Purchase Money Security Interests under the Revised Article Nine of the Uniform Commercial Code

The Uniform Commercial Code (UCC) was conceived in 1940. The UCC facilitates the development of uniform laws without the involvement of Congress. Since 1944, National Conference of Commissioners on Uniform State Laws (NCCUSL), and the American Law Institute (ALI) have been co-sponsors of the UCC and have worked to preserve and update it. Many of the transactions involving goods and services involve the extension of credit. Article 9 governs secured transactions in personal or movable property. The creation of an enforceable security interest requires more than an appropriate security agreement. This chapter focuses on the unique treatment of a purchase money security interest (PMSI) in Revised Article 9. Revised Article 9 specifically restricts the rules dealing with the dual status, transformation and cross-collateral rules to commercial transactions. PMSIs in certain circumstances are treated differently and given a priority often called a "super-priority".