to be made to the assignee. After
14 receipt of the notification, the account debtor may discharge its obligation by paying
15 the assignee and may not discharge the obligation by paying the assignor.
16 (b) When notification ineffective. Subject to Subsection Subsections (h) and
17 (l) of this Section, notification is ineffective under Subsection (a) of this Section:
18 * * *
19 (c) Proof of assignment. Subject to Subsection Subsections (h) and (l) of this
20 Section, if requested by the account debtor, an assignee shall seasonably furnish
21 reasonable proof that the assignment has been made. Unless the assignee complies,
22 the account debtor may discharge its obligation by paying the assignor, even if the
23 account debtor has received a notification under Subsection (a) of this Section.
24 (d) Term restricting assignment generally ineffective. In this Subsection,
25 "promissory note" includes a negotiable instrument that evidences chattel paper.
26 Except as otherwise provided in Subsection (e), (i), and (k) of this Section and R.S.
27 10:9-407 and R.S. 10:9-410, and subject to Subsection (h) of this Section, a term in
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1 an agreement between an account debtor and an assignor or in a promissory note is
2 ineffective to the extent that it:
3 * * *
4 (g) Subsection (b)(3) not waivable. Subject to Subsection Subsections (h)
5 and (l) of this Section, an account debtor may not waive or vary its option under
6 Subsection (b)(3) of this Section.
7 * * *
8 (l) Inapplicability of certain subsections. Subsections (a), (b), (c), and (g)
9 of this Section do not apply to a controllable account or controllable payment
10 intangible.
11 * * *
12 Louisiana Official Revision Comments - 2023
13 The reference to subsection (k) in subsection (d) is intentional, even though
14 the subsection (k) in Louisiana Chapter 9 is nonuniform and completely different
15 from the subsection (k) in revised national U.C.C. Article 9.
16 * * *
17 §9-408. Restrictions on assignment of promissory notes, health-care-insurance
18 receivables, and certain general intangibles ineffective
19 * * *
20 (g) "Promissory note." In this Section, "promissory note" includes a
21 negotiable instrument that evidences chattel paper.
22 (h) Subsections (a) and (c) of this Section do not apply to the assignment or
23 transfer or creation of a security interest in:
24 (1) a claim or right to receive compensation for injuries or sickness as
25 described in 26 U.S.C. 104(a)(1) or (2), as amended; or
26 (2) a claim or right to receive benefits under a special needs trust as
27 described in 42 U.S.C. 1396p(d)(4), as amended.
28 * * *
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1 §9-412. Discharge of tortfeasor; notification and filing of assignment
2 (a) Discharge of tortfeasor. Subject to Subsections (b) through (c) of this
3 Section, a person obligated on a tort claim may discharge its obligation by paying the
4 debtor until, but not after, the person receives a notification, authenticated signed by
5 the debtor or the secured party, that the amount due has been assigned and that
6 payment is to be made to the secured party. After receipt of the notification, the
7 person may discharge its obligation by paying the secured party and may not
8 discharge the obligation by paying the debtor.
9 * * *
10 §9-509. Persons entitled to file a record
11 (a) Person entitled to file record. A person may file an initial financing
12 statement, amendment that adds collateral covered by a financing statement, or
13 amendment that adds a debtor to a financing statement only if:
14 (1) the debtor authorizes the filing in an authenticated a signed record or
15 pursuant to Subsection (b) or (c) of this Section; or
16 * * *
17 (b) Security agreement as authorization. By authenticating signing or
18 becoming bound as debtor by a security agreement, a debtor or new debtor
19 authorizes the filing of an initial financing statement, and an amendment, covering:
20 * * *
21 §9-513. Termination statement
22 * * *
23 (b) Time for compliance with Subsection (a). To comply with Subsection
24 (a) of this Section, a secured party shall cause the secured party of record to file the
25 termination statement in the filing office where the financing statement was
26 originally filed:
27 * * *
28 (2) if earlier, within twenty days after the secured party receives an
29 authenticated a signed demand from a debtor.
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1 (c) Other collateral. In cases not governed by Subsection (a) of this Section,
2 within twenty days after a secured party receives an authenticated a signed demand
3 from a debtor, the secured party shall cause the secured party of record for a
4 financing statement to send to the debtor a termination statement for the financing
5 statement or file the termination statement in the filing office where the financing
6 statement was originally filed if:
7 * * *
8 §9-601. Rights after default; judicial enforcement; consignor or buyer of accounts,
9 chattel paper, payment intangibles, or promissory notes
10 * * *
11 (b) Rights and duties of secured party in possession or control. A secured
12 party in possession of collateral or control of collateral under R.S. 10:7-106, 9-104,
13 9-105, 9-105.1 9-106, 9-107, or 9-107.1, or 9-107.3 has the rights and duties
14 provided in R.S. 10:9-207.
15 * * *
16 §9-605. Unknown debtor or secondary obligor
17 A (a) In general: No duty owed by secured party. Except as provided in
18 Subsection (b) of this Section, a secured party does not owe a duty based on its status
19 as secured party:
20 (1) to a person that is a debtor or obligor, unless the secured party knows:
21 (A) that the person is a debtor or obligor;
22 (B) the identity of the person; and
23 (C) how to communicate with the person; or
24 (2) to a secured party or lienholder that has filed a financing statement
25 against a person, unless the secured party knows:
26 (A) that the person is a debtor; and
27 (B) the identity of the person.
28 (b) Exception: Secured party owes duty to debtor or obligor. A secured
29 party owes a duty based on its status as a secured party to a person if, at the time the
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1 secured party obtains control of collateral that is a controllable account, controllable
2 electronic record, or controllable payment intangible or at the time the security
3 interest attaches to the collateral, whichever is later:
4 (1) the person is a debtor or obligor; and
5 (2) the secured party knows that the information in Subsection (a)(1)(A), (B),
6 or (C) of this Section relating to the person is not provided by the collateral, a record
7 attached to or logically associated with the collateral, or the system in which the
8 collateral is recorded.
9 * * *
10 §9-608. Application of proceeds of collection or enforcement; liability for
11 deficiency and right to surplus
12 (a) Application of proceeds, surplus, and deficiency if obligation secured.
13 If a security interest or agricultural lien secures payment or performance of an
14 obligation, the following rules apply:
15 (1) A secured party shall apply or pay over for application the cash proceeds
16 of collection or enforcement under R.S. 10:9-607 in the following order to:
17 * * *
18 (C) the satisfaction of obligations secured by any subordinate security
19 interest in or lien on the collateral subject to the security interest or agricultural lien
20 under which the collection or enforcement is made if the secured party receives an
21 authenticated a signed demand for proceeds before distribution of the proceeds is
22 completed.
23 * * *
24 §9-611. Notification before disposition of collateral
25 (a) "Notification date." In this Section, "notification date" means the earlier
26 of the date on which:
27 (1) a secured party sends to the debtor and any secondary obligor an
28 authenticated a signed notification of disposition; or
29 * * *
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1 (b) Notification of disposition required. Except as otherwise provided in
2 Subsection (d) of this Section, a secured party that disposes of collateral under R.S.
3 10:9-610 shall send to the persons specified in Subsection (c) of this Section a
4 reasonable authenticated signed notification of disposition.
5 (c) Persons to be notified. To comply with Subsection (b) of this Section,
6 the secured party shall send an authenticated a signed notification of disposition to:
7 * * *
8 (3) if the collateral is other than consumer goods:
9 (A) any other person from which the secured party has received, before the
10 notification date, an authenticated a signed notification of a claim of an interest in
11 the collateral;
12 * * *
13 (e) Compliance with Subsection (c)(3)(B). A secured party complies with
14 the requirement for notification prescribed by Subsection (c)(3)(B) of this Section
15 if:
16 * * *
17 (2) before the notification date, the secured party:
18 * * *
19 (B) received a response to the request for information and sent an
20 authenticated a signed notification of disposition to each secured party or other
21 lienholder named in that response whose financing statement covered the collateral.
22 * * *
23 §9-613. Contents and form of notification before disposition of collateral: general
24 (a) Contents and form of notification. Except in a consumer-goods
25 transaction, the following rules apply:
26 (1) The contents of a notification of disposition are sufficient if the
27 notification:
28 (A) describes the debtor and the secured party;
29 (B) describes the collateral that is the subject of the intended disposition;
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1 (C) states the method of intended disposition;
2 (D) states that the debtor is entitled to an accounting of the unpaid
3 indebtedness and states the charge, if any, for an accounting; and
4 (E) states the time and place of a public disposition or the time after which
5 any other disposition is to be made.
6 (2) Whether the contents of a notification that lacks any of the information
7 specified in Paragraph (1) of this Section are nevertheless sufficient is a question of
8 fact.
9 (3) The contents of a notification providing substantially the information
10 specified in Paragraph (1) of this Section are sufficient, even if the notification
11 includes:
12 (A) information not specified by that Paragraph; or
13 (B) minor errors that are not seriously misleading.
14 (4) A particular phrasing of the notification is not required.
15 (5) The following form of notification and the form appearing in R.S.
16 10:9-614(3) 10:9-614(a)(3), when completed, each provides sufficient information:
17 NOTIFICATION OF DISPOSITION OF COLLATERAL
18 To: [Name of debtor, obligor, or other person to which the notification is sent]
19 From: [Name, address, and telephone number of secured party]
20 Name of Debtor(s): [Include only if debtor(s) are not an addressee]
21 [For a public disposition:]
22 We will sell [or lease or license, as applicable] the [describe collateral] to
23 [the highest qualified bidder] in public as follows:
24 Day and Date:
25 Time:
26 Place:
27 [For a private disposition:]
28 We will sell [or lease or license, as applicable] the [describe
29 collateral] privately sometime after [day and date].
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1 You are entitled to an accounting of the unpaid indebtedness secured by the
2 property that we intend to sell [or lease or license, as applicable] [for a charge of
3 $ ]. You may request an accounting by calling us at [telephone number]
4 [End of Form]
5 NOTIFICATION OF DISPOSITION OF COLLATERAL
6 To: (Name of debtor, obligor, or other person to which the notification is sent)
7 From: (Name, address, and telephone number of secured party)
8 {1} Name of any debtor that is not an addressee: (Name of each debtor)
9 {2} We will sell (describe collateral) (to the highest qualified bidder) at
10 public sale. A sale could include a lease or license. The sale will be held as follows:
11 (Date)
12 (Time)
13 (Place)
14 {3} We will sell (describe collateral) at private sale sometime after (date).
15 A sale could include a lease or license.
16 {4} You are entitled to an accounting of the unpaid indebtedness secured by
17 the property that we intend to sell or, as applicable, lease or license.
18 {5} If you request an accounting you must pay a charge of $ (amount).
19 {6} You may request an accounting by calling us at (telephone number).
20 [End of Form]
21 (b) Instructions for form of notification. The following instructions apply
22 to the form of notification in Subsection (a)(5) of this Section:
23 (1) The instructions in this Subsection refer to the numbers in braces before
24 items in the form of notification in Subsection (a)(5) of this Section. Do not include
25 the numbers or braces in the notification. The numbers and braces are used only for
26 the purpose of these instructions.
27 (2) Include and complete item {1} only if there is a debtor that is not an
28 addressee of the notification and list the name or names.
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1 (3) Include and complete either item {2}, if the notification relates to a
2 public disposition of the collateral, or item {3}, if the notification relates to a private
3 disposition of the collateral. If item {2} is included, include the words "to the
4 highest qualified bidder" only if applicable.
5 (4) Include and complete items {4} and {6}.
6 (5) Include and complete item {5} only if the sender will charge the recipient
7 for an accounting.
8 §9-614. Contents and form of notification before disposition of collateral:
9 consumer-goods transaction
10 (a) Contents and form of notification. In a consumer-goods transaction, the
11 following rules apply:
12 (1) A notification of disposition must provide the following information:
13 (A) the information specified in R.S. 10:9-613(1) R.S. 10:9-613(a)(1);
14 (B) a description of any liability for a deficiency of the person to which the
15 notification is sent;
16 (C) a telephone number from which the amount that must be paid to the
17 secured party to redeem the collateral under R.S. 10:9-623 is available; and
18 (D) a telephone number or mailing address from which additional
19 information concerning the disposition and the obligation secured is available.
20 (2) A particular phrasing of the notification is not required.
21 (3) The following form of notification, when completed, provides sufficient
22 information:
23 NOTICE OF OUR PLAN TO SELL PROPERTY
24 [Name and address of any obligor who is also a debtor]
25 Subject: [Identification of Transaction]
26 We have your [describe collateral], because you broke promises in our
27 agreement.
28 [For a public disposition:]
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1 We will sell [describe collateral] at public sale. A sale could include a lease
2 or license. The sale will be held as follows:
3 Date:
4 Time:
5 Place:
6 You may attend the sale and bring bidders if you want.
7 [For a private disposition:]
8 We will sell [ describe collateral] at private sale sometime after [date]. A
9 sale could include a lease or license.
10 The money that we get from the sale (after paying our costs) will reduce the
11 amount you owe. If we get less money than you owe, you [will or will not, as
12 applicable] still owe us the difference. If we get more money than you owe, you will
13 get the extra money, unless we must pay it to someone else.
14 You can get the property back at any time before we sell it by paying us the
15 full amount you owe (not just the past due payments), including our expenses. To
16 learn the exact amount you must pay, call us at [telephone number].
17 If you want us to explain to you in writing how we have figured the amount
18 that you owe us, you may call us at [telephone number] [or write us at [secured
19 party's address]] and request a written explanation. [We will charge you $______
20 for the explanation if we sent you another written explanation of the amount you owe
21 us within the last six months.]
22 If you need more information about the sale call us at [telephone number] [or
23 write us at [secured party's address] ].
24 We are sending this notice to the following other people who have an interest
25 in [describe collateral] or who owe money under your agreement:
26 [Names of all other debtors and obligors, if any]
27 [End of Form]
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1 (Name and address of secured party)
2 (Date)
3 NOTICE OF OUR PLAN TO SELL PROPERTY
4 (Name and address of any obligor who is also a debtor)
5 Subject: (Identify transaction)
6 We have your (describe collateral), because you broke promises in our
7 agreement.
8 {1} We will sell (describe collateral) at public sale. A sale could include a
9 lease or license. The sale will be held as follows:
10 (Date)
11 (Time)
12 (Place)
13 You may attend the sale and bring bidders if you want.
14 {2} We will sell (describe collateral) at private sale sometime after (date).
15 A sale could include a lease or license.
16 {3} The money that we get from the sale, after paying our costs, will reduce
17 the amount you owe. If we get less money than you owe, you (will or will not, as
18 applicable) still owe us the difference. If we get more money than you owe, you will
19 get the extra money, unless we must pay it to someone else.
20 {4} You can get the property back at any time before we sell it by paying us
21 the full amount you owe, not just the past due payments, including our expenses. To
22 learn the exact amount you must pay, call us at (telephone number).
23 {5} If you want us to explain to you in (writing) (writing or in (description
24 of electronic record)) (description of electronic record) how we have figured the
25 amount that you owe us,
26 {6} call us at (telephone number) (or) (write us at (secured party's address))
27 (or contact us by (description of electronic communication method))
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1 {7} and request (a written explanation) (a written explanation or an
2 explanation in (description of electronic record)) (an explanation in (description of
3 electronic record)).
4 {8} We will charge you $ (amount) for the explanation if we sent you
5 another written explanation of the amount you owe us within the last six months.
6 {9} If you need more information about the sale (call us at (telephone
7 number)) (or) (write us at (secured party's address)) (or contact us by (description of
8 electronic communication method)).
9 {10} We are sending this notice to the following other people who have an
10 interest in (describe collateral) or who owe money under your agreement:
11 (Names of all other debtors and obligors, if any)
12 [End of Form]
13 (b) Instructions for form of notification. The following instructions apply
14 to the form of notification in Subsection (a)(3) of this Section:
15 (1) The instructions in this Subsection refer to the numbers in braces before
16 items in the form of notification in Subsection (a)(3) of this Section. Do not include
17 the numbers or braces in the notification. The numbers and braces are used only for
18 the purpose of these instructions.
19 (2) Include and complete either item {1}, if the notification relates to a
20 public disposition of the collateral, or item {2}, if the notification relates to a private
21 disposition of the collateral.
22 (3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
23 (4) In item {5}, include and complete any one of the three alternative
24 methods for the explanation-writing, writing or electronic record, or electronic
25 record.
26 (5) In item {6}, include the telephone number. In addition, the sender may
27 include and complete either or both of the two additional alternative methods of
28 communication-writing or electronic communication-for the recipient of the
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1 notification to communicate with the sender. Neither of the two additional methods
2 of communication is required to be included.
3 (6) In item {7}, include and complete the method or methods for the
4 explanation-writing, writing or electronic record, or electronic record-included in
5 item {5}.
6 (7) Include and complete item {8} only if a written explanation is included
7 in item {5} as a method for communicating the explanation and the sender will
8 charge the recipient for another written explanation.
9 (8) In item {9}, include either the telephone number or the address or both
10 the telephone number and the address. In addition, the sender may include and
11 complete the additional method of communication-electronic communication-for the
12 recipient of the notification to communicate with the sender. The additional method
13 of electronic communication is not required to be included.
14 (9) If item {10} does not apply, insert "None" after "agreement:".
15 (4) (10) A notification in the form of Paragraph (a)(3) of this Section is
16 sufficient, even if additional information appears at the end of the form.
17 (5) (11) A notification in the form of Paragraph (a)(3) of this Section, is
18 sufficient, even if it includes errors in information not required by Paragraph (a)(1)
19 of this Section, unless the error is misleading with respect to rights arising under this
20 Chapter.
21 (6) (12) If a notification under this Section is not in the form of Paragraph
22 (a)(3), law other than this Chapter determines the effect of including information not
23 required by Paragraph (a)(1) of this Section.
24 §9-615. Application of proceeds of disposition; liability for deficiency and right to
25 surplus
26 (a) Application of proceeds. A secured party shall apply or pay over for
27 application the cash proceeds of disposition under R.S. 10:9-610 in the following
28 order to:
29 * * *
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1 (3) the satisfaction of obligations secured by any subordinate security
2 interest in or subordinate lien on the collateral if:
3 (A) the secured party receives from the holder of the subordinate security
4 interest or lien an authenticated a signed demand for proceeds before distribution of
5 the proceeds is completed; and
6 * * *
7 (4) a secured party that is a consignor of the collateral if the secured party
8 receives from the consignor an authenticated a signed demand for proceeds before
9 distribution of the proceeds is completed.
10 * * *
11 §9-616. Explanation of calculation of surplus or deficiency
12 (a) Definitions. In this Section:
13 (1) "Explanation" means a writing record that:
14 * * *
15 (B) provides an explanation in accordance with Subsection (c) of this Section
16 of how the secured party calculated the surplus or deficiency;
17 * * *
18 (2) "Request" means a record:
19 (A) authenticated signed by a debtor or consumer obligor;
20 * * *
21 (b) Explanation of calculation. In a consumer-goods transaction in which
22 the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency
23 under R.S. 10:9-615, the secured party shall:
24 (1) send an explanation to the debtor or consumer obligor, as applicable after
25 the disposition and:
26 (A) before or when the secured party accounts to the debtor and pays any
27 surplus or first makes written demand in a record on the consumer obligor after the
28 disposition for payment of the deficiency; and
29 * * *
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1 (c) Required information. To comply with Subsection (a)(1)(B) of this
2 Section, a writing an explanation must provide the following information in the
3 following order:
4 * * *
5 §9-619. Transfer of record or legal title
6 (a) "Transfer statement." In this Section, "transfer statement" means a record
7 authenticated signbed by a secured party stating:
8 * * *
9 §9-620. Acceptance of collateral in full or partial satisfaction of obligation;
10 compulsory disposition of collateral
11 (a) Conditions to acceptance in satisfaction. A secured party may accept
12 collateral in full or partial satisfaction of the obligation it secures only if:
13 * * *
14 (2) the secured party does not receive, within the time set forth in Subsection
15 (d) of this Section, a notification of objection to the proposal authenticated signed
16 by:
17 * * *
18 (b) Purported acceptance ineffective. A purported or apparent acceptance
19 of collateral under this Section is ineffective unless:
20 (1) the secured party consents to the acceptance in an authenticated a signed
21 record or sends a proposal to the debtor; and
22 * * *
23 (c) Debtor's consent. For purposes of this Section:
24 (1) a debtor consents to an acceptance of collateral in partial satisfaction of
25 the obligation it secures only if the debtor agrees to the terms of the acceptance in
26 a record authenticated signed after default; and
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1 (2) a debtor consents to an acceptance of collateral in full satisfaction of the
2 obligation it secures only if the debtor agrees to the terms of the acceptance in a
3 record authenticated signed after default or the secured party:
4 * * *
5 (C) does not receive a notification of objection authenticated signed by the
6 debtor within twenty days after the proposal is sent.
7 * * *
8 (f) Compliance with mandatory disposition requirement. To comply with
9 Subsection (e) of this Section, the secured party shall dispose of the collateral or
10 alternatively institute judicial proceedings to execute upon the security interest:
11 * * *
12 (2) within any longer period to which the debtor and all secondary obligors
13 have agreed in an agreement to that effect entered into and authenticated signed after
14 default.
15 * * *
16 §9-621. Notification of proposal to accept collateral
17 (a) Persons to which proposal to be sent. A secured party that desires to
18 accept collateral in full or partial satisfaction of the obligation it secures shall send
19 its proposal to:
20 (1) any person from which the secured party has received, before the debtor
21 consented to the acceptance, an authenticated a signed notification of a claim of an
22 interest in the collateral;
23 * * *
24 §9-624. Waiver
25 (a) Waiver of disposition notification. A debtor or secondary obligor may
26 waive the right to notification of disposition of collateral under R.S. 10:9-611 only
27 by an agreement to that effect entered into and authenticated signed after default.
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1 (b) Waiver of mandatory disposition. A debtor may waive the right to
2 require disposition of collateral under R.S. 10:9-620(e) only by an agreement to that
3 effect entered into and authenticated signed after default.
4 (c) Waiver of redemption right. Except in a consumer-goods transaction, a
5 debtor or secondary obligor may waive the right to redeem collateral under R.S.
6 10:9-623 only by an agreement to that effect entered into and authenticated signed
7 after default.
8 * * *
9 §9-628. Nonliability and limitation on liability of secured party; liability of
10 secondary obligor
11 (a) Limitation of liability of secured party for noncompliance with Chapter.
12 Unless Subject to Subsection (f) of this Section, unless a secured party knows that
13 a person is a debtor or obligor, knows the identity of the person, and knows how to
14 communicate with the person:
15 * * *
16 (b) Limitation of liability based on status as secured party. A Subject to
17 Subsection (f) of this Section, a secured party is not liable because of its status as
18 secured party:
19 * * *
20 (f) Exception: Limitation of liability under Subsections (a) and (b) does not
21 apply. Subsections (a) and (b) of this Section do not apply to limit the liability of a
22 secured party to a person if, at the time the secured party obtains control of collateral
23 that is a controllable account, controllable electronic record, or controllable payment
24 intangible or at the time the security interest attaches to the collateral, whichever is
25 later:
26 (1) the person is a debtor or obligor; and
27 (2) the secured party knows that the information in Subsection (b)(1)(A),
28 (B), or (C) of this Section relating to the person is not provided by the collateral, a
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1 record attached to or logically associated with the collateral, or the system in which
2 the collateral is recorded.
3 §9-629. Judicial proceedings; authentic evidence
4 (a) Foreclosure. For purposes of executory or ordinary process seeking
5 enforcement of a security interest and the obligation it secures:
6 (1) An authenticated A signed record that contains a confession of judgment
7 shall be deemed to be authentic for purposes of executory process.
8 (2) The negotiation, assignment, pledge, or other transfer in whole or in part
9 of an obligation or of any right therein or thereto secured by a security interest may
10 be proven by any record authenticated signed by the secured party or any person
11 entitled to effect such a transfer, and such record shall be deemed authentic for
12 purposes of executory process.
13 * * *
14 CHAPTER 12. CONTROLLABLE ELECTRONIC RECORDS
15 §12-101. Title
16 This Chapter may be cited as Uniform Commercial Code-Controllable
17 Electronic Records.
18 §12-102. Definitions
19 (a) Chapter 12 definitions. In this Chapter:
20 (1) "Controllable electronic record" means a record stored in an electronic
21 medium that can be subjected to control under R.S. 10:12-105. The term does not
22 include a controllable account, a controllable payment intangible, a deposit account,
23 an electronic copy of a record evidencing chattel paper, an electronic document of
24 title, electronic money, investment property, or a transferable record.
25 (2) "Qualifying purchaser" means a purchaser of a controllable electronic
26 record or an interest in a controllable electronic record that obtains control of the
27 controllable electronic record for value, in good faith, and without notice of a claim
28 of a property right in the controllable electronic record.
29 (3) "Transferable record" has the meaning provided for that term in:
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1 (A) Section 201(a)(1) of the Electronic Signatures in Global and National
2 Commerce Act, 15 U.S.C. Section 7021(a)(1), as amended; or
3 (B) R.S. 9:2616(A).
4 (4) "Value" has the meaning provided in R.S. 10:3-303(a), as if references
5 in that Subsection to an "instrument" were references to a controllable account,
6 controllable electronic record, or controllable payment intangible.
7 (b) Definitions in Chapter 9. The definitions in Chapter 9 of "account
8 debtor", "controllable account", "controllable payment intangible", "chattel paper",
9 "deposit account", "electronic money", and "investment property" apply to this
10 Chapter.
11 (c) Chapter 1 definitions and principles. Chapter 1 contains general
12 definitions and principles of construction and interpretation applicable throughout
13 this Chapter.
14 §12-103. Relation to Chapter 9 and consumer laws
15 (a) Chapter 9 governs in case of conflict. If there is conflict between this
16 Chapter and Chapter 9, Chapter 9 governs.
17 (b) Applicable consumer law and other laws. A transaction subject to this
18 Chapter is subject to any applicable statute or regulation that establishes a different
19 rule for consumers and any other statute or regulation that regulates the rates,
20 charges, agreements, and practices for loans or other extensions of credit.
21 Louisiana Official Revision Comments - 2023
22 (a) Subsection (b) varies from revised national U.C.C. Article 12 by
23 replacing the phrase "rule of law" as used in U.C.C. Article 12 with the term "statute
24 or regulation." The phrase "rule of law" is of common law origin and carries
25 connotations not applicable in Louisiana. The sources of law in Louisiana are
26 legislation and custom. Civil Code Article 1. To the extent the phrase "rule of law"
27 includes jurisprudential precedent as opposed to legislation, it is rejected. See Doerr
28 v. Mobil Oil Corp., 774 So. 2d 119 (La. 2000) (Louisiana civilian tradition does not
29 recognize the doctrine of stare decisis; judicial decisions are not intended to be an
30 authoritative source of law in Louisiana).
31 (b) Subsection (b) does not list specific consumer, usury, loan, and credit
32 laws, as suggested by national U.C.C. Article 12. Instead, subsection (b) makes a
33 general reference to avoid missing any particular law and to allow for later
34 legislation. Subsection (b) is copied from existing R.S. 10:9-201(b), which is the
35 source provision for this section, just as uniform subsection 9-201(b) is copied as the
36 source for this subsection in national U.C.C. Article 12.
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1 §12-104. Rights in controllable account, controllable electronic record, and
2 controllable payment intangible
3 (a) Applicability of Section to controllable account and controllable payment
4 intangible. This Section applies to the acquisition and purchase of rights in a
5 controllable account or controllable payment intangible, including the rights and
6 benefits under Subsections (c), (d), (e), (g), and (h) of this Section of a purchaser and
7 qualifying purchaser, in the same manner this Section applies to a controllable
8 electronic record.
9 (b) Control of controllable account and controllable payment intangible. To
10 determine whether a purchaser of a controllable account or a controllable payment
11 intangible is a qualifying purchaser, the purchaser obtains control of the account or
12 payment intangible if it obtains control of the controllable electronic record that
13 evidences the account or payment intangible.
14 (c) Applicability of other law to acquisition of rights. Except as provided in
15 this Section, law other than this Chapter determines whether a person acquires a right
16 in a controllable electronic record and the right the person acquires.
17 (d) Shelter principle and purchase of limited interest. A purchaser of a
18 controllable electronic record acquires all rights in the controllable electronic record
19 that the transferor had or had power to transfer, except that a purchaser of a limited
20 interest in a controllable electronic record acquires rights only to the extent of the
21 interest purchased.
22 (e) Rights of qualifying purchaser. A qualifying purchaser acquires its rights
23 in the controllable electronic record free of a claim of a property right in the
24 controllable electronic record.
25 (f) Limitation of rights of qualifying purchaser in other property. Except as
26 provided in Subsections (a) and (e) of this Section for a controllable account and a
27 controllable payment intangible or law other than this Chapter, a qualifying
28 purchaser takes a right to payment, right to performance, or other interest in property
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1 evidenced by the controllable electronic record subject to a claim of a property right
2 in the right to payment, right to performance, or other interest in property.
3 (g) No-action protection for qualifying purchaser. An action may not be
4 asserted against a qualifying purchaser based on both a purchase by the qualifying
5 purchaser of a controllable electronic record and a claim of a property right in
6 another controllable electronic record, whether the action is framed in conversion,
7 replevin, constructive trust, equitable lien, or other theory.
8 (h) Filing not notice. Filing of a financing statement under Chapter 9 is not
9 notice of a claim of a property right in a controllable electronic record.
10 §12-105. Control of controllable electronic record
11 (a) General rule: control of controllable electronic record. A person has
12 control of a controllable electronic record if the electronic record, a record attached
13 to or logically associated with the electronic record, or a system in which the
14 electronic record is recorded:
15 (1) gives the person:
16 (A) power to avail itself of substantially all the benefit from the electronic
17 record; and
18 (B) exclusive power, subject to Subsection (b) of this Section, to:
19 (i) prevent others from availing themselves of substantially all the benefit
20 from the electronic record; and
21 (ii) transfer control of the electronic record to another person or cause
22 another person to obtain control of another controllable electronic record as a result
23 of the transfer of the electronic record; and
24 (2) enables the person readily to identify itself in any way, including by
25 name, identifying number, cryptographic key, office, or account number, as having
26 the powers specified in Paragraph (1) of this Subsection.
27 (b) Meaning of exclusive. Subject to Subsection (c) of this Section, a power
28 is exclusive under Subsection (a)(1)(B)(i) and (ii) of this Section even if:
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1 (1) the controllable electronic record, a record attached to or logically
2 associated with the electronic record, or a system in which the electronic record is
3 recorded limits the use of the electronic record or has a protocol programmed to
4 cause a change, including a transfer or loss of control or a modification of benefits
5 afforded by the electronic record; or
6 (2) the power is shared with another person.
7 (c) When power not shared with another person. A power of a person is not
8 shared with another person under Subsection (b)(2) of this Section and the person's
9 power is not exclusive if:
10 (1) the person can exercise the power only if the power also is exercised by
11 the other person; and
12 (2) the other person:
13 (A) can exercise the power without exercise of the power by the person; or
14 (B) is the transferor to the person of an interest in the controllable electronic
15 record or a controllable account or controllable payment intangible evidenced by the
16 controllable electronic record.
17 (d) Presumption of exclusivity of certain powers. If a person has the powers
18 specified in Subsection (a)(1)(B)(i) and (ii) of this Section, the powers are presumed
19 to be exclusive.
20 (e) Control through another person. A person has control of a controllable
21 electronic record if another person, other than the transferor to the person of an
22 interest in the controllable electronic record or a controllable account or controllable
23 payment intangible evidenced by the controllable electronic record:
24 (1) has control of the electronic record and acknowledges that it has control
25 on behalf of the person; or
26 (2) obtains control of the electronic record after having acknowledged that
27 it will obtain control of the electronic record on behalf of the person.
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1 (f) No requirement to acknowledge. A person that has control under this
2 Section is not required to acknowledge that it has control on behalf of another
3 person.
4 (g) No duties or confirmation. If a person acknowledges that it has or will
5 obtain control on behalf of another person, unless the person otherwise agrees or law
6 other than this Chapter or Chapter 9 otherwise provides, the person does not owe any
7 duty to the other person and is not required to confirm the acknowledgment to any
8 other person.
9 §12-106. Discharge of account debtor on controllable account or controllable
10 payment intangible
11 (a) Discharge of account debtor. An account debtor on a controllable
12 account or controllable payment intangible may discharge its obligation by paying:
13 (1) the person having control of the controllable electronic record that
14 evidences the controllable account or controllable payment intangible; or
15 (2) except as provided in Subsection (b) of this Section, a person that
16 formerly had control of the controllable electronic record.
17 (b) Content and effect of notification. Subject to Subsection (d) of this
18 Section, the account debtor may not discharge its obligation by paying a person that
19 formerly had control of the controllable electronic record if the account debtor
20 receives a notification that:
21 (1) is signed by a person that formerly had control or the person to which
22 control was transferred;
23 (2) reasonably identifies the controllable account or controllable payment
24 intangible;
25 (3) notifies the account debtor that control of the controllable electronic
26 record that evidences the controllable account or controllable payment intangible was
27 transferred;
28 (4) identifies the transferee, in any reasonable way, including by name,
29 identifying number, cryptographic key, office, or account number; and
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1 (5) provides a commercially reasonable method by which the account debtor
2 is to pay the transferee.
3 (c) Discharge following effective notification. After receipt of a notification
4 that complies with Subsection (b) of this Section, the account debtor may discharge
5 its obligation by paying in accordance with the notification and may not discharge
6 the obligation by paying a person that formerly had control.
7 (d) When notification ineffective. Subject to Subsection (h) of this Section,
8 notification is ineffective under Subsection (b) of this Section:
9 (1) unless, before the notification is sent, the account debtor and the person
10 that, at that time, had control of the controllable electronic record that evidences the
11 controllable account or controllable payment intangible agree in a signed record to
12 a commercially reasonable method by which a person may furnish reasonable proof
13 that control has been transferred;
14 (2) to the extent an agreement between the account debtor and seller of a
15 payment intangible limits the account debtor's duty to pay a person other than the
16 seller and the limitation is effective under law other than this Chapter; or
17 (3) at the option of the account debtor, if the notification notifies the account
18 debtor to:
19 (A) divide a payment;
20 (B) make less than the full amount of an installment or other periodic
21 payment; or
22 (C) pay any part of a payment by more than one method or to more than one
23 person.
24 (e) Proof of transfer of control. Subject to Subsection (h) of this Section, if
25 requested by the account debtor, the person giving the notification under Subsection
26 (b) of this Section seasonably shall furnish reasonable proof, using the method in the
27 agreement referred to in Subsection (d)(1) of this Section, that control of the
28 controllable electronic record has been transferred. Unless the person complies with
29 the request, the account debtor may discharge its obligation by paying a person that
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1 formerly had control, even if the account debtor has received a notification under
2 Subsection (b) of this Section.
3 (f) What constitutes reasonable proof. A person furnishes reasonable proof
4 under Subsection (e) of this Section that control has been transferred if the person
5 demonstrates, using the method in the agreement referred to in Subsection (d)(1) of
6 this Section, that the transferee has the power to:
7 (1) avail itself of substantially all the benefit from the controllable electronic
8 record;
9 (2) prevent others from availing themselves of substantially all the benefit
10 from the controllable electronic record; and
11 (3) transfer the powers specified in Paragraphs (1) and (2) of this Subsection
12 to another person.
13 (g) Rights not waivable. Subject to Subsection (h) of this Section, an
14 account debtor may not waive or vary its rights under Subsections (d)(1) and (e) of
15 this Section or its option under Subsection (d)(3) of this Section.
16 (h) Rule for individual under other law. This Section is subject to law other
17 than this Chapter which establishes a different rule for an account debtor who is an
18 individual and who incurred the obligation primarily for personal, family, or
19 household purposes.
20 §12-107. Governing law
21 (a) Governing law: general rule. Except as provided in Subsection (b) of
22 this Section, the local law of a controllable electronic record's jurisdiction governs
23 a matter covered by this Chapter.
24 (b) Governing law: R.S. 10:12-106. For a controllable electronic record that
25 evidences a controllable account or controllable payment intangible, the local law
26 of the controllable electronic record's jurisdiction governs a matter covered by R.S.
27 10:12-106 unless an effective agreement determines that the local law of another
28 jurisdiction governs.
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1 (c) Controllable electronic record's jurisdiction. The following rules
2 determine a controllable electronic record's jurisdiction under this Section:
3 (1) If the controllable electronic record, or a record attached to or logically
4 associated with the controllable electronic record and readily available for review,
5 expressly provides that a particular jurisdiction is the controllable electronic record's
6 jurisdiction for purposes of this Chapter or this Title, that jurisdiction is the
7 controllable electronic record's jurisdiction.
8 (2) If Paragraph (1) of this Subsection does not apply and the rules of the
9 system in which the controllable electronic record is recorded are readily available
10 for review and expressly provide that a particular jurisdiction is the controllable
11 electronic record's jurisdiction for purposes of this Chapter or this Title, that
12 jurisdiction is the controllable electronic record's jurisdiction.
13 (3) If Paragraphs (1) and (2) of this Subsection do not apply and the
14 controllable electronic record, or a record attached to or logically associated with the
15 controllable electronic record and readily available for review, expressly provides
16 that the controllable electronic record is governed by the law of a particular
17 jurisdiction, that jurisdiction is the controllable electronic record's jurisdiction.
18 (4) If Paragraphs (1), (2), and (3) of this Subsection do not apply and the
19 rules of the system in which the controllable electronic record is recorded are readily
20 available for review and expressly provide that the controllable electronic record or
21 the system is governed by the law of a particular jurisdiction, that jurisdiction is the
22 controllable electronic record's jurisdiction.
23 (5) If Paragraphs (1) through (4) of this Subsection do not apply, the
24 controllable electronic record's jurisdiction is the District of Columbia.
25 (d) Applicability of Article 12. If Subsection (c)(5) of this Section applies
26 and Article 12 is not in effect in the District of Columbia without material
27 modification, the governing law for a matter covered by this Chapter is the law of the
28 District of Columbia as though Article 12 were in effect in the District of Columbia
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1 without material modification. In this Subsection, "Article 12" means Article 12 of
2 Uniform Commercial Code Amendments (2022).
3 (e) Relation of matter or transaction to controllable electronic record's
4 jurisdiction not necessary. To the extent Subsections (a) and (b) of this Section
5 provide that the local law of the controllable electronic record's jurisdiction governs
6 a matter covered by this Chapter, that law governs even if the matter or a transaction
7 to which the matter relates does not bear any relation to the controllable electronic
8 record's jurisdiction.
9 (f) Rights of purchasers determined at time of purchase. The rights acquired
10 under R.S. 10:12-104 by a purchaser or qualifying purchaser are governed by the law
11 applicable under this Section at the time of purchase.
12 CHAPTER 13. TRANSITIONAL PROVISIONS FOR
13 UNIFORM COMMERCIAL CODE AMENDMENTS (2022)
14 PART 1. GENERAL PROVISIONS AND DEFINITIONS
15 §13-101. Title
16 This Chapter may be cited as Transitional Provisions for Uniform
17 Commercial Code Amendments (2022).
18 §13-102. Definitions
19 (a) Chapter 13 Definitions. In this Chapter:
20 (1) "Adjustment date" means July 1, 2025.
21 (2) "Chapter 12" means Chapter 12 of this Title.
22 (3) "Chapter 12 property" means a controllable account, controllable
23 electronic record, or controllable payment intangible.
24 (b) Definitions in other Chapters. The following definitions in other
25 Chapters of this Title apply to this Chapter.
26 "Controllable account" R.S. 10:9-102.
27 "Controllable electronic record" R.S. 10:12-102.
28 "Controllable payment intangible" R.S. 10:9-102.
29 "Electronic money" R.S. 10:9-102.
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1 "Financing statement" R.S. 10:9-102.
2 (c) Chapter 1 definitions and principles. Chapter 1 contains general
3 definitions and principles of construction and interpretation applicable throughout
4 this Chapter.
5 (d) Definition of "Act". As used in this Chapter, "Act" means the Act that
6 originated as House Bill No.__ of the 2023 Regular Session of the Legislature that
7 enacted Chapters 12 and 13 of this Title and amended other provisions of law in
8 other Chapters of this Title.
9 PART 2. GENERAL TRANSITIONAL PROVISION
10 §13-201. Saving clause
11 Except as provided in Part 3, a transaction validly entered into before the
12 effective date of this Act and the rights, duties, and interests flowing from the
13 transaction remain valid thereafter and may be terminated, completed, consummated,
14 or enforced as required or permitted by law other than this Title or, if applicable, this
15 Title, as though this Act had not taken effect.
16 PART 3. TRANSITIONAL PROVISIONS FOR CHAPTERS 9 AND 12
17 §13-301. Saving clause
18 (a) Pre-effective-date transaction, lien, or interest. Except as provided in this
19 Part, Chapter 9 as amended by this Act and Chapter 12 apply to a transaction, lien,
20 or other interest in property, even if the transaction, lien, or interest was entered into,
21 created, or acquired before the effective date of this Act.
22 (b) Continuing validity. Except as provided in Subsection (c) of this Section
23 and R.S. 10:13-302 through 13-306:
24 (1) a transaction, lien, or interest in property that was validly entered into,
25 created, or transferred before the effective date of this Act and was not governed by
26 this Title, but would be subject to Chapter 9 as amended by this Act or Chapter 12
27 if it had been entered into, created, or transferred on or after the effective date of this
28 Act, including the rights, duties, and interests flowing from the transaction, lien, or
29 interest, remains valid on and after the effective date of this Act; and
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1 (2) the transaction, lien, or interest may be terminated, completed,
2 consummated, and enforced as required or permitted by this Act or by the law that
3 would apply if this Act had not taken effect.
4 (c) Pre-effective-date proceeding. This Act does not affect an action, case,
5 or proceeding commenced before the effective date of this Act.
6 §13-302. Security interest perfected before effective date
7 (a) Continuing perfection: perfection requirements satisfied. A security
8 interest that is enforceable and perfected immediately before the effective date of this
9 Act is a perfected security interest under this Act if, on the effective date of this Act,
10 the requirements for enforceability and perfection under this Act are satisfied without
11 further action.
12 (b) Continuing perfection: enforceability or perfection requirements not
13 satisfied. If a security interest is enforceable and perfected immediately before the
14 effective date of this Act, but the requirements for enforceability or perfection under
15 this Act are not satisfied on the effective date of this Act, the security interest:
16 (1) is a perfected security interest until the earlier of the time perfection
17 would have ceased under the law in effect immediately before the effective date of
18 this Act or the adjustment date;
19 (2) remains enforceable thereafter only if the security interest satisfies the
20 requirements for enforceability under R.S. 10:9-203, as amended by this Act, before
21 the adjustment date; and
22 (3) remains perfected thereafter only if the requirements for perfection under
23 this Act are satisfied before the time specified in Paragraph (1) of this Subsection.
24 §13-303. Security interest unperfected before effective date
25 A security interest that is enforceable immediately before the effective date
26 of this Act but is unperfected at that time:
27 (1) remains an enforceable security interest until the adjustment date;
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1 (2) remains enforceable thereafter if the security interest becomes
2 enforceable under R.S. 10:9-203, as amended by this Act, on the effective date of
3 this Act or before the adjustment date; and
4 (3) becomes perfected:
5 (A) without further action, on the effective date of this Act if the
6 requirements for perfection under this Act are satisfied before or at that time; or
7 (B) when the requirements for perfection are satisfied if the requirements are
8 satisfied after that time.
9 §13-304. Effectiveness of actions taken before effective date
10 (a) Pre-effective-date action; attachment and perfection before adjustment
11 date. If action, other than the filing of a financing statement, is taken before the
12 effective date of this Act and the action would have resulted in perfection of the
13 security interest had the security interest become enforceable before the effective
14 date of this Act, the action is effective to perfect a security interest that attaches
15 under this Act before the adjustment date. An attached security interest becomes
16 unperfected on the adjustment date unless the security interest becomes a perfected
17 security interest under this Act before the adjustment date.
18 (b) Pre-effective-date filing. The filing of a financing statement before the
19 effective date of this Act is effective to perfect a security interest on the effective
20 date of this Act to the extent the filing would satisfy the requirements for perfection
21 under this Act.
22 (c) Pre-effective-date enforceability action. The taking of an action before
23 the effective date of this Act is sufficient for the enforceability of a security interest
24 on the effective date of this Act if the action would satisfy the requirements for
25 enforceability under this Act.
26 §13-305. Priority
27 (a) Determination of priority. Subject to Subsections (b) and (c) of this
28 Section, this Act determines the priority of conflicting claims to collateral.
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1 (b) Established priorities. Subject to Subsection (c) of this Section, if the
2 priorities of claims to collateral were established before the effective date of this Act,
3 Chapter 9 as in effect before the effective date of this Act determines priority.
4 (c) Determination of certain priorities on adjustment date. On the adjustment
5 date, to the extent the priorities determined by Chapter 9 as amended by this Act
6 modify the priorities established before the effective date of this Act, the priorities
7 of claims to Chapter 12 property and electronic money established before the
8 effective date of this Act cease to apply.
9 §13-306. Priority of claims when priority rules of Chapter 9 do not apply
10 (a) Determination of priority. Subject to Subsections (b) and (c) of this
11 Section, Chapter 12 determines the priority of conflicting claims to Chapter 12
12 property when the priority rules of Chapter 9 as amended by this Act do not apply.
13 (b) Established priorities. Subject to Subsection (c) of this Section, when the
14 priority rules of Chapter 9 as amended by this Act do not apply and the priorities of
15 claims to Chapter 12 property were established before the effective date of this Act,
16 law other than Chapter 12 determines priority.
17 (c) Determination of certain priorities on adjustment date. When the priority
18 rules of Chapter 9 as amended by this Act do not apply, to the extent the priorities
19 determined by this Act modify the priorities established before the effective date of
20 this Act, the priorities of claims to Chapter 12 property established before the
21 effective date of this Act cease to apply on the adjustment date.
22 Section 2. The Louisiana State Law Institute is hereby directed to update or print the
23Official Comments to the national Uniform Commercial Code as set forth in the Uniform
24Commercial Code Amendments (2022) drafted by the Uniform Law Commission and the
25American Law Institute.
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 239 Original 2023 Regular Session Brown
Abstract: Provides relative to certain assets and technologies that are subject to the
Uniform Commercial Code.
Present law (R.S. 10:1-201(b)(10)) defines the term "conspicuous".
Proposed law retains present law and clarifies that whether a term is conspicuous is
determined by reference to the totality of the circumstances in a given case.
Present law (R.S. 10:1-201(b)(15)) defines the term "delivery".
Proposed law retains present law and conforms the reference to chattel paper to the
definition of the term provided in R.S. 10:9-102(a)(11).
Proposed law (R.S. 10:1-201(b)(16.1)) provides a definition for the term "electronic".
Present law (R.S. 10:1-201(b)(21)(C)) defines the term "holder".
Proposed law excludes from the definition of the term "holder" someone who has control of
an electronic document of title by acknowledgment pursuant to R.S. 10:7-106(g).
Present law (R.S. 10:1-201(b)(24)) defines the term "money".
Proposed law excludes from the definition of "money" an electronic record recorded and
transferrable in a system that existed prior to adoption by the government as a monetary unit
of account.
Present law (R.S. 10:1-201(b)(27)) defines the term "person".
Proposed law retains present law and clarifies that the definition of "person" includes a
protected series.
Present law (R.S. 10:1-201(b)(36)(A)) provides a definition of the term "send", limiting the
appropriateness of sending the communication to "any address reasonable under the
circumstances" to the case of an instrument.
Proposed law retains present law but eliminates the limitation.
Present law (R.S. 10:1-201(b)(36)(B)) provides a definition of "send".
Proposed law retains present law and makes minor changes for grammatical uniformity.
Present law (R.S. 10:1-201(b)(37)) defines the term "signed".
Proposed law defines the term "sign" and expands the applicability of present law to the
adoption of all records, not merely writings, and expands the manner in which a record can
be "signed" to include the attachment of an electronic symbol, sound, or process. Proposed
law also clarifies that this definition applies to alternate forms of the term "sign".
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Present law (R.S. 10:1-204(intro. para.)) specifies the portions of Title 10 to which the
description of giving for "value" is inapplicable.
Proposed law adds new Chapter 12 of Title 10 to the list provided in present law.
Present law (R.S. 10:1-301(g)) sets out a list of exceptions to the general rule for territorial
applicability and parties' power to choose applicable law.
Proposed law adds R.S. 10:12-107 to this list of exceptions.
Present law (R.S. 10:3-104(a)) provides the criteria necessary for an unconditional promise
or order to pay a fixed amount of money to constitute a "negotiable instrument", including
that the promise or order to pay does not include any other undertaking or instruction beyond
the payment of money.
Proposed law retains present law and clarifies that the inclusion of a choice-of-law or
forum-selection clause does not negate the negotiability of an instrument. Proposed law also
makes technical corrections.
Present law (R.S. 10:3-105(a)) defines the term "issue".
Proposed law expands present law to include the electronic transmission of an image of and
information derived from the instrument if agreed by the payee.
Present law (R.S. 10:3-401) provides that a signature is necessary for liability on an
instrument and specifies how a signature may be made.
Proposed law retains present law and deletes the description of how a signature may be made
as redundant.
Present law (R.S. 10:3-604(a)) provides the manner by which a person entitled to enforce
an instrument may discharge the obligation of a party to pay the instrument.
Proposed law retains present law and clarifies that the destruction of a check in connection
with a process by which information is extracted from the check and an image is made and
transmitted for payment does not, of itself, discharge the obligation of a party to pay the
check.
Present law (R.S. 10:4A-103(a)(1)) defines the term "payment order".
Proposed law retains present law and replaces reference to transmission electronically or in
a writing with reference to transmission in a record.
Present law (R.S. 10:4A-201) provides relative to a "security procedure".
Proposed law retains and clarifies present law while expanding the list of examples of a
"security procedure" and specifying that the requirement that a payment order be sent from
a known source does not by itself suffice as a "security procedure".
Present law (R.S. 10:4A-202(b) and (c)) provides relative to authorized and verified payment
orders.
Proposed law retains and clarifies present law while making grammatical corrections and
replacing reference to writings with reference to records.
Present law (R.S. 10:4A-203(a)(1)) provides a rule applicable if an accepted payment order
is not an authorized order but is nevertheless effective as an order of the customer under R.S.
10:4A-202(b).
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Proposed law retains present law and replaces reference to a writing with reference to a
record.
Present law (R.S. 10:4A-207) provides relative to the misdescription of a beneficiary.
Proposed law retains present law while making technical and grammatical corrections and
replacing reference to a writing with reference to a record.
Present law (R.S. 10:4A-208(b)(2)) provides relative to the misdescription of an
intermediary bank or a beneficiary's bank.
Proposed law retains present law, replaces reference to a writing with reference to a record,
and makes technical corrections.
Present law (R.S. 10:4A-210(a)) provides relative to the rejection of a payment order.
Proposed law retains present law, replaces reference to electronic transmission or
transmission in a writing with reference to transmission in a record, and makes grammatical
corrections.
Present law (R.S. 10:4A-211(a) and (d)) provides relative to the cancellation and amendment
of payment orders.
Proposed law (R.S. 10:4A-211(a)) retains present law and replaces reference to electronic
transmission or transmission in a writing with reference to transmission in a record.
Proposed law (R.S. 10:4A-211(d)) retains present law and makes grammatical corrections.
Present law (R.S. 10:4A-305(b) through (d)) provides relative to late or improper execution
or failure to execute payment orders.
Proposed law retains present law, replaces reference to a writing with reference to a record,
and makes technical corrections.
Present law (R.S. 10:5-104) sets out the formal requirements for a letter of credit,
confirmation, advice, transfer, amendment, or cancellation.
Proposed law retains present law but eliminates language that is now redundant as subsumed
by the expanded definition of "sign" contained in R.S. 10:1-201(b)(37).
Present law (R.S. 10:5-116) provides relative to choice of law and forum.
Proposed law (R.S. 10:5-116(a)) retains present law but eliminates language that is now
redundant as subsumed by the expanded definition of "sign" provided in R.S.
10:1-201(b)(37).
Proposed law (R.S. 10:5-116(b) and (c)) retains present law and makes technical corrections.
Proposed law (R.S. 10:5-116(d)) retains present law and adds clarification regarding the
location of a bank branch.
Proposed law (R.S. 10:5-116(e) through (g)) retains present law and makes technical
corrections.
Present law (R.S. 10:7-102(a)(11)) defines the term "sign".
Proposed law deletes present law as redundant in light of the substantially equivalent
definition of "sign" provided in R.S. 10:1-201(b)(37).
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Present law (R.S. 10:7-106) provides relative to control of an electronic document of title.
Proposed law (R.S. 10:7-106(b)) retains present law and makes nonsubstantive stylistic
revisions.
Proposed law (R.S. 10:7-106(c)) adds to present law an additional mechanism by which to
effect control of an electronic document of title.
Proposed law (R.S. 10:7-106(d) and (e)) describes when power is considered exclusive.
Proposed law (R.S. 10:7-106(f)) provides for a presumption of exclusivity of power.
Proposed law (R.S. 10:7-106(g)) provides for control through another person.
Proposed law (R.S. 10:7-106(h)) clarifies that a person with control is not required to
acknowledge that it has control on behalf of another person.
Proposed law (R.S. 10:7-106(i)) clarifies that a person who has control on behalf of another
person owes no duties to that person unless agreed otherwise.
Present law (R.S. 10:8-102(a)(6)) defines the term "communicate".
Proposed law retains present law and replaces reference to a writing with reference to a
record.
Present law (R.S. 10:8-102(b)) incorporates by reference defined terms appearing elsewhere
throughout Title 10.
Proposed law adds to this list the defined terms "controllable account", "controllable
electronic record", and "controllable payment intangible".
Proposed law (R.S. 10:8-103(h)) provides the circumstances under which a controllable
account, controllable electronic record, or controllable payment constitutes a financial asset.
Present law (R.S. 10:8-106(d)(3)) provides one means by which a purchaser can obtain
"control" of a security entitlement.
Proposed law conforms the structure of present law to corresponding provisions for control
of other types of assets while clarifying that an acknowledgment is only effective to confer
control if made by a person other than the transferor of an interest in the security entitlement.
Proposed law (R.S. 10:8-106(h)) clarifies that a person with control of a security entitlement
is not required to acknowledge that it has control on behalf of another person.
Proposed law (R.S. 10:8-106(i)) clarifies that a person who has control of a security
entitlement on behalf of another person owes no duties to that person unless agreed
otherwise.
Present law (R.S. 10:8-110(a) and (b)) provides relative to the governing law of certain
matters and transactions.
Proposed law (R.S. 10:8-110(g)) clarifies that present law applies even if the matter or
transaction at issue bears no relation to the jurisdiction identified by present law.
Present law (R.S. 10:8-303(b)) provides that a protected purchaser both acquires the rights
of a purchaser and acquires its interest in the security free of any adverse claim.
Proposed law retains present law and deletes reference to the former concept as redundant.
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Present law (R.S. 10:9-102(a)(2)) defines the term "account".
Proposed law retains present law and revises this definition to conform to the revised
definition of the term "chattel paper" as provided in R.S. 10:9-102(a)(11). Proposed law also
clarifies certain exceptions that accommodate use of the term "account" in other provisions.
Present law (R.S. 10:9-102(a)(3)) defines the term "account debtor".
Proposed law retains present law and clarifies that an obligor on a negotiable instrument is
not an account debtor.
Present law (R.S. 10:9-102(a)) defines the term "accounting".
Proposed law (R.S. 10:9-102(a)(4)(A)) retains present law and replaces the term
"authenticated" with the term "signed" to account for the replacement of the defined term
"sign" in R.S. 10:9-102(a)(7) with the substantially similar defined term "authenticate" in
R.S. 10:1-102(b)(37).
Present law (R.S. 10:9-102(a)(7)) defines the term "authenticate".
Proposed law deletes present law to account for the replacement of the defined term "sign"
in R.S. 10:9-102(a)(7) with the substantially similar defined term "authenticate" in R.S.
10:1-102(b)(37).
Proposed law (R.S. 10:9-102(a)(7.1)) adds the defined term "assignee".
Proposed law (R.S. 10:9-102(a)(7.2)) adds the defined term "assignor".
Present law (R.S. 10:9-102(a)(11)) defines the term "chattel paper".
Proposed law revises the definition of "chattel paper" for accuracy and to clarify the
distinction between the right to payment versus the record evidencing that right and
regarding the creation of chattel paper in mixed-purpose contracts. Proposed law also
eliminates the need for separate definitions of "electronic chattel paper" and "tangible chattel
paper".
Proposed law (R.S. 10:9-102(a)(27.1)) adds the defined term "controllable account".
Proposed law (R.S. 10:9-102(a)(27.2)) adds the defined term "controllable payment
intangible".
Present law (R.S. 10:9-102(a)(31)) defines the term "electronic chattel paper".
Proposed law deletes this definition as no longer necessary in light of the new definition of
"chattel paper" provided in R.S. 10:9-102(a)(11).
Proposed law (R.S. 10:9-102(a)(31.1)) adds the defined term "electronic money".
Present law (R.S. 10:9-102(a)(42)) defines the term "general intangible".
Proposed law retains present law and adds controllable electronic records to the illustrative
list of general intangibles.
Present law (R.S. 10:9-102(a)(47)) defines the term "instrument".
Proposed law excludes from this definition writings that evidence chattel paper.
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Proposed law (R.S. 10:9-102(a)(54.1)) adds a Chapter-specific definition of the term
"money" that excludes deposit accounts and money in an electronic form that cannot be
subjected to control.
Present law (R.S. 10:9-102(a)(61)) defines the term "payment intangible".
Proposed law retains present law and clarifies that the term "payment intangible" includes
a controllable payment intangible.
Present law (R.S. 10:9-102(a)(66)) defines the term "proposal".
Proposed law retains present law and replaces the term "authenticated" with "signed".
Present law (R.S. 10:9-102(a)(75)) defines the term "send".
Proposed law deletes this definition as redundant in light of the adoption in R.S.
10:1-102(36) of a substantially similar definition of the term "send".
Present law (R.S. 10:9-102(a)(79)) defines the term "tangible chattel paper".
Proposed law deletes this definition as no longer necessary in light of the new definition of
"chattel paper" provided in R.S. 10:9-102(a)(11).
Proposed law (R.S. 10:9-102(a)(79.1)) adds the defined term "tangible money".
Present law (R.S. 10:9-102(b)) incorporates by reference defined terms appearing elsewhere
throughout Title 10.
Proposed law adds to this list the defined terms "controllable electronic record", "protected
purchaser", and "qualifying purchaser".
Present law (R.S. 10:9-104(a)) provides the requirements for control of a deposit account.
Proposed law (R.S. 10:9-104(a)(2) and (3)) retains present law and replaces the term
"authenticated" with "signed".
Proposed law (R.S. 10:9-104(a)(4)) allows for a secured party to obtain control of a deposit
account by virtue of the acknowledgment by another person in control of the deposit
account.
Present law (R.S. 10:9-105) provides relative to control of electronic chattel paper.
Proposed law revises present law to conform to the new definition of the term "chattel
paper" provided in R.S. 10:9-102(a)(11) and the new concept of control.
Proposed law (R.S. 10:9-105.1) describes the manner by which to obtain control of
electronic money.
Present law (R.S. 10:9-107.1) provides relative to control over a life insurance policy.
Proposed law retains present law while adding the concept of control by acknowledgment
and replacing the term "authenticates" with "signs".
Present law (R.S. 10:9-107.2) provides relative to control conditioned on default.
Proposed law updates the list of cross-references in present law to incorporate R.S.
10:9-105.1 and 9-107.3 in the list of provisions providing rules for control over various types
of assets.
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Proposed law (R.S. 10:9-107.3) provides relative to control over a controllable electronic
record, controllable account, or controllable payment intangible.
Proposed law (R.S. 10:9-107.4(a)) provides that a person with control is not required to
acknowledge that it has control on behalf of another person.
Proposed law (R.S. 10:9-107.4(b)) provides that a person who has control on behalf of
another person owes no duties to that person unless agreed otherwise.
Present law (R.S. 10:9-203(b)(3)(A)) provides for the enforceability of a security interest if
the debtor has authenticated a security agreement providing a description of the collateral
and has satisfied other conditions.
Proposed law retains present law and replaces the term "authenticates" with the term "signs".
Present law (R.S. 10:9-203(b)(3)(C) and (D)) provides for the enforceability of a security
interest if the collateral is one of several listed types and the secured party has control over
it.
Proposed law revises the list of types of collateral that suffice to satisfy present law to
include new categories of assets and to conform to the new definition of the term "chattel
paper" provided in R.S. 10:9-102(a)(11). Proposed law also updates the list of
cross-references providing how to obtain control over such collateral.
Present law (R.S. 10:9-204(b)) sets out when an after-acquired property clause is not
effective.
Proposed law (R.S. 10:9-204(b)(introductory paragraph) and (b.1)) provide a limitation on
present law.
Present law (R.S. 10:9-207(c)) provides for the rights and duties of a secured party with
possession or control of collateral.
Proposed law updates the list of cross-references contained in present law and makes
technical corrections.
Present law (R.S. 10:9-208) provides for additional duties of a secured party with control of
collateral.
Proposed law (R.S. 10:9-208(b)(intro. para.) and (1)) retains present law and replaces the
term "authenticated" with "signed" and the term "authenticated statement" with "signed
record".
Present law (R.S. 10:9-208(b)(3)) provides the duties of a secured party with control of
electronic chattel paper.
Proposed law revises present law to conform to the new definition of the term "chattel
paper" provided in R.S. 10:9-102(a)(11).
Proposed law (R.S. 10:9-208(b)(4) and (5)) retains present law and replaces the term
"authenticated" with "signed".
Present law (R.S. 10:9-208(b)(6)) provides the duties of a secured party with control of an
electronic document.
Proposed law revises present law to conform to changes to the definition of the term "chattel
paper" provided in R.S. 10:9-102(a)(11) and the concept of control of an authoritative
electronic copy of a record evidencing chattel paper provided in R.S. 10:9-105.
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Proposed law (R.S. 10:9-208(b)(7)) provides the duties of a secured party with control of
electronic money.
Proposed law (R.S. 10:9-208(b)(8)) provides the duties of a secured party with control of a
controllable electronic record.
Present law (R.S. 10:9-208(b)(7)) provides the duties of a secured party with control in a life
insurance policy.
Proposed law (R.S. 10:9-208(b)(9)) retains and redesignates present law and replaces the
term "authenticated" with "signed".
Present law (R.S. 10:9-209(b)) provides for the duties of a secured party after receiving
demand from the debtor.
Proposed law retains present law while expanding the manner of sufficient notice to conform
to R.S. 10:12-106(b). Proposed law also replaces the term "authenticated" with "signed" and
makes nonsubstantive stylistic changes.
Present law (R.S. 10:9-210) provides relative to a request for accounting or list of collateral
or statement of account.
Proposed law retains present law, replaces the term "authenticated" with "signed", and
makes technical corrections.
Present law (R.S. 10:9-301) provides relative to the law governing perfection and priority
of security interests.
Proposed law (R.S. 10:9-301(intro. para.)) updates the list of exceptions to incorporate a
cross-reference to R.S. 10:9-306.2.
Proposed law (R.S. 10:9-301(3)(intro. para.)) updates the list of assets to conform to changes
under proposed law.
Present law (R.S. 10:9-304(a)) provides that the law that governs perfection and priority of
a security interest in a deposit account is the law of the bank's jurisdiction.
Proposed law retains present law and clarifies that this rule applies even if the transaction
at issue bears no relation to the bank's jurisdiction.
Present law (R.S. 10:9-305(a)) provides general rules regarding the law governing perfection
and priority of security interests in investment property.
Proposed law (R.S. 10:9-305(a)(intro. para.)) makes technical corrections.
Proposed law (R.S. 10:9-305(a)(5)) retains present law and clarifies that provisions of
present law apply even if the transaction at issue bears no relation to the identified
jurisdiction.
Proposed law (R.S. 10:9-306.1) provides for the law governing perfection and priority of
security interest in chattel paper.
Proposed law (R.S. 10:9-306.2) provides for the law governing perfection and priority of
security interests in controllable accounts, controllable electronic records, and controllable
payment intangibles.
Present law (R.S. 10:9-310(b)(8)) sets out when the filing of a financing statement is not
necessary to perfect a security interest.
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Proposed law (R.S. 10:9-310(b)(8) and (8.1)) reorganizes and expands the list of asset
classes in present law for which filing is not necessary to perfect a security interest to
include controllable accounts, controllable electronic records, and controllable payment
intangibles and to conform to the new definition of the term "chattel paper" provided in R.S.
10:9-102(a)(11) and the new manner of perfection of a security interest in chattel paper
provided in R.S. 10:9-314.1.
Present law (R.S. 10:9-312(a)) provides the asset classes in which a security interest may be
perfected by filing.
Proposed law expands this list to include controllable accounts, controllable electronic
records, and controllable payment intangibles.
Present law (R.S. 10:9-312(b)(3)) provides for perfection of a security interest in money.
Proposed law clarifies that present law applies only to tangible money.
Proposed law (R.S. 10:9-312(b)(4)) provides for perfection of a security interest in electronic
money.
Present law (R.S. 10:9-312(b)(4) and (5)) provide for perfection of a security interest in a
collateral mortgage note or a life insurance policy.
Proposed law (R.S. 10:9-312(b)(5) and (6)) retain and redesignate present law.
Present law (R.S. 10:9-312(e)) provides for temporary perfection of a security interest when
there is new value.
Proposed law retains present law and replaces the term "authenticated" with "signed".
Present law (R.S. 10:9-313(a)) provides for the types of collateral in which a secured party
may perfect a security interest by taking possession of the collateral.
Proposed law removes reference to "tangible chattel paper" to conform to the new definition
of the term "chattel paper" provided in R.S. 10:9-102(a)(11) and the new manner of
perfection of a security interest in chattel paper provided in R.S. 10:9-314.1.
Present law (R.S. 10:9-313(c) and (d)) provides relative to perfection of a security interest
by possession.
Proposed law replaces the terms "authenticates" and "authenticated" with "signs" and
"signed" and makes technical corrections.
Present law (R.S. 10:9-314(a) through (c)) provides for perfection of a security interest by
control.
Proposed law (R.S. 10:9-314(a) and (b)) updates lists of categories of collateral and
corresponding cross-references to add new categories of collateral and to conform to the new
definition of the term "chattel paper" provided in R.S. 10:9-102(a)(11) and the new manner
of perfection of a security interest in chattel paper provided in R.S. 10:9-314.1.
Proposed law (R.S. 10:9-314(c)) makes semantic changes.
Proposed law (R.S. 10:9-314.1) provides for perfection by possession and control of chattel
paper.
Present law (R.S. 10:9-316(a) and (f)) provides relative to continued perfection of a security
interest following a change in governing law.
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Proposed law updates lists of categories of collateral and corresponding cross-references.
Present law (R.S. 10:9-317(b) and (d)) sets out when buyers of certain categories of
collateral take free of existing security interests.
Proposed law updates lists of categories of collateral to remove reference to chattel paper
and otherwise conform to changes to asset classes.
Proposed law (R.S. 10:9-317(f)) sets out when a buyer of chattel paper takes free of a
security interest.
Proposed law (R.S. 10:9-317(g)) sets out when a buyer of electronic documents takes free
of a security interest.
Proposed law (R.S. 10:9-317(h)) sets out when a buyer of controllable electronic records
takes free of a security interest.
Proposed law (R.S. 10:9-317(i)) sets out when a buyer of controllable accounts or
controllable payment intangibles takes free of a security interest.
Present law (R.S. 10:9-323(d)) sets out when a buyer of goods takes free of a security
interest.
Proposed law expands present law to remove the exclusion of buyers in the ordinary course
of business.
Present law (R.S. 10:9-323(f)) sets out when a lessee of goods takes the leasehold interest
free of a security interest.
Proposed law expands present law to remove the exclusion of lessees in the ordinary course
of business.
Present law (R.S. 10:9-324) provides relative to the priority of purchase-money security
interests.
Proposed law replaces the term "authenticated" with the term "signed" and makes technical
corrections.
Proposed law (R.S. 10:9-326.1) provides for the priority of a security interest in a
controllable account, controllable electronic record, or controllable payment intangible.
Present law (R.S. 10:9-330) provides for the priority of purchasers of chattel paper or
instruments.
Proposed law updates present law to conform to the new definition of the term "chattel
paper" provided in R.S. 10:9-102(a)(11) and the new concept of control in chattel paper
provided in R.S. 10:9-105.
Present law (R.S. 10:9-331(a) and (b)) provides relative to the priority of rights of purchasers
of various categories of asset.
Proposed law updates the lists of assets and corresponding cross-references to conform with
changes under proposed law.
Present law (R.S. 10:9-332) sets out when a transferee of money takes free of a security
interest.
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Proposed law (R.S. 10:9-332(a)) retains and clarifies present law while updating terminology
to account for new categories of assets under R.S. 10:9-102(a)(79.1).
Present law (R.S. 10:9-332(b)) sets out when the transferee of funds from a deposit account
takes free of a security interest.
Proposed law retains and clarifies present law.
Proposed law (R.S. 10:9-332(c)) sets out when a transferee of electronic money takes free
of a security interest.
Present law (R.S. 10:9-334) provides for the priority of security interests in fixtures and
crops.
Proposed law retains present law and replaces the term "authenticated" with the term
"signed".
Present law (R.S. 10:9-341) provides for a bank's rights and duties with respect to a deposit
account.
Proposed law retains present law and replaces the term "authenticated" with the term
"signed".
Present law (R.S. 10:9-404) provides relative to the rights acquired by and claims and
defenses against an assignee.
Proposed law retains present law, replaces the term "authenticated" with the term "signed",
and makes technical corrections.
Present law (R.S. 10:9-406) provides relative to the discharge of an account debtor.
Proposed law (R.S. 10:9-406(a)) replaces the term "authenticated" with "signed".
Proposed law (R.S. 10:9-406(a) through (d)) updates the internal cross-references contained
in present law for clarification and also makes technical corrections.
Proposed law (R.S. 10:9-406(d)) retains present law by restoring the scope of the provision
to ensure that it applies to a negotiable instrument that would be a promissory note but for
changes made under R.S. 10:9-102(a)(65).
Proposed law (R.S. 10:9-406(l)) provides for the inapplicability of R.S. 10:9-404(a), (b), (c),
and (g) to controllable accounts or controllable payment intangibles in light of R.S.
10:12-106.
Present law (R.S. 10:9-408(g)) provides relative to the applicability of present law to the
assignment or transfer or creation of certain security interests.
Proposed law ensures that present law (R.S. 10:9-408) remains applicable to a negotiable
instrument that would otherwise be a promissory note but for changes under R.S.
10:9-102(a)(65).
Proposed law (R.S. 10:9-408(h)) retains and redesignates present law (R.S. 10:9-408(g)) and
makes technical corrections.
Present law (R.S. 10:9-412) provides relative to the discharge of a tortfeasor.
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Proposed law retains present law, replaces the term "authenticated" with "signed", and
makes technical corrections.
Present law (R.S. 10:9-509) provides relative to the persons entitled to file a record.
Proposed law retains present law, replaces the term "authenticated" with "signed", and
makes technical corrections.
Present law (R.S. 10:9-513) provides relative to a termination statement.
Proposed law retains present law, replaces the term "authenticated" with "signed", and
makes technical corrections.
Present law (R.S. 10:9-601(b)) provides for the rights and duties of a secured party in
possession or control.
Proposed law expands the list of cross-references contained in present law to account for
new control rules under R.S. 10:9-105.1 and 107.3.
Present law (R.S. 10:9-605) sets out circumstances in which a secured party does not owe
a duty based on its status as secured party.
Proposed law retains present law while adding reference to the exception created by R.S.
10:9-605(b).
Present law (R.S. 10:9-608) provides relative to the application of proceeds of collection or
enforcement.
Proposed law retains present law and replaces the term "authenticated" with "signed".
Present law (R.S. 10:9-611) provides rules for notification before disposition of collateral.
Proposed law retains present law, replaces the term "authenticated" with "signed", and
makes technical corrections.
Present law (R.S. 10:9-613) sets out the required content and form of the notification before
disposition of collateral in general.
Proposed law (R.S. 10:9-613(a)) retains present law, updates the applicable safe-harbor
form, and makes technical corrections.
Proposed law (R.S. 10:9-613(b)) provides further instruction and clarification regarding
present law.
Present law (R.S. 10:9-614) sets out the required content and form of the notification before
disposition of collateral for a consumer goods transaction.
Proposed law (R.S. 10:9-614(a)) retains present law and updates the applicable safe-harbor
form to achieve medium neutrality. Proposed law also makes technical corrections.
Proposed law (R.S. 10:9-614)(b)) provides further instruction and clarification regarding
present law.
Present law (R.S. 10:9-615) provides relative to the application of proceeds of disposition.
Proposed law retains present law and replaces the term "authenticated" with "signed".
Present law (R.S. 10:9-616) sets out the manner of calculation of surplus and deficiency.
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Proposed law retains present law and replaces the term "writing" with "record and the term
"authenticated" with "signed". Proposed law also makes technical corrections.
Present law (R.S. 10:9-619) provides for transfer of a record or legal title.
Proposed law retains present law, replaces the term "authenticated" with "signed", and
makes technical corrections.
Present law (R.S. 10:9-620) provides relative to acceptance of collateral in satisfaction of
an obligation.
Proposed law replaces the term "authenticated" with "signed" and makes technical
corrections.
Present law (R.S. 10:9-621(a)(1)) provides which parties must be notified of a proposal to
accept collateral.
Proposed law replaces the term "authenticated" with "signed".
Present law (R.S. 10:9-624) provides relative to waiver.
Proposed law replaces the term "authenticated" with "signed".
Present law (R.S. 10:9-628) provides for the nonliability and limitation of liability of a
secured party and the liability of a secondary obligor.
Proposed law (R.S. 10:9-628(a)(intro. para.) and (b)(intro. para.)) retains present law while
adding reference to the exception created by R.S. 10:9-628(f).
Proposed law (R.S. 10:9-628(f)) provides for circumstances in which the limitation of
liability contained in present law is inapplicable.
Present law (R.S. 10:9-629) provides relative to judicial proceedings and authentic evidence.
Proposed law retains present law and replaces the term "authenticated" with "signed".
Proposed law (Chapter 12) provides relative to a new class of digital assets to be called
controllable electronic records.
Proposed law (R.S. 10:12-101) provides a short title.
Proposed law (R.S. 10:12-102) provides for definitions.
Proposed law (R.S. 10:12-103) governs the relationship between Chapter 12 and the
Uniform Commercial Code-Secured Transactions and other consumer laws.
Proposed law (R.S. 10:12-104) provides relative to rights in a controllable accounts,
controllable electronic records, or controllable payment intangibles.
Proposed law (R.S. 10:12-105) provides relative to control of a controllable electronic
record.
Proposed law (R.S. 10:12-106) sets out how an account debtor on a controllable account or
controllable payment intangible may discharge its debt.
Proposed law (R.S. 10:12-107) sets forth the law that governs matters covered by Chapter
12.
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Proposed law (Chapter 13) provides for transition rules relative to Chapter 12.
Proposed law (R.S. 10:13-101) provides a short title.
Proposed law (R.S. 10:13-102) provides definitions.
Proposed law (R.S. 10:13-201) provides a general savings clause.
Proposed law (R.S. 10:13-301) provides a special savings clause.
Proposed law (R.S. 10:13-302) provides relative to the continuing perfection of security
interests perfected before the effective date of the Act.
Proposed law (R.S. 10:13-303) provides relative to security interests that remain unperfected
upon the effective date of the Act.
Proposed law (R.S. 10:13-304) provides for the effectiveness of certain actions taken before
the effective date of the Act.
Proposed law (R.S. 10:13-305) provides for the priority of claims to collateral established
before and after the effective date and adjustment date of the Act.
Proposed law (R.S. 10:13-306) provides relative to the priority of claims to collateral when
the priority rules of Chapter 9 do not apply.
(Amends R.S. 10:1-201(b)(10), (15), (21)(C), (24), (27), (36), and (37), 1-204(intro. para.),
1-301(g)(8), 3-104(a)(intro. para.) and (3), 3-105(a), 3-401, 3-604(a), 4A-103(a)(1)(intro.
para.), 4A-201, 4A-202(b) and (c), 4A-203(a)(1), 4A-207(b)(2) and (c)(intro. para.) and (2),
4A-208(b)(2), 4A-210(a), 4A-211(a) and (d), 4A-305(b) - (d), 5-104, 5-116, 7-102(a)(11),
7-106(b)(intro. para.) and (4), 8-102(a)(6)(i) and (b), 8-106(d)(3), 8-303(b), 9-102(a)(2), (3),
(4)(A), (7), (11), (31), (42), (47), (61), (66), (75), and (79) and (b), 9-104(a)(2) and (3),
9-105, 9-107.1, 9-107.2, 9-203(b)(3)(A), (C), and (D), 9-204(b)(intro. para.), 9-207(c)(intro.
para.), 9-208(b)(intro. para.), (1), and (3) through (7), 9-209(b), 9-210(a)(2) - (4), (b), (c),
(d)(intro. para.), and (e)(intro. para.), 9-301(intro. para.) and (3)(intro. para.), 9-304(a),
9-305(a)(intro. para.), 9-310(b)(8), 9-312(a), (b)(3) through (5), and (e), 9-313(a), (c), and
(d), 9-314(a) - (c), 9-316(a)(intro. para.) and (f)(intro. para.), 9-317(b) and (d),
9-323(d)(intro. para.) and (f)(intro. para.), 9-324(b)(intro. para.) and (2) and (d)(intro. para.)
and (2), 9-330(a), (b), and (f), 9-331(a) and (b), 9-332, 9-334(f)(1), 9-341(intro. para.),
9-404(a)(intro. para.) and (2), 9-406(a), (b)(intro. para.), (c), (d)(intro. para.), and (g),
9-408(g), 9-412(a), 9-509(a)(1) and (b)(intro. para.), 9-513(b)(intro. para.) and (2) and
(c)(intro. para.), 9-601(b), 9-605, 9-608(a)(1)(C), 9-611(a)(1), (b), (c)(intro. para.) and
(3)(A), and (e)(intro. para.) and (2)(B), 9-613, 9-614, 9-615(a)(3)(A) and (4),
9-616(a)(1)(intro. para.) and (B) and (2)(A), (b)(1)(A), and (c)(intro. para.), 9-619(a)(intro.
para.), 9-620(a)(2)(intro. para.), (b)(1), (c)(1) and (2)(intro. para.) and (C), and (f)(intro.
para.) and (2), 9-621(a)(1), 9-624, 9-628(a)(intro. para.) and (b)(intro. para.), and 9-629(a)(1)
and (2); Adds R.S. 10:1-201(b)(16.1), 1-301(g)(9), 7-106(c) - (i), 8-103(h), 8-106(h) and (i),
8-110(g), 9-102(7.1), (7.2), (27.1), (27.2), (31.1), (54.1), and (79.1), 9-104(a)(4), 9-105.1,
9-107.3, 9-107.4, 9-203(b)(3)(E), 9-204(b.1), 9-208(b)(8) and (9), 9-305(a)(5), 9-306.1,
9-306.2, 9-310(b)(8.1), 9-312(b)(6), 9-314.1, 9-317(f) - (i), 9-326.1, 9-406(l), 9-408(h),
9-628(f), R.S. 10:12-101 - 12-107, and R.S. 10:13-101 - 13-306)
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