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SENATE FLOOR VERSION
April 2, 2024
ENGROSSED HOUSE
BILL NO. 2776 By: McCall of the House
and
Hall of the Senate
An Act relating to the Uniform Commercial Code;
amending 12A O.S. 2021, Sections 1 -201, 1-204, 1-301
and 1-306, which relate to Gen eral Provisions of the
Uniform Commercial Code; clarifying scope of certain
definitions; adding definitions; providing statutory
references; replacing certain term with new term;
amending 12A O.S. 2021, Sections 2 -102, 2-106, 2-201,
2-202, 2-203, 2-205 and 2-209, which relate to sales;
deleting exception to the applicability of
transactions in goods; providing for the
applicability of hybrid transactions; providing
exceptions to applicability provision; defining term;
replacing certain term with new term; a dding signed
records to certain exception; amending 12A O.S. 2021,
Sections 2A-102, 2A-103, 2A-107, 2A-201, 2A-202, 2A-
203, 2A-205 and 2A-208, which relate to leases;
expanding scope of leases to include hybrid leases;
providing guidelines for hybrid lease s; making
Article 2A applicable if lease -of-goods aspects
predominate; adding definition; replacing certain
term with new term; amending 12A O.S. 2021, Sections
3-104, 3-105, 3-401 and 3-604, which relate to
negotiable instruments; expanding scope of certa in
definitions; deleting certain requirements for when a
signature may be made; affirming obligation of party
to pay check despite its destruction; deleting
certain defined term; amending 12A O.S. 2021,
Sections 4A-103, 4A-201, 4A-202, 4A-203, 4A-207, 4A-
208, 4A-210, 4A-211 and 4A-305, which relate to funds
transfers; modifying scope of certain definitions;
clarifying bank's obl igations concerning security
procedures; requiring express agreement be evidenced
by a record; replacing certain term with new term ;
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deleting references to electronically transmitted
notices or communications; amending 12A O.S. 2021,
Sections 5-104 and 5-116, which relate to letters of
credit; providing for the issuance of letter of
credit by signed record; deleting authentication
requirements; deleting statutory reference;
clarifying jurisdiction of bank's branches; amending
12A O.S. 2021, Sections 7 -102 and 7-106, which relate
to documents of title; deleting certain defined term;
clarifying requirements for controlling electronic
documents of title; providing for exclusivity of
power; making power nonshareable and nonexclusive
under certain circumstances; providing circumstances
when a person has control of an electronic document
of title; providing for the acknowledgment of control
of electronic documents of title; amending 12A O.S.
2021, Sections 8-102, 8-103, 8-106, 8-110 and 8-303,
which relate to inves tment securities; modifying
scope of certain definitions; providing statutory
references; declaring certain accounts and records as
not a financial asset; providing an exception;
stating circumstances when a purchaser has control of
a security entitlement; providing for the
acknowledgment of control on behalf of a purchaser;
declaring the law that governs jurisdiction;
modifying scope of certain definition; amending 12A
O.S. 2021, Sections 1 -9-102, 1-9-104, 1-9-105, 1-9-
203, 1-9-204, 1-9-207, 1-9-208, 1-9-209, 1-9-210, 1-
9-301, 1-9-304, 1-9-305, 1-9-310, 1-9-312, 1-9-313,
1-9-314, 1-9-316, 1-9-317, 1-9-323, 1-9-324, 1-9-330,
1-9-331, 1-9-332, 1-9-334, 1-9-341, 1-9-404, 1-9-406,
1-9-408, 1-9-509, 1-9-513, 1-9-601, 1-9-605, 1-9-608,
1-9-611, 1-9-613, 1-9-614, 1-9-615, 1-9-616, 1-9-619,
1-9-620, 1-9-621, 1-9-624 and 1-9-628, which relate
to secured transactions; modifying scope of certain
definitions; deleting and adding definitions;
providing statutory references; replacing certain
term with new term; expanding requirements for
secured parties to control deposit accounts;
clarifying requirements for establishing control of
electronic chattel paper; stating manner by which a
system may satisfy certain requirements; providing
for the exclusivity of power under certain
circumstances; providing exceptions; presuming powers
to be exclusive under certain circumstance; providing
control to purchaser if certain conditions are met;
stating when a secured party has control of a
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controllable electronic record, controllable account
or controllable payment intangible; allowing person
with specific control to deny acknowledgment of said
control; modifying certain conditions to include
controllable accounts, controllable electronic
records, controllable payment intangibles and
documents; providing statutory references; declaring
chattel paper as collateral; providing for the
attachment of security interests ; modifying
procedures for responding to signed demand by a
debtor; clarifying jurisdiction requirement;
declaring bank's jur isdiction even if transaction
bears no relation to bank's jurisdiction; providing
additional exception to certain rules; providing
guidelines for determining the jurisdiction of
chattel paper; establishing rules for determining
jurisdiction; providing circumstances when local law
governs jurisdiction; stating that filing is required
to perfect security interest; allowing perfection of
a security interest by taking possession or control
of collateral; providing time limitations; providing
for perfection by possession and control of chattel
paper; providing time limitations for perfected
security interests; stating circumstances that all ow
buyers of chattel paper, electronic documents,
controllable electronic records, controllable
accounts or controllable payment intangibles to take
free of security interests; clarifying exceptions for
buyers of goods; specifying when security interests
have priority over conflicting security interests;
specifying circumstances when a purchaser of chattel
paper has priority ove r security interests in the
chattel paper; declaring when purchaser of chattel
paper or instrument has knowledge that purchase
violates rights of the secured party; stating rights
of holders and purchasers; modifying procedures for
transferring money; clarifying references to
promissory note; excepting certain provisions from
controllable account or controllable payment
intangible; stating duties of secured party; deleting
certain forms; creating Notification of Disposition
of Collateral form; providing ins tructions for form;
creating Notice of Plan to Sell Property form;
providing instructions for form; clarifying scope of
certain definitions; making certain provisions
inapplicable to limiting the liability of a secured
party; creating new article for the Uniform
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Commercial Code to be named Controllable Electronic
Records; defining terms; declaring which article
controls if conflict ex ists; providing applicability
provision; stating rights of purchaser of
controllable account, controllable payment
intangible, and controllable electronic record;
stating how qualifying purchaser acquires its rights;
providing limitations on actions agains t qualified
purchaser; providing restriction on notice of claims;
declaring when a person has control of a controllable
electronic record; stating exclusivity of powers
under certain circumstances; declaring when powers
are nonexclusive; making powers pres umptive under
certain circumstances; providing additional
circumstances for when a person has control of a
controllable electronic record; providing procedures
for account debtors discharging their obligations;
providing restrictions on discharging obligat ions;
making notifications ineffective under certain
circumstances; requiring certain proof if requested
by account debtor; providing circumstances that show
reasonable proof has been furnished; prohibiting
waiver or varying of rights; making provisions
subject to other laws; providing jurisdiction for
controllable electronic records; stating rules for
determining jurisdiction; declaring governing laws
for certain matters; defining term; providing for
rights to be governed under certain applicable law;
creating new article for the Uniform Commercial Code
to be named Transitional Provisions for Uniform
Commercial Code Amendments (2022); defining terms;
providing for the termination of transactions;
providing for the applicability of certain articles
to transactions, liens, or other interests in
property; declaring the validity of transactions,
liens, or other interest in property o n and after
certain date; making exception to applicability
provision; declaring previously perfected security
interest as perfecte d after certain date; providing
guidelines for enforceable and perfected security
interest when requirements therefor are not
satisfied; declaring status of enforceable security
interest that is unperfected on certain date; stating
certain actions as effec tive to perfect a security
interest; providing for the effectiveness of
financing statement for perfecting a security
interest; providing for the sufficiency of taking an
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action before certain date; providing guidelines for
determining priority of claims t o collateral;
providing statutory reference for determining
priority of conflicting claims; stating which
articles and statutes apply when determining
priority; providing construing provision regarding
digital currency; providing for codification; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 12A O.S. 2021, Section 1 -201, is
amended to read as follows:
Section 1-201.
General Definitions and Principles of Interpretat ion.
(a) Unless the context otherwise requires, words or phrases
defined in this section, or in the additional definitions contained
in other articles of the Uniform Commercial Code that apply to
particular articles or parts thereof, have the meanings sta ted.
(b) Subject to definitions contained in other articles of the
Uniform Commercial Code that apply to particular articles or parts
thereof:
(1) "Action" in the sense of a judicial proceeding includes a
recoupment, counterclaim, setoff, suit in equity, and any other
proceedings in which rights are determined.
(2) "Aggrieved party" means a party entitled to pursue a
remedy.
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(3) "Agreement", as distinguished from "contract", means the
bargain of the parties in fact as found in their language or
inferred from other circumstance s including course of performance,
course of dealing, or usage of trade as provided in Section 1 -303 of
this title.
(4) "Bank" means a person engaged in the business of banking
and includes a savings bank, savings and loan associat ion, credit
union, and trust company.
(5) "Bearer" means a person in control of a negotiable
electronic document of title or a person in possession of an
instrument, negotiable tangible document of title, or certificated
security payable to bearer or endo rsed in blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of directly or indirectly transporting or forwarding goods.
The term does not include a warehouse receip t.
(7) "Branch" includes a separately incorporated foreign branch
of a bank.
(8) "Burden of establishing" means the burden of persuading the
trier of fact that the existence of the fact is more probable than
its nonexistence.
(9) "Buyer in ordinary cour se of business" means a person that
buys goods in good faith, without knowledge that the sale violates
the rights of another person in the goods, and in the ordinary
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course from a person, other than a pawnbroker, in the business of
selling goods of that ki nd. A person buys goods in the ordinary
course if the sale to the person comports with the usual or
customary practices in the kind of business in which the seller is
engaged or with the seller's own usual or customary practices. A
person that sells oil, gas, or other minerals at the wellhead or
minehead is a person in the business of selling goods of that kind.
A buyer in ordinary course of business may buy for cash, by exchange
of other property, or on secured or unsecured credit, and may
acquire goods or documents of title under a preexisting contract for
sale. Only a buyer that takes possession of the goods or has a
right to recover the goods from the seller under Article 2 may be a
buyer in ordinary course of business. "Buyer in ordinary course of
business" does not inclu de a person that acquires goods in a
transfer in bulk or as security for or total or partial satisfaction
of a money debt.
(10) "Conspicuous", with reference to a term , means so written,
displayed, or presented that , based on the totality of the
circumstances, a reasonable person against whom it is to operate
ought to have noticed it. Whether a term is "conspicuous" or not is
a decision for the court. Conspicuous terms include the following:
(A) a heading in capitals equal to or g reater in size than
the surrounding text, or in contrasting type, font, or
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color to the surrounding text of same or lesser size;
and
(B) language in the body of a record or display in larger
type than the surrounding text of the same size, or
set off from surrounding text of the same size by
symbols or other marks that call attention to the
language.
(11) "Consumer" means an individual who enters into a
transaction primarily for personal, family, or household purposes.
(12) "Contract", as distinguished fr om "agreement", means th e
total legal obligation that results from the parties' agreement as
determined by the provisions of the Uniform Commercial Code as
supplemented by any other applicable laws.
(13) "Creditor" includes a general creditor, a secured
creditor, a lien creditor, and any representative of creditors,
including an assignee for the benefit of creditors, a trustee in
bankruptcy, a receiver in equity, and an executor or administrator
of an insolvent debtor's or assignor's estate.
(14) "Defendant" includes a person in the position of defendant
in a counterclaim, cross -claim, or third-party claim.
(15) "Delivery", with respect to an electronic document of
title, means voluntary transfer of control and , with respect to an
instrument, a tangible d ocument of title, or an authoritative
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tangible copy of a record evidencing chattel paper, means voluntary
transfer of possession.
(16) "Document of title" means a record that in the regular
course of business or financing is treated as adequately evidenci ng
that the person in po ssession or control of the record is entitled
to receive, control, hold, and dispose of the record and the goods
the record covers and that purports to be issued by or addressed to
a bailee and to cover goods in the bailee's possess ion which are
either identified or are fungible portions of an identified mass.
The term includes a bill of lading, transport document, dock
warrant, dock receipt, warehouse receipt, and order for delivery of
goods. An electronic document of title means a document of title
evidenced by a record consisting of information stored in an
electronic medium. A tangible document of title means a document of
title evidenced by a record consisting of information that is
inscribed on a tangible medium.
(16A) "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities.
(17) "Fault" means a default, breach, or wrongful act or
omission.
(18) "Fungible goods" means:
(A) goods of which any unit, by nature or usag e of trade,
is the equivalent of any other like unit; or
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(B) goods that by agreement are treated as equivalent.
(19) "Genuine" means free of forgery or counterfeiting.
(20) "Good faith", except as otherwise provided in Article 5 o f
this title, means honesty in fact and the observance of reasonable
commercial standards of fair dealing.
(21) "Holder" means:
(A) the person in possession of a negotiable instrument
that is payable either to bearer or to an identified
person that is the person in possession;
(B) the person in possession of a document of title if the
goods are deliverable either to bearer or to the order
of the person in possession; or
(C) the person in control , other than pursuant to
subsection (g) of Section 7 -106 of this title, of a
negotiable electronic document of title.
(22) "Insolvency proceeding" includes any assignment for the
benefit of creditors or other proceeding intended to liquidate or
rehabilitate the estate of the person involved.
(23) "Insolvent" means:
(A) having generally ceased to pay debts in the ordinary
course of business other than as a result of bona fide
dispute;
(B) being unable to pay debts as they become due; or
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(C) being insolvent within the meaning of the federal
bankruptcy law.
(24) "Money" means a medium of exchange that is authorized or
adopted by a domestic or foreign government and is not in an
electronic form. The term includes a monetary unit of account
established by an intergovernmental organization or by agreement
between two or more countries.
(25) "Organization" means a person other than an individual.
(26) "Party", as distinguished from "third party", means a
person who has engaged in a transaction or made an agreement subject
to the Uniform Commercial Code.
(27) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, government, governmental subdivision, agency, or
instrumentality, public corporation, or any other legal or
commercial entity. The term includes a p rotected series, however
denominated, of an entity if the protected series is established
under law other than the Uniform Commercial Code that limits, or
limits if conditions specified under the law are satisfied, the
ability of a creditor of the entity or of any other protected series
of the entity to satisfy a claim from assets of the protected
series.
(28) "Present value" means the amount as of a date certain of
one or more sums payable in the future, discounted to the date
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certain by use of either an interest rate specified by the parties
if that rate is not manifestly unreasonable at the time the
transaction is entered into or, if an interest rate is not so
specified, a commercially reasonable rate that takes into account
the facts and circumstances at the time the transaction is entered
into.
(29) "Purchase" means taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or reissue, gift,
or any other voluntary transaction creating an interest in property.
(30) "Purchaser" means a person who takes by purchase.
(31) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(32) "Remedy" means any re medial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(33) "Representative" means a person empowered to act for
another, including an agent, an officer of a corporation or
association, and a trustee, executor, or admin istrator of an estate.
(34) "Right" includes remedy.
(35) "Security interest" means an interest in personal property
or fixtures which secures payment or performance of an obligation.
"Security interest" includes any interest of a consignor and a buyer
of accounts, chattel paper, a payment intangible, or a promissory
note in a transaction that is subject to Article 9 of this title.
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"Security interest" does not include the special property interest
of a buyer of goods on identification of those goods to a contract
for sale under Section 2-401 of this title, but a buyer may also
acquire a "security interest" by complying with the provisions of
Article 9 of this title. Except as otherwise provided in Section 2 -
505 of this title, the right of a seller or le ssor of goods under
Article 2 or 2A of this title to retain or acquire possession of the
goods is not a "security interest", but a seller or lessor may also
acquire a "security interest" by complying with Article 9 of this
title. The retention or reservat ion of title by a seller of goods
notwithstanding shipment or delivery to the buyer under Section 2 -
401 of this title is limited in effect to a reservation of a
"security interest". Whether a transaction in the form of a lease
creates security interest is determined pursuant to Section 1 -203 of
this title.
(36) "Send", in connection with any writing, a record, or
notice notification means:
(A) to deposit in the mail or, deliver for transmission ,
or transmit by any other usual means of communication ,
with postage or cost of trans mission provided for and
properly addressed and, in the case of an instrument,
to an address specified thereon or otherwise agreed,
or if there be none, addressed to any address
reasonable under the circumstances; or
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(B) in any other way to cause to be received any record or
notice within the time at which it would have arrived
if properly sent to cause the record or notification
to be received within the time it would have been
received if properly sent under subparagraph (A) of
this paragraph.
(37) "Signed" includes any symbol executed or adopted with
present intention to adopt or accept a writing "Sign" means, with
present intent to authenticate or adopt a record:
(A) execute or adopt a tangible symbol; or
(B) attach to or logical ly associate with the record an
electronic symbol, sound, or process.
"Signed", "signing", and "signature" have corresponding meanings .
(38) "State" means a state of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Island s, or any
territory or insular possession subject to the jurisdiction of the
United States.
(39) "Surety" includes guarantor or other secondary obligor.
(40) "Term" means a portion of an agreement which relates to a
particular matter.
(41) "Unauthorized signature" means a signature made without
actual, implied or apparent authority. The term includes a forgery.
(42) "Warehouse receipt" means a document of title issued by a
person engaged in the business of storing goods for hire.
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(43) "Writing" includ es printing, typewriting , or any other
intentional reduction to tangible form. "Written" has a
corresponding meaning.
SECTION 2. AMENDATORY 12A O.S. 2021, Section 1 -204, is
amended to read as follows:
Section 1-204.
"Value".
Except as otherwise provided in Articles 3, 4 and, 5, 6, and 12
of the Uniform Commercial Code, a person gives value for rights if
the person acquires them:
(1) in return for a binding commitment to extend credit or for
the extension of immediately available credit, whether or not d rawn
upon and whether or not a charge -back is provided for in the event
of difficulties in collection;
(2) as security for, or in total or partial satisfaction of, a
preexisting claim;
(3) by accepting delivery under a preexisting contract for
purchase; or
(4) in return for any consideration sufficient to support a
simple contract.
SECTION 3. AMENDATORY 12A O.S. 2021, Section 1 -301, is
amended to read as follows:
Section 1-301. Territorial Applicability; Parties' Power to
Choose Applicable Law.
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(a) Except as provided hereafter in this section, when a
transaction bears a reasonable relation to this state and also to
another state or nation, the parties may agree that the law either
of this state or of suc h other state or nation shall govern their
rights and duties. Failing such agreement, this title applies to
transactions bearing an appropriate relation to this state.
(b) To the extent that the Uniform Commercial Code governs a
transaction, if one of th e following provisions o f the Uniform
Commercial Code specifies the applicable law, that provision governs
and a contrary agreement is effective only to the extent permitted
by the law so specified:
(1) Section 2-402 of this title;
(2) Sections 2A-105 and 2A-106 of this title;
(3) Section 4-102 of this title;
(4) Section 4A-507 of this title;
(5) Section 5-116 of this title;
(6) Section 8-110 of this title; and
(7) Sections 1-9-301 through 1-9-307 of this title; and
(8) Section 12-107 of this title.
SECTION 4. AMENDATORY 12A O.S. 2021, Section 1 -306, is
amended to read as follows:
Section 1-306. Waiver or Renunciation of Claim or Right after
Breach.
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A claim or right arising out of an alleged breach may be
discharged in whole or in part without consideration by agreement of
the aggrieved party in an authenticated a signed record.
SECTION 5. AMENDATORY 12A O.S. 2021, Section 2 -102, is
amended to read as follows:
Section 2-102. Scope; Certain Security and Other Transactions
Excluded from this Article.
(a) Unless the context otherwise requires, and except as
provided in subsection (c) of this section, this article applies to
transactions in goods ; it does not apply to any transaction which
although in the form of an unconditional contract to sell or present
sale is intended to operate only as a security transaction nor does
this article impair or repeal any statute regulating sales to
consumers, farmers or other specified classes of buyers and, in the
case of a hybrid transact ion, it applies to the extent provided in
subsection (b) of this section.
(b) In a hybrid transaction:
(1) If the sale-of-goods aspects do not predominate, only the
provisions of this article which relate primarily to the sale -of-
goods aspects of the transaction apply, and the provisions that
relate primarily to the transaction as a whole do not apply.
(2) If the sale-of-goods aspects predominate, this article
applies to the transaction but does not preclude application, in
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appropriate circumstances, of other law to aspects of the
transaction which do not relate to the sale of goods.
(c) This article does not:
(1) Apply to a transaction that, even though in the form of an
unconditional contract to sell or present sale, operates o nly to
create a security interest; or
(2) Impair or repeal a statute regulating sales to consumers,
farmers, or other specified classes of buyers .
SECTION 6. AMENDATORY 12A O.S. 2021, Section 2 -106, is
amended to read as follows:
Section 2-106. Definitions: "Contract"; "Agreement"; "Contract
for Sale"; "Sale"; "Present Sale"; "Conforming" to Contract;
"Termination"; "Cancellation" ; "Hybrid Transaction" .
(1) In this article , unless the context otherwise requires ,
"contract" and "agreement" are limited to those relating to the
present or future sale of goods. "Contract for sale" includes both
a present sale of goods and a contract to sell goods at a future
time but does not include a license of information. A "sale"
consists in the passing of title from the seller to the buyer for a
price (Section 2-401). A "present sale" means a sale which is
accomplished by the making of the contract.
(2) Goods or conduct including any part of a performance are
"conforming" or conform to the c ontract when they are in accordance
with the obligations under the contract.
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(3) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the contract otherwise
than for its breach. On "termination" all obliga tions which are
still executory on both sides are discharged but any right based on
prior breach or performance survives.
(4) "Cancellation" occurs when either party puts an end to the
contract for breach by the other and its effect is the same as that
of "termination" except that the canceling party also retains any
remedy for breach of the whole contract or any unperformed balance.
(5) "Hybrid transaction" means a single transaction involving a
sale of goods and:
(a) the provision of services;
(b) a lease of other goods; or
(c) a sale, lease, or license of property other than
goods.
SECTION 7. AMENDATORY 12A O.S. 2021, Section 2 -201, is
amended to read as follows:
Section 2-201. (1) Except as otherwise provided in this
section, a contract for the sale of goods for the price of Five
Hundred Dollars ($500.00) or more is not enforceable by way of
action or defense unless there is some writing a record sufficient
to indicate that a contract for sale has been made between the
parties and signed by the part y against whom enforcement is sought
or by his the party's authorized agent or broker. A writing record
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is not insufficient because it omits or incorrectly states a term
agreed upon but the contract is not enforceable under this pa ragraph
beyond the quantity of goods shown in such writing the record.
(2) Between merchants if within a reasonable time a writing
record in confirmation of the contract and sufficient against the
sender is received and the party receiving it has reason t o know its
contents, it satisfies the requirements of subsection (1) against
such the party unless written notice in a record of objection to its
contents is given within ten (10) days after it is received.
(3) A contract which does not satisfy the requir ements of
subsection (1) but which is valid in other respects is enforceable :
(a) if the goods are to be specially manufactured for the
buyer and are not suitable for sale to others in the ordinary course
of the seller's business and the seller, before no tice of
repudiation is received and under circumstances which reasonably
indicate that the goods are for the buyer, has made either a
substantial beginning of their manufacture or commitments for their
procurement; or
(b) if the party against whom enforce ment is sought admits
in his pleading, testimony or otherwise in court that a contract for
sale was made, but the contract is not enforceable under this
provision beyond the quantity of goods admitted; or
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(c) with respect to goods for which payment has be en made
and accepted or which have been received and accepted (Section 2 -
606).
SECTION 8. AMENDATORY 12A O.S. 2021, Section 2 -202, is
amended to read as follows:
Section 2-202. Final Written Expression: Parol or Extrinsic
Evidence.
Terms with respect to which the confirmatory memoranda of the
parties agree or which are otherwise set forth in a writing record
intended by the parties as a final expression of their agreement
with respect to such terms as are included therein may not be
contradicted by evide nce of any prior agreement or of a
contemporaneous oral agreement but may be explained or supplemented:
(a) by course of performance, course of dealing or usage of
trade (Section 16 of this act); and
(b) by evidence of consistent additional terms unless the court
finds the writing record to have been intended also as a complete
and exclusive statement of the terms of the agreement.
SECTION 9. AMENDATORY 12A O.S. 2021, Section 2 -203, is
amended to read as f ollows:
Section 2-203. The affixing of a seal to a writing record
evidencing a contract for sale or an offer to buy or sell goods does
not constitute the writing record a sealed instrument and the law
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with respect to sealed instruments does not apply to s uch a contract
or offer.
SECTION 10. AMENDATORY 12A O.S. 2021, Section 2 -205, is
amended to read as follows:
Section 2-205. An offer by a merchant to buy or sell goods in a
signed writing record which by its terms gives assurance that it
will be held open is not revocable, for lack of consideration,
during the time stated or if no time is stated for a reasonable
time, but in no event may such period of irrevocability exceed three
(3) months; but any such term of assurance on a form supplied by the
offeree must be separately signed by the offeror.
SECTION 11. AMENDATORY 12A O.S. 2021, Section 2 -209, is
amended to read as follows:
Section 2-209. (1) An agreement modifying a contract within
this article needs no consideration to be binding.
(2) A signed agreement which excludes modification or
rescission except by a signed writing or other signed record cannot
be otherwise modified or rescinded, but except as between merchants
such a requirement on a form sup plied by the merchant must be
separately signed by the other party.
(3) The requirements of the statute of frauds section of this
article (Section 2-201) must be satisfied if the contract as
modified is within its provisions.
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(4) Although an attempt at m odification or rescissio n does not
satisfy the requirements of subsection (2) or (3) it can operate as
a waiver.
(5) A party who has made a waiver affecting an executory
portion of the contract may retract the waiver by reasonable
notification received by the other party that strict performance
will be required of any term waived, unless the retraction would be
unjust in view of a material change of position in reliance on the
waiver.
SECTION 12. AMENDATORY 12A O.S. 2021, Section 2 A-102, is
amended to read as follows:
Section 2A-102.
SCOPE
(1) This article applies to any transaction, regardless of
form, that creates a lease of goods and, in the case of a hybrid
lease, it applies to the extent provided in paragraph (2) of this
section.
(2) In a hybrid lease:
(a) if the lease-of-goods aspects do not predominate:
(i) only the provisions of this article which relate
primarily to the lease -of-goods aspects of the
transaction apply, and the provisions that relate
primarily to the transac tion as a whole do not
apply;
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(ii) Section 2A-209 of this title applies if the lease
is a finance lease; and
(iii) Section 2A-407 of this title applies to the
promises of the lessee in a finance lease to the
extent the promises are consideration for the
right to possession and use of the leased goods;
and
(b) if the lease-of-goods aspects predominate, this
article applies to the transaction, but does not
preclude application, in appropriate circumstances, of
other law to aspects of the lease which do not re late
to the lease of goods.
SECTION 13. AMENDATORY 12A O.S. 2021, Section 2A -103, is
amended to read as follows:
Section 2A-103.
DEFINITIONS AND INDEX OF DEFINITIONS
(1) In this article unless the context otherwise requires:
(a) "Buyer in the ordinary course of business" means a
person who in good faith and without knowledge that
the sale to him or her is in violation of the
ownership rights or security interest or leasehold
interest of a third party in the goods, buys in the
ordinary course from a person in the business of
selling goods of that kind but does not include a
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pawnbroker. "Buying" may be for cash or by exchange
of other property or on secured or unsecured credit
and includes acquiring goods or documents of title
under a preexisting contract for sale but does not
include a transfer in bulk or as security for or in
total or partial satisfaction of a money debt.
(b) "Cancellation" occurs when either party puts an end to
the lease contract for default by the other party.
(c) "Commercial unit" mean s such a unit of goods as by
commercial usage is a single whole for purposes of
lease and division of which materially impairs its
character or value on the market or in use. A
commercial unit may be a single article, as a machine,
or a set of articles, as a suite of furniture or a
line of machinery, or a quantity, as a gross or
carload, or any other unit treated in use or in the
relevant market as a single whole.
(d) "Conforming" goods or performance under a lease
contract means goods or performance that are in
accordance with the obligations under the lease
contract.
(e) "Consumer lease" means a lease that a lessor regularly
engaged in the business of leasing or selling makes to
a lessee who is an individual and who takes under the
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lease primarily for a personal, family, or household
purpose, if the total payments to be made under the
lease contract, excluding payments for options to
renew or buy, do not exceed Forty -five Thousand
Dollars ($45,000.00).
(f) "Fault" means wrongful act , omission, breach, or
default.
(g) "Finance lease" means a lease with respect to which:
(i) the lessor does not select, manufacture or supply
the goods;
(ii) the lessor acquires the goods or the right to
possession and use of the goods in connection
with the lease; and
(iii) one of the following occurs:
(A) the lessee receives a copy of the contract
by which the lessor acquired the goods or
the right to possession and use of the goods
before signing the lease contract;
(B) the lessee's approval of the cont ract by
which the lessor acquired the goods or the
right to possession and use of the goods is
a condition to effectiveness of the lease
contract;
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(C) the lessee, before signing the lease
contract, receives an accurate and complete
statement designating th e promises and
warranties, and any disclaimers of
warranties, limitations or modifications of
remedies, or liquidated damages, including
those of a third party, such as the
manufacturer of the goods, provided to the
lessor by the person supplying the goods in
connection with or a s part of the contract
by which the lessor acquired the goods or
the right to possession and use of the
goods; or
(D) if the lease is not a consumer lease, the
lessor, before the lessee signs the lease
contract, informs the lessee i n writing (a)
of the identity of the person supplying the
goods to the lessor, unless the lessee has
selected that person and directed the lessor
to acquire the goods or the right to
possession and use of the goods from that
person, (b) that the lessee is entitled
under this article to the promises and
warranties, including those of any third
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party, provided to the lessor by the person
supplying the goods in connection with or as
part of the contract by which the lessor
acquired the goods or the right to
possession and use of the goods, and (c)
that the lessee may communicate with the
person supplying the goods to the lessor and
receive an accurate and complete statement
of those promises and warranties, including
any disclaimers and limitations of them or
of remedies.
(h) "Goods" means all things that are movable at the time
of identification to the lease contract, or are
fixtures (Section 2A -309 of this title). The term
includes future goods, specially manufactured goods,
and the unborn young of animals. The term does not
include information, the money in which the price is
to be paid, investment securities under Article 8 of
the Uniform Commercial Code, minerals or the like,
including oil and gas, before extraction, or choses in
action.
(i) "Hybrid lease" means a single transact ion involving a
lease of goods and:
(i) the provision of services;
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(ii) a sale of other goods; or
(iii) a sale, lease, or license of property other than
goods.
(j) "Installment lease contract" means a lease contract
that authorizes or requires the delivery of goods in
separate lots to be separately accepted, even though
the lease contract contains a clause "each delivery is
a separate lease" or its equivalent.
(j)
(k) "Lease" means a transfer of the right to possession
and use of goods for a term in return for
consideration, but a sale, including a sale on
approval or a sale or return, or retention or creation
of a security interest or license of information is
not a lease. Unless the context clearly indicates
otherwise, the term inc ludes a sublease.
(k)
(l) "Lease agreement" means the bargain, with respect to
the lease, of the lessor and the lessee in fact as
found in their language or by implication from other
circumstances including course of dealing of usage of
trade or course of performance as provided in this
article. Unless the context clearly indicates
otherwise, the term includes a sublease agreement.
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(l)
(m) "Lease contract" means the total legal obligation that
results from the lease agreement as affected by this
article and any other applicable rules of law. Unless
the context clearly indicates otherwise, the term
includes a sublease contract.
(m)
(n) "Leasehold interest" means the interest of the lessor
or the lessee under a lease contract.
(n)
(o) "Lessee" means a person who acquires the right to
possession and use of goods under a lease. Unless the
context clearly indicates otherwise, the term includes
a sublessee.
(o)
(p) "Lessee in the ordinary course of business" means a
person who in good faith and without knowledge that
the lease to him or her is in violation of the
ownership rights or security interest or leasehold
interest of a third party in the goods leases in the
ordinary course from a person in the business of
selling or leasing goods of that kind but does not
include a pawnbroker. "Leasing" may be for cash or by
exchange of other property or on secured or unsecured
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credit and includes acquiring goods or documents of
title under a preexisting lease contract but does not
include a transfer in bulk or as securit y for or in
total or partial satisfaction of a money debt.
(p)
(q) "Lessor" means a person who transfers the right to
possession and use of goods under a lease. Unless the
context clearly indicates otherwise, the term includes
a sublessor.
(q)
(r) "Lessor's residual interest" me ans the lessor's
interest in the goods after expiration, termination,
or cancellation of the lease contract.
(r)
(s) "Lien" means a charge against or interest in goods to
secure payment of a debt or performance of an
obligation, but the term does not include a security
interest.
(s)
(t) "Lot" means a parcel or a single article that is the
subject matter of a separate lease or delivery,
whether or not it is sufficient to perform the lease
contract.
(t)
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(u) "Merchant lessee" means a le ssee that is a merchant
with respect to goods of the kind subject to the
lease.
(u)
(v) "Present value" means the amount as of a date certain
of one or more sums payable in the future, discounted
to the date certain. The discount is determined by
the interest rate specified by the parties if the rate
was not manifestly unreasonable at the time the
transaction was entered into; otherwise, the discount
is determined by a commercially reasonable rate that
takes into account the facts and circumstances of each
case at the time the tr ansaction was entered into.
(v)
(w) "Purchase" includes taking by sale, lease, mortgage,
security interest, pledge, gift, or any other
voluntary transaction creating an interest in goods.
(w)
(x) "Sublease" means a lease of goods th e right to
possession and use of which was acquired by the lessor
as a lessee under an existing lease.
(x)
(y) "Supplier" means a person from whom a lessor buys or
leases goods to be leased under a finance lease.
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(y)
(z) "Supply contract" means a contract under which a
lessor buys or leases goods to be leased.
(z)
(aa) "Termination" occurs when either party pursuant to a
power created by agreement or law puts an end to the
lease contract otherwise than for default.
(2) Other definitions applying to this ar ticle and the sections
in which they appear are:
"Accessions". Subsection (1) of Section 2A -310 of this
title.
"Construction mortgage". Paragraph (d) of subsection (1)
of Section 2A-309 of this title.
"Encumbrance". Paragraph (e) of subsection (1) of Se ction
2A-309 of this title.
"Fixtures". Paragraph (a) of subsection (1) of Section 2A -
309 of this title.
"Fixture filing". Paragraph (b) of subsection (1) of
Section 2A-309 of this title.
"Purchase money lease". Paragraph (c) of subsection (1) of
Section 2A-309 of this title.
(3) The following definitions in other articles apply to this
article:
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"Account". Paragraph (2) of subsection (a) of Section 1 -9-
102 of this title.
"Between merchants". Subsection (3) of Section 2 -104 of
this title.
"Buyer". Paragraph (a) of subsection (1) of Section 2-103
of this title.
"Chattel paper". Paragraph (11) of subsection (a) of
Section 1-9-102 of this title.
"Consumer goods". Paragraph (23) of subsection (a) of
Section 1-9-102 of this title.
"Document". Paragraph ( 30) of subsection (a) of Section 1 -
9-102 of this title.
"Entrusting". Paragraph (3) of Section 2 -403 of this
title.
"General intangible". Paragraph (42) of subsection (a) of
Section 1-9-102 of this title.
"Instrument". Paragraph (47) of subsection (a) o f Section
1-9-102 of this title.
"Merchant". Subsection (1) of Section 2 -104 of this title.
"Mortgage". Paragraph (55) of subsection (a) of Section 1 -
9-102 of this title.
"Pursuant to commitment". Paragraph (69) of subsection (a)
of Section 1-9-102 of this title.
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"Receipt". Subsection (c) of paragraph (1) of Section 2 -
103 of this title.
"Sale". Paragraph (1) of Section 2 -106 of this title.
"Sale on approval". Section 2 -326 of this title.
"Sale or return". Section 2 -326 of this title.
"Seller". Subparagraph (c) of paragraph (1) of Section 2-
103 of this title.
(4) In addition, Article 1 of this title, contains general
definitions and principles of construction and interpretation
applicable throughout this article.
SECTION 14. AMENDATORY 12A O.S. 2021, Section 2A -107, is
amended to read as follows:
Section 2A-107.
WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER DEFAULT
Any claim or right arising out of an alleged default or breach
of warranty may be discharged in whole or in part without
consideration by a written waiver or renunciation in a signed and
record delivered by the aggrieved party.
SECTION 15. AMENDATORY 12A O.S. 2021, Section 2A -201, is
amended to read as follows:
Section 2A-201.
STATUTE OF FRAUDS
(1) A lease contract is not enforceable by way of action or
defense unless:
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(a) the total payments to be made under the lease
contract, excluding payments for options to renew or buy, are less
than One Thousand Dollars ($1,000.00); or
(b) there is a writing record, signed by the party
against whom enforcement is sought or by that party's authorized
agent, sufficient to indicate that a lease contract has been made
between the parties and to describe the goods leased and the lease
term.
(2) Any description of leased goods or of the lease term is
sufficient and satisfies paragraph (b) of subsection (1) of this
section, whether or not it is specific, if it reasonably identifies
what is described.
(3) A writing record is not insufficient because it omits o r
incorrectly states a t erm agreed upon, but the lease contract is not
enforceable under paragraph (b) of subsection (1) of this section
beyond the lease term and the quantity of goods shown in the writing
record.
(4) A lease contract that does not satisf y the requirements of
subsection (1) of this section, but which is valid in other
respects, is enforceable:
(a) if the goods are to be specially manufactured or
obtained for the lessee and are not suitable for lease or sale to
others in the ordinary course of the lessor's busines s, and the
lessor, before notice of repudiation is received and under
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circumstances that reasonably indicate that the goods are for the
lessee, has made either a substantial beginning of their manufacture
or commitments for their pr ocurement;
(b) if the party against whom enforcement is sought
admits in that party's pleading, testimony or otherwise in court
that a lease contract was made, but the lease contract is not
enforceable under this provision beyond the quantity of goods
admitted; or
(c) with respect to goods that have been received
and accepted by the lessee.
(5) The lease term under a lease contract referred to in
subsection (4) of this section is:
(a) if there is a writing record signed by the party
against whom enforcemen t is sought or by that party's authorized
agent specifying the lease term, the term so specified;
(b) if the party against whom enforcement is sought
admits in that party's pleading, testimony, or otherwise in court a
lease term, the term so admitted; or
(c) a reasonable lease te rm.
SECTION 16. AMENDATORY 12A O.S. 2021, Section 2A -202, is
amended to read as follows:
Section 2A-202.
FINAL WRITTEN EXPRESSION; PAROL OR EXTRINSIC EVIDENCE
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Terms with respect to which the confirmatory mem oranda of the
parties agree or which are otherwise set forth in a writing record
intended by the parties as a final expression of their agreement
with respect to such terms as are included therein may not be
contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement but may be explained or supplemented:
(a) by course of dealing or usage of trade or by
course of performance; and
(b) by evidence of consistent additional terms
unless the court finds the writing record to have been intended also
as a complete and exclusive statement of the terms of the agreement.
SECTION 17. AMENDATORY 12A O.S. 2021, Section 2A -203, is
amended to read as follows:
Section 2A-203.
SEALS INOPERATIVE
The affixing of a seal to a writing record evidencing a lease
contract or an offer to enter into a lease contract does not render
the writing record a sealed instrument and the law with respect to
sealed instruments does not apply to the lease contract or offer.
SECTION 18. AMENDATORY 12A O.S. 2021, Section 2A -205, is
amended to read as follows:
Section 2A-205.
FIRM OFFERS
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An offer by a merchant to lease goods to or from another person
in a signed writing record that by its terms gives assurance it will
be held open is not revocable, f or lack of consideration, during the
time stated or, if no time is stated, for a reasonable time, but in
no event may the period of irrevocability exceed three (3) months.
Any such term of assurance on a form supplied by the offere e must be
separately signed by the offeror.
SECTION 19. AMENDATORY 12A O.S. 2021, Section 2A -208, is
amended to read as follows:
Section 2A-208.
MODIFICATION, RESCISSION , AND WAIVER
(1) An agreement modifying a lease contract need s no
consideration to be binding.
(2) A signed lease agreement that excludes modification or
rescission except by a signed writing record may not be otherwise
modified or rescinded, but, except as between merchants, such a
requirement on a form supplied b y a merchant must be separately
signed by the other party.
(3) Although an attempt at modification or rescission does not
satisfy the requirements of subsection (2) of this section, it may
operate as a waiver.
(4) A party who has made a waiver affecting an executory
portion of a lease contract may retract the waiver by reasonable
notification received by the other party that strict performance
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will be required of any term waived, unless the retraction would be
unjust in view of a material change of positi on in reliance on the
waiver.
SECTION 20. AMENDATORY 12A O.S. 2021, Section 3 -104, is
amended to read as follows:
Section 3-104.
NEGOTIABLE INSTRUMENT
(a) Except as provided in subsections (c) and (d) of this
section, "negotiable instrument" means an unc onditional promise or
order to pay a fixed amount of money, with or without interest or
other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is
issued or first comes into posses sion of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by
the person promising or ordering payment to do any act
in addition to the payment of money, but the promise
or order may contain (i) an undertaking or power to
give, maintain, or protect collateral to secure
payment, (ii) an authorization or power to the holder
to confess judgment or realize on or dispose of
collateral, or (iii) a waiver of the benefit of any
law intended for the advantage or protection of an
obligor, (iv) a term that specifies the law that
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governs the promise or order, or (v) an undertaking to
resolve in a specified forum a dispute concerning the
promise or order.
(b) "Instrument" means a negotiable instrument.
(c) An order that meets all of the requirements of subsection
(a) of this section, except paragraph (1), and otherwise falls
within the definition of "check" in subsection (f) of this section
is a negotiable instrument and a check.
(d) A promise or order other than a check is not an instrument
if, at the time it is issued or first comes into possession of a
holder, it contains a conspicuous statement, however expressed, to
the effect that the promise or order is not negotiable or is not an
instrument governed by this article.
(e) An instrument is a "note" if it is a promise and is a
"draft" if it is an order. If an instrument falls within the
definition of both "note" and "draft", a person entitled to enforce
the instrument may treat it as either.
(f) "Check" means (i) a draft, other than a documentary draft,
payable on demand and drawn on a bank or (ii) a cashier's check or
teller's check. An instrument may be a check even though it is
described on its face by another term, such as "money order".
(g) "Cashier's check" means a draft with respect to which the
drawer and drawee are the same bank or branches of the same bank.
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(h) "Teller's check" means a draft drawn by a bank (i) on
another bank, or (ii) payable at or through a bank.
(i) "Traveler's check " means an instrument that (i) is payable
on demand, (ii) is drawn on or payable at or through a bank, (iii)
is designated by the term "traveler's check" or by a substantially
similar term, and (iv) requires, as a condition to payment, a
countersignature by a person whose specime n signature appears on the
instrument.
(j) "Certificate of deposit" means an instrument containing an
acknowledgment by a bank that a sum of money has been received by
the bank and a promise by the bank to repay the sum of money. A
certificate of deposit is a note of the bank.
SECTION 21. AMENDATORY 12A O.S. 2021, Section 3 -105, is
amended to read as follows:
Section 3-105.
ISSUE OF INSTRUMENT
(a) "Issue" means the:
(1) The first delivery of an instrument by the maker or drawer,
whether to a holder or nonholder, for the purpose of giving rights
on the instrument to any person ; or
(2) If agreed by the payee, the first transmission by the
drawer to the payee of an image of an item and information derived
from the item that enables the depository bank to collect the item
by transferring or presenting under federal law an electronic check .
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(b) An unissued instrument, or an unissued incomplete
instrument that is completed, is binding on the maker or drawer, bu t
nonissuance is a defen se. An instrument that is conditionally
issued or is issued for a special purpose is binding on the maker or
drawer, but failure of the condition or special purpose to be
fulfilled is a defense.
(c) "Issuer" applies to issued and unissued instruments and
means a maker or drawer of an instrument.
SECTION 22. AMENDATORY 12A O.S. 2021, Section 3 -401, is
amended to read as follows:
Section 3-401.
SIGNATURE NECESSARY FOR LIABILITY ON INSTRUMENT
(a) A person is not liable on an instrum ent unless (i) the
person signed the instrument, or (ii) the person is represented by
an agent or representative who signed the instrument and the
signature is binding on the represented person under Section 3 -402
of this title.
(b) A signature may be made (i) manually or by means of a
device or machine, and (ii) by the use of any name, including a
trade or assumed name, or by a word, mark, or symbol executed or
adopted by a person with present intention to authenticate a
writing.
SECTION 23. AMENDATORY 12A O.S. 2021, Section 3 -604, is
amended to read as follows:
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Section 3-604.
DISCHARGE BY CANCELLATION OR RENUNCIATION
(a) A person entitled to enforce an instrument, with or without
consideration, may dischar ge the obligation of a party to pay the
instrument (i) by an intentional voluntary act, such as surrender of
the instrument to the party, destruction, mutilation, or
cancellation of the instrument, cancellation or striking out of the
party's signature, or the addition of words to the instrument
indicating discharge, or (ii) by agreeing not to sue or otherwise
renouncing rights against the party by a signed record. The
obligation of a party to pay a check is not discharged solely by
destruction of the check in connection with a process in which
information is extracted from the check and an image of the check is
made and, subsequently, the information and image are transmitted
for payment.
(b) Cancellation or striking out of an indorsement pursuant to
subsection (a) of this sectio n does not affect the status and rights
of a party derived from the indorsement.
(c) As used in this section, "signed", with respect to a record
that is not a writing, includes the attachment to or logical
association with the reco rd of an electronic symbol, sound, or
process with the present intent to adopt or accept the record.
SECTION 24. AMENDATORY 12A O.S. 2021, Section 4A -103, is
amended to read as follows:
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Section 4A-103.
PAYMENT ORDER - DEFINITIONS
(a) In this Article article:
(1) "Payment order" means an instruction of a sender to a
receiving bank, transmitted orally , electronically, or in writing or
in a record, to pay, or to cause another bank to pay, a fixed or
determinable amount of money to a beneficiary if:
(i) the instruction does not state a condition to payment
to the beneficiary other than time of payment,
(ii) the receiving bank is to be reimbursed by debiting an
account of, or otherwise receiving payment from, the
sender, and
(iii) the instruction is transmitte d by the sender directly
to the receiving bank or to an agent, funds -transfer
system, or communication system for transmittal to the
receiving bank.
(2) "Beneficiary" means the person to be paid by the
beneficiary's bank.
(3) "Beneficiary's bank" means the bank identified in a payment
order in which an account of the beneficiary is to be credited
pursuant to the order or which otherwise is to make payment to the
beneficiary if the order does not provide for payment to an account.
(4) "Receiving bank" mea ns the bank to which the sender's
instruction is addressed.
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(5) "Sender" means the person giving the instruction to the
receiving bank.
(b) If an instruction complying with paragraph (1) of
subsection (a) is to make more than one payment to a beneficiary,
the instruction is a separate payment order with respect to each
payment.
(c) A payment order is issued when it is sent to the receiving
bank.
SECTION 25. AMENDATORY 12A O.S. 2021, Section 4A -201, is
amended to read as follows:
Section 4A-201.
SECURITY PROCEDURE
"Security procedure" means a procedure established by agreement
of a customer and a receiving bank for the purpose of (i) verifying
that a payment order or communication amending or canceling a
payment order is that of the customer, or (ii) detecting error in
the transmission or the content of the payment order or
communication. A security procedure may impose an obligation on the
receiving bank or the customer and may require the use of algorithms
or other codes, identif ying words or, numbers, symbols, sounds,
biometrics, encryption, callback procedures, or similar security
devices. Comparisons of a signature on a payment order or
communication with an authorized specimen signature of the customer
or requiring a payment order to be sent from a known email address,
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IP address, or telephone number is not by itself a security
procedure.
SECTION 26. AMENDATORY 12A O.S. 2021, Section 4A -202, is
amended to read as follows:
Section 4A-202.
AUTHORIZED AND VERIFIED PAYMENT ORDERS
(a) A payment order received by the receiving bank is the
authorized order of the person identified as sender if that person
authorized the order or is otherwise bound by it under the law of
agency.
(b) If a bank and its customer have agreed that the
authenticity of payment orders issued to the bank in the name of the
customer as sender will be verified pursuant to a security
procedure, a payment order received by the receiving bank is
effective as the orde r of the customer, wheth er or not authorized,
if (i) the security procedure is a commercially reasonable method of
providing security against unauthorized payment orders, and (ii) the
bank proves that it accepted the payment order in good faith and in
compliance with the bank's obligations under the security procedure
and any written agreement or instruction of the customer , evidenced
by a record, restricting acceptance of payment orders issued in the
name of the customer. The bank is not required to follo w an
instruction that violates a written an agreement with the customer ,
evidenced by a record, or notice of which is not received at a time
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and in a manner affording the bank a reasonable opportunity to act
on it before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is a
question of law to be determined by considering the wishes of the
customer expressed to the bank, the circumstances of the customer
known to the bank, including the size, type, and frequency of
payment orders normally issued by the customer to the bank,
alternative security procedures offered to the customer, and
security procedures in general use by customers and receiving banks
similarly situated. A security procedure is deemed to be
commercially reasonable if (i) the security procedure was chosen by
the customer after the bank offered, and the customer refused, a
security procedure that was commercially reasonable for that
customer, and (ii) the customer expressly agreed in writing a record
to be bound by any payment order , whether or not authorized, issued
in its name and accepted by the bank in compliance with the bank's
obligations under the security procedure chosen by the customer.
(d) The term "sender" in this Article article includes the
customer in whose name a payment order is issued if the order is the
authorized order of the customer under subsection (a), or it is
effective as the order of the customer under subsection (b).
(e) This section applies to amendments and cancellations of
payment orders to the same ex tent it applies to payment orders.
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(f) Except as provided in this section and in paragraph (1) of
subsection (a) of Section 11 of this act rights and obligations
arising under this section or Section 11 of this act may not be
varied by agreement.
SECTION 27. AMENDATORY 12A O.S. 2021, Section 4A -203, is
amended to read as follows:
Section 4A-203.
UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT ORDERS
(a) If an accepted payment order is not, under subsection (a)
of Section 10 of this a ct, an authorized order of a customer
identified as sender, but is effective as an order of the customer
pursuant to subsection (b) of Section 10 of this act, the following
rules apply:
(1) By express written agreement evidenced by a record, the
receiving bank may limit the extent to which it is entitled to
enforce or retain payment of the payment order.
(2) The receiving bank is not entitled to enforce or retain
payment of the payment order if the customer proves that the order
was not caused, directly o r indirectly, by a person (i) entrusted at
any time with duties to act for the customer with respect to payment
orders or the security procedure, or (ii) who obtained access to
transmitting facilities of the customer or who obtained , from a
source controlled by the customer and without authority of the
receiving bank, information facilitating breach of the security
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procedure, regardless of how the information was obtained or whether
the customer was at fault. Information includes an y access device,
computer software, or the like.
(b) This section applies to amendments of payment orders to the
same extent it applies to payment orders.
SECTION 28. AMENDATORY 12A O.S. 2021, Section 4A -207, is
amended to read as follows:
Section 4A-207.
MISDESCRIPTION OF BENEFICIARY
(a) Subject to subsection (b) of this section, if, in a payment
order received by the beneficiary's bank, the name, bank account
number, or other identification of the beneficiary refers to a
nonexistent or unidentifiable p erson or account, no person has
rights as a beneficiary of the order and acceptance of the order
cannot occur.
(b) If a payment order received by the beneficiary's bank
identifies the beneficiary both by name and by an identifying or
bank account number and the name and number identify different
persons, the following rules apply:
(1) Except as otherwise provided in subsection (c) of this
section, if the beneficiary's bank does not know that the name and
number refer to different p ersons, it may rely on t he number as the
proper identification of the beneficiary of the order. The
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beneficiary's bank need not determine whether the name and number
refer to the same person.
(2) If the beneficiary's bank pays the person identified by
name or knows that the name and number identify different persons,
no person has rights as beneficiary except the person paid by the
beneficiary's bank if that person was entitled to receive payment
from the originator of the funds transfer. If no person ha s rights
as beneficiary, acceptance of the order cannot occur.
(c) If (i) a payment order described in subsection (b) of this
section is accepted, (ii) the originator's payment order described
the beneficiary inconsistently by name and number, and (iii) t he
beneficiary's bank pays the person identified by number as permitted
by paragraph (1) of subsection (b) of this section, the following
rules apply:
(1) If the originator is a bank, the originator is obliged to
pay its order.
(2) If the originator is n ot a bank and proves tha t the person
identified by number was not entitled to receive payment from the
originator, the originator is not obliged to pay its order unless
the originator's bank proves that the originator, before acceptance
of the originator's order, had notice that payment of a payment
order issued by the originator might be made by the beneficiary's
bank on the basis of an identifying or bank account number even if
it identifies a person different from the named beneficiary. Proof
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of notice may be made by any admis sible evidence. The originator's
bank satisfies the burden of proof if it proves that the originator,
before the payment order was accepted, signed a writing record
stating the information to which the notice relates.
(d) In a case governed by paragraph (1) of subsection (b) of
this section, if the beneficiary's bank rightfully pays the person
identified by number and that person was not entitled to receive
payment from the originator, the amount paid may be recovered from
that person to the extent allowe d by the law governing mistake and
restitution as follows:
(1) If the originator is obliged to pay its payment order as
stated in subsection (c) of this section, the originator has the
right to recover.
(2) If the originator is no t a bank and is not obliged to pay
its payment order, the originator's bank has the right to recover.
SECTION 29. AMENDATORY 12A O.S. 2021, Section 4A -208, is
amended to read as follows:
Section 4A-208.
MISDESCRIPTION OF INTERMEDIA RY BANK OR BENEFICIARY'S BANK
(a) This subsection applies to a payment order identifying an
intermediary bank or the beneficiary's bank only by an identifying
number.
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(1) The receiving bank may rely on the number as the proper
identification of the inter mediary or beneficiary's bank and need
not determine whether the number identifies a bank.
(2) The sender is obliged to compensate the receiving bank for
any loss and expenses incurred by the receiving bank as a result of
its reliance on the number in exe cuting or attempting to execute the
order.
(b) This subsection applies to a payment order identifying an
intermediary bank or the beneficiary's bank both by name and an
identifying number if the name and number identify different
persons.
(1) If the sender is a bank, the receiving bank may rely on the
number as the proper identification of the intermediary or
beneficiary's bank if the receiving bank, when it executes the
sender's order, does not know that the name and number identify
different persons. T he receiving bank need n ot determine whether
the name and number refer to the same person or whether the number
refers to a bank. The sender is obliged to compensate the receiving
bank for any loss and expenses incurred by the receiving bank as a
result of its reliance on the number in executing or attempting to
execute the order.
(2) If the sender is not a bank and the receiving bank proves
that the sender, before the payment order was accepted, had notice
that the receiving bank might rely on the number as the proper
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identification of the intermediary or beneficiary's bank even if it
identifies a person different from the bank identified by name, the
rights and obligations of the sender and the receiving bank are
governed by paragraph (1) of subsection ( b) of this section, as
though the sender were a bank. Proof of notice may be made by any
admissible evidence. The receiving bank satisfies the burden of
proof if it proves that the sender, before the payment order was
accepted, signed a writing record stating the information to which
the notice relates.
(3) Regardless of whether the sender is a bank, the receiving
bank may rely on the name as the proper identification of the
intermediary or beneficiary's bank if the receiving bank, at the
time it executes the sender's order, does not know that the name and
number identify different persons. The receiving bank need not
determine whether the name and number refer to the same person.
(4) If the receiving bank knows that the name and number
identify different persons, reliance on either the name or the
number in executing the sender's payment order is a breach of the
obligation stated in paragraph (1) of subsection (a) of Section 22
of this act.
SECTION 30. AMENDATORY 12A O.S. 2021, Section 4A-210, is
amended to read as follows:
Section 4A-210.
REJECTION OF PAYMENT ORDER
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(a) A payment order is rejected by the receiving bank by a
notice of rejection transmitted to the sender orally ,
electronically, or in writing a record. A notice of rejection need
not use any particular words and is sufficient if it indicates that
the receiving bank is rejecting the order or will not execute or pay
the order. Rejection is effective when the notice is given if
transmission is by a means that is reaso nable in the circumstances.
If notice of rejection is given by a means that is not reasonable,
rejection is effective when the notice is received. If an agreement
of the sender and receiving bank establishes the means to be used to
reject a payment order , (i) any means complyin g with the agreement
is reasonable and (ii) any means not complying is not reasonable
unless no significant delay in receipt of the notice resulted from
the use of the noncomplying means.
(b) This subsection applies if a receiving bank other than the
beneficiary's bank fails to execute a payment order despite the
existence on the execution date of a withdrawable credit balance in
an authorized account of the sender sufficient to cover the order.
If the sender does not receive notic e of rejection of the or der on
the execution date and the authorized account of the sender does not
bear interest, the bank is obliged to pay interest to the sender on
the amount of the order for the number of days elapsing after the
execution date to the earlier of the day the order is canceled
pursuant to subsection (d) of Section 19 of this act or the day the
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sender receives notice or learns that the order was not executed,
counting the final day of the period as an elapsed day. If the
withdrawable credit balance during that p eriod falls below the
amount of the order, the amount of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted
payment orders issued to it are deemed rejected at the time the bank
suspends payments.
(d) Acceptance of a payment order precludes a later rejection
of the order. Rejection of a payment order precludes a later
acceptance of the order.
SECTION 31. AMENDATORY 12A O.S. 2021, Section 4A -211, is
amended to read as follows:
Section 4A-211.
CANCELLATION AND AMENDMENT OF PAYMENT ORDER
(a) A communication of the sender of a payment order canceling
or amending the order may be transmitted to the receiving bank
orally, electronically, or in writing a record. If a security
procedure is in effect between the sender and the receiving bank,
the communication is not effective to cancel or amend the order
unless the communication is verified pursuant to the security
procedure or the bank agrees to the cancellation or amendment .
(b) Subject to subsec tion (a) of this section, a communication
by the sender canceling or amending a payment order is effective to
cancel or amend the order if notice of the communication is received
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at a time and in a manner affording the receiving ban k a reasonable
opportunity to act on the communication before the bank accepts the
payment order.
(c) After a payment order has been accepted, cancellation or
amendment of the order is not effective unless the receiving bank
agrees or a funds-transfer system rule allows cancella tion or
amendment without agreement of the bank.
(1) With respect to a payment order accepted by a receiving
bank other than the beneficiary's bank, cancellation or amendment is
not effective unless a conforming cancellation or ame ndment of the
payment order issued by the receiving bank is also made.
(2) With respect to a payment order accepted by the
beneficiary's bank, cancellation or amendment is not effective
unless the order was issued in execution of an unauthorized payment
order, or because of a mi stake by a sender in the funds transfer
which resulted in the issuance of a payment order (i) that is a
duplicate of a payment order previously issued by the sender, (ii)
that orders payment to a beneficiary not entitled to receive payment
from the originator, or (iii) that orders payment in an amount
greater than the amount the beneficiary was entitled to receive from
the originator. If the payment order is canceled or amended, the
beneficiary's bank is entitled to recover from the beneficiary any
amount paid to the beneficiary to the extent allowed by the law
governing mistake and restitution.
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(d) An unaccepted payment order is canceled by operation of law
at the close of the fifth funds -transfer business day of the
receiving bank after the execution date or payment date of the
order.
(e) A canceled payment order cannot be accepted. If an
accepted payment order is canceled, the acceptance is nullified and
no person has any right or obligation based on the acceptance.
Amendment of a payment order is dee med to be cancellation of the
original order at the time of amendment and issue of a new payment
order in the amended form at the same time.
(f) Unless otherwise provided in an agreement of the parties or
in a funds-transfer system rule, if the receiving bank, after
accepting a payment order, agrees to cancellation or amendment of
the order by the sender or is bound by a funds -transfer system rule
allowing cancellation or amendment without the bank's agreement, the
sender, whether or not cancellation or am endment is effective, is
liable to the bank for any loss and expenses, including reasonable
attorney's attorney fees, incurred by the bank as a result of the
cancellation or amendment or attempted cancellation or amendment.
(g) A payment order is not revoked by the death or legal
incapacity of the sender unless the receiving bank knows of the
death or of an adjudication of incapacity by a court of competent
jurisdiction and has reasonable opportunity to act before acceptance
of the order.
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(h) A funds-transfer system rule is not effective to the extent
it conflicts with paragraph (2) of subsection (c) of this section.
SECTION 32. AMENDATORY 12A O.S. 2021, Section 4A -305, is
amended to read as follows:
Section 4A-305.
LIABILITY FOR LATE OR IMPROPER EXECUTION OR FAILURE TO
EXECUTE PAYMENT ORDER
(a) If a funds transfer is completed but execution of a payment
order by the receiving bank in breach of Section 22 of this act
results in delay in payment to the benefi ciary, the bank is oblig ed
to pay interest to either the originator or the beneficiary of the
funds transfer for the period of delay caused by the improper
execution. Except as provided in subsection (c) of this section,
additional damages are not recover able.
(b) If execution of a payment order by a receiving bank in
breach of Section 22 of this act results in (i) noncompletion of the
funds transfer, (ii) failure to use an intermediary bank designated
by the originator, or (iii) issuance of a payment ord er that does
not comply with the terms of the payment order of the originator,
the bank is liable to the originator for its expenses in the funds
transfer and for incidental expenses and interest losses, to the
extent not covered by subsection (a) of this section, resulting from
the improper execution. Except as provided in subsection (c) of
this section, additional damages are not recoverable.
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(c) In addition to the amounts payable under subsections (a)
and (b) of this section, damages, including consequ ential damages,
are recoverable to the extent provided in an express written
agreement of the receiving bank , evidenced by a record .
(d) If a receiving bank fails to execute a payment order it was
obliged by express agreement to execute, the receiving ban k is
liable to the sender for its expenses in the transaction and for
incidental expenses and interest losses resulting from the failure
to execute. Additional damages, including consequential damages,
are recoverable to the extent provided in an express written
agreement of the receiving bank, evidenced by a record, but are not
otherwise recoverable.
(e) Reasonable attorney's attorney fees are recoverable if
demand for compensation under subsection (a) or (b) of this section
is made and refused before an action is brought on the claim. If a
claim is made for breach of an agreement under subsection (d) of
this section and the agreement does not provide for damages,
reasonable attorney's attorney fees are recoverable if demand for
compensation under subsec tion (d) of this section is made and
refused before an action is brought on the claim.
(f) Except as stated in this section, the liability of a
receiving bank under subsections (a) and (b) of this section may not
be varied by agreement.
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SECTION 33. AMENDATORY 12A O.S. 2021, Section 5 -104, is
amended to read as follows:
Section 5-104.
Formal Requirements.
A letter of credit, confirmation, advice, transfer, amendment,
or cancellation may be issued in any form that is a signed record
and is authenticated:
(1) By a signature; or
(2) In accordance with the agreement of the parties or the
standard practice referred to in subsection (e) of
Section 5-108 of this title.
SECTION 34. AMENDATORY 12A O.S. 2021, Section 5 -116, is
amended to read as follows:
Section 5-116.
Choice of Law and Forum.
(a) The liability of an issuer, nominated person, or adviser for
action or omission is governed by the law of the jurisdiction chosen
by an agreement in the form of a record signe d or otherwise
authenticated by the affected parties in the manner provided in
Section 5-104 of this title or by a provision in the person's letter
of credit, confirmation, or other undertaking. The jurisdiction
whose law is chosen need not bear any relat ion to the transaction.
(b) Unless subsection (a) of this section applies, the
liability of an issuer, nominated person, or adviser for action or
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omission is governed by the law of the jurisdiction in which the
person is located. The person is considered to be located at the
address indicated in the person's undertaking. If more than one
address is indicated, the person is considered to be located at the
address from which the person's undertaking was issued.
(c) For the purpose of jurisdiction, choice of law, and
recognition of interbranch letters of credit, but not enforcement of
a judgment, all branches of a bank are considered separate juridical
entities and a bank is considered to be located at the place where
its relevant branch is considered to be located under this
subsection (d) of this section.
(d) A branch of a bank is considered to be located at the
address indicated in the branch's undertaking. If more than one
address is indicated, the branch is considered to be located at the
address from which the undertaking was issued.
(c) (e) Except as otherwise provided in this subsection, the
liability of an issuer, nominated person, or adviser is governed by
any rules of custom or practice, such as the Uniform Customs and
Practice for Documentary C redits, to which the let ter of credit,
confirmation, or other undertaking is expressly made subject. If:
(1) This article would govern the liability of an issuer,
nominated person, or adviser under subsection (a) or
(b) of this section;
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(2) The relevant undertaking incorporates rules of custom
or practice; and
(3) There is conflict between this article and those rules
as applied to that undertaking,
those rules govern except to the extent of any conflict with the
nonvariable provisions specified in subsect ion (c) of Section 5 -103
of this title.
(d) (f) If there is conflict between this article and Article
3, 4, 4A, or 9 of this title, this article governs.
(e) (g) The forum for settling disputes arising out of an
undertaking within this article may be cho sen in the manner and with
the binding effect that governing law may be chosen in accordance
with subsection (a) of this section.
SECTION 35. AMENDATORY 12A O.S. 2021, Section 7 -102, is
amended to read as follows:
Section 7-102.
Definitions and Index of D efinitions.
(a) In this article, unless the context otherwise requires :
(1) "Bailee" means a person that by a warehouse receipt, bill
of lading or other document of title acknowledges possession of
goods and contracts to deliver t hem.
(2) "Carrier" means a person that issues a bill of lading.
(3) "Consignee" means a person named in a bill of lading to
which or to whose order the bill promises delivery.
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(4) "Consignor" means the person named in a bill of lading as
the person from whom the goods have bee n received for shipment.
(5) "Delivery order" means a record that contains an order to
deliver goods directed to a warehouse, carrier, or other person that
in the ordinary course of business issues warehouse receipts or
bills of lading.
(6) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(7) "Goods" means all things that are treated as movable for
the purposes of a contract of storage or transportation.
(8) "Issuer" means a bailee that issues a d ocument of title or,
in the case of an unaccepted delivery order, the person that orders
the possessor of goods to deliver. The term includes a person for
which an agent or employee purports to act in issuing a document if
the agent or employee has real or apparent authority to issue
documents, even if the issuer did not receive any goods, the goods
were misdescribed, or in any other respect the agent or employee
violated the issuer's instructions.
(9) "Person entitled under the do cument" means the holder , in
the case of a negotiable document of title, or the person to which
delivery of the goods is to be made by the terms of, or pursuant to
instructions in a record under, a nonnegotiable document of title.
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(10) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(11) "Sign" means, with present intent to authenticate or adopt
a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic sound, symbol, or process.
(12) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(13) (11) "Warehouse" means a person engaged in the business o f
storing goods for hire.
(b) Definitions in other articles applying to this article and
the sections in which they appear are:
(1) "Contract for sale", Section 2 -106.
(2) "Lessee in the ordinary course of business", Section 2A -
103.
(3) "Receipt" of go ods, Section 2-103.
(c) In addition Article 1 contains general definitions and
principles of construction and interpretation applicable throughout
this article.
SECTION 36. AMENDATORY 12A O.S. 2021, Section 7 -106, is
amended to read as follows:
Section 7-106.
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Control of Electronic Document of Title.
(a) A person has control of an electronic document of title if
a system employed for evidencing the transfer of interests in the
electronic document reliably establishes that person as the person
to which the electronic document was issued or transferred.
(b) A system satisfies subsection (a) of this section, and a
person is deemed to have has control of an electronic document of
title, if the document is created, stored, and assigned transferred
in such a manner that:
(1) a single authoritative copy of the document exists which
is unique, identifiable, and, except as otherwise provided in
paragraphs (4), (5), and (6) of this subsection, unalterable;
(2) the authoritative copy identifie s the person asserting
control as:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document
has been transferred, the person to which the document
was most recently transferred;
(3) the authoritative co py is communicated to and maintained by
the person asserting control or its designated custodian;
(4) copies or amendments that add or change an identified
assignee transferee of the authoritative copy can be made only with
the consent of the person asser ting control;
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(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
(6) any amendment of the authoritative copy is readily
identifiable as authorized or unauthorized.
(c) A system satisfies subsection (a) of this section, and a
person has control of an electronic document of title, if an
authoritative electronic copy of the document, a record attached to
or logically associated with the electronic copy, or a system in
which the electronic copy is recorded:
(1) enables the person readily to identify each electronic copy
as either an authoritative copy or a nonauthoritative copy;
(2) enables the person readily to identify itself in any way,
including by name, identifying nu mber, cryptographic key, office, or
account number, as the person to which each authoritative electronic
copy was issued or transferred; and
(3) gives the person exclusive power, subject to subsection (d)
of this section, to:
(A) prevent others from addin g or changing the person to
which each authoritative electronic copy has been
issued or transferred; and
(B) transfer control of each authoritative electronic
copy.
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(d) Subject to subsection (e) of this section, a power is
exclusive under subparagraphs (A ) and (B) of paragraph (3) of
subsection (c) of this section even if:
(1) the authoritative electronic copy, a record attached to or
logically associated with the authoritative electronic copy, or a
system in which the authoritative electronic copy is rec orded limits
the use of the document of title or has a protocol that is
programmed to cause a change, including a transfer or loss of
control; or
(2) the power is shared with another person.
(e) A power of a person is not shared with another person under
paragraph (2) of subsection (d) of this section and the person's
power is not exclusive if:
(1) the person can exercise the power only if the power also is
exercised by the other person; and
(2) the other person:
(A) can exercise the power without exerc ise of the power
by the person; or
(B) is the transferor to the person of an interest in the
document of title.
(f) If a person has the powers specified in subparagraphs (A)
and (B) of paragraph (3) of subsection (c) of this section, the
powers are presumed to be exclusive.
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(g) A person has control of an electronic document of title if
another person, other than the transferor to the person of an
interest in the document:
(1) has control of the document and acknowledges that it has
control on behalf of t he person; or
(2) obtains control of the document after having acknowledged
that it will obtain control of the document on behalf of the person.
(h) A person that has control under this section is not
required to acknowledge that it has control on behalf of another
person.
(i) If a person acknowledges that it has or will obtain control
on behalf of another person, unless the person otherwise agrees or
law other than this article or Article 9 of this title otherwise
provides, the person does not owe any d uty to the other person and
is not required to confirm the acknowledgment to any other person.
SECTION 37. AMENDATORY 12A O.S. 2021, Section 8 -102, is
amended to read as follows:
Section 8-102.
Definitions.
(a) In this article:
(1) "Adverse claim" means a claim that a claimant has a
property interest in a financial asset and that it is
a violation of the rights of the claimant for another
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person to hold, transfer or deal with the financial
asset;
(2) "Bearer form", as applied to a certificated security,
means a form in which the security is payable to the
bearer of the security certificate according to its
term but not by reason of an indorsement;
(3) "Broker" means a person defined as a broker or dealer
under the federal securities laws, but without
excluding a bank acting in that capacity;
(4) "Certificated security" means a security that is
represented by a certificate;
(5) "Clearing corporation" means:
(i) a person that is registered as a "clearing
agency" under the federal secur ities laws;
(ii) a federal reserve bank; or
(iii) any other person that provides clearance or
settlement services with respect to financial
assets that would require it to register as a
clearing agency under the federal securities laws
but for an exclusion or exemption from the
registration requirement, if its activities as a
clearing corporation, including promulgation of
rules, are subject to regulation by a federal or
state governmental authority;
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(6) "Communicate" means to:
(i) send a signed writing record; or
(ii) transmit information by any mechanism agreed upon
by the persons transmitting and receiving the
information;
(7) "Entitlement holder" means a person identified in the
records of a securities intermediary as the person
having a security entitle ment against the securities
intermediary. If a person acquires a security
entitlement by virtue of paragraph (2) or (3) of
subsection (b) of Section 8 -501 of this title, that
person is the entitlement holder;
(8) "Entitlement order" means a notification c ommunicated
to a securities intermediary directing transfer or
redemption of a financial asset to which the
entitlement holder has a security entitlement;
(9) "Financial asset", except as otherwise provided in
Section 8-103 of this title, means:
(i) a security;
(ii) an obligation of a person or a share,
participation or other interest in a person or in
property or an enterprise of a person, which is,
or is of a type, dealt in or traded on financial
markets, or which is recognized in any area in
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which it is issued or dealt in as a medium for
investment; or
(iii) any property that is held by a securities
intermediary for another person in a securities
account if the securities intermediary has
expressly agreed with the other person that the
property is to be treated as a financial asset
under this article.
As context requires, the term means either the
interest itself or the means by which a person's claim
to it is evidenced, including a certificated or
uncertificated security, a security certificate, or a
security entitlement;
(10) "Good faith", for purposes of the obligation of good
faith in the performance or enforcement of contracts
or duties within this article, means honesty in fact
and the observance of reasonable commercial standards
of fair dealing;
(11) "Indorsement" means a signature that alone or
accompanied by other words is made on a security
certificate in registered form or on a separate
document for the purpose of assigning, transferring or
redeeming the security or granting a power to assign,
transfer, or redeem it;
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(12) "Instruction" means a notification communicated to the
issuer of an uncertificated security which directs
that the transfer of the security be registered or
that the security be redeemed;
(13) "Registered form", as applied to a c ertificate
security, means a form in which:
(i) the security certificate specifies a person
entitled to the security; and
(ii) a transfer of the security may be registered upon
books maintained for that purpose by or on behalf
of the issuer, or the securit y certificate so
states;
(14) "Securities intermediary" means:
(i) a clearing corporation; or
(ii) a person, including a bank or broker, that in the
ordinary course of its business maintains
securities accounts for others and is acting in
that capacity;
(15) "Security", except as otherwise provided in Section 8 -
103 of this title, means an obligation of an issuer or
a share, participation, or other interest in an issuer
or in property or an enterprise of an issuer:
(i) which is represented by a security cert ificate in
bearer or registered form, or the transfer of
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which may be registered upon books maintained for
that purpose by or on behalf of the issuer;
(ii) which is one of a class or series or by its terms
is divisible into a class or series of shares,
participations, interests, or obligations; and
(iii) which:
(A) is, or is of a type, dealt in or traded on
securities exchanges or securities markets;
or
(B) is a medium for investment and by its terms
expressly provides that it is a security
governed by this article;
(16) "Security certificate" means a certificate
representing a security;
(17) "Security entitlement" means the rights and property
interest of an entitlement holder with respect to a
financial asset specified in Part 5 of this article;
and
(18) "Uncertificated security" means a security that is not
represented by a certificate.
(b) Other The following definitions applying to in this article
and the sections in which they appear are other articles apply to
this article:
"Appropriate person". Sect ion 8-107.
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"Control". Section 8-106.
"Controllable account". Section 1 -9-102.
"Controllable electronic record". Section 12 -102.
"Controllable payment intangible". Section 1 -9-102.
"Delivery". Section 8 -301.
"Investment company security". Section 8 -103.
"Issuer". Section 8 -201.
"Overissue". Section 8 -210.
"Protected purchaser". Section 8 -303.
"Securities account". Section 8 -501.
(c) In addition, Article 1 contains general definitions and
principles of construction and interpretation applicable thr oughout
this article.
(d) The characterization of a person, business, or transaction
for purposes of this article does not determine the characterization
of the person, business, or transaction for purposes of any other
law, regulation, or rule.
SECTION 38. AMENDATORY 12A O.S. 2021, Section 8 -103, is
amended to read as follows:
Section 8-103. Rules for Determining Whether Certain
Obligations and Interests Are Securities or Financial Assets.
(a) A share or similar equity interest issued by a corporation,
business trust, joint stock company, or similar entity is a
security.
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(b) An "investment company security" is a security.
"Investment company security" means a share or similar equity
interest issued by an entity that is register ed as an investment
company under the federal investment company laws, an interest in a
unit investment trust that is so registered, or a face -amount
certificate issued by a face -amount certificate company that is so
registered. Investment company securit y does not include an
insurance policy or endowment policy or annuity contract issued by
an insurance company.
(c) An interest in a partnership or limited liability company
is not a security unless it is dealt in or traded on securities
exchanges or in securities markets, its terms expressly provide that
it is a security governed by this article, or it is an investment
company security. However, an interest in a partnership or limited
liability company is a financial asset if it is held in a securities
account.
(d) A writing that is a security certificate is governed by
this article and not by Article 3 of this code, even though it also
meets the requirements of that article. However, a negotiable
instrument governed by Article 3 of this code is a financ ial asset
if it is held in a securities account.
(e) An option or similar obligation issued by a clearing
corporation to its participants is not a security, but is a
financial asset.
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(f) A commodity contract, as defined in paragraph (15) of
subsection (a) of Section 1-9-102 of this title, is not a security
or a financial asset.
(g) A document of title is not a financial asset unless
subparagraph (iii) of paragraph (9) of subsection (a) of Section 8 -
102 of this title applies.
(h) A controllable account, controllable electronic record, or
controllable payment intangible is not a financial asset unless
subparagraph (iii) of paragraph 9 of subsection (a) of Section 8 -102
of this title applies.
SECTION 39. AMENDATORY 12A O.S. 2021, Se ction 8-106, is
amended to read as follows:
Section 8-106.
Control.
(a) A purchaser has "control" of a certificated security in
bearer form if the certificated security is delivered to the
purchaser.
(b) A purchaser has "control" of a certificated securi ty in
registered form if the certificated security is delivered to the
purchaser, and:
(1) the certificate is indorsed to the purchaser or in
blank by an effective endorsement; or
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(2) the certificate is registered in the name of the
purchaser, upon origina l issue or registration of
transfer by the issuer.
(c) A purchaser has "control" of an uncertificated security if:
(1) the uncertificated security is delivered to the
purchaser; or
(2) the issuer has agreed that it will comply with
instructions originated by the purchaser without
further consent by the registered owner.
(d) A purchaser has "control" of a security entitlement if:
(1) the purchaser becomes the entitlement holder;
(2) the securities intermediary has agreed that it will
comply with entitlemen t orders originated by t he
purchaser without further consent by the entitlement
holder; or
(3) another person has control of the, other than the
transferor to the purchaser of an interest in the
security entitlement on behalf of the purchaser or,
having previously acquired control of the security
entitlement, acknowledges that it has control :
(A) has control of the security entitlement and
acknowledges that it has control on behalf of the
purchaser; or
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(B) obtains control of the security entitlement after
having acknowledged that it will obtain control
of the security entitlement on behalf of the
purchaser.
(e) If an interest in a security entitlement is granted by the
entitlement holder to the entitlement holder's own securities
intermediary, the securitie s intermediary has control.
(f) A purchaser who has satisfied the requirements of
subsection (c) or (d) of this section has control even if the
registered owner in the case of subsection (c) of this section or
the entitlement holder in the case of subsect ion (d) of this section
retains the right to make substitutions for the uncertificated
security or security entitlement, to originate instructions or
entitlement orders to the issuer or securities intermediary, or
otherwise to deal with the uncertificated security or security
entitlement.
(g) An issuer or a securities intermediary may not enter into
an agreement of the kind described in paragraph (2) of subsection
(c) or paragraph (2) of subsection (d) of this section without the
consent of the registered owner or entitlement hol der, but an issuer
or a securities intermediary is not required to enter into such an
agreement even though the registered owner or entitlement holder so
directs. An issuer or securities intermediary that has entered into
such an agreement is not required to confirm the existence of the
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agreement to another party unless requested to do so by the
registered owner or entitlement holder.
(h) A person that has control under this section is not
required to acknowledge that it has contro l on behalf of a
purchaser.
(i) If a person acknowledges that it has or will obtain control
on behalf of a purchaser, unless the person otherwise agrees or law
other than this article or Article 9 of this title otherwise
provides, the person does not owe any duty to the purchaser and is
not required to confirm the acknowledgment to any other person.
SECTION 40. AMENDATORY 12A O.S. 2021, Section 8 -110, is
amended to read as follows:
Section 8-110.
Applicability; Choice of Law.
(a) The local law of the iss uer's jurisdiction, as specified in
subsection (d) of this section, governs:
(1) the validity of a security;
(2) the rights and duties of the issuer with respect to
registration of transfer;
(3) the effectiveness of registration of transfer by the
issuer;
(4) whether the issuer owes any duties to an adverse
claimant to a security; and
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(5) whether an adverse claim can be asserted against a
person to whom transfer of a certificated or
uncertificated security is registered or a person w ho
obtains control of an uncertificated security.
(b) The local law of the securities intermediary's
jurisdiction, as specified in subsection (e) of this section,
governs:
(1) acquisition of a security entitlement from the
securities intermediary;
(2) the rights and duties of the securities intermediary
and entitlement holder arising out of a security
entitlement;
(3) whether the securities intermediary owes any duties to
an adverse claimant to a security entitlement; and
(4) whether an adverse claim can b e asserted against a
person who acquires a security entitlement from the
securities intermediary or a person who purchases a
security entitlement or interest therein from an
entitlement holder.
(c) The local law of the jurisdiction in which a security
certificate is located at the time of delivery governs whether an
adverse claim can be asserted against a person to whom the security
certificate is delivered.
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(d) "Issuer's jurisdiction" means the jurisdiction under which
the issuer of the security is organ ized or, if permitted by the law
of that jurisdiction, the law of another jurisdiction specified by
the issuer. An issuer organized under the law of this state may
specify the law of another jurisdiction as the law governing the
matters specified in parag raphs (2) through (5) of subsection (a) of
this section.
(e) The following rules determine a "securities intermediary's
jurisdiction" for purposes of this section:
(1) If an agreement between the securities intermediary
and its entitlement holder governin g the securities
account expressly provides that a particular
jurisdiction is the securities intermediary's
jurisdiction for purposes of this part, this article,
or this title, that jurisdiction is the securities
intermediary's jurisdiction;
(2) If paragraph (1) does not apply and an agreement
between the securities intermediary and its
entitlement holder governing the securities account
expressly provides that the agreement is governed by
the law of a particular jurisdiction, that
jurisdiction is the secur ities intermediary's
jurisdiction.
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(3) If neither paragraph (1) nor paragraph (2) of this
subsection applies and an agreement between the
securities intermediary and its entitlement holder
governing the securities account expressly provides
that the securities account is maintained at an office
in a particular jurisdiction, that jurisdiction is the
securities intermediary's jurisdiction;
(4) If none of the preceding paragraphs of this subsection
applies, the securities intermediary's jurisdiction is
the jurisdiction in which the o ffice identified in an
account statement as the office serving the
entitlement holder's account is located; and
(5) If none of the preceding paragraphs of this subsection
applies, the securities intermediary's jurisdiction is
the jurisdiction in which the chief executive office
of the securities intermediary is located.
(f) A securities intermediary's jurisdiction is not determined
by the physical location of certificates representing financial
assets, or by the jurisdiction in whic h is organized the issue r of
the financial asset with respect to which an entitlement holder has
a security entitlement, or by the location of facilities for data
processing or other recordkeeping concerning the account.
(g) The local law of the issuer's jurisdiction or the
securities intermediary's jurisdiction governs a matter or
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transaction specified in subsection (a) or (b) of this section even
if the matter or transaction does not bear any relation to the
jurisdiction.
SECTION 41. AMENDATORY 12A O.S. 2021, Section 8-303, is
amended to read as follows:
Section 8-303.
Protected Purchaser.
(a) "Protected purchaser" means a purchaser of a certificated
or uncertificated security, or of an interest therein, who:
(1) gives value;
(2) does not have notice of any adverse claim to the
security; and
(3) obtains control of the certificated or uncertificated
security.
(b) In addition to acquiring the rights of a purchaser, a A
protected purchaser also acquires its interest in the security free
of any adverse claim.
SECTION 42. AMENDATORY 12A O.S. 2021, Section 1 -9-102,
is amended to read as follows:
Section 1-9-102.
DEFINITIONS AND INDEX OF DEFINITIONS
(a) In this article:
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(1) "Accession" means goods that are phys ically united with
other goods in such a manner that the identity of the original goods
is not lost.
(2) (A) "Account", except as used in "account for", "account
statement", "account to", "commodity account" in
paragraph (14) of this subsection, "customer account",
"deposit account" in paragraph (29) of this
subsection, "on account of", and "statement of
account", means a right to payment of a monetary
obligation, whether or not earned by performance:
(i) for property that has been or is to be sold,
leased, licensed, assigned, or otherwise disposed
of;
(ii) for services rendered or to be rendered;
(iii) for a policy of insurance issued or to be issued;
(iv) for a secondary obligation incurred or to be
incurred;
(v) for energy provided or to be provided;
(vi) for the use or hire of a vessel under a charter
or other contract;
(vii) arising out of the use of a credit or charge card
or information contained on or for use with the
card; or
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(viii) as winnings in a lottery or other game of chance
operated or sponsored by a state, governmental
unit of a state, or a person licensed or
authorized to operate the game by a state or
governmental unit of a state.
(B) The term includes controllable accounts and health-
care-insurance receivables.
(C) The term does not include :
(i) rights to payment evidenced by chattel paper or
an instrument;
(ii) commercial tort claims;
(iii) deposit accounts;
(iv) investment property;
(v) letter-of-credit rights or letters of credit; or
(vi) rights to payment for money or funds advanced or
sold, other than rights arising out of the use of
a credit or charge card or information contained
on or for use with the card ; or
(vii) rights to payment evidenced by an instrument .
(3) "Account debtor" means a person obligated on an account,
chattel paper, or general intangible . The term does not include
persons obligated to pay a negotiable instrument, even if the
negotiable instrument constitutes part of evidences chattel paper.
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(4) "Accounting", except as used in "accounting for", means a
record:
(A) authenticated signed by a secured party;
(B) indicating the aggregate unpaid secured obligations as
of a date not more than thirty -five (35) days earlier
or thirty-five (35) days later than the date of the
record; and
(C) identifying the components of the obligations in
reasonable detail.
(5) "Agricultural lien" means an interest in farm products:
(A) which secures payment or performance of an obligation
for:
(i) goods or services furnished in connection with a
debtor's farming operation; or
(ii) rent on real property leased by a debtor in
connection with its farming operation;
(B) which is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished
goods or services to a debtor in connection with
a debtor's farming o peration; or
(ii) leased real property to a debtor in connection
with the debtor's farming operation; and
(C) whose effectiveness does not depend on the person's
possession of the personal property.
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(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a
security interest that:
(i) is created by a debtor having an interest in the
minerals before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or
minehead of oil, gas, or other mi nerals in which the
debtor had an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) with present intent to adopt or accept a record, to
attach to or logically associate with the record an
electronic sound, symbol, or process Reserved.
(7A) "Assignee", except as used in "assignee for benefit of
creditors", means a person:
(A) in whose favor a security interest that secures an
obligation is created or provided for under a security
agreement, whether or not the obligation is
outstanding; or
(B) to which an account, chattel paper, payment
intangible, or promissory note has been sold. The
term includes a person to which a security interest
has been transferred by a secured party.
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(7B) "Assignor" means a person t hat:
(A) under a security agreement, creates or provides for a
security interest that secures an obligation; or
(B) sells an account, chattel paper, payment intangible,
or promissory note. The term includes a secured party
that has transferred a security interest to another
person.
(8) "Bank" means an organization that is engaged in the
business of banking. The term includes savings banks, savings and
loan associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are mone y, checks,
deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with
respect to which a statute provides for the security interest in
question to be indicated on the certificate as a condition or result
of the security interest's obtaining prio rity over the rights of a
lien creditor with respect to the collateral. The term includes
another record maintained as an alternative to a certificate of
title by the governmental unit that issues certificates of title if
a statute permits the security interest in question to be indicated
on the record as a condition or result of the security interest's
obtaining priority over the rights of a lien creditor with respect
to the collateral.
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(11) "Chattel paper" means a record or records that evidence
both a monetary obligation and a security interest in specific
goods, a security interest in specific goods and software used in
the goods, a security interest in specific goods and license of
software used in the goods, a lease of specifi c goods, or a lease of
specific goods and license of software used in the goods. In this
paragraph, "monetary obligation" means a monetary obligation secured
by the goods or owed under a lease of goods and includes a monetary
obligation with respect to so ftware used in the goods :
(A) a right to payment of a monetary obligation secured by
specific goods, if the right to payment and security
agreement are evidenced by a record; or
(B) a right to payment of a monetary obligation owed by a
lessee under a lease agreement with respect to
specific goods and a monetary obligation owed by the
lessee in connection with the transaction giving rise
to the lease, if:
(i) the right to payment and lease agreement are
evidenced by a record; and
(ii) the predominant purpose of the transaction givi ng
rise to the lease was to give the lessee the
right to possession and use of the goods .
The term does not include charters or other contracts involving the
use or hire of a vessel. If a transaction is evidenced by records
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that include an instrument or series of instruments, the group of
records taken together constitutes chattel paper a right to payment
arising out of a charter or other contract involving the use or hire
of a vessel or a right to payment arising out of the use of a credit
or charge card or information contained on or for use with the card .
(12) "Collateral" means the property subject to a security
interest or agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, and
promissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an indi vidual and the claim:
(i) arose in the course of the claimant's business or
profession; and
(ii) does not include damages arising out of personal
injury to or the death of an individual.
(14) "Commodity account" means an account ma intained by a
commodity intermediary in which a commodity contract is carried for
a commodity customer.
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(15) "Commodity contract" means a commodity futures contract,
an option on a commodity futures contract, a commodity option, or
another contract if the contract or option is:
(A) traded on or subject to the rules of a board of trade
that has been designated as a contract market for such
a contract pursuant to federal commodities laws; or
(B) traded on a foreign commodity board of trade,
exchange, or market, and is carried on the books of a
commodity intermediary for a commodity customer.
(16) "Commodity customer" means a person for which a commodity
intermediary carries a commodity contract on its books.
(17) "Commodity intermediary" means a person that :
(A) is registered as a futures commission merchant under
federal commodities law; or
(B) in the ordinary course of its business provides
clearance or settlement services for a board of trade
that has been designated as a contract market pursuant
to federal commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the
persons sending and receiving the record; or
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(C) in the case of transmission of a record to or by a
filing office, to transmit a record by any means
prescribed by filing -office rule.
(19) "Consignee" means a merchant to which goods are delivered
in a consignment.
(20) "Consignment" means a transaction, regardless of its form,
in which a person delivers goo ds to a merchant for the purpose of
sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other
than the name of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be
substantially engaged in selling the goods of
others;
(B) with respect to each delivery, the aggregate value of
the goods is One Thousand Dollars ($1,000.00) or more
at the time of delivery;
(C) the goods are not consumer goods immediately before
delivery; and
(D) the transaction does not create a security interest
that secures an obligation.
(21) "Consignor" means a person that delivers goods to a
consignee in a consignment.
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(22) "Consumer debtor" means a debtor in a consumer
transaction.
(23) "Consumer goods" means goods that are used or bought for
use primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer transaction
in which:
(A) an individual incurs an obligation primarily for
personal, family, or household purp oses; and
(B) a security interest in consumer goods secures the
obligation.
(25) "Consumer obligor" means an obligor who is an individual
and who incurred the obligation as part of a transaction entered
into primarily for personal, family, or household pu rposes.
(26) "Consumer transaction" means a transaction in which (i) an
individual incurs an obligation primarily for personal, family, or
household purposes, (ii) a security interest secures the obligation,
and (iii) the collateral is held or acquired pr imarily for personal,
family, or household purposes. The term includes consumer -goods
transactions.
(27) "Continuation statement" means an amendment of a financing
statement which:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
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(B) indicates that it is a continuation statement for, or
that it is filed to continue the effectiveness of, the
identified financing statement.
(27A) "Controllable account" means an account evidenced by a
controllable electronic recor d that provides that the account debtor
undertakes to pay the person that has control under Section 12 -105
of this title of the controllable electronic record.
(27B) "Controllable payment intangible" means a payment
intangible evidenced by a controllable electronic record that
provides that the account debtor undertakes to pay the person that
has control under Section 12 -105 of this title of the controllable
electronic record.
(28) "Debtor" means:
(A) a person having an interest, other than a security
interest or other lien, in the collateral, whether or
not the person is an obligor;
(B) a seller of accounts, chattel paper, payment
intangibles, or promissory notes; or
(C) a consignee.
(29) "Deposit account" means a demand, time, savings, passbook,
or similar account maintained w ith a bank as defined in paragraph
(8) of this subsection. The term does not include investment
property or a deposit account evidenced by an instrument.
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(30) "Document" means a document of title or a receipt of the
type described in subsection (b) of Section 7 -201 of this title.
(31) "Electronic chattel paper" means chattel paper evidenced
by a record or records consisting of information stored in an
electronic medium Reserved.
(32) "Encumbrance" means a right, other than an own ership
interest, in real property. The term includes mortgages and other
liens on real property.
(33) "Equipment" means goods other than inventory, farm
products, or consumer goods.
(34) "Farm products" means goods, other than standing timber,
with respect to which the debtor is engaged in a farming operation
and which are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural
operations;
(B) livestock, born or unborn, including aquat ic goods
produced in aquacultural operations;
(C) supplies used or produced in a farming operation; or
(D) products of crops or livestock in their unmanufactured
states.
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(35) "Farming operation" means raising, cultivating,
propagating, fattening, grazing, or any other farming, livestock, or
aquacultural operation.
(36) "File number" means the number assigned to an initial
financing statement pursuant to subsection (a) of Section 1 -9-519 of
this title.
(37) "Filing office" means an office designated in Se ction 1-9-
501 as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to
Sections 1-9-526 and 1-9-526.1 of this title.
(39) "Financing statement" means a record or records composed
of an initial financing statement and any filed record relating to
the initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying
subsections (a) and (b) of Sect ion 1-9-502 of this title. The term
includes the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an int erest in them arises under real
property law.
(42) "General intangible" means any personal property,
including things in action, other than accounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods,
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instruments, investment proper ty, letter-of-credit rights, letters
of credit, money, and oil, gas, or other minerals before extraction.
The term includes controllable electronic records, payment
intangibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) (A) "Goods" means all things that are movable when a
security interest attaches.
(B) The term includes:
(i) fixtures;
(ii) standing timber that is to be cut and removed
under a conveyance or contract for sale;
(iii) the unborn young of animals;
(iv) crops grown, growing, or to be grown, even if the
crops are produced on trees, vines, or bushes;
and
(v) manufactured homes.
(C) The term also includes a computer program embedded in
goods and any supporting i nformation provided in
connection with a transaction relating to the program
if:
(i) the program is associated with the goods in such
a manner that it customarily is considered part
of the goods; or
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(ii) by becoming the owner of the goods, a person
acquires a right to use the pro gram in connection
with the goods.
(D) The term does not include a computer program which is
embedded in goods and that consist solely of the
medium in which the program is embedded.
(E) The term also does not include accounts, chat tel
paper, commercial tort claims, deposit accounts,
documents, general intangibles, instruments,
investment property, letter -of-credit rights, letters
of credit, money, or oil, gas, or other minerals
before extraction.
(45) "Governmental unit" means a su bdivision, agency,
department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country. The
term includes an organization having a separate corporate existence
if the organization is eligible to is sue debt on which interest is
exempt from income taxation under the laws of the United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance which is a right to payment of a
monetary obligation for healt h-care goods or services provided or to
be provided.
(47) (A) "Instrument" means a negotiable instrument or any
other writing that evidences a right to the payment of
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a monetary obligation, is not itself a security
agreement or lease, and is of a type that in ordinary
course of business is transferred by delivery with any
necessary endorsement or assignment.
(B) "Instrument" includes:
(i) an instrument as defined in subparagraph (A) of
this paragraph, whether the instrument is subject
to Section 3-104 of this title because it is n ot
payable to order; and
(ii) a writing that contains both an acknowledgment by
a bank as defined in paragraph (8) of this
subsection that a sum of money has been received
by the bank and its promise to repay the sum of
money, which is considered a certificate of
deposit by the bank issuing it, even if the
writing provides that it is nontransferable or
uses similar language.
(C) The term does not include:
(i) investment property;
(ii) letters of credit; or
(iii) writings that evidenc e a right to payment ari sing
out of the use of a credit or charge card or
information contained on or for use with the
card; or
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(iv) writings that evidence chattel paper .
(48) "Inventory" means goods, other than farm products, which:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be
furnished under a contract of service;
(C) are furnished by a person under a contract of service;
or
(D) consist of raw materials, work in process, or
materials used or consumed in a busi ness.
(49) "Investment property" means a security, whether
certificated or uncertificated, security entitlement, securities
account, commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a
registered organization, means the jurisdiction under whose law the
organization is formed or organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the beneficiary
has demanded or is at the time entitled to dema nd payment or
performance. The term does not include the right of a beneficiary
to demand payment or performance under a letter of credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property
involved by attachment, levy, o r the like;
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(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of
the petition; or
(D) a receiver in equity from the time of appointment.
(53) (A) "Manufactured home" means a struct ure, transportable
in one or more sections, which:
(i) in the traveling mode, is eight (8) body feet or
more in width or forty (40) body feet or more in
length, or, when erected on site, is three
hundred twenty (320) or more square feet;
(ii) is built on a permanent chassis;
(iii) is designed to be used as a dwelling with or
without a permanent foundation when connected to
the required utilities; and
(iv) includes the plumbing, heating, air -conditioning,
and electrical systems contained therein.
(B) The term includes any structure that meets all of the
requirements of this paragraph except the size
requirements and with respect to which the
manufacturer voluntarily files a certification
required by the United States Secretary of Housing and
Urban Development and complies with the standards
established under Title 42 of the United States Code.
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(54) "Manufactured-home transaction" means a secured
transaction:
(A) that creates a purchase -money security interest in a
manufactured home, other than a manufactured home held
as inventory; or
(B) in which a manufactured home, other than a
manufactured home held as inventory, is the primary
collateral.
(54A) "Money" has the same meaning as in paragraph (24) of
subsection (b) of Section 1 -201 of this title, but does no t include
a deposit account.
(55) "Mortgage" means a consensual interest in real property,
including fixtures, which secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as a debtor
under subsection (d) of Section 1-9-203 of this title by a security
agreement previously entered into by another person.
(57) (A) "New value" means:
(i) money;
(ii) money's worth in property, services, or new
credit; or
(iii) release by a transferee of an interest in
property previously transferred to the
transferee.
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(B) The term does not include an obligation substituted
for another obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) (A) "Obligor" means a person that, with respect to an
obligation secured by a security int erest in or an
agricultural lien on the collateral:
(i) owes payment or other performance of the
obligation;
(ii) has provided property other than the collateral
to secure payment or other performance of the
obligation; or
(iii) is otherwise accountable in whole or in part for
payment or other performance of the obligation.
(B) The term does not include issuers or nominated persons
under a letter of credit.
(60) "Original debtor" means a person that, as debtor, entered
into a security agreement to which a new debtor has become bound
under subsection (d) of Section 1 -9-203 of this title.
(61) "Payment intangible" means a general intangible under
which the account debtor's principal obligation is a monetary
obligation. The term includes a controllable payment intangible.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
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(B) a brother, brother-in-law, sister, or sister -in-law of
the individual;
(C) an ancestor or lineal descendant of the individual or
the individual's spouse; or
(D) any other relative, by blood or marriage, of the
individual or the individual's spouse who shares the
same home with the individual.
(63) "Person related to", with respect to an organization,
means:
(A) a person directly or indirectly controlling,
controlled by, or under common control with the
organization;
(B) an officer or director of, or a person performing
similar functions with respect to, the organization;
(C) an officer or director of, or a person perf orming
similar functions with respect to, a person described
in subparagraph (A) of this paragraph;
(D) the spouse of an individual described in subparagraph
(A), (B), or (C) of this paragraph; or
(E) an individual who is related by blood or marriage to
an individual described in subparagraph (A), (B), (C),
or (D) of this paragraph and who shares the same home
with the individual.
(64) "Proceeds" means the following property:
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(A) whatever is acquired upon the sale, lease, license,
exchange, or other dispos ition of collateral;
(B) whatever is collected on, or distributed on account
of, collateral;
(C) rights arising out of collateral;
(D) to the extent of the value of collateral, claims
arising out of the loss, nonconformity, or
interference with the use of, defects or infringement
of rights in, or damage to, the collateral; or
(E) to the extent of the value of collateral and to the
extent payable to the debtor or the secured party,
insurance payable by reason of the loss or
nonconformity of, defects or infri ngement of rights
in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a
promise to pay a monetary obligation, does not evidence an order to
pay, and does not contain an acknowledgment by a bank that the bank
has received for deposit a sum of money or funds.
(66) "Proposal" means a record authenticated signed by a
secured party which includes the terms on which the secured party is
willing to accept collateral in full or partial satisfaction of the
obligation it secures pursuant to Sections 1-9-620, 1-9-621, and 1-
9-622 of this title.
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(67) "Public-finance transaction" means a secured transaction
in connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an
initial stated maturity of at least twenty (20) years;
and
(C) the debtor, obligor, secured party, account debtor or
other person obligated on collateral, assignor or
assignee of a secured obligation, or assignor or
assignee of a security interest is a state or a
governmental unit of a stat e.
(68) "Public organic record" means a record that is available
to the public for inspection and that is:
(A) a record consisting of the record initially filed with
or issued by a state or the United States to form or
organize an organization and any record filed with or
issued by the state or the United States which amends
or restates the initial record;
(B) an organic record of a business trust consisting of
the record initially filed with a state and any record
filed with the state which amends or rest ates the
initial record, if a statute of the state governing
business trusts requires that the record be filed with
the state; or
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(C) a record consisting of legislation enacted by the
Legislature of a state or the Congress of the Un ited
States which forms or organizes an organization, any
record amending the legislation, and any record filed
with or issued by the state or United States which
amends or restates the name of the organization.
(69) "Pursuant to commitment", with respect to an advance made
or other value given by a secured party, means pursuant to the
secured party's obligation, whether or not a subsequent event of
default or other event not within the secured party's control has
relieved or may relieve the secured party from its obligation.
(70) "Record", except as used in "for record", "of record",
"record or legal title", and "record owner", means information that
is inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable i n perceivable form.
(71) "Registered organization" means an organization formed or
organized solely under the law of a single state or the United
States by the filing of a public organic record with, the issuance
of a public organic record by, or the enac tment of legislation by
the state or United States. The term includes a business trust that
is formed or organized under the law of a single state if a statute
of the state governing business trusts requires that the business
trusts' organic record be fil ed with the state.
(72) "Secondary obligor" means an obligor to the extent that:
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(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor,
another obligor, or property of either.
(73) "Secured party" means:
(A) a person in whose favor a security interest is created
or provided for under a security agreement, whether or
not any obligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment
intangibles, or promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent,
or other representative in whose favor a security
interest or agricult ural lien is created or provided
for; or
(F) a person that holds a security interest arising under
Section 2-401, 2-505, paragraph (3) of Section 2 -711,
paragraph (5) of Section 2A -508, 4-210, or 5-118 of
this title.
(74) "Security agreement" means an agr eement that creates or
provides for a security interest.
(75) "Send", in connection with a record or notification,
means:
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(A) to deposit in the mail, deliver for transmission, or
transmit by any other usual means of communication,
with postage or cost of transmission provided for,
addressed to any address reasonable under the
circumstances; or
(B) to cause the record or notification to be received
within the time that it would have been received if
properly sent under subparagraph (A) of this paragraph
Reserved.
(76) "Software" means a computer program and any supporting
information provided in connection with a transaction relating to
the program. The term does not include a computer program that is
included in the definition of goods.
(77) "State" means a state of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(78) "Supporting obligation" means a letter -of-credit right or
secondary obligation t hat supports the payment or performance of an
account, chattel paper, a document, a general intangible, an
instrument, or investment property.
(79) "Tangible chattel paper" means chattel paper evidenced by
a record or records consi sting of information that is inscribed on a
tangible medium Reserved.
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(80) "Termination statement" means an amendment of a financing
statement which:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates either that it is a te rmination statement or
that the identified financing statement is no longer
effective.
(81) "Transmitting utility" means a person primarily engaged in
the business of:
(A) operating a railroad, subway, street railway, or
trolley bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting
electricity, steam, gas, or water.
(b) "Control" as provided in Section 7 -106 of this title and
the following definitions in other articles of this title apply to
this article:
"Applicant" - Section 5-102 of this title.
"Beneficiary" - Section 5-102 of this title.
"Broker" - Section 8-102 of this title.
"Certificated security" - Section 8-102 of this title.
"Check" - Section 3-104 of this title.
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"Clearing corporation" - Section 8-102 of this title.
"Contract for sale" - Section 2-106 of this title.
"Controllable electronic record" – Section 12-102 of this title.
"Customer" - Section 4-104 of this title.
"Entitlement holder" - Section 8-102 of this title.
"Financial asset" - Section 8-102 of this title.
"Holder in due course" - Section 3-302 of this title.
"Issuer" (with respect to a letter of credit or letter -of-credit
right)- Section 5-102 of this title.
"Issuer" – (with respect to a security) – Section 8-201 of this
title.
"Issuer" – (with respect to documents of title) – Section 7-102
of this title.
"Lease" - Section 2A-103 of this title.
"Lease agreement" - Section 2A-103 of this title.
"Lease contract" - Section 2A-103 of this title.
"Leasehold interest" - Section 2A-103 of this title.
"Lessee" - Section 2A-103 of this title.
"Lessee in ordinary course of business" - Section 2A-103 of this
title.
"Lessor" - Section 2A-103 of this title.
"Lessor's residual interest" - Section 2A-103 of this title.
"Letter of credit" - Section 5-102 of this title.
"Merchant" - Section 2-104 of this title.
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"Negotiable instrument" - Section 3-104 of this title.
"Nominated person" - Section 5-102 of this title.
"Note" - Section 3-104 of this title.
"Proceeds of a letter of credit" - Section 5-114 of this title.
"Protected purchaser" – Section 8-303 of this title.
"Prove" - Section 3-103 of this title.
"Qualifying purchaser" – Section 12-102 of this title.
"Sale" - Section 2-106 of this title.
"Securities account" - Section 8-501 of this title.
"Securities intermediary" - Section 8-102 of this title.
"Security" - Section 8-102 of this title.
"Security certificate" - Section 8-102 of this title.
"Security entitlement" - Section 8-102 of this title.
"Uncertificated security" - Section 8-102 of this title.
(c) Article 1 of this title contains general definitions and
principles of construction and interpretation applicable throughout
this article.
SECTION 43. AMENDATORY 12A O.S. 2021, Section 1 -9-104,
is amended to read as follows:
Section 1-9-104.
CONTROL OF DEPOSIT ACCOUNT
(a) A secured party has control of a deposit account if:
(1) the secured party is the bank with which the deposi t
account is maintained;
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(2) the debtor, secured party, and bank have agreed in an
authenticated a signed record that the bank will
comply with instructions originated by the secured
party directing disposition of the funds in the
deposit account without f urther consent by the debtor;
or
(3) the secured party becomes the bank's customer with
respect to the deposit account ; or
(4) another person, other than the debtor:
(A) has control of the deposit account and
acknowledges that it has control on behalf of t he
secured party; or
(B) obtains control of the deposit account after
having acknowledged that it will obtain control
of the deposit account on behalf of the secured
party.
(b) A secured party that has satisfied subsection (a) of this
section has control, even if the debtor retains the right to direct
the disposition of funds from the deposit account.
SECTION 44. AMENDATORY 12A O.S. 2021, Section 1 -9-105,
is amended to read as follows:
Section 1-9-105.
CONTROL OF ELECTRONIC COPY OF RECORD EVIDENCING CHATTEL PAPER
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(a) A secured party purchaser has control of an authoritative
electronic copy of a record evidencing chattel paper if a system
employed for evidencing the transfer assignment of interests in the
chattel paper reliably esta blishes the secured party purchaser as
the person to which the chattel paper authoritative electronic copy
was assigned.
(b) A system satisfies subsection (a) of this section , and a
secured party has control of electronic chattel paper, if the record
or records comprising evidencing the chattel paper are created,
stored, and assigned in such a manner that:
(1) a single authoritative copy of the record or records exists
which is unique, identifiable and, except as otherwise provided in
paragraphs (4), (5), and (6) of this section, unalterable;
(2) the authoritative copy identifies the secured party
purchaser as the assignee of the record or records;
(3) the authoritative copy is communicated to and maintained by
the secured party purchaser or its designated custodian;
(4) copies or amendments that add or change an identified
assignee of the authoritative copy can be made only with the consent
of the secured party purchaser;
(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
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(6) any amendment of the authoritative copy is readily
identifiable as authorized or unauthorized.
(c) A system satisfies subsection (a) of this section, and a
purchaser has control of an authoritat ive electronic copy of a
record evidencing chattel paper, if the electronic copy, a record
attached to or logically associated with the electronic copy, or a
system in which the electronic copy is recorded:
(1) enables the purchaser readily to identify ea ch electronic
copy as either an authoritative copy or a nonauthoritative copy;
(2) enables the purchaser readily to identify itself in any
way, including by name, identifying number, cryptographic key,
office, or account number, as the assignee of the aut horitative
electronic copy; and
(3) gives the purchaser exclusive power, subject to subsection
(d) of this section, to:
(A) prevent others from adding or changing an identified
assignee of the authoritative electronic copy; and
(B) transfer control of the authoritative electronic copy.
(d) Subject to subsection (e) of this section, a power is
exclusive under subparagraphs (A) and (B) of paragraph 3 of
subsection (c) of this section even if:
(1) the authoritative electronic copy, a record attached to or
logically associated with the authoritative electronic copy, or a
system in which the authoritative electronic copy is recorded limits
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the use of the authoritative electronic copy or has a protocol
programmed to cause a change, including a transfer or loss of
control; or
(2) the power is shared with another person.
(e) A power of a purchaser is not shared with another person
under paragraph 2 of subsection (d) of this section and the
purchaser's power is not exclusive if:
(1) the purchaser can exercise th e power only if the powe r also
is exercised by the other person; and
(2) the other person:
(A) can exercise the power without exercise of the power
by the purchaser; or
(B) is the transferor to the purchaser of an interest in
the chattel paper.
(f) If a purchaser has the powers specified in subparagraphs
(A) and (B) of paragraph (3) of subsection (c) of this section, the
powers are presumed to be exclusive.
(g) A purchaser has control of an authoritative electronic copy
of a record evidencing chattel pap er if another person, ot her than
the transferor to the purchaser of an interest in the chattel paper:
(1) has control of the authoritative electronic copy and
acknowledges that it has control on behalf of the purchaser; or
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(2) obtains control of the auth oritative electronic copy after
having acknowledged that it will obtain control of the electronic
copy on behalf of the purchaser.
SECTION 45. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1 -9-107A of Title 12A, unless
there is created a duplication in numbering, reads as follows:
CONTROL OF CONTROLLABLE ELECTRONIC RECORD, CONTROLLABLE ACCOUNT, OR
CONTROLLABLE PAYMENT INTANGIBLE
(a) A secured party has control of a controllable electronic
record as provided in Section 12 -105 of this title.
(b) A secured party has control of a controllable account or
controllable payment intangible if the secured party has control of
the controllable electronic record that evidences the controllable
account or controllable payment intangible .
SECTION 46. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1 -9-107B of Title 12A, unless
there is created a duplication in numbering, reads as follows:
NO REQUIREMENT TO ACKN OWLEDGE OR CONFIRM; NO DUTIES
(a) A person that has control under Section 9 -104 or 9-105 of
this title is not required to acknowledge that it has control on
behalf of another person.
(b) If a person acknowledges that it has or will obtain control
on behalf of another person, un less the person otherwise agrees or
law other than this article otherwise provides, the person does not
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owe any duty to the other person and is not required to confirm the
acknowledgment to any other person.
SECTION 47. AMENDATORY 12A O.S. 2021, Section 1 -9-203,
is amended to read as follows:
Section 1-9-203.
ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST;
PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES
(a) A security interest attaches to collateral when it becomes
enforceable against the debtor with respect to the collateral,
unless an agreement expressly postpones the time of attachment.
(b) Except as otherwise provided in subsections (c) through (i)
of this section, a security interest is enforcea ble against the
debtor and third parties with respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the power to
transfer rights in the collateral to a secured party; and
(3) one of the following con ditions is met:
(A) the debtor has authenticated signed a security
agreement that provides a description of the
collateral and, if the security interest covers timber
to be cut, a description of the land concerned;
(B) the collateral is not a certificated security and is
in the possession of the secured party under Section
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1-9-313 of this title pursuant to the debtor's
security agreement;
(C) the collateral is a certificated security in
registered form and the security certificate has been
delivered to the secured party under Sect ion 8-301 of
this title pursuant to the debtor's security
agreement; or
(D) the collateral is controllable accounts, controllable
electronic records, controllable payment intangibles,
deposit accounts, electronic chattel paper documents,
investment property, or letter-of-credit rights, or
electronic documents, and the secured party has
control under Section 7 -106, 1-9-104, 1-9-105, 1-9-
106, or 1-9-107, or 1-9-107A of this title pursuant to
the debtor's security agreement ; or
(E) the collateral is chattel pa per and the secured party
has possession and control under Section 1 -9-314A of
this title pursuant to the debtor's security
agreement.
(c) Subsection (b) of this section is subject to Section 4 -210
of this title on the security int erest of a collecting bank, Section
5-118 of this title on the security interest of a letter -of-credit
issuer or nominated person, Section 1 -9-110 of this title on a
security interest arising under Article 2 or 2A of this title, and
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Section 1-9-206 of this title on security inter ests in investment
property.
(d) A person becomes bound as debtor by a security agreement
entered into by another person if, by operation of law other than
this article or by contract:
(1) the security agreement becomes effective to create a
security interest in the person's property; or
(2) the person becomes generally obligated for the obligations
of the other person, including the obligation secured under the
security agreement, and acquires or succeeds to all or substantially
all of the assets of the other person.
(e) If a new debtor becomes bound as debtor by a security
agreement entered into by another person:
(1) the agreement satisfies paragraph (3) of subsection (b) of
this section with respect to existing or after -acquired property of
the new debtor to the extent the property is described in the
agreement; and
(2) another agreement is not necessary to make a security
interest in the property enforceable.
(f) The attachment of a security interest in collateral gives
the secured party the right s to proceeds provided by Section 1 -9-315
of this title and is also attachment of a security interest in a
supporting obligation for the collateral.
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(g) The attachment of a security interest in a right to payment
or performance secured by a security interest or other lien on
personal or real property is also attachment of a security interest
in the security interest, mortgage, or other lien.
(h) The attachment of a security interest in a securities
account is also attachment of a s ecurity interest in the security
entitlements carried in the securities account.
(i) The attachment of a security interest in a commodity
account is also attachment of a security interest in the commodity
contracts carried in the commodity account.
SECTION 48. AMENDATORY 12A O.S. 2021, Section 1 -9-204,
is amended to read as follows:
Section 1-9-204.
AFTER-ACQUIRED PROPERTY; FUTURE ADVANCES
(a) Except as otherwise provided in subsection (b) of this
section, a security agreement may create or provide for a security
interest in after-acquired collateral.
(b) A Subject to subsection (d) of this section, a security
interest does not attach under a term constituting an after -acquired
property clause to:
(1) consumer goods, other than a n accession when given as
additional security, unless the debtor acquires rights in them
within ten (10) days after the secured party gives value; or
(2) a commercial tort claim.
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(c) A security agreement may provide that collateral secures,
or that accounts, chattel paper, paym ent intangibles, or promissory
notes are sold in connection with, future advances or other value,
whether or not the advances or value are given pursuant to
commitment.
(d) Subsection (b) of this section does not prevent a security
interest from attaching:
(1) to consumer goods as proceeds under subsection (a) of
Section 1-9-315 of this title or commingled goods under subsection
(c) of Section 1-9-336 of this title;
(2) to a commercial tort claim as proceeds under subsection (a)
of Section 1-9-315 of this title; or
(3) under an after-acquired property clause to property that is
proceeds of consumer goods or a commercial tort claim.
SECTION 49. AMENDATORY 12A O.S. 2021, Section 1 -9-207,
is amended to read a s follows:
Section 1-9-207.
RIGHTS AND DUTIES OF SECURED PARTY
HAVING POSSESSION OR CONTROL OF COLLATERAL
(a) Except as otherwise provided in subsection (d) of this
section, a secured party shall use reasonable care in the custody
and preservation of coll ateral in the secured pa rty's possession.
In the case of chattel paper or an instrument, reasonable care
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includes taking necessary steps to preserve rights against prior
parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d) of this
section, if a secured party has possession of collateral:
(1) reasonable expenses, including the cost of insurance and
payment of taxes or other charges, incurred in the custody,
preservation, use, or operation of the collateral are chargeable to
the debtor and are secur ed by the collateral;
(2) the risk of accidental loss or damage is on the debtor to
the extent of a deficiency in any effective insurance coverage;
(3) the secured party shall keep the collateral identifiable,
but fungible collate ral may be commingled; and
(4) the secured party may use or operate the collateral:
(A) for the purpose of preserving the collateral or its
value;
(B) as permitted by an order of a court having competent
jurisdiction; or
(C) except in the case of consumer goods, in the manner
and to the extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d) of this
section, a secured party having possession of collateral or control
of collateral under Section 7 -106, 1-9-104, 1-9-105, 1-9-106, or 1-
9-107, or 1-9-107A of this title:
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(1) may hold as additional security any proceeds, except money
or funds, received from the collateral;
(2) shall apply money or funds received from the collateral to
reduce the secured obligation, unless remitted to the debtor; and
(3) may create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor:
(1) subsection (a) of this section does not apply unless the
secured party is entitled under an agreement:
(A) to charge back uncollected collateral; or
(B) otherwise to full or limited recourse against the
debtor or a secondary obligor based on the nonpayment
or other default of an account debtor or other obligor
on the collateral; and
(2) subsections (b) and (c) of this section do not apply.
SECTION 50. AMENDATORY 12A O.S. 2021, Section 1 -9-208,
is amended to read as follows:
Section 1-9-208.
ADDITIONAL DUTIES OF SECURED PARTY
HAVING CONTROL OF COLLATERAL
(a) This section applies to cases in which there is no
outstanding secured obligation and the secured party is not
committed to make advances, incur obligations, or otherwise give
value.
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(b) Within ten (10) days after receiving an authenticated a
signed demand by the debtor:
(1) a secured party having control of a deposit account under
paragraph (2) of subsection (a) of Section 1 -9-104 of this title
shall send to the bank with which the deposit account is maintained
an authenticated statemen t a signed record that releases the bank
from any further obligation to comply with instructions originated
by the secured party;
(2) a secured party having control of a deposit account under
paragraph (3) of subsection (a) of Section 1 -9-104 of this title
shall:
(A) pay the debtor the balance on deposit in the deposit
account; or
(B) transfer the balance on deposit into a deposit account
in the debtor's name;
(3) a secured party, other than a buyer, having control of
electronic chattel paper under Section 1-9-105 of this title shall:
(A) communicate the of an authoritative electronic copy of
the electronic a record evidencing chattel paper to
the debtor or its designated custodian;
(B) if the debtor designates a custodian that is the
designated custodian with which the authorita tive copy
of the electronic chattel paper is maintained for the
secured party, communicate to the custodian an
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authenticated record releasing the designated
custodian from any further obligation to comply with
instructions originate d by the secured party and
instructing the custodian to comply with instructions
originated by the debtor; and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to
the authoritative copy which add o r change an
identified assignee of the authoritative copy without
the consent of the secured party shall transfer
control of the electronic copy to the debtor or a
person designated by the debtor ;
(4) a secured party having control of investment property under
paragraph (2) of subsection (d) of Section 8 -106 of this title or
subsection (b) of Section 1 -9-106 of this title shall send to the
securities intermediary or commodity intermediary with which the
security entitlement or commodity contract is maintai ned an
authenticated a signed record that releases the securities
intermediary or commodity intermediary from any further obligation
to comply with entitlement orders or directions originated by the
secured party;
(5) a secured party having control of a l etter-of-credit right
under Section 1-9-107 of this title shall send to each person having
an unfulfilled obligation to pay or deliver proceeds of the letter
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of credit to the secured party an authenticated a signed release
from any further obligation to pa y or deliver proceeds of the letter
of credit to the secured party; and
(6) a secured party having control under Section 7-106 of this
title of an authoritative electronic copy of an electronic document
shall:
(A) give control of the electronic document t o the debtor
or its designated custodian;
(B) if the debtor designates a custodian that is the
designated custodian with which the authoritative copy
of the electronic document is maintained for the
secured party, communicate to the custodian an
authenticated record releasing the designated
custodian from any further obligation to comply with
instructions originated by the secured party and
instructing the custodian to comply with instructions
originated by the debtor; and
(C) take appropriate action to ena ble the debtor or its
designated custodian to make copies of or revisions to
the authoritative copy which add or change an
identified assignee of the authoritative copy without
the consent of the secured party transfer control of
the electronic copy to the debtor or a person
designated by the debtor; and
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(7) a secured party having control under Section 12 -105 of this
title of a controllable electronic record, other than a buyer of a
controllable account or controllable payment intangible evidenced by
the controllable electronic record, shall transfer control of the
controllable electronic record to the debtor or a person designated
by the debtor.
SECTION 51. AMENDATORY 12A O.S. 2021, Section 1 -9-209,
is amended to read as follows:
Section 1-9-209.
DUTIES OF SECURED PARTY IF ACCOUNT
DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT
(a) Except as otherwise provided in subsection (c) of this
section, this section applies if:
(1) there is no outstanding secured obligation; and
(2) the secured party is not committed to make advances, incur
obligations, or otherwise give value.
(b) Within ten (10) days after receiving an authenticated a
signed demand by the debtor, a secured party shall send to an
account debtor that has received notification under subsection (a)
of Section 1-9-406 of this title or subsection (b) of Section 12 -106
of this title of an assignment to the secured party as assignee
under subsection (a) of Section 1 -9-406 of this title an
authenticated a signed record that releases the a ccount debtor from
any further obligation to the secured party.
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(c) This section does not apply to an assignment constituting
the sale of an account, chattel paper, or payment intangible.
SECTION 52. AMENDATORY 12A O.S. 2021, Sect ion 1-9-210,
is amended to read as follows:
Section 1-9-210.
REQUEST FOR ACCOUNTING; REQUEST REGARDING
LIST OF COLLATERAL OR STATEMENT OF ACCOUNT
(a) In this section:
(1) "Request" means a record of a type described in paragraph
(2), (3), or (4) of this subsection.
(2) "Request for an accounting" means a record authenticated
signed by a debtor requesting that the recipient provide an
accounting of the unpaid obligations secured by collateral and
reasonably identifying the transaction or relationship that is the
subject of the request.
(3) "Request regarding a list of collateral" means a record
authenticated signed by a debtor requesting that the recipient
approve or correct a list of what the debtor believes to be the
collateral securing an obligation an d reasonably identifying the
transaction or relationship that is the subject of the request.
(4) "Request regarding a statement of account" means a record
authenticated signed by a debtor requesting that the recipient
approve or correct a statement indica ting what the debtor bel ieves
to be the aggregate amount of unpaid obligations secured by
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collateral as of a specified date and reasonably identifying the
transaction or relationship that is the subject of the request.
(b) Subject to subsections (c), (d), (e), and (f) of this
section, a secured party, other than a buyer of accounts, chattel
paper, payment intangibles, or promissory notes or a consignor,
shall comply with a request within fourteen (14) days after receipt:
(1) in the case of a request for a n accounting, by
authenticating signing and sending to the debtor an accounting; and
(2) in the case of a request regarding a list of collateral or
a request regarding a statement of account, by authenticating
signing and sending to the debtor an approval or correction.
(c) A secured party that claims a security interest in all of a
particular type of collateral owned by the debtor may comply with a
request regarding a list of collateral by sending to the debtor an
authenticated a signed record including a statement to that effe ct
within fourteen (14) days after receipt.
(d) A person that receives a request regarding a list of
collateral, claims no interest in the collateral when it receives
the request, and claimed an interest in the collateral at an ear lier
time shall comply with the request within fourteen (14) days after
receipt by sending to the debtor an authenticated a signed record:
(1) disclaiming any interest in the collateral; and
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(2) if known to the recipient, providing the name and mailing
address of any assignee o f or successor to the recipient's interest
in the collateral.
(e) A person that receives a request for an accounting or a
request regarding a statement of account, claims no interest in the
obligations when it receives the request, and claimed an interest in
the obligations at an earlier time shall comply with the request
within fourteen (14) days after receipt by sending to the debtor an
authenticated a signed record:
(1) disclaiming any interest in the obligations; and
(2) if known to the recipient, pr oviding the name and mailing
address of any assignee of or successor to the recipient's interest
in the obligations.
(f) A debtor is entitled without charge to one response to a
request under this section during any six -month period. The secured
party may require payment of a charge not exceeding Twenty -five
Dollars ($25.00) for each additional response.
SECTION 53. AMENDATORY 12A O.S. 2021, Section 1 -9-301,
is amended to read as follows:
Section 1-9-301.
LAW GOVERNING PERFECTION AND
PRIORITY OF SECURITY INTERESTS
Except as otherwise provided in Sections 1 -9-303 through 1-9-306
1-9-306B of this title, the following rules determine the law
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governing perfection, the effect of perfection or nonperfection, and
the priority of a security interest in collateral:
(1) Except as otherwise provided in this section, while a
debtor is located in a jurisdiction, the local law of that
jurisdiction governs perfection, the effect of perfection or
nonperfection, and the prio rity of a security inter est in
collateral.
(2) While collateral is located in a jurisdiction, the local
law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a possessory
security interest in that coll ateral.
(3) Except as otherwise provided in paragraph (4) of this
section, while tangible negotiable tangible documents, goods,
instruments, or money, or tangible chattel paper is are located in a
jurisdiction, the local law of that jurisdiction governs:
(A) perfection of a security interest in the goods by
filing a fixture filing;
(B) perfection of a security interest in timber to be cut;
and
(C) the effect of perfection or nonperfection and the
priority of a nonpossessory security interest in the
collateral.
(4) The local law of the jurisdiction in which the wellhead or
minehead is located governs perfection, the effect of perfection or
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nonperfection, and the priority of a security interest in as -
extracted collateral.
SECTION 54. AMENDATORY 12A O.S. 202 1, Section 1-9-304,
is amended to read as follows:
Section 1-9-304.
LAW GOVERNING PERFECTION AND PRIORITY OF
SECURITY INTERESTS IN DEPOSIT ACCOUNTS
(a) The local law of a bank's jurisdiction governs perfection,
the effect of perfec tion or nonperfection, and the priority of a
security interest in a deposit account maintained with that bank
even if the transaction does not bear any relation to the bank's
jurisdiction.
(b) The following rules determine a bank's jurisdiction for
purposes of this part:
(1) If an agreement between the bank and its customer governing
the deposit account expressly provides that a particular
jurisdiction is the bank's jurisdiction for purposes of this part,
this article, or the Uniform Commercial Code, that jurisdiction is
the bank's jurisdiction.
(2) If paragraph (1) of this subsection does not apply and an
agreement between the bank and its customer governing the deposit
account expressly provides that the agreement is governed by the law
of a particular jurisdiction, that juris diction is the bank's
jurisdiction.
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(3) If neither paragraph (1) nor paragraph (2) of this
subsection applies and an agreement between the bank and its
customer governing the deposit account expressly provides that the
deposit account is maintained at an office in a particular
jurisdiction, that jurisdiction is the bank's jurisdiction.
(4) If none of the preceding paragraphs of this subsection
applies, the bank's jurisdiction is the jurisdiction in which the
office identified in an account statement as th e office serving the
customer's account is located.
(5) If none of the preceding paragraphs applies, the bank's
jurisdiction is the jurisdiction in which the chief executive office
of the bank is located.
SECTION 55. AMENDATORY 12A O.S. 2021, Section 1 -9-305,
is amended to read as follows:
Section 1-9-305.
LAW GOVERNING PERFECTION AND PRIORITY
OF SECURITY INTERESTS IN INVESTMENT PROPERTY
(a) Except as otherwise provided in subsection (c) of this
section, the following rules apply:
(1) While a security certificate is located in a jurisdiction,
the local law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest
in the certificated security represented thereby.
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(2) The local law of the issuer's jurisdiction as specified in
subsection (d) of Section 8 -110 of this title governs perfection,
the effect of perfection or nonperfection, and the priority of a
security interest in an uncertificated s ecurity.
(3) The local law of the securities intermediary's jurisdiction
as specified in subsection (e) of Section 8 -110 of this title
governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a security ent itlement or
securities account.
(4) The local law of the commodity intermediary's jurisdiction
governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a commodity contract or
commodity account.
(5) Paragraphs (2), (3), and (4) o f this subsection apply even
if the transaction does not bear any relation to the jurisdiction.
(b) The following rules determine a commodity intermediary's
jurisdiction for purposes of this part:
(1) If an agreement between the c ommodity intermediary and
commodity customer governing the commodity account expressly
provides that a particular jurisdiction is the commodity
intermediary's jurisdiction for purposes of this part, this article,
or this title, that jurisdiction is the com modity intermediary's
jurisdiction.
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(2) If paragraph (1) of this subsection does not apply and an
agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that the
agreement is governed by the law of a particular jurisdiction, that
jurisdiction is the commodity intermediary's jurisdiction.
(3) If neither paragraph (1) nor paragraph (2) of this
subsection applies and an agreement between the commodity
intermediary and commodity customer governin g the commodity account
expressly provides that the commodity account is maintained at an
office in a particular jurisdiction, that jurisdiction is the
commodity intermediary's jurisdiction.
(4) If none of the preceding paragraphs of this section
applies, the commodity intermediary's jurisdiction is the
jurisdiction in which the office identified in an account statement
as the office serving the commodity customer's account is located.
(5) If none of the preceding paragraphs of this section
applies, the commodity intermediary's jurisdiction is the
jurisdiction in which the chief executive office of the commodity
intermediary is located.
(c) The local law of the jurisdiction in which the debtor is
located governs:
(1) perfection of a security interest in investment property by
filing;
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(2) automatic perfection of a security interest in investment
property created by a broker or securities intermediary; and
(3) automatic perfection of a security interest in a commodity
contract or commodity account created by a commodity intermed iary.
SECTION 56. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1 -9-306A of Title 12A, unless
there is created a duplication in numbering, reads as follows:
LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN
CHATTEL PAPER
(a) Except as provided in subsection (d) of this section, if
chattel paper is evidenced only by an authoritative electronic copy
of the chattel paper or is evidenced by an authoritative electronic
copy and an authoritati ve tangible copy, the local law of the
chattel paper's jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest
in the chattel paper, even if the transaction does not bear a ny
relation to the chattel paper's jurisdiction.
(b) The following rules determine the chattel paper's
jurisdiction under this section:
(1) If the authoritative electronic copy of the record
evidencing chattel paper, or a record attached to or logically
associated with the elec tronic copy and readily available for
review, expressly provides that a particular jurisdiction is the
chattel paper's jurisdiction for purposes of this part, this
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article, or the Uniform Commercial Code, that jurisdiction is the
chattel paper's jurisdiction.
(2) If paragraph (1) of this subsection does not apply and the
rules of the system in which the authoritative electronic copy is
recorded are readily available for review and expressly provide that
a particular jurisdiction is the chattel paper's juri sdiction for
purposes of this part, this article, or the Uniform Commercial Code,
that jurisdiction is the chattel paper's jurisdiction.
(3) If paragraphs (1) and (2) of this subsection do not apply
and the authoritative electronic copy, or a record attached to or
logically associated with the electronic copy and readily available
for review, expressly provides that the chattel paper is governed by
the law of a particular jurisdiction, that jurisdiction is the
chattel paper's jurisd iction.
(4) If paragraphs (1), (2), and (3) of this subsection do not
apply and the rules of the system in which the authoritative
electronic copy is recorded are readily available for review and
expressly provide that the chattel paper or the system is g overned
by the law of a particular jurisdiction, that jurisdiction is the
chattel paper's jurisdiction.
(5) If paragraphs (1) through (4) of this subsection do not
apply, the chattel paper's jurisdiction is the jurisdiction in which
the debtor is located.
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(c) If an authoritativ e tangible copy of a record evidences
chattel paper and the chattel paper is not evidenced by an
authoritative electronic copy, while the authoritative tangible copy
of the record evidencing chattel paper is located in a jurisdictio n,
the local law of that jurisdiction governs:
(1) perfection of a security interest in the chattel paper by
possession under Section 9 -314A of this title; and
(2) the effect of perfection or nonperfection and the priority
of a security interest in the c hattel paper.
(d) The local law of the jurisdiction in which the debtor is
located governs perfection of a security interest in chattel paper
by filing.
SECTION 57. NEW LAW A new section of law to be codified
in the Oklahoma Statute s as Section 1-9-306B of Title 12A, unless
there is created a duplication in numbering, reads as follows:
LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN
CONTROLLABLE ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS, AND
CONTROLLABLE PAYMENT INTANG IBLES
(a) Except as provided in subsection (b) of this section, the
local law of the controllable electronic record's jurisdiction
specified in subsections (c) and (d) of Section 12 -107 of this title
governs perfection, the effect of perfection or nonperf ection, and
the priority of a security interest in a controllable electronic
record and a security interest in a controllable account or
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controllable payment intangible evidenced by the controllable
electronic record.
(b) The local law of the jurisdiction in which the debtor is
located governs:
(1) perfection of a security interest in a controllable
account, controllable electronic record, or controllable payment
intangible by filing; and
(2) automatic perfection of a security interest in a
controllable payment intangible created by a sale of the
controllable payment intangible.
SECTION 58. AMENDATORY 12A O.S. 2021, Section 1 -9-310,
is amended to read as follows:
Section 1-9-310.
WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST O R
AGRICULTURAL LIEN; SEC URITY INTERESTS AND AGRICULTURAL
LIENS TO WHICH FILING PROVISIONS DO NOT APPLY
(a) Except as otherwise provided in subsection (b) of this
section and Section 1 -9-312 of this title, a financing statement
must be filed to perfect all security interests and agricultural
liens.
(b) The filing of a financing statement is not necessary to
perfect a security interest:
(1) that is perfected under subsection (d), (e), (f), or (g) of
Section 1-9-308 of this title;
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(2) that is perfected und er Section 1-9-309 of this title when
it attaches;
(3) in property subject to a statute, regulation, or treaty
described in subsection (a) of Section 1 -9-311 of this title;
(4) in goods in possession of a bailee which is perfected under
paragraph (1) or (2) of subsection (d) of Section 1 -9-312 of this
title;
(5) in certificated securities, documents, goods, or
instruments which is perfected without filing, control, or
possession under subsection (e), (f), or (g) of Section 1 -9-312 of
this title;
(6) in collateral in the secure d party's possession under
Section 1-9-313 of this title;
(7) in a certificated security which is perfected by delivery
of the security certificate to the secured party under Section 1 -9-
313 of this title;
(8) in controllable accounts, controllable electronic records,
controllable payment intangibles, deposit accounts, electronic
chattel paper documents, investment property, or letter -of-credit
rights which is perfected by control under Section 1 -9-314 of this
title;
(9) in chattel paper which is perfect ed by possession and
control under Section 1 -9-314A of this title;
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(10) in proceeds which is perfected under Section 1 -9-315 of
this title; or
(10) (11) that is perfected under Section 1 -9-316 of this
title.
(c) If a secured part y assigns a perfected security interest or
agricultural lien, a filing under this article is not required to
continue the perfected status of the security interest against
creditors of and transferees from the original debtor.
SECTION 59. AMENDATORY 12A O .S. 2021, Section 1-9-312,
is amended to read as follows:
Section 1-9-312.
PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, CONTROLLABLE
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS, CONTROLLABLE PAYMENT
INTANGIBLES, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY
DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER -OF-CREDIT
RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY
PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION
(a) A security interest in chattel paper, negotiable documents
controllable accounts, controllable electronic records, controllable
payment intangibles, instruments, or investment property, or
negotiable documents may be perfected by filing.
(b) Except as otherwise provided in subsections (c) and (d) of
Section 1-9-315 of this title for proceeds:
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(1) a security interest in a deposit account may be perfected
only by control under Section 1 -9-314 of this title;
(2) and except as otherwise provided in subsection (d) of
Section 1-9-308 of this title, a sec urity interest in a lett er-of-
credit right may be perfected only by control under Section 1 -9-314
of this title; and
(3) a security interest in money may be perfected only by the
secured party's taking possession under Section 1 -9-313 of this
title.
(c) While goods are in the possession of a bailee that has
issued a negotiable document covering the goods:
(1) a security interest in the goods may be perfected by
perfecting a security interest in the document; and
(2) a security interest perfected in the document has priority
over any security interest that becomes perfected in the goods by
another method during that time.
(d) While goods are in the possession of a bailee that has
issued a nonnegotiable document covering the goods, a security
interest in the goods may be perfected by:
(1) issuance of a document in the name of the secured party;
(2) the bailee's receipt of notification of the secured party's
interest; or
(3) filing as to the goods.
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(e) A security interest in certificated securities, neg otiable
documents, or instruments is perfected without filing or the taking
of possession or control for a period of twenty (20) days from the
time it attaches to the extent that it arises for new value given
under an authenticated a signed security agreement.
(f) A perfected security interest in a negotiable document or
goods in possession of a bailee, other than one that has issued a
negotiable document for the goods, remains perfected for twenty (20)
days without filing if the secured party makes availa ble to the
debtor the goods or documents representing the goods for the purpose
of:
(1) ultimate sale or exchange; or
(2) loading, unloading, storing, shipping, transshipping,
manufacturing, processing, or otherwise dealing with them in a
manner preliminary to their sale or exchange.
(g) A perfected security interest in a certificated security or
instrument remains perfected for twenty (20) days without filing if
the secured party delivers the security certificate or instrument to
the debtor for the purp ose of:
(1) ultimate sale or exchange; or
(2) presentation, collection, enforcement, renewal, or
registration of transfer.
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(h) After the twenty -day period specified in subsection (e),
(f), or (g) of this section expires, perfection depends upon
compliance with this article.
SECTION 60. AMENDATORY 12A O.S. 2021, Section 1 -9-313,
is amended to read as follows:
Section 1-9-313.
WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY
PERFECTS SECURITY INTEREST WITHOUT FILING
(a) Except as otherwise provided in sub section (b) of this
section, a secured party may perfect a security interest in tangible
negotiable documents, goods, instruments, negotiable tangible
documents, or money, or tangible chattel paper by taking possession
of the collateral. A secured party may perfect a security interest
in certificated securities by taking delivery of the certificated
securities under Section 8 -301 of this title.
(b) With respect to goods covered by a certificate of title
issued by this state, a secu red party may perfect a security
interest in the goods by taking possession of the goods only in the
circumstances described in subsection (d) of Section 1 -9-316 of this
title.
(c) With respect to collateral other than certificated
securities and goods co vered by a document, a secured party takes
possession of collateral in the possession of a person other than
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the debtor, the secured party, or a lessee of the collateral from
the debtor in the ordinary course of the debtor's business, when:
(1) the person in possession authenticates signs a record
acknowledging that it holds possession of the collateral for the
secured party's benefit; or
(2) the person takes possession of the collateral after having
authenticated signed a record acknowledging that it wil l hold
possession of collateral for the secured party's benefit.
(d) If perfection of a security interest depends upon
possession of the collateral by a secured party, perfection occurs
no not earlier than the time the secured party takes possession and
continues only while the secured party retains possession.
(e) A security interest in a certificated security in
registered form is perfected by delivery when delivery of the
certificated security occurs under Section 8 -301 of this title and
remains perfected by delivery until the debtor obtains possession of
the security certificate.
(f) A person in possession of collateral is not required to
acknowledge that it holds possession for a secured party's benefit.
(g) If a person acknowledges that it holds po ssession for the
secured party's benefit:
(1) the acknowledgment is effective under subsection (c) of
this section or subsection (a) of Section 8 -301 of this title, even
if the acknowledgment violates the rights of a debtor; and
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(2) unless the person oth erwise agrees or law other than this
article otherwise provides, the person does not owe any duty to the
secured party and is not required to confirm the acknowledgment to
another person.
(h) A secured party having possession of collateral does not
relinquish possession by deliv ering the collateral to a person other
than the debtor or a lessee of the collateral from the debtor in the
ordinary course of the debtor's business if the person was
instructed before the delivery or is instructed contemporaneously
with the delivery:
(1) to hold possession of the collateral for the secured
party's benefit; or
(2) to redeliver the collateral to the secured party.
(i) A secured party does not relinquish possession, even if a
delivery under subsection (h) of this se ction violates the right s of
a debtor. A person to which collateral is delivered under
subsection (h) of this section does not owe any duty to the secured
party and is not required to confirm the delivery to another person
unless the person otherwise agre es or law other than this article
otherwise provides.
SECTION 61. AMENDATORY 12A O.S. 2021, Section 1 -9-314,
is amended to read as follows:
Section 1-9-314.
PERFECTION BY CONTROL
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(a) A security interest in investment property, dep osit
accounts, letter-of-credit rights, electronic chattel paper, or
electronic documents controllable accounts, controllable electronic
records, controllable payment intangibles, deposit accounts,
electronic documents, investment property, or letter -of-credit
rights may be perfected by control of the collateral under Section
7-106, 1-9-104, 1-9-105, 1-9-106, or 1-9-107, or 1-9-107A of this
title.
(b) A security interest in deposit accounts, electronic chattel
paper, letter-of-credit rights, or electronic documents controllable
accounts, controllable electronic records, controllable payment
intangibles, deposit accounts, electronic documents, or letter -of-
credit rights is perfected by control under Section 1 -9-104, 1-9-
105, or 1-9-107, or 1-9-107A of this title when not earlier than the
time the secured party obtains control and remains perfected by
control only while the secured party retains control.
(c) A security interest in investment property is perfected by
control under Section 1 -9-106 of this title from not earlier than
the time the secured party obtains control and remains perfected by
control until:
(1) the secured party does not have control; and
(2) one of the following occurs:
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(A) if the collateral is a certificated security, the
debtor has or acquires possession of the security
certificate;
(B) if the collateral is an uncertificated security, the
issuer has registered or registers the debtor as the
registered owner; or
(C) if the collateral is a security entitlement, the
debtor is or becomes the entitlement holder.
SECTION 62. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1 -9-314A of Title 12A, unless
there is created a duplication in numbering, reads as follows:
PERFECTION BY POSSESSION AND CONTROL OF CHATTEL PAPER
(a) A secured party may perfect a security interest in chattel
paper by taking possession of each authoritative tangible copy of
the record evidencing the chattel paper and obtaining control of
each authoritative electronic c opy of the electronic re cord
evidencing the chattel paper.
(b) A security interest is perfected under subsection (a) of
this section not earlier than the time the secured party takes
possession and obtains control and remains perfected under
subsection (a) of this section only while the secured party retains
possession and control.
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(c) Subsections (c) and (f) through (i) of Section 1 -9-313 of
this title apply to perfection by possession of an authoritative
tangible copy of a record evidencing chattel pape r.
SECTION 63. AMENDATORY 12A O.S. 2021, Section 1 -9-316,
is amended to read as follows:
Section 1-9-316.
EFFECT OF CHANGE IN GOVERNING LAW
(a) A security interest perfected pursuant to the law of the
jurisdiction designated in pa ragraph (1) of Section 1 -9-301 or,
subsection (c) of Section 1 -9-305, subsection (d) of Section 1 -9-
306A, or subsection (b) of Section 1 -9-306B of this title remains
perfected until the earliest of:
(1) the time perfection would have ceased under the law of that
jurisdiction;
(2) the expiration of four (4) months after a change of the
debtor's location to another jurisdiction; or
(3) the expiration of one (1) year after a transfer of
collateral to a person that thereby becomes a debtor and is located
in another jurisdiction.
(b) If a security interest described in subsection (a) of this
section becomes perfected under the law of the other jurisdiction
before the earliest time or event described in that subsection, it
remains perfected thereafter. If the security interest does not
become perfected under the law of the other jurisdiction before the
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earliest time or event, it becomes unperfected and is deemed never
to have been perfected as against a purchaser of the collateral for
value.
(c) A possessory security interest in collateral, other than
goods covered by a certificate of title and as -extracted collateral
consisting of goods, remains continuously perfected if:
(1) the collateral is located in one jurisdiction and subject
to a security interest pe rfected under the law of that jurisdiction;
(2) thereafter the collateral is brought into another
jurisdiction; and
(3) upon entry into the other jurisdiction, the security
interest is perfected under the law of the other jurisdiction.
(d) Except as otherwise provided in subsection (e) of this
section, a security interest in goods covered by a certificate of
title which is perfected by any method under the law of another
jurisdiction when the goods become covered by a certificate of title
from this state remains perfected until the security interest would
have become unperfected under the law of the other jurisdiction had
the goods not become so covered.
(e) A security interest described in subsection (d) of this
section becomes unperfected as against a purchaser of the goods for
value and is deemed never to have been perfected as against a
purchaser of the goods for value if the applicable requirements for
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perfection under subsection (b) of Section 1 -9-311 or Section 1-9-
313 of this title are not satisfi ed before the earlier of :
(1) the time the security interest would have become
unperfected under the law of the other jurisdiction had the goods
not become covered by a certificate of title from this state; or
(2) the expiration of four (4) months after the goods had
become so covered.
(f) A security interest in chattel paper, controllable
accounts, controllable electronic records, controllable payment
intangibles, deposit accounts, letter -of-credit rights, or
investment property which is perfected under the law of the chattel
paper's jurisdiction, the controllable electronic records'
jurisdiction, the bank's jurisdiction, the issuer's jurisdiction, a
nominated person's jurisdiction, the securities intermediary's
jurisdiction, or the commodity intermediar y's jurisdiction, as
applicable, remains perfected until the earlier of:
(1) the time the security interest would have become
unperfected under the law of that jurisdiction; or
(2) the expiration of four (4) months after a change of the
applicable jurisdiction to another jurisd iction.
(g) If a security interest described in subsection (f) of this
section becomes perfected under the law of the other jurisdiction
before the earlier of the time or the end of the period described in
that subsection, it remai ns perfected thereafter. If the security
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interest does not become perfected under the law of the other
jurisdiction before the earlier of that time or the end of that
period, it becomes unperfected and is deemed never to have been
perfected as against a p urchaser of the collater al for value.
(h) The following rules apply to collateral to which a security
interest attaches within four (4) months after the debtor changes
its location to another jurisdiction:
(1) a financing statement filed before the chang e pursuant to
the law of the jurisdiction designated in subsection (1) of Section
1-9-301 of this title or subsection (c) of 1 -9-305 of this title is
effective to perfect a security interest in the collateral if the
financing statement would have been effe ctive to perfect a secur ity
interest in the collateral if the debtor had not changed its
location.
(2) if a security interest that is perfected by a financing
statement that is effective under paragraph (1) of this subsection
becomes perfected under the l aw of the other jurisdiction before the
earlier of the time the financing statement would have become
ineffective under the law of the jurisdiction designated in
subsection (1) of Section 1 -9-301 of this title or subsection (c) of
Section 1-9-305 of this title or the expiration o f the four-month
period, it remains perfected thereafter. If the security interest
does not become perfected under the law of the other jurisdiction
before the earlier time or event, it becomes unperfected and is
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deemed never to have been perfected as against a purchaser of the
collateral for value.
(i) If a financing statement naming an original debtor is filed
pursuant to the law of the jurisdiction designated in subsection (1)
of Section 1-9-301 of this title or subsection (c) o f Section 1-9-
305 of this title and the new debtor is located in another
jurisdiction, the following rules apply:
(1) the financing statement is effective to perfect a security
interest in collateral in which the new debtor has or acquires
rights before or within four (4) months after the new debtor becomes
bound under subsection (d) of Section 1 -9-203 of this title, if the
financing statement would have been effective to perfect a security
interest in the collateral if the collateral had been acquired by
the original debtor.
(2) a security interest that is perfected by the financing
statement and which becomes perfected under the law of the other
jurisdiction before the earlier of the expiration of the four -month
period or the time the financing statement would have become
ineffective under the law of the jurisdiction designated in
subsection (1) of Section 1 -9-301 of this title or subsection (c) of
Section 1-9-305 of this title remains perfected thereafter. A
security interest that is perfected by the fi nancing statement but
which does not become perfected under the law of the other
jurisdiction before the earlier time or event becomes unperfected
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and is deemed never to have been perfected as against a purchaser of
the collateral for value.
SECTION 64. AMENDATORY 12A O.S. 2021, Section 1 -9-317,
is amended to read as follows:
Section 1-9-317.
INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE
OF SECURITY INTEREST OR AGRICULTURAL LIEN
(a) A security interest or agricultural lien is subo rdinate to
the rights of:
(1) a person entitled to priority under Section 1 -9-322 of this
title; and
(2) except as otherwise provided in subsection (e) of this
section, a person that becomes a lien creditor before the earlier of
the time:
(A) the security interest or agricultural lien is
perfected; or
(B) one of the conditions specified in paragraph (3) of
subsection (b) of Section 1 -9-203 of this title is met
and a financing statement covering the collateral is
filed.
(b) Except as otherwise provided in subsection (e) of this
section, a buyer, other than a secured party, of tangible chattel
paper, tangible documents, goods, instruments, tangible documents,
or a certificated security takes free of a security interest or
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agricultural lien if the buyer give s value and receives delivery of
the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(c) Except as otherwise provided in subsection (e) of this
section, a lessee of goods takes free of a security inte rest or
agricultural lien if the lessee gives value and receives delivery of
the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(d) A Subject to subsections (f) through (i) of this section, a
licensee of a general intangible or a buyer, other than a secured
party, of collateral other than tangible chattel paper, tangible
documents, goods, instruments, tangible documents, or a certificated
security takes free of a security interest if the licensee or b uyer
gives value without knowledge of the security interest and before it
is perfected.
(e) Except as otherwise provided in Sections 1 -9-320 and 1-9-
321 of this title, if a person files a financing statement with
respect to a purchase -money security inter est before or within
twenty (20) days after the debtor receives delivery of the
collateral, the security interest takes priority over the rights of
a buyer, lessee, or lien creditor which arise between the time the
security interest attaches and the time o f filing.
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(f) A buyer, other than a secured party, of chattel paper takes
free of a security interest if, without knowledge of the security
interest and before it is perfected, the buyer gives value and:
(1) receives delivery of each authoritative tangib le copy of
the record evidencing the chattel paper; and
(2) if each authoritative electronic copy of the record
evidencing the chattel paper can be subjected to control under
Section 1-9-105 of this title, obtains control of each authoritative
electronic copy.
(g) A buyer of an electronic document takes free of a security
interest if, without knowledge of the security interest and before
it is perfected, the buyer gives value and, if each authoritative
electronic copy of the document can be subjected to c ontrol under
Section 7-106 of this title, obtains control of each authoritative
electronic copy.
(h) A buyer of a controllable electronic record takes free of a
security interest if, without knowledge of the security interest and
before it is perfected, t he buyer gives value and obtains control of
the controllable electronic record.
(i) A buyer, other than a secured party, of a controllable
account or a controllable payment intangible takes free of a
security interest if, without knowledge of the security interest and
before it is perfected, the buyer gives value and obtains control of
the controllable account or controllable payment intangible.
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SECTION 65. AMENDATORY 12A O.S. 2021, Section 1 -9-323,
is amended to read as follows:
Section 1-9-323.
FUTURE ADVANCES
(a) Except as otherwise provided in subsection (c) of this
section, for purposes of determining the priority of a perfected
security interest under paragraph (1) of subsection (a) of Section
1-9-322 of this title, perfectio n of the security interest dates
from the time an advance is made to the extent that the security
interest secures an advance that:
(1) is made while the security interest is perfected only:
(A) under Section 1-9-309 of this title when it attaches;
or
(B) temporarily under subse ction (e), (f), or (g) of
Section 1-9-312 of this title; and
(2) is not made pursuant to a commitment entered into before or
while the security interest is perfected by a method other than
under Section 1-9-309 or subsection (e), ( f), or (g) of Section 1 -9-
312 of this title.
(b) Except as otherwise provided in subsection (c) of this
section, a security interest is subordinate to the rights of a
person that becomes a lien creditor to the extent that the security
interest secures an advance made more than f orty-five (45) days
after the person becomes a lien creditor unless the advance is made:
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(1) without knowledge of the lien; or
(2) pursuant to a commitment entered into without knowledge of
the lien.
(c) Subsections (a) and (b) o f this section do not apply to a
security interest held by a secured party that is a buyer of
accounts, chattel paper, payment intangibles, or promissory notes or
a consignor.
(d) Except as otherwise provided in subsection (e) of this
section, a buyer of goods other than a buyer in ordinary course of
business takes free of a security interest to the extent that it
secures advances made after the earlier of:
(1) the time the secured party acquires knowledge of the
buyer's purchase; or
(2) forty-five (45) days after the purchase.
(e) Subsection (d) of this section does not apply if the
advance is made pursuant to a commitment entered into without
knowledge of the buyer's purchase and before the expiration of the
forty-five-day period.
(f) Except as otherw ise provided in subsecti on (g) of this
section, a lessee of goods , other than a lessee in ordinary course
of business, takes the leasehold interest free of a security
interest to the extent that it secures advances made after the
earlier of:
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(1) the time the secured party acquires knowledge of the lease;
or
(2) Forty-five (45) days after the lease contract becomes
enforceable.
(g) Subsection (f) of this section does not apply if the
advance is made pursuant to a commitment entered into without
knowledge of the lease and before the expiration of the forty -five-
day period.
SECTION 66. AMENDATORY 12A O.S. 2021, Section 1 -9-324,
is amended to read as follows:
Section 1-9-324.
PRIORITY OF PURCHASE -MONEY SECURITY INTERESTS
(a) Except as otherwise provided in subsection (g) of this
section, a perfected purchase -money security interest in goods other
than inventory or livestock has priority over a conflicting security
interest in the same goods, and, except as otherwise provided in
Section 1-9-327 of this title, a perfected security interest in its
identifiable proceeds also has priority, if the purchase -money
security interest is perfected when the debtor receives possession
of the collateral or within twenty (20) days thereafter.
(b) Subject to subsection (c) of this section and except as
otherwise provided in subsection (g) of this section, a perfected
purchase-money security interest in inventory has priority over a
conflicting security interest in the same inventory, has priority
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over a conflicting security interest in chattel paper or an
instrument constituting proceeds of the inventory and in proceeds of
the chattel paper, if so provided in Section 1 -9-330 of this title,
and, except as otherwise provided in Section 1 -9-327 of this title,
also has priority in identifiable cash proceeds of the inventory to
the extent the identifiable cash proceeds are received on or before
the delivery of the inventory to a buyer, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the inventory;
(2) the purchase-money secured party sends an authenticated a
signed notification to the holder of the conflicting security
interest;
(3) the holder of the conflicting security interest receives
the notification within five (5) years before the debtor receives
possession of the inventory; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase -money security
interest in inventory of the debtor and describes the inventory.
(c) Paragraphs (2) through (4) of subsection (b) of this
section apply only if the holder of the conflicting security
interest had filed a financing statement covering the same types of
inventory:
(1) if the purchase -money security interest is perfected by
filing, before the date of the filing; or
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(2) if the purchase -money security interest is temporarily
perfected without filing or possession under subsection (f) of
Section 1-9-312 of this title, before the beginning of the twenty -
day period thereunder.
(d) Subject to subsection (e) of this section and except as
otherwise provided in subsection (g) of this section, a perfected
purchase-money security interest in livestock that are farm products
has priority over a conflicting security interes t in the same
livestock, and, except as otherwise provided in Section 1 -9-327 of
this title, a perfected security interest in their identifiable
proceeds and identifiable products in their unmanufactured states
also has priority, if:
(1) the purchase-money security interest is p erfected when the
debtor receives possession of the livestock;
(2) the purchase-money secured party sends an authenticated a
signed notification to the holder of the conflicting security
interest;
(3) the holder of the conflicting security interest receives
the notification within six (6) months before the debtor receives
possession of the livestock; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase -money security
interest in livestock of the de btor and describes the livestock.
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(e) Paragraphs (2) through (4) of subsection (d) of this
section applies only if the holder of the conflicting security
interest had filed a financing statement covering the same types of
livestock:
(1) if the purchase -money security interest is perfected by
filing, before the date of the filing; or
(2) if the purchase -money security interest is temporarily
perfected without filing or possession under subsection (f) of
Section 1-9-312 of this title, before the beginning of the twenty-
day period thereunder.
(f) Except as otherwise provided in subsection (g) of this
section, a perfected purchase -money security interest in software
has priority over a conflicting security interest in the same
collateral, and, except as otherwise provided in Section 1 -9-327 of
this title, a perfected security interest in its identifiable
proceeds also has priority, to the extent that the purchase -money
security interest in the goods in which the software was acquired
for use has priority in t he goods and proceeds of the goods under
this section.
(g) If more than one security interest qualifies for priority
in the same collateral under subsection (a), (b), (d), or (f) of
this section:
(1) a security interest securing a n obligation incurred as all
or part of the price of the collateral has priority over a security
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interest securing an obligation incurred for value given to enable
the debtor to acquire rights in or the use of collateral; and
(2) in all other cases, subse ction (a) of Section 1 -9-322 of
this title applies to the qualifying security interests.
SECTION 67. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1 -9-326A of Title 12A, unless
there is created a dup lication in numbering, reads as follows:
PRIORITY OF SECURITY INTEREST IN CONTROLLABLE ACCOUNT, CONTROLLABLE
ELECTRONIC RECORD, AND CONTROLLABLE PAYMENT INTANGIBLE
A security interest in a controllable account, controllable
electronic record, or controllab le payment intangible he ld by a
secured party having control of the account, electronic record, or
payment intangible has priority over a conflicting security interest
held by a secured party that does not have control.
SECTION 68. AMENDATORY 12A O.S. 2021, Section 1 -9-330,
is amended to read as follows:
Section 1-9-330.
PRIORITY OF PURCHASER OF CHATTEL PAPER OR INSTRUMENT
(a) A purchaser of chattel paper has priority over a security
interest in the chattel paper which is claimed m erely as proceeds of
inventory subject to a security interest if:
(1) in good faith and in the ordinary course of the purchaser's
business, the purchaser gives new value and, takes possession of
each authoritative tangible copy of the record evidencing the
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chattel paper or, and obtains control of under Section 1-9-105 of
this title of each authoritative electronic copy of the record
evidencing the chattel paper under Section 1-9-105 of this title;
and
(2) the authoritative copies of the record evidencing the
chattel paper does do not indicate that it the chattel paper has
been assigned to an identified assignee other than the purchaser.
(b) A purchaser of chattel paper has priority over a security
interest in the chattel paper which is claimed other than merely as
proceeds of inventory subject to a security interest if the
purchaser gives new value and, takes possession of each
authoritative tangible copy of the record evidencing the chattel
paper or, and obtains control of under Section 1-9-105 of this title
of each authoritativ e electronic copy of the record evidencing the
chattel paper under Section 1-9-105 of this title in good faith, in
the ordinary course of the purchaser's business, and without
knowledge that the purchase violates the rights of the s ecured
party.
(c) Except as otherwise provided in Section 1 -9-327 of this
title, a purchaser having priority in chattel paper under subsection
(a) or (b) of this section also has priority in proceeds of the
chattel paper to the extent that:
(1) Section 1-9-322 of this title pro vides for priority in the
proceeds; or
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(2) the proceeds consist of the specific goods covered by the
chattel paper or cash proceeds of the specific goods, even if the
purchaser's security interest in the proceeds is unperfected.
(d) Except as otherwise provided in subsection (a) of Section
1-9-331 of this title, a purchaser of an instrument has priority
over a security interest in the instrument perfected by a method
other than possession if the purchaser gives value and takes
possession of the instrument in good faith and without knowledge
that the purchase violates the rights of the secured party.
(e) For purposes of subsections (a) and (b) of this section,
the holder of a purchase -money security interest in inventory gives
new value for chattel paper constituting proceeds of the inventory.
(f) For purposes of subsections (b) and (d) of this section, if
the authoritative copies of the record evidencing chattel paper or
an instrument indicates indicate that it the chattel paper or
instrument has been assigned to an identified secured party other
than the purchaser, a purchaser of the chattel paper or instrument
has knowledge that the purchase violates the rights of the secured
party.
SECTION 69. AMENDATORY 12A O.S. 2021, Section 1 -9-331,
is amended to read as follows:
Section 1-9-331.
PRIORITY OF RIGHTS OF PURCHASERS OF INSTRUMENTS CONTROLLABLE
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS, CONTROLLABLE PAYMENT
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INTANGIBLES, DOCUMENTS, INSTRUMENTS, AND SECURITIES UNDER OTHER
ARTICLES; PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND SECURITY
ENTITLEMENTS AND PROTECTION AGAINST ASSERTION OF CLAIM UNDER ARTICLE
ARTICLES 8 AND 12
(a) This article does not limit the rights of a holder in due
course of a negotiable instr ument, a holder to which a negotiable
document of title has been duly negotiated, or a protected purchaser
of a security, or a qualifying purchaser of a controllable account,
controllable electronic record, or controllable payment intangible .
These holders or purchasers take pri ority over an earlier security
interest, even if perfected, to the extent provided in Articles 3,
7, and 8, and 12 of this title.
(b) This article does not limit the rights of or impose
liability on a person to the extent that the person is protected
against the assertion of a claim under Article 8 or 12 of this
title.
(c) Filing under this article does not constitute notice of a
claim or defense to the holders, or purchasers, or persons described
in subsections (a) and (b) of this section.
SECTION 70. AMENDATORY 12A O.S. 2021, Section 1 -9-332,
is amended to read as follows:
Section 1-9-332.
TRANSFER OF MONEY; TRANSFER OF FUNDS FROM DEPOSIT ACCOUNT
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(a) A transferee of money takes the money free of a securit y
interest unless if the transferee acts receives possession of the
money without acting in collusion with the debtor in violating the
rights of the secured party.
(b) A transferee of funds from a deposit account takes the
funds free of a security interes t in the deposit account unless if
the transferee acts receives the funds without acting in collusion
with the debtor in violating the rights of the secured party.
SECTION 71. AMENDATORY 12A O.S. 2021, Section 1 -9-334,
is amended to read as follows:
Section 1-9-334.
PRIORITY OF SECURITY INTERESTS IN FIXTURES AND CROPS
(a) A security interest under this article may be created in
goods that are fixtures or may continue in goods that become
fixtures. A security interest does not exis t under this article in
ordinary building materials incorporated into an improvement on
land.
(b) This article does not prevent creation of an encumbrance
upon fixtures under real property law.
(c) In cases not governed by subsections (d) through (h) of
this section, a security interest in fixtures is subordinate to a
conflicting interest of an encumbrancer or owner of the related real
property other than the debtor.
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(d) Except as otherwise provided in subsection (h) of this
section, a perfected security interest in fixtures ha s priority over
a conflicting interest of an encumbrancer or owner of the real
property if the debtor has an interest of record in or is in
possession of the real property and:
(1) the security interest is a purchase -money security
interest;
(2) the interest of the encumbrancer or owner arises before the
goods become fixtures; and
(3) the security interest is perfected by a fixture filing
before the goods become fixtures or within twenty (20) days
thereafter.
(e) A perfected secu rity interest in fixture s has priority over
a conflicting interest of an encumbrancer or owner of the real
property if:
(1) the debtor has an interest of record in the real property
or is in possession of the real property and the security interest:
(A) is perfected by a fixture filing before the interest
of the encumbrancer or owner is of record; and
(B) has priority over any conflicting interest of a
predecessor in title of the encumbrancer or owner;
(2) before the goods become fixtures, the security in terest is
perfected by any method permitted by this article and the fixtures
are readily removable:
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(A) factory or office machines;
(B) equipment that is not primarily used or leased for use
in the operation of the real property; or
(C) replacements of domestic appliances that are consumer
goods;
(3) the conflicting interest is a lien on the real property
obtained by legal or equitable proceedings after the security
interest was perfected by any method permitted by this article; or
(4) the security intere st is:
(A) created in a manufactured home in a manufactured -home
transaction; and
(B) perfected pursuant to a statute described in paragraph
(2) of subsection (a) of Section 1 -9-311 of this
title.
(f) A security interest in fixtures, whether or not perfec ted,
has priority over a conflicting interest of an encumbrancer or owner
of the real property if:
(1) the encumbrancer or owner has, in an authenticated a signed
record, consented to the security interest or disclaimed an interest
in the goods as fixture s; or
(2) the debtor has a right to remove the goods as against the
encumbrancer or owner.
(g) The priority of the security interest under paragraph (2)
of subsection (f) of this section continues for a reasonable time if
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the debtor's right to remove the goods as against the encumbrancer
or owner terminates.
(h) A mortgage is a construction mortgage to the extent that it
secures an obligation incurred for the construction of an
improvement on land, including the acquisition cost of the land, if
a recorded record of the mortgage so indicates. Except as otherwise
provided in subsections (e) and (f) of this section, a security
interest in fixtures is subordinate to a construction mortgage if a
record of the mortgage is recorded before the goods become fixtu res
and the goods become fixtures before the completion of the
construction. A mortgage has this priority to the same extent as a
construction mortgage to the extent that it is given to refinance a
construction mortgage.
(i) A perfected security interest in crops growing on rea l
property has priority over a conflicting interest of an encumbrancer
or owner of the real property if the debtor has an interest of
record in or is in possession of the real property.
(j) Subsection (i) of this section prevails o ver any
inconsistent provisions of other statutes of this state.
SECTION 72. AMENDATORY 12A O.S. 2021, Section 1 -9-341,
is amended to read as follows:
Section 1-9-341.
BANK'S RIGHTS AND DUTIES WITH RESPECT TO DEPOSIT ACCOUNT
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Except as otherwise provided i n subsection (c) of Section 1 -9-
340 of this title, and unless the bank otherwise agrees in an
authenticated a signed record, a bank's rights and duties with
respect to a deposit account maintained with the bank are not
terminated, suspended, or modified by:
(1) the creation, attachment, or perfection of a security
interest in the deposit account;
(2) the bank's knowledge of the security interest; or
(3) the bank's receipt of instructions from the secured party.
SECTION 73. AMENDATORY 12A O.S. 2021, Section 1 -9-404,
is amended to read as follows:
Section 1-9-404.
RIGHTS ACQUIRED BY ASSIGNEE;
CLAIMS AND DEFENSES AGAINST ASSIGNEE
(a) Unless an account debtor has made an enforceable agreement
not to assert defenses or claims, and subject to subsections (b)
through (e) of this section, the rights of an assignee are subject
to:
(1) all terms of the agreement between the account debtor and
assignor and any defense or claim in recoupment arising from the
transaction that gave rise to the contract; and
(2) any other defense or claim of the account debtor against
the assignor which accrues before the account debtor receives a
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notification of the assignment authenticated signed by the assignor
or the assignee.
(b) Subject to subsection (c) of this section and except as
otherwise provided in subsection (d) of this section, the claim of
an account debtor against an assignor may be asserted against an
assignee under subsection (a) of this section only to reduce the
amount the account debtor ow es.
(c) This section is subject to law other than this article
which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal,
family, or household purposes.
(d) In a consumer transaction, if a record evidences the
account debtor's obligation, law other than this article requires
that the record include a statement to the effect that the account
debtor's recovery against an assignee with respect to claims and
defenses against the assign or may not exceed amounts paid by the
account debtor under the record, and the record does not include
such a statement, the extent to which a claim of an account debtor
against the assignor may be asserted against an assignee is
determined as if the record included such a statement.
(e) This section does not apply to an assignment of a health -
care-insurance receivable.
SECTION 74. AMENDATORY 12A O.S. 2021, Section 1 -9-406,
is amended to read as follows:
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Section 1-9-406.
DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT;
IDENTIFICATION AND PROOF OF ASSIGNMENT; RESTRICTIONS ON
ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER, PAYMENT
INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE
(a) Subject to subsections (b) thro ugh (i) (k) of this section,
an account debtor on an account, chattel paper, or a payment
intangible may discharge its obligation by paying the assignor
until, but not after, the account debtor receives a notification,
authenticated signed by the assignor or the assignee, that th e
amount due or to become due has been assigned and that payment is to
be made to the assignee. After receipt of the notification, the
account debtor may discharge its obligation by paying the assignee
and may not discharge the obl igation by paying the assignor.
(b) Subject to subsection subsections (h) and (k) of this
section, notification is ineffective under subsection (a) of this
section:
(1) if it does not reasonably identify the rights assigned;
(2) to the extent that an ag reement between an accou nt debtor
and a seller of a payment intangible limits the account debtor's
duty to pay a person other than the seller and the limitation is
effective under law other than this article; or
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(3) at the option of an account debtor, if the notification
notifies the account debtor to make less than the full amount of any
installment or other periodic payment to the assignee, even if:
(A) only a portion of the account, chattel paper, or
general intangible has been assigned to that assignee ;
(B) a portion has been assigned to another assignee; or
(C) the account debtor knows that the assignment to that
assignee is limited.
(c) Subject to subsection subsections (h) and (k) of this
section, if requested by the account debtor, an assignee shal l
seasonably furnish reasonable proof that the assignment has been
made. Unless the assignee complies, the account debtor may
discharge its obligation by paying the assignor, even if the account
debtor has received a notification under subsection (a) of t his
section.
(d) (1) In this subsection, "promissory note" includes a
negotiable instrument that evidences chattel paper. Except as
otherwise provided in paragraph (2) of this subsection and
subsection subsections (e) and (j) of this section and Section s 2A-
303 and 1-9-407 of this title, and subject to subsection (h) of this
section, a term in an agreement between an account debtor and an
assignor or in a promissory note is ineffective to the extent that
it:
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(A) prohibits, restricts, or requires the cons ent of the
account debtor or person obligated on the promissory
note to the assignment or transfer of, or the
creation, attachment, perfection, or enforcement of a
security interest in, the account, chattel paper,
payment intangible, or promissory note; or
(B) provides that the assignment or transfer or the
creation, attachment, perfection, or enforcement of
the security interest may give rise to a default,
breach, right of recoupment, claim, defense,
termination, right of termination, or remedy under the
account, chattel paper, p ayment intangible, or
promissory note.
(2) This subsection does not apply to the assignment or
transfer of or creation of a security interest in the following:
(A) a claim or right to receive compensation for injuries
or sickness as described in 26 U.S.C., Section 104
(a)(1) or (2), as amended from time to time;
(B) a claim or right to receive benefits under a special
needs trust as described in 42 U.S.C., Section
1396p(d)(4), as amended from time to time; or
(C) a structured settlement payment right as de fined in
paragraph 16 of Section 3239 of Title 12 of the
Oklahoma Statutes to the extent of any conflict
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between the Uniform Commercial Code and the Structured
Settlement Protection Act of 2001.
(e) Subsection (d) of this section d oes not apply to the sale
of a payment intangible or promissory note, other than a sale
pursuant to a disposition under Section 1 -9-610 of this title or an
acceptance of collateral under Section 1 -9-620 of this title.
(f) Except as otherwise provided in subsection (j) of this
section and Sections 2A-303 and 1-9-407 of this title and subject to
subsections (h) and (i) of this section, a rule of law, statute, or
regulation, that prohibits, restricts, or requires the consent of a
government, governmental body or official, or account debtor to the
assignment or transfer of, or creation of a security interest in, an
account or chattel paper is ineffective to the extent that the rule
of law, statute, or regulation:
(1) prohibits, restricts, or requires the conse nt of the
government, governmental body or official, or account debtor to the
assignment or transfer of, or the creation, attachment, perfection,
or enforcement of a security interest in, the account or chattel
paper; or
(2) provides that the assignment o r transfer or the creation,
attachment, perfection, or enforcement of the security interest may
give rise to a default, breach, right of recoupment, claim, defense,
termination, right of termination, or remedy under the account or
chattel paper.
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(g) Subject to subsection subsections (h) and (k) of this
section, an account debtor may not waive or vary its option under
paragraph (3) of subsection (b) of this section.
(h) This section is subject to law other than this article
which establishes a different ru le for an account debtor who is an
individual and who incurred the obligation primarily for personal,
family, or household purposes.
(i) This section does not apply to an assignment of a health -
care-insurance receivable.
(j) Subsections (d) and (f) of th is section do not apply to a
security interest in an ownership interest in a general partnership,
limited partnership, or limited liability company.
(k) Subsections (a), (b), (c), and (g) of this section do not
apply to a controllable account or controlla ble payment intangible.
SECTION 75. AMENDATORY 12A O.S. 2021, Section 1 -9-408,
is amended to read as follows:
Section 1-9-408.
RESTRICTIONS ON ASSIGNMENT OF PROMISSORY
NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND
CERTAIN GENERAL INTANGIBLES INEFFECTIVE
(a) Except as otherwise provided in subsection subsections (b)
and (f) of this section, a term in a promissory note or in an
agreement between an account debtor and a debtor which relates to a
health-care-insurance receivable or a g eneral intangible, including
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a contract, permit, license, or franchise, and which term prohibits,
restricts, or requires the consent of the person obligated on the
promissory note or the account debtor to, the assignment or transfer
of, or creation, attach ment, or perfection of a security interest
in, the promissory note, health -care-insurance receivable, or
general intangible, is ineffective to the extent that the term:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment or transfer or the creation,
attachment, or perfection of the security interest may give rise to
a default, breach, right of recoupment, claim, defense, termination,
right of termination, or remedy under the promissory note, health-
care-insurance receivable, or general intangible.
(b) Subsection (a) of this section applies to a security
interest in a payment intangible or promissory note only if the
security interest arises out of a sale of the payment intangible or
promissory note, other than a sale pursuant to a disposition under
Section 1-9-610 of this title or an acceptance of collateral under
Section 1-9-620 of this title.
(c) A Except as otherwise provided in subsection (f) of this
section, a rule of law, statute, or r egulation, that prohibit s,
restricts, or requires the consent of a government, governmental
body or official, person obligated on a promissory note, or account
debtor to the assignment or transfer of, or creation of a security
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interest in, a promissory not e, health-care-insurance receivable, or
general intangible, including a contract, permit, license, or
franchise between an account debtor and a debtor, is ineffective to
the extent that the rule of law, statute, or regulation:
(1) would impair the creatio n, attachment, or perfec tion of a
security interest; or
(2) provides that the assignment or transfer or the creation,
attachment, or perfection of the security interest may give rise to
a default, breach, right of recoupment, claim, defense, termination,
right of termination, or remedy under the promissory note, health -
care-insurance receivable, or general intangible.
(d) To the extent that a term in a promissory note or in an
agreement between an account debtor and a debtor which relates to a
health-care-insurance receivable or general intangible or a rule of
law, statute, or regulation described in subsection (c) of this
section would be effective under law other than this article but is
ineffective under subsection (a) or (c) of this section, the
creation, attachment, or perfection of a security interest in the
promissory note, health -care-insurance receivable, or general
intangible:
(1) is not enforceable against the person obligated on the
promissory note or the account debtor;
(2) does not impose a duty or obligation on th e person
obligated on the promissory note or the account debtor;
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(3) does not require the person obligated on the promissory
note or the account debtor to recognize the security interest, pay
or render performance to the secured pa rty, or accept payment or
performance from the secured party;
(4) does not entitle the secured party to use or assign the
debtor's rights under the promissory note, health -care-insurance
receivable, or general intangible, including any related information
or materials furnished to the debtor in the transaction giving rise
to the promissory note, health -care-insurance receivable, or general
intangible;
(5) does not entitle the secured party to use, assign, possess,
or have access to any trade secrets or co nfidential information of
the person obligated on the promissory note or the account debtor;
and
(6) does not entitle the secured party to enforce the security
interest in the promissory note, health -care-insurance receivable,
or general intangible.
(e) Subsections (a) and (c) of this section do not apply to the
assignment or transfer of or creation of a security interest in:
(1) a claim or right to receive compensation for injuries or
sickness as described in 26 U.S.C., Section 104(a)(1) or (2), as
amended from time to time;
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(2) a claim or right to receive benefits under a special needs
trust as described in 42 U.S.C., Section 1396p(d)(4), as amended
from time to time; or
(3) a structured settlement payment right as defined in
paragraph 16 of Section 3 239 of Title 12 of the O klahoma Statutes to
the extent of any conflict between the Uniform Commercial Code and
the Structured Settlement Protection Act of 2001.
(f) This section does not apply to a security interest in an
ownership interest in a general p artnership, limited partnership, or
limited liability company.
(g) As used in this section, "promissory note" includes a
negotiable instrument that evidences chattel paper.
SECTION 76. AMENDATORY 12A O.S. 2021, Section 1 -9-509,
is amended to read as foll ows:
Section 1-9-509.
PERSONS ENTITLED TO FILE A RECORD
(a) A person may file an initial financing statement, amendment
that adds collateral covered by a financing statement, or amendment
that adds a debtor to a financing statement only if:
(1) the debtor authorizes the filing in an authenticated a
signed record; or
(2) the person holds an agricultural lien that has become
effective at the time of filing and the financing statement covers
only collateral in which the person holds an agricultural lien.
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(b) By authenticating signing or becoming bound as a debtor by
a security agreement, a debtor or new debtor authorizes the filing
of an initial financing statement, and an amendment, covering:
(1) the collateral described in the sec urity agreement; and
(2) property that becomes collateral under paragraph (2) of
subsection (a) of Section 1 -9-315 of this title, whether or not the
security agreement expressly covers proceeds.
(c) By acquiring collateral in which a security interest or
agricultural lien conti nues under paragraph (1) of subsection (a) of
Section 1-9-315 of this title, a debtor authorizes the filing of an
initial financing statement, and an amendment, covering the
collateral and property that becomes collateral under para graph (2)
of subsection (a) of Section 1 -9-315 of this title.
(d) A person may file an amendment other than an amendment that
adds collateral covered by a financing statement or an amendment
that adds a debtor to a financing statement only if:
(1) the secured party of record au thorizes the filing; or
(2) the amendment is a termination statement for a financing
statement for which the secured party of record has failed to file
or send a termination statement as required by subsection (a) or (c)
of Section 1-9-513 of this title, the debtor authorizes the filing,
and the termination statement indicates that the debtor authorized
it to be filed.
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(e) If there is more than one secured party of record for a
financing statement, each secured party of record may authorize the
filing of an amendment under subsection (d) of this section.
SECTION 77. AMENDATORY 12A O.S. 2021, Section 1 -9-513,
is amended to read as follows:
Section 1-9-513.
TERMINATION STATEMENT
(a) A secured party shall caus e the secured party of record for
a financing statement to file a termination statement for the
financing statement if the financing statement covers consumer goods
and:
(1) there is no obligation secured by the collateral covered by
the financing stateme nt and no commitment to make an advance, incur
an obligation, or otherwise give value; or
(2) the debtor did not authorize the filing of the initial
financing statement.
(b) To comply with subsection (a) of this section, a secured
party shall cause the s ecured party of record to file the
termination statement:
(1) within one (1) month after there is no obligation secured
by the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or otherwise
give value; or
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(2) if earlier, within twenty (20) days after the secured party
receives an authenticated a signed demand from a debtor.
(c) In cases not governed by subsection (a) of this section,
within twenty (20) days after a secured party receives an
authenticated a signed demand from a debtor, the secured party shall
cause the secured party of record for a financing statement to send
to the debtor a termination statement for the financing statement or
file the termination statement in the filing office if:
(1) except in the case of a financing statement covering
accounts or chattel paper that has been sold or goods that are the
subject of a consignment, there is no obligation secured by the
collateral covered by the financing statement and no commitment to
make an advance, incur an obligation, or otherwise give value;
(2) the financing statement covers accounts or chattel paper
that has been sold but as to which the account debtor or other
person obligated has discharged its obligation;
(3) the financing stat ement covers goods that were the subject
of a consignment to the debtor but are not in the debtor's
possession; or
(4) the debtor did not authorize the filing of the initial
financing statement.
(d) Except as otherwise provided in Section 1 -9-510 of this
title, upon the filing of a termination statement with the filing
office, the financing statement to which the termination statement
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relates ceases to be effective. Except as otherwise provided in
Section 1-9-510 of this title, for purposes of subsection (g) of
Section 1-9-519, subsection (a) of Section 1 -9-522, and subsection
(c) of Section 1-9-523 of this title, the filing with the filing
office of a termination statement relating to a financing statement
that indicates that the debtor is a transmitting utility also causes
the effectiveness of the financing statement to lapse.
SECTION 78. AMENDATORY 12A O.S. 2021, Section 1 -9-601,
is amended to read as follows:
Section 1-9-601.
RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT;
CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER,
PAYMENT INTANGIBLES, OR PROMISSORY NOTES
(a) After default, a secured party has the rights provided in
this part and, except as otherwise provided in Section 1 -9-602 of
this title, those provided by agreement of the parties. A secured
party:
(1) may reduce a claim to judgment, foreclose, or otherwise
enforce the claim, security interest, or agricultural lien by any
available judicial procedure, but Section 686 of Title 12 of the
Oklahoma Statutes, shall not apply to the enforcement of a cl aim,
security interest, or agricultural lien under this article except as
provided in Section 1 -9-604 of this title where the procedure is in
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accordance with the rights of the parties with respect to real
property; and
(2) if the collateral is documents, may proceed either as to
the documents or as to the goods they cover.
(b) A secured party in possession of collateral or control of
collateral under Section 7 -106, 1-9-104, 1-9-105, 1-9-106, or 1-9-
107, or 1-9-107A of this title has the rights and duties provided in
Section 1-9-207 of this title.
(c) The rights under subsections (a) and (b) of this section
are cumulative and may be exercised simultaneously.
(d) Except as otherwise provided in subsection (g) of this
section and Section 1-9-605 of this title, after default, a debtor
and an obligor have the rights provided in this part and by
agreement of the parties.
(e) If a secured party has reduced its claim to judgment, the
lien of any levy that may be made upon the collateral b y virtue of
an execution based upon the judgment relates back to the earliest
of:
(1) the date of perfection of the security interest or
agricultural lien in the collateral;
(2) the date of filing a financing statement covering the
collateral; or
(3) any date specified in a statute under which the
agricultural lien was created.
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(f) A sale pursuant to an execution is a foreclosure of the
security interest or agricultural lien by judicial procedure within
the meaning of this section. A secured party may purchase at the
sale and thereafter hold the collateral free of any other
requirements of this article.
(g) Except as otherwise provided in subsection (c) of Section
1-9-607 of this title, this part imposes no duties upon a secured
party that is a consign or or is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes.
SECTION 79. AMENDATORY 12A O.S. 2021, Section 1 -9-605,
is amended to read as follows:
Section 1-9-605.
UNKNOWN DEBTOR OR SECONDARY OBLIGOR
A (a) Except as provided in subsection (b) of this section, a
secured party does not owe a duty based on its status as secured
party:
(1) to a person that is a debtor or obligor, unless the secured
party knows:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) how to communicate with the person; or
(2) to a secured party or lienholder that has filed a financing
statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
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(B) the identity of the person.
(b) A secured party owes a duty based on its status as a
secured party to a person if, at the time the secured party obtains
control of collateral that is a controllable account, controllable
electronic record, or controllable payment intangi ble or at the time
the security interest attaches to the collateral, whichever is
later:
(1) the person is a debtor or obligor; and
(2) the secured party knows that the information in
subparagraph (A), (B), or (C) of paragraph (1) of subsection (a) of
this section relating to t he person is not provided by the
collateral, a record attached to or logically associated with the
collateral, or the system in which the collateral is recorded.
SECTION 80. AMENDATORY 12A O.S. 2021, Section 1-9-608,
is amended to read as follows:
Section 1-9-608.
APPLICATION OF PROCEEDS OF COLLECTION OR ENFORCEMENT;
LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS
(a) If a security interest or agricultural lien secures payment
or performance of an obligation, the following rules appl y:
(1) A secured party shall apply or pay over for application the
cash proceeds of collection or enforcement under this section in the
following order to:
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(A) the reasonable expenses of collection and enforcement
and, to the extent provided for by agreement and not
prohibited by law, reasonable attorney's attorney fees
and legal expenses incurred by the secured party;
(B) the satisfaction of obligations secured by the
security interest or agricultural lien under which the
collection or enforcement is made ; and
(C) the satisfaction of obligations secured by any
subordinate security interest in or other lien on the
collateral subject to the security interest or
agricultural lien under which the collection or
enforcement is made if the secured party receives an
authenticated a signed demand for proceeds before
distribution of the proceeds is completed.
(2) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasonable time. Unless the holder
complies, the secured party need not comply with the holder's demand
under subparagraph (C) of paragraph (1) of this subsection.
(3) A secured party need not apply or pay over for application
noncash proceeds of collection and enforcement under this section
unless the failure to do so would be commercially unreasonable. A
secured party that applies or pays over for application noncash
proceeds shall do so in a commercially reasonable manner.
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(4) A secured party shall a ccount to and pay a debtor for any
surplus, and the obligor is liable for any deficiency.
(b) If the underlying transaction is a sale of accounts,
chattel paper, payment intangibles, or promissory notes, the debtor
is not entitled to any surplus, and the obligor is not liable for
any deficiency.
SECTION 81. AMENDATORY 12A O.S. 2021, Section 1 -9-611,
is amended to read as follows:
Section 1-9-611.
NOTIFICATION BEFORE DISPOSITION OF COLLATERAL
(a) In this section, "notification date " means the earlier of
the date on which:
(1) a secured party sends to the debtor and any secondary
obligor an authenticated a signed notification of disposition; or
(2) the debtor and any secondary obligor waive the right to
notification.
(b) Except as otherwise provided in subsection (d) of this
section, a secured party that disposes of collateral under Section
1-9-610 of this title shall send to the persons specified in
subsection (c) of this section a reasonable authenticated signed
notification of disposition.
(c) To comply with subsection (b) of this section, the secured
party shall send an authenticated a signed notification of
disposition to:
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(1) the debtor;
(2) any secondary obligor; and
(3) if the collateral is other than consumer goods:
(A) any other person from which the secured party has
received, before the notification date, an
authenticated a signed notification of a claim of an
interest in the collateral;
(B) any other secured party or lienholder that, ten (10)
days before the notifica tion date, held a security
interest in or other lien on the collateral perfected
by the filing of a financing statement that:
(i) identified the collateral;
(ii) was indexed under the debtor's name as of that
date; and
(iii) was filed in the office in which to file a
financing statement against the debtor covering
the collateral as of that date; and
(C) any other secured party that, ten (10) days before the
notification date, held a security interest in the
collateral perfected by co mpliance with a statute,
regulation, or treaty described in subsection (a) of
Section 1-9-311 of this title.
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(d) Subsection (b) of this section does not apply if the
collateral is perishable or threatens to decline speedily in value
or is of a type custom arily sold on a recognized market.
(e) A secured party complies with the requirement for
notification prescribed by subparagraph (B) of paragraph (3) of
subsection (c) of this section if:
(1) not later than twenty (20) days or earlier than thirty (30)
days before the notificati on date, the secured party requests, in a
commercially reasonable manner, information concerning financing
statements indexed under the debtor's name in the office indicated
in subparagraph (B) of paragraph (3) of subsection (c) of this
section; and
(2) before the notification date, the secured party:
(A) did not receive a response to the request for
information; or
(B) received a response to the request for information and
sent an authenticated a signed notification of
disposition to each secured party or other lienholder
named in that response whose financing statement
covered the collateral.
SECTION 82. AMENDATORY 12A O.S. 2021, Section 1 -9-613,
is amended to read as follows:
Section 1-9-613.
CONTENTS AND FORM OF NOTIFICATION
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BEFORE DISPOSITION OF COLLATERAL: GENERAL
(a) Except in a consumer -goods transaction, the following rules
apply:
(1) The contents of a notification of disposition are
sufficient if the notification:
(A) describes the debtor and the secured party;
(B) describes the collateral that is the subject of the
intended disposition;
(C) states the method of intended disposition;
(D) states that the debtor is entitled to an accounting of
the unpaid indebtedness and states the charge, if any,
for an accounting; and
(E) states the time and place of a public disposition or
the time after which any other disposition is to be
made.
(2) Whether the contents of a notification that lacks any of
the information specified in paragraph (1) of this section are
nevertheless sufficient is a question of fact.
(3) The contents of a notification providing substantially the
information specified in paragraph (1) of this section are
sufficient, even if the notification includes:
(A) information not specified by t hat paragraph; or
(B) minor errors that are not seriously misleading.
(4) A particular phrasing of the notification is not required.
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(5) The following form of notification and the form appearing
in paragraph (3) of subsection (a) of Section 1-9-614 of this title,
when completed in accordance with the instructions in subsection (b)
of this section and subsection (b) of Section 1 -9-614 of this title,
each provides sufficient information:
NOTIFICATION OF DISPOSITION OF COLLATERAL
To: [Name of debtor, obligor , or other person to which the
notification is sent]
____________________________________________________
____________________________________________________
From: [Name, address, and telephone number of secured party]
____________________________________ ________________
____________________________________________________
Name of Debtor(s):
[Include only if debtor(s) are not an addressee]
____________________________________________________
[For a public disposition:]
We will sell [or lease or license, as applicable] the [describe
collateral] __________________ [to the highest qualified bidder] in
public as follows:
Day and Date: _________________
Time: _________________
Place: _________________
[For a private disposition:]
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We will sell [or lease or license, as applicable] the [describe
collateral] __________________ privately sometime after [day and
date] ________________.
You are entitled to an accounting of the unpaid indebtedness
secured by the property that we intend to sell [or lease or license,
as applicable] [for a charge of $_____________ ]. You may request
an accounting by calling us at [telephone number] ________________.
[End of Form]
NOTIFICATION OF DISPOSITION OF COLLATERAL
To: (Name of debtor, obligor, or other person to which the
notification is sent)
From: (Name, address, and telephone number of secured party)
{1} Name of any debtor that is not an addressee: (Name of each
debtor)
{2} We will sell (describe collateral) (to the highest qualified
bidder) at public sale. A sale could i nclude a lease or license.
The sale will be held as follows:
(Date)
(Time)
(Place)
{3} We will sell (describe collateral) at private sale sometime
after (date). A sale could include a lease or license.
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{4} You are entitled to an accounting of the unpa id indebtedness
secured by the property that we intend to sell or, as applicable,
lease or license.
{5} If you request an accounting, you must pay a charge of $
(amount).
{6} You may request an accounting by calling us at (telephone
number).
[End of Form]
(b) The following instructions apply to the form of
notification in paragraph (5) of subsection (a) of this section:
(1) The instructions in this paragraph refer to the numbers in
braces before items in the form of notification in paragraph (5) of
subsection (a) of this section . Do not include the numbers or
braces in the notification. The numbers and braces are used only
for the purpose of these instructions.
(2) Include and complete item {1} only if there is a debtor
that is not an addressee of the n otification and list the name or
names.
(3) Include and complete either item {2}, if the notification
relates to a public disposition of the collateral, or item {3}, if
the notification relates to a private disposition of the collateral.
If item {2} is included, include the wor ds "to the highest qualified
bidder" only if applicable.
(4) Include and complete items {4} and {6}.
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(5) Include and complete item {5} only if the sender will
charge the recipient for an accounting.
SECTION 83. AMENDATORY 12A O.S. 2021, Section 1 -9-614,
is amended to read as follows:
Section 1-9-614.
CONTENTS AND FORM OF NOTIFICATION BEFORE
DISPOSITION OF COLLATERAL: CONSUMER -GOODS TRANSACTION
(a) In a consumer-goods transaction, the following rules apply :
(1) A notification of disposition must provide the following
information:
(A) the information specified in paragraph (1) of
subsection (a) of Section 1-9-613 of this title;
(B) a description of any liability for a deficiency of the
person to which the n otification is sent;
(C) a telephone number from which the amount that must be
paid to the secured party to redeem the collateral
under Section 1-9-623 of this title is available; and
(D) a telephone number or mailing address from which
additional information concerning the dispo sition and
the obligation secured is available.
(2) A particular phrasing of the notification is not required.
(3) The following form of notification, when completed in
accordance with the instructions in subsection (b) of this se ction,
provides sufficient information:
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[Name and address of secured party]
______________________________________________
[Date]
_________________
NOTICE OF OUR PLAN TO SELL PROPERTY
[Name and address of any obligor who is also a debtor]
_________________________________________ _______________________
Subject: [Identification of Transaction]
________________________________________________________________
We have your [describe collateral] ________________________,
because you broke promises in our agreeme nt.
[For a public disposition:]
We will sell [describe collateral] _______________________ at public
sale. A sale could include a lease or license. The sale will be
held as follows:
Date: _________________________
Time: _________________________
Place: _______________________ __
You may attend the sale and bring bidders if you want.
[For a private disposition:]
We will sell [describe collateral] ______________________ at
private sale sometime after [date] _________________. A sale could
include a lease or license.
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The money that we get from the sale (after paying our costs)
will reduce the amount you owe. If we get less money than you owe,
you [will or will not, as applicable] _______________________ still
owe us the difference. If we get more money th an you owe, you will
get the extra money, unless we must pay it to someone else.
You can get the property back at any time before we sell it by
paying us the full amount you owe (not just the past due payments),
including our expenses. To learn the exact amount you must pay,
call us at [telephone number] _________________.
If you want us to explain to you in writing how we have figured
the amount that you owe us, you may call us at [telephone number]
_______________ [or write us at [secured party's address ]
______________________ __] and request a written explanation. [We
will charge you $_______________ for the explanation if we sent you
another written explanation of the amount you owe us within the last
six months.]
If you need more information about the sale call us at
[telephone number]__________________] [or write us at [secured
party's address]_________________________________].
We are sending this notice to the following other people who
have an interest in [describe collateral] _____________________ or
who owe money under your agreement:
[Names of all other debtors and obligors, if any]
____________________________________________________________
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[End of Form]
(Name and address of secured party)
(Date)
NOTICE OF OUR PLAN TO SELL PROPERTY
(Name and address of any obligor who is also a debtor)
Subject: (Identify transaction)
We have your (describe collateral), because you broke promises
in our agreement.
{1} We will sell (describe collateral) at public sale. A sale
could include a lease or license. T he sale will be held as follows:
(Date)
(Time)
(Place)
You may attend the sale and bring bidders if you want.
{2} We will sell (describe collateral) at private sale sometime
after (date). A sale could include a lease or license.
{3} The money that we get from the sale, after paying our costs,
will reduce the amount you owe. If we get less money than you owe,
you (will or will not, as applicable) still owe us the difference.
If we get more money than you owe, you will get the extra money,
unless we must pay it to someone else.
{4} You can get the property back at any time before we sell it
by paying us the full amount you owe, not just the past due
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payments, including our expenses. To learn the exact amount you
must pay, call us at (telephone number).
{5} If you want us to explain to you in (writing) (writing or in
(description of electronic record)) (description of electronic
record) how we have figured the amount that you owe us, {6} Call us
at (telephone number) (or) (write us at (secured party's addres s))
(or contact us by (d escription of electronic communication method))
{7} and request (a written explanation) (a written explanation or an
explanation in (description of electronic record)) (an explanation
in (description of electronic record)).
{8} We will charge you $ (amount) for the explanation if we sent
you another written explanation of the amount you owe us within the
last six months.
{9} If you need more information about the sale (call us at
(telephone number)) (or) (write us at (secured party's address)) (or
contact us by (description of electronic communication method)).
{10} We are sending this notice to the following other people
who have an interest in (describe collateral) or who owe money under
your agreement:
(Names of all other debtors and obligors, if any)
[End of Form]
(4) A notification in the form of paragraph (3) of this section
subsection is sufficient, even if additional information appears at
the end of the form.
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(5) A notification in the form of paragraph (3) of this section
subsection is sufficient, even if it includes errors in information
not required by paragraph (1) of this section subsection, unless the
error is misleading with respect to rights arising under this
article.
(6) If a notification under this section is not in the form of
paragraph (3) of this section subsection, law other than this
article determines the effect of including information not required
by paragraph (1) of this section subsection.
(b) The following instructions apply to the form of
notification in paragraph (3) of subs ection (a) of this section:
(1) The instructions in this subsection refer to the numbers in
braces before items in the form of notification in paragraph (3) of
subsection (a) of this section. Do not include the numbers or
braces in the notification. The numbers and braces are used only
for the purpose of these instructions.
(2) Include and complete either item {1}, if the notification
relates to a public disposition of the collateral, or item {2}, if
the notification relates to a private disposition of the collateral.
(3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
(4) In item {5}, include and complete any one of the three
alternative methods for the explanation — writing, writing or
electronic record, or electronic record.
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(5) In item {6}, include the telephone number. In addition,
the sender may include and complete either or both of the two
additional alternative methods of communication - writing or
electronic communication - for the recipient of the notificatio n to
communicate with the sender. Neither of the two additional methods
of communication is required to be included.
(6) In item {7}, include and complete the method or methods for
the explanation — writing, writing or electronic record, or
electronic record — included in item {5}.
(7) Include and complete item {8} only if a written explanation
is included in item {5} as a method for communicating the
explanation and the sender will charge the recipient for another
written explanation.
(8) In item {9}, include either the telep hone number or the
address or both the telephone number and the address. In addition,
the sender may include and complete the additional method of
communication - electronic communication - for the recipient of the
notification to communicate with the sender. The additional method
of electronic communication is not required to be included.
(9) If item {10} does not apply, insert "None" after
"agreement:".
SECTION 84. AMENDATORY 12A O.S. 2021, Section 1 -9-615,
is amended to read a s follows:
Section 1-9-615.
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APPLICATION OF PROCEEDS OF DISPOSITION;
LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS
(a) A secured party shall apply or pay over for application the
cash proceeds of disposition pursuant to Section 1 -9-610 of this
title in the following order to:
(1) the reasonable expenses of retaking, holding, preparing for
disposition, processing, and disposing, and, to the extent provided
for by agreement and not prohibited by law, reasonable attorney's
attorney fees and legal expenses inc urred by the secured party;
(2) the satisfaction of obligations secured by the security
interest or agricultural lien under which the disposition is made;
(3) the satisfaction of obligations secured by any subordinate
security interest in or other subordinate lien on the collateral if:
(A) the secured party receives from the holder of the
subordinate security interest or other lien an
authenticated a signed demand for proceeds before
distribution of the proceeds is completed; and
(B) in a case in which a consignor has an interest in the
collateral, the subordinate security interest or other
lien is senior to the interest of the consignor; and
(4) a secured party that is a consignor of the collateral if
the secured party receives fr om the consignor an authenticated a
signed demand for proceeds before distribution of the proceeds is
completed.
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(b) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasona ble time. Unless the holder
does so, the secured party need not comply with the holder's demand
under paragraph (3) of subsection (a) of this section.
(c) A secured party need not apply or pay over for application
noncash proceeds of disposition pursuant to Section 1 -9-610 of this
title unless the failure to do so would be commercially
unreasonable. A secured party that applies or pays over for
application noncash proceeds shall do so in a commercially
reasonable manner.
(d) If the security interest und er which a disposition is made
secures payment or performance of an obligation, after making the
payments and applications required by subsection (a) of this section
and permitted by subsection (c) of this section:
(1) unless paragraph (4) of subsection (a) of this section
requires the secured party to apply or pay over cash proceeds to a
consignor, the secured party shall account to and pay a debtor for
any surplus; and
(2) the obligor is liable for any deficiency.
(e) If the underlying transaction is a sale of accounts,
tangible chattel paper, payment intangibles, or promissory notes:
(1) the debtor is not entitled to any surplus; and
(2) the obligor is not liable for any deficiency.
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(f) The surplus or deficiency following a d isposition is
calculated based on the amount of proceeds that would have been
realized in a disposition complying with this part to a transferee
other than the secured party, a person related to the secured party,
or a secondary obligor if:
(1) the transferee in the disposition is the secured party, a
person related to the secured party, or a secondary obligor; and
(2) the amount of proceeds of the disposition is significantly
below the range of proceeds that a complying disposition to a person
other than the secured party, a person related to the secured party,
or a secondary obligor would have brought.
(g) A secured party that receives cash proceeds of a
disposition in good faith and without knowledge that the receipt
violates the rights of the holder o f a security interest or other
lien that is not subordinate to the security interest or
agricultural lien under which the disposition is made:
(1) takes the cash proceeds free of the security interest or
other lien;
(2) is not obligated to apply the proc eeds of the disposition
to the satisfaction of obligations secured by the security interest
or other lien; and
(3) is not obligated to account to or pay the holder of the
security interest or other lien for any surplus.
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SECTION 85. AMENDATORY 12A O.S. 20 21, Section 1-9-616,
is amended to read as follows:
Section 1-9-616.
EXPLANATION OF CALCULATION OF SURPLUS OR DEFICIENCY
(a) In this section:
(1) "Explanation" means a writing record that:
(A) states the amount of the surplus or d eficiency;
(B) provides an explanation in accordance with subsection
(c) of this section of how the secured party
calculated the surplus or deficiency;
(C) states, if applicable, that future debits, credits,
charges, including additional credit service cha rges
or interest, rebates, and expenses may affect the
amount of the surplus or deficiency; and
(D) provides a telephone number or mailing address from
which additional information concerning the
transaction is available.
(2) "Request" means a record:
(A) authenticated signed by a debtor or consumer obligor;
(B) requesting that the recipient provide an explanation;
and
(C) sent after disposition of the collateral under Section
1-9-610 of this title.
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(b) In a consumer-goods transaction in which the debtor is
entitled to a surplus or a consumer obligor is liable for a
deficiency under Section 1 -9-615 of this title, the secured party
shall:
(1) send an explanation to the debtor or consumer obligor, as
applicable, after the disposition and:
(A) before or when the secured party accounts to the
debtor and pays any surplus or first makes written
demand in a record on the consumer obligor after the
disposition for payment of the deficiency; and
(B) within fourteen (14) days after receipt of a request;
or
(2) in the case of a consumer ob ligor who is liable for a
deficiency, within fourteen (14) days after receipt of a request,
send to the consumer obligor a record waiving the secured party's
right to a deficiency.
(c) To comply with subparagraph (B) of paragraph ( 1) of
subsection (a) of this section, a writing an explanation must
provide the following information in the following order:
(1) the aggregate amount of obligations secured by the security
interest under which the disposition was made, and, if the amount
reflects a rebate of un earned interest or credit service charge, an
indication of that fact, calculated as of a specified date:
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(A) if the secured party takes or receives possession of
the collateral after default, not more than thirty -
five (35) days before the secured party takes or
receives possession; or
(B) if the secured party takes or receives possession of
the collateral before default or does not take
possession of the collateral, not more than thirty -
five (35) days before the disposition;
(2) the amount of proceeds of t he disposition;
(3) the aggregate amount of the obligations after deducting the
amount of proceeds;
(4) the amount, in the aggregate or by type, and types of
expenses, including expenses of retaking, holding, preparing for
disposition, processing, and disposing of the collateral, and
attorney's attorney fees secured by the collateral which are known
to the secured party and relate to the current disposition;
(5) the amount, in the aggregate or by type, and types of
credits, including rebates of interest or credit service charges, to
which the obligor is known to be entitled and which are not
reflected in the amount in paragraph (1) of this subsection; and
(6) the amount of the surplus or deficiency.
(d) A particular phrasing of t he explanation is not required.
An explanation complying substantially with the requirements of
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subsection (a) of this section is sufficient, even if it includes
minor errors that are not seriously misleading.
(e) A debtor or consumer obligor is entitled without charge to
one response to a request under this section during any six -month
period in which the secured party did not send to the debtor or
consumer obligor an explanation pursuant to paragraph (1) of
subsection (b) of this section. The secured p arty may require
payment of a charge not exceeding Twenty -five Dollars ($25.00) for
each additional response.
SECTION 86. AMENDATORY 12A O.S. 2021, Section 1 -9-619,
is amended to read as follows:
Section 1-9-619.
TRANSFER OF RECORD OR LEGAL TITLE
(a) In this section, "transfer statement" means a record
authenticated signed by a secured party stating:
(1) that the debtor has defaulted in connection with an
obligation secured by specified collateral;
(2) that the secured party has exercised its post-default
remedies with respect to the collateral;
(3) that, by reason of the exercise, a transferee has acquired
the rights of the debtor in the collateral; and
(4) the name and mailing address of the secured party, debtor,
and transferee.
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(b) A transfer stat ement entitles the transferee to the
transfer of record of all rights of the debtor in the collateral
specified in the statement in any official filing, recording,
registration, or certificate -of-title system covering the
collateral. If a transfer statement is presented with the
applicable fee and request form to the official or office
responsible for maintaining the system, the official or office
shall:
(1) accept the transfer statement;
(2) promptly amend its records to reflect the transfer; and
(3) if applicable, issue a new appropriate certificate of title
in the name of the transferee.
(c) A transfer of the record or legal title to collateral to a
secured party under subsection (b) of this section or otherwise is
not of itself a disposition of collateral under this article and
does not of itself relieve the secured party of its duties under
this article.
SECTION 87. AMENDATORY 12A O.S. 2021, Section 1 -9-620,
is amended to read as follows:
Section 1-9-620.
ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION
OF OBLIGATION; COMPULSORY DISPOSITION OF COLLATERAL
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(a) Except as otherwise provided in subsection (g) of this
section, a secured party may accept collateral in full or partial
satisfaction of the obligation it secures only if:
(1) the debtor consents to the acceptance under subsection (c)
of this section;
(2) the secured party does not receive, within the time set
forth in subsection (d) of this section, a notification of objection
to the proposal authenticated signed by:
(A) a person to which the secured party was required to
send a proposal under Section 1 -9-621 of this title;
or
(B) any other person, other than the debtor, holding an
interest in the collateral subordinate to the security
interest that is the subject of the proposal;
(3) if the collateral is consumer goods, the collateral is not
in the possession of the debtor when the debtor consents to the
acceptance; and
(4) subsection (e) of this section does not require the secured
party to dispose of the col lateral or the debtor waives the
requirement pursuant to Section 1 -9-624 of this title.
(b) A purported or apparent acceptance of collateral under this
section is ineffective unless:
(1) the secured party consents to the acceptanc e in an
authenticated a signed record or sends a proposal to the debtor; and
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(2) the conditions of subsection (a) of this section are met.
(c) For purposes of this section:
(1) a debtor consents to an acceptance of collateral in partial
satisfaction of the obligation it secure s only if the debtor agrees
to the terms of the acceptance in a record authenticated signed
after default; and
(2) a debtor consents to an acceptance of collateral in full
satisfaction of the obligation it secures only if the debto r agrees
to the terms of the acceptance in a record authenticated signed
after default or the secured party:
(A) sends to the debtor after default a proposal that is
unconditional or subject only to a condition that
collateral not in the possession of the secured party
be preserved or maintained;
(B) in the proposal, proposes to accept collateral in full
satisfaction of the obligation it secures; and
(C) does not receive a notification of objection
authenticated signed by the debtor within twenty (20)
days after the proposal is sent.
(d) To be effective under paragraph (2) of subsection (a) of
this section, a notification of objection must be received by the
secured party:
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(1) in the case of a person to which the proposal was sent
pursuant to Section 1 -9-621 of this title, within twenty (20) days
after notification was sent to that person; and
(2) in other cases:
(A) within twenty (20) days after the last notification
was sent pursuant to Section 1 -9-621 of this title; or
(B) if a notification was not sent , before the debtor
consents to the acceptance under subsection (c) of
this section.
(e) A secured party that has taken possession of collateral
shall dispose of the collateral pursuant to Section 1 -9-610 of this
title within the time specified in subsect ion (f) of this section
if:
(1) Sixty percent (60%) of the cash price has been paid in the
case of a purchase-money security interest in consumer goods; or
(2) Sixty percent (60%) of the principal amount of the
obligation secured has been paid in the cas e of a non-purchase-money
security interest in consumer goods.
(f) To comply with subsection (e) of this section, the secured
party shall dispose of the collateral:
(1) within ninety (90) days after taking possession; or
(2) within any longer period to which the debtor and all
secondary obligors have agreed in an agreement to that effect
entered into and authenticated signed after default.
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(g) In a consumer transaction, a secured party may not accept
collateral in partial satisfaction of the obligation it secures.
SECTION 88. AMENDATORY 12A O.S. 2021, Section 1 -9-621,
is amended to read as follows:
Section 1-9-621.
NOTIFICATION OF PROPOSAL TO ACCEPT COLLATERAL
(a) A secured party that desires to accept collateral in full
or partial satisfaction of the obligation it secures shall send its
proposal to:
(1) any person from which the secured party has received,
before the debtor consented to the acceptance, an authenticated a
signed notification of a claim of an interest in the coll ateral;
(2) any other secured party or lienholder that, ten (10) days
before the debtor consented to the acceptance, held a security
interest in or other lien on the collateral perfected by the filing
of a financing statement that:
(A) identified the collateral;
(B) was indexed under the debtor's name as of that date;
and
(C) was filed in the office or offices in which a
financing statement against the debtor covering the
collateral as of that date would have been filed; and
(3) any other secured party th at, ten (10) days before the
debtor consented to the acceptance, held a security interest in the
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collateral perfected by compliance with a statute, regulation, or
treaty described in subsection (a) of Section 1 -9-311 of this title.
(b) A secured party tha t desires to accept coll ateral in
partial satisfaction of the obligation it secures shall send its
proposal to any secondary obligor in addition to the persons
described in subsection (a) of this section.
SECTION 89. AMENDATORY 12A O.S. 2021, Section 1 -9-624,
is amended to read as follows:
Section 1-9-624.
WAIVER
(a) A debtor or secondary obligor may waive the right to
notification of disposition of collateral under Section 1 -9-611 of
this title only by an agreement to that effect entered into and
authenticated signed after default.
(b) A debtor may waive the right to require disposition of
collateral under subsection (e) of Section 1 -9-620 of this title
only by agreement to that effect entered into and authenticated
signed after default.
(c) Except in a consumer -goods transaction, a debtor or
secondary obligor may waive the right to redeem collateral under
Section 1-9-623 of this title only by an agreement to that effect
entered into and authenticated signed after default.
SECTION 90. AMENDATORY 12A O.S. 2021, Section 1 -9-628,
is amended to read as follows:
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Section 1-9-628.
NONLIABILITY AND LIMITATION ON LIABILITY
OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR
(a) Unless Subject to subsection (f) of this section, unless a
secured party knows that a person is a debtor or obligor, knows the
identity of the person, and knows how to communicate with the
person:
(1) the secured party is not liable to the person, or to a
secured party or lienholder that has fi led a financing statemen t
against the person, for failure to comply with this article; and
(2) the secured party's failure to comply with this article
does not affect the liability of the person for a deficiency.
(b) A Subject to subsection (f) of this s ection, a secured
party is not liable because of its status as secured party:
(1) to a person that is a debtor or obligor, unless the secured
party knows:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) how to communicate with the person; or
(2) to a secured party or lienholder that has filed a financing
statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
(B) the identity of the person.
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(c) A secured party is not liable to a ny person, and a person's
liability for a deficiency is not affected, because of any act or
omission arising out of the secured party's reasonable belief that a
transaction is not a consumer -goods transaction or a consumer
transaction or that goods are not consumer goods, if the secured
party's belief is based on its reasonable reliance on:
(1) a debtor's representation concerning the purpose for which
collateral was to be used, acquired, or held; or
(2) an obligor's representation concerning the purpose for
which a secured obligation was incurred.
(d) A secured party is not liable to any person under paragraph
(2) of subsection (c) of Section 1 -9-625 of this title for its
failure to comply with Section 1 -9-616 of this title.
(e) A secured party is not l iable under paragraph (2 ) of
subsection (c) of Section 1 -9-625 of this title more than once with
respect to any one secured obligation.
(f) Subsections (a) and (b) of this section do not apply to
limit the liability of a secured party to a person if, at t he time
the secured party obtains control of collateral that is a
controllable account, controllable electronic record, or
controllable payment intangible or at the time the security interest
attaches to the collateral, whichever is later:
(1) the person is a debtor or obligor; and
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(2) the secured party knows that the information in
subparagraph (A), (B), or (C) of paragraph (1) of subsection (b) of
this section relating to the person is not provided by the
collateral, a record attached to or logically as sociated with the
collateral, or the system in which the collateral is recorded.
SECTION 91. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -101 of Title 12A, unless
there is created a duplication i n numbering, reads as fo llows:
SHORT TITLE
This article, Sections 92 through 97 of this act, may be cited
as Uniform Commercial Code – Controllable Electronic Records.
SECTION 92. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -102 of Title 12A, unless
there is created a duplication in numbering, reads as follows:
DEFINITIONS
(a) In this article, unless the context otherwise requires:
(1) "Controllable electronic record" means a record stored in
an electronic medium that can be subjected to control under Section
12-105 of this title. The term does not include a controllable
account, a controllable payment intangible, a deposit account, an
electronic copy of a record evidencing chattel paper, an ele ctronic
document of title, investment property, a transferable record, or an
electronic record that is a medium of exchange currently authorized
or adopted by a domestic or foreign government and is not a medium
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of exchange that was recorded and transferab le in a system that
existed and operated for the medium of exchange before the medium of
exchange was authorized or adopted by the government.
(2) "Qualifying purchaser" means a purchaser of a controllable
electronic record or an interest in a controllabl e electronic record
that obtains control of the controllable electronic record for
value, in good faith, and without notice of a claim of a property
right in the controllable electronic record.
(3) "Transferable record" has the meaning provided for that
term in:
(A) Section 201(a)(1) of the Electronic Signatures in
Global and National Commerce Act, 15 U.S.C., Section
7021(a)(1); or
(B) Subsection (a) of Section 15 -116 of Title 12A of the
Oklahoma Statutes.
(4) "Value" has the same meaning as provided in s ubsection (a)
of Section 3-303 of this title, as if references in that subsection
to an "instrument" were references to a controllable account,
controllable electronic record, or controllable payment intangible.
(b) The definitions in Article 9 of this ti tle of "account
debtor", "controllable account", "controllable payment intangible",
"chattel paper", "deposit account", and "investment property" apply
to this article.
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(c) Article 1 of this title contains general definitions and
principles of constructio n and interpretation applicable throughout
this article.
SECTION 93. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -103 of Title 12A, unless
there is created a duplication in numbering, reads as fo llows:
RELATION TO ARTICLE 9 AND CONSUMER LAWS
(a) If there is conflict between this article and Article 9 of
this title, Article 9 of this title governs.
(b) A transaction subject to this article is subject to any
applicable rule of law that establishes a different rule for
consumers, any other statute or regulation that regulates the rates,
charges, agreements, and practices for loans, credit sales, or other
extensions of credit, and the Oklahoma Consumer Protection Act.
SECTION 94. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -104 of Title 12A, unless
there is created a duplication in numbering, reads as follows:
RIGHTS IN CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC RECORD, AND
CONTROLLABLE PAYMENT INTANGIBLE
(a) This section applies to the acquisition and purchase of
rights in a controllable account or controllable payment intangible,
including the rights and benefits under subsections (c), (d), (e),
(g), and (h) of this section of a purchas er and qualifying
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purchaser, in the same manner this section applies to a controllable
electronic record.
(b) To determine whether a purchaser of a controllable account
or a controllable payment intangible is a qualifying purchaser, the
purchaser obtains control of the account or payment intangible if it
obtains control of the controllable electronic record that evidences
the account or payment intangible.
(c) Except as provided in this section, law other than this
article determines whether a person acqu ires a right in a
controllable electronic record and the right the person acquires.
(d) A purchaser of a controllable electronic record acquires
all rights in the controllable electronic record that the transferor
had or had power to transfer, except that a purchaser of a limited
interest in a controllable electronic record acquires rights only to
the extent of the interest purchased.
(e) A qualifying purchaser acquires its rights in the
controllable electronic record free of a claim of a property right
in the controllable elect ronic record.
(f) Except as provided in subsections (a) and (e) of this
section for a controllable account and a controllable payment
intangible or law other than this article, a qualifying purchaser
takes a right to payment, right to performance, or other interest in
property evidenced by the controllable electronic record subject to
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a claim of a property right in the right to payment, right to
performance, or other interest in property.
(g) An action may not be asserted against a qualifying
purchaser based on both a purchase by the qualifying purchaser of a
controllable electronic record and a claim of a property right in
another controllable electronic record, whether the action is framed
in conversion, replevin, constructive tru st, equitable lien, or
other theory.
(h) Filing of a financing statement under Article 9 of this
title is not notice of a claim of a property right in a controllable
electronic record.
SECTION 95. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -105 of Title 12A, unless
there is created a duplication in numbering, reads as follows:
CONTROL OF CONTROLLABLE ELECTRONIC RECORD
(a) A person has control of a controllable electronic record if
the electronic record, a record attached to or logically associated
with the electronic record, or a system in which the electronic
record is recorded:
(1) gives the person:
(A) power to avail itself of substantially all the benefit
from the electronic record; and
(B) exclusive power, subjec t to subsection (b) of this
section, to:
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(i) prevent others from availing themselves of
substantially all the benefit from the electronic
record; and
(ii) transfer control of the electronic record to
another person or cause another person to obtain
control of another controllable electronic record
as a result of the transfer of the electronic
record; and
(2) enables the person readily to identify itself in any way,
including by name, identifying number, cryptographic key, office, or
account number, as havi ng the powers specified in paragraph (1) of
this subsection.
(b) Subject to subsection (c) of this section, a power is
exclusive under divisions (i) and (ii) of subparagraph (B) of
paragraph (1) of subsection (a) of this section ev en if:
(1) the controllable electronic record, a record attached to or
logically associated with the electronic record, or a system in
which the electronic record is recorded limits the use of the
electronic record or has a protocol programmed to cause a change,
including a transfer or loss of control or a modification of
benefits afforded by the electronic record; or
(2) the power is shared with another person.
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(c) A power of a person is not shared with another person under
paragraph (2) of subsection ( b) of this section and the person's
power is not exclusive if:
(1) the person can exercise the power only if the power also is
exercised by the other person; and
(2) the other person:
(A) can exercise the power without exercise of the power
by the person; or
(B) is the transferor to the person of an interest in the
controllable electronic record or a controllable
account or controllable payment intangible evidenced
by the controllable electronic record.
(d) If a person has the powers specified in divisio ns (i) and
(ii) of subparagraph (B) of paragraph (1) of subsection (a) of this
section, the powers are presumed to be exclusive.
(e) A person has control of a controllable electronic record if
another person, other than the transferor to the person of an
interest in the controll able electronic record or a controllable
account or controllable payment intangible evidenced by the
controllable electronic record:
(1) has control of the electronic record and acknowledges that
it has control on behalf of the per son; or
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(2) obtains control of the electronic record after having
acknowledged that it will obtain control of the electronic record on
behalf of the person.
(f) A person that has control under this section is not
required to acknowledge that it has contr ol on behalf of another
person.
(g) If a person acknowledges that it has or will obtain control
on behalf of another person, unless the person otherwise agrees or
law other than this article or Article 9 of this title otherwise
provides, the person does n ot owe any duty to the other person and
is not required to confirm the acknowledgment to any other person.
SECTION 96. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -106 of Title 12A, unless
there is created a duplication in numbering, reads as follows:
DISCHARGE OF ACCOUNT DEBTOR ON CONTROLLABLE ACCOUNT OR CONTROLLABLE
PAYMENT INTANGIBLE
(a) An account debtor on a controllable account or controllable
payment intangible may discharge its obligation by paying:
(1) the person having control of the controllable electronic
record that evidences the controllable account or controllable
payment intangible; or
(2) except as provided in subsection (b) of this section, a
person that formerly had control of the controllable electr onic
record.
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(b) Subject to subsection (d) of this section, the account
debtor may not discharge its obligation by paying a person that
formerly had control of the controllable electronic record if the
account debtor receives a not ification that:
(1) is signed by a person that formerly had control or the
person to which control was transferred;
(2) reasonably identifies the controllable account or
controllable payment intangible;
(3) notifies the account debtor that control of th e
controllable electroni c record that evidences the controllable
account or controllable payment intangible was transferred;
(4) identifies the transferee, in any reasonable way, including
by name, identifying number, cryptographic key, office, or account
number; and
(5) provides a commercially reasonable method by which the
account debtor is to pay the transferee.
(c) After receipt of a notification that complies with
subsection (b) of this section, the account debtor may discharge its
obligation by paying in accordance with t he notification and may not
discharge the obligation by paying a person that formerly had
control.
(d) Subject to subsection (h) of this section, notification is
ineffective under subsection (b) of this section:
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(1) unless, before the notification is sent, the account debtor
and the person that, at that time, had control of the controllable
electronic record that evidences the controllable account or
controllable payment intangible agree in a signed record to a
commercially reasona ble method by which a pe rson may furnish
reasonable proof that control has been transferred;
(2) to the extent an agreement between the account debtor and
seller of a payment intangible limits the account debtor's duty to
pay a person other than the selle r and the limitation is effective
under law other than this article; or
(3) at the option of the account debtor, if the notification
notifies the account debtor to:
(A) divide a payment;
(B) make less than the full amount of an installment or
other periodic payment; or
(C) pay any part of a payment by more than one method or
to more than one person.
(e) Subject to subsection (h) of this section, if requested by
the account debtor, the person giving the notification under
subsection (b) of this section sea sonably shall furnish reasonable
proof, using the method in the agreement referred to in paragraph
(1) of subsection (d) of this section, that control of the
controllable electronic record has been transferred. Unless the
person complies with the request, the account debtor may discharge
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its obligation by paying a person that formerly had control, even if
the account debtor has received a notification under subsection (b)
of this section.
(f) A person furnishes reasonable proof under subsection (e) of
this section that control has been transferred if the person
demonstrates, using the method in the agreement referred to in
paragraph 1 of subsection (d) of this section, that the transferee
has the power to:
(1) avail itself of substantially all the benefit from the
controllable electronic record;
(2) prevent others from availing themselves of substantially
all the benefit from the controllable electronic record; and
(3) transfer the powers specified in paragraphs (1) and (2) of
this subsection to another person.
(g) Subject to subsection (h) of this section, an account
debtor may not waive or vary its rights under paragraph (1) of
subsection (d) and subsection (e) of this section or its option
under paragraph (3) of subsection (d) of this section.
(h) This section is subject to law other than this article
which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal,
family, or household purposes.
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SECTION 97. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12 -107 of Title 12A, unless
there is created a duplication in numbering, reads as follows:
GOVERNING LAW
(a) Except as provided in subsection (b) of this section, the
local law of a controllable electro nic record's jurisdiction governs
a matter covered by this article.
(b) For a controllable electronic record that evidences a
controllable account or controllable payment intangible, the local
law of the controllable electronic rec ord's jurisdiction governs a
matter covered by Section 12 -106 of this title unless an effective
agreement determines that the local law of another jurisdiction
governs.
(c) The following rules determine a controllable electronic
record's jurisdiction unde r this section:
(1) If the controllable electronic record, or a record attached
to or logically associated with the controllable electronic record
and readily available for review, expressly provides that a
particular jurisdiction is the controllable elec tronic record's
jurisdiction for purposes of this article or the Uniform Commercial
Code, that jurisdiction is the controllable electronic record's
jurisdiction.
(2) If paragraph (1) of this subsection does not apply and the
rules of the system in which t he controllable electron ic record is
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recorded are readily available for review and expressly provide that
a particular jurisdiction is the controllable electronic record's
jurisdiction for purposes of this article or the Uniform Commercial
Code, that jurisdiction is the controllable electronic record's
jurisdiction.
(3) If paragraphs (1) and (2) of this subsection do not apply
and the controllable electronic record, or a record attached to or
logically associated with the controllable electronic record and
readily available for r eview, expressly provides that the
controllable electronic record is governed by the law of a
particular jurisdiction, that jurisdiction is the controllable
electronic record's jurisdiction.
(4) If paragraphs (1), (2), and (3) of t his subsection do not
apply and the rules of the system in which the controllable
electronic record is recorded are readily available for review and
expressly provide that the controllable electronic record or the
system is governed by the law of a particu lar jurisdiction, that
jurisdiction is the controllable electronic record's jurisdiction.
(5) If paragraphs (1) through (4) of this subsection do not
apply, the controllable electronic record's jurisdiction is the
District of Columbia.
(d) If paragraph (5) of subsection (c) of this section applies
and Article 12 is not in effect in the District of Columbia without
material modification, the governing law for a matter covered by
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this article is the law of the District of Columbia as though
Article 12 were in effect in the Distric t of Columbia without
material modification. In this subsection, "Article 12" means
Article 12 of Uniform Commercial Code Amendments (2022).
(e) To the extent subsections (a) and (b) of this section
provide that the local law of t he controllable electronic record's
jurisdiction governs a matter covered by this article, that law
governs even if the matter or a transaction to which the matter
relates does not bear any relation to the controllable electronic
record's jurisdiction.
(f) The rights acquired un der Section 12-104 of this title by a
purchaser or qualifying purchaser are governed by the law applicable
under this section at the time of purchase.
SECTION 98. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Article A, Part 1, Section A -101 of
Title 12A, unless there is created a duplication in numbering, reads
as follows:
SHORT TITLE
This article, Sections 99 through 106 of this act, may be cited
as Uniform Commercial Code - Transitional Provisions for Unif orm
Commercial Code Amendments (2022).
SECTION 99. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Article A, Part 1, Section A -102 of
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Title 12A, unless there is created a duplication i n numbering, reads
as follows:
DEFINITIONS
(a) As used in this article:
(1) "Adjustment date" means July 1, 2025, or the date that is
one (1) year after the effective date of this act, whichever is
later;
(2) "Article 12" means Article 12 of the Uniform Commercial
Code; and
(3) "Article 12 property" means a controllable account,
controllable electronic record, or controllable payment intangible.
(b) The following definitions in other articles of the Uniform
Commercial Code apply to this article:
"Controllable account", Section 1 -9-102 of this title.
"Controllable electronic record", Section 12 -102 of this title.
"Controllable payment intangible", Section 1 -9-102 of this
title.
"Financing statement", Section 1 -9-102 of this title.
(c) Article 1 of this title contains general d efinitions and
principles of construction and interpretation applicable throughout
this article.
SECTION 100. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Article A, Part 2, Section A -201 of
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Title 12A, unless there is created a duplication in numbering, reads
as follows:
SAVINGS CLAUSE
Except as provided in Part 3 of Article A of this title, a
transaction validly entered into before the effective date of this
act and the rights, duties , and interests flowing from the
transaction remain valid thereafter and may be terminated,
completed, consummated, or enforced as required or permitted by law
other than the Uniform Commercial Code or, if applicable, the
Uniform Commercial Code, as though this act had not taken effect.
SECTION 101. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Article A, Part 3, Section A -301 of
Title 12A, unless there is created a duplication in numbering, reads
as follows:
SAVINGS CLAUSE
(a) Except as provided in this part, Article 9 of this title as
amended by this act and Article 12 of this title apply to a
transaction, lien, or other interest in property, even if the
transaction, lien, or interest was entered into, creat ed, or
acquired before the effective date of this act.
(b) Except as provided in subsection (c) of this section and
Sections A-302 through A-306 of this title:
(1) a transaction, lien, or interest in property that was
validly entered into, created, or tr ansferred before the eff ective
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date of this act and was not governed by the Uniform Commercial
Code, but would be subject to Article 9 of this title as amended by
this act or Article 12 of this title if it had been entered into,
created, or transferred on or after the effective date of this act,
including the rights, duties, and interests flowing from the
transaction, lien, or interest, remains valid on and after the
effective date of this act; and
(2) the transaction, lien, or interest may be terminated,
completed, consummated, and enforced as required or permitted by
this act or by the law that would apply if this act had not taken
effect.
(c) This act does not affect an action, case, or proceeding
commenced before the effective date of this act.
SECTION 102. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section A -302 of Title 12A, unless there
is created a duplication in numbering, reads as follows:
SECURITY INTEREST PERFECTED BEFORE EFFECTIVE DATE
(a) A security interest that is enforceable and perfected
immediately before the effective date of this act is a perfected
security interest under this act if, on the effective date of this
act, the requirements for enforceability and perfection under this
act are satisfied without further action.
(b) If a security interest is enforceable and perfected
immediately before the effective date of this act, but the
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requirements for enforceability or perfection under this act are not
satisfied on the effective date of this act, the security i nterest:
(1) is a perfected security interest until the earlier of the
time perfection would have ceased under the law in effect
immediately before the effective date of this act or the adjustment
date;
(2) remains enforceable thereafter only if the security
interest satisfies the requirements for enforceability under Section
1-9-203 of this title, as amended by this act, before the adjustment
date; and
(3) remains perfected thereafter only if the requirement s for
perfection under this act are satisfied before the time specified in
paragraph (1) of this subsection.
SECTION 103. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section A -303 of Title 12A, unless there
is created a duplication in numbering, reads as follows:
SECURITY INTEREST UNPERFECTED BEFORE EFFECTIVE DATE
A security interest that is enforceable immediately before the
effective date of this act but is unperfected at that time:
(1) Remains an enforce able security interest u ntil the
adjustment date;
(2) Remains enforceable thereafter if the security interest
becomes enforceable under Section 1 -9-203 of this title, as amended
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by this act, on the effective date of this act or before the
adjustment date; and
(3) Becomes perfected:
(A) without further action, on the effective date of this
act if the requirements for perfection under this act
are satisfied before or at that time; or
(B) when the requirements for perfection are satisfied if
the requirements are satisfied after tha t time.
SECTION 104. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section A -304 of Title 12A, unless there
is created a duplication in numbering, reads as follows:
EFFECTIVENESS OF ACTIONS TAKEN BEFORE EFFECTIVE DATE
(a) If action, other than the filing of a financing statement,
is taken before the effective date of this act and the action would
have resulted in perfection of the security interest had the
security interest become enfo rceable before the effec tive date of
this act, the action is effective to perfect a security interest
that attaches under this act before the adjustment date. An
attached security interest becomes unperfected on the adjustment
date unless the security int erest becomes a perfected security
interest under this act before the adjustment date.
(b) The filing of a financing statement before the effective
date of this act is effective to perfect a security interest on the
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effective date of this act to the exten t the filing would satis fy
the requirements for perfection under this act.
(c) The taking of an action before the effective date of this
act is sufficient for the enforceability of a security interest on
the effective date of this act if the action would satisfy the
requirements for enforceability under this act.
SECTION 105. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section A -305 of Title 12A, unless there
is created a duplication in numbering, reads as follows:
PRIORITY
(a) Subject to subsections (b) and (c) of this section, this
act determines the priority of conflicting claims to collateral.
(b) Subject to subsection (c) of this section, if the
priorities of claims to collateral were established befo re the
effective date of this act, Article 9 of this title as in effect
before the effective date of this act determines priority.
(c) On the adjustment date, to the extent the priorities
determined by Article 9 of this title as amended by this act modify
the priorities establis hed before the effective date of this act,
the priorities of claims to Article 12 of this title and property
established before the effective date of this act cease to apply.
SECTION 106. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section A -306 of Title 12A, unless there
is created a duplication in numbering, reads as follows:
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PRIORITY OF CLAIMS WHEN PRIORITY RULES OF ARTICLE 9 DO NOT APPLY
(a) Subject to subsections (b) and (c) of this section, Article
12 of this title determines the priority of conflicting claims to
Article 12 property when the priority rules of Article 9 of this
title as amended by this act do not apply.
(b) Subject to subsection (c) of this section, when the
priority rules of Article 9 of this title as amended by this act do
not apply and the priorities of claims to Article 12 property were
established before the effective date of this act, law other than
Article 12 of this title determines priority.
(c) When the priority rules of Arti cle 9 of this title as
amended by this act do not apply, to the extent the priorities
determined by this act modify the priorities established before the
effective date of this act, the priorities of claims to Article 12
property established before the effective date of this act cease to
apply on the adjustment date.
SECTION 107. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Article A, Part 4, Section A -401 of
Title 12A, unless there is a duplication in number ing, reads as
follows:
Nothing in this act may be construed to support, endorse,
create, or implement a national digital currency.
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SECTION 108. This act shall become effective November 1, 2024.
COMMITTEE REPORT BY: COMMITTEE ON JUDICIARY
April 2, 2024 - DO PASS