13 Pa.C.S. § 2A109 — PA Code / Title 13 / Chapter 2 / Section 2A109
Option to accelerate at will.
Status: in_force

(a) General rule.--A term providing that one party or his successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or "when he deems himself insecure" or in words of similar import must be construed to mean that he has power to do so only if he in good faith believes that the prospect of payment or performance is impaired.

(b) Burden of proof.--With respect to a consumer lease, the burden of establishing good faith under subsection (a) is on the party who exercised the power; otherwise, the burden of establishing lack of good faith is on the party against whom the power has been exercised.
13 Pa.C.S. § 8511 — PA Code / Title 13 / Chapter 85 / Section 8511
Priority among security interests and entitlement holders.
Status: in_force

(a) General rule.--Except as otherwise provided in subsections (b) and (c), if a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both its obligations to entitlement holders who have security entitlements to that financial asset and its obligation to a creditor of the securities intermediary who has a security

interest in that financial asset, the claims of entitlement holders other than the creditor have priority over the claim of the creditor.

(b) When creditor of securities intermediary has control over financial asset.--A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary's entitlement holders who have security entitlements with respect to that financial asset if the creditor has control over the financial asset.

(c) Clearing corporations.--If a clearing corporation does not have sufficient financial assets to satisfy both its obligations to entitlement holders who have security entitlements with respect to a financial asset and its obligation to a creditor of the clearing corporation who has a security interest in that financial asset, the claim of the creditor has priority over the claims of entitlement holders. Cross References. Section 8511 is referred to in section 8503 of this title. DIVISION 9 SECURED TRANSACTIONS Chapter 91. General Provisions 92. Effectiveness of Security Agreement, Attachment of Security Interest and Rights of Parties to Security Agreement 93. Perfection and Priority 94. Rights of Third Parties 95. Filing 96. Default 97. Transition Provisions 98. Transition Provisions for 2013 Amendments Enactment. Division 9 was added June 8, 2001, P.L.123, No.18, effective July 1, 2001. Prior Provisions. Former Division 9, which related to secured transactions, sales of accounts, contract rights and chattel paper, was added November 1, 1979, P.L.255, No.86, and repealed June 8, 2001, P.L.123, No.18, effective July 1, 2001.
13 Pa.C.S. § 4202 — PA Code / Title 13 / Chapter 42 / Section 4202
Responsibility for collection or return; when action timely.
Status: in_force

(a) When collecting bank must exercise ordinary care.--A collecting bank must exercise ordinary care in:

(1) presenting an item or sending it for presentment;

(2) sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the transferor of the bank after learning that the item has not been paid or accepted, as the case may be;

(3) settling for an item when the bank receives final settlement; and

(4) notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.

(b) Exercise of ordinary care.--A collecting bank exercises ordinary care under subsection (a) by taking proper action before its midnight deadline following receipt of an item, notice or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.

(c) Nonliability of bank for action of others.--Subject to subsection (a)(1), a bank is not liable for the insolvency, neglect, misconduct, mistake or default of another bank or person or for loss or destruction of an item in the possession of others or in transit. (July 9, 1992, P.L.507, No.97, eff. one year)
13 Pa.C.S. § 2A518 — PA Code / Title 13 / Chapter 2 / Section 2A518
Cover; substitute goods.
Status: in_force

(a) Right and manner of cover.--After default by a lessor under the lease contract of the type described in section 2A508(a) (relating to lessee's remedies) or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor.

(b) Damages recoverable.--Except as otherwise provided with respect to damages liquidated in the lease agreement (section 2A504) or otherwise determined pursuant to agreement of the parties (sections 1302 and 2A503), if a lessee's cover is by lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages:

(1) the present value, as of the date of the commencement of the term of the new lease agreement, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement minus the present value as of the same date of the total rent for the then remaining lease term of the original lease agreement; and

(2) any incidental or consequential damages less expenses saved in consequence of the lessor's default.

(c) Recovery in other cases.--If a lessee's cover is by lease agreement that for any reason does not qualify for treatment under subsection (b), or is by purchase or otherwise, the lessee may recover from the lessor as if the lessee had elected not to cover and section 2A519 (relating to lessee's damages for nondelivery, repudiation, default and breach of warranty in regard to accepted goods) governs. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 amended subsec. (b) intro. par. Cross References. Section 2A518 is referred to in sections 2A508, 2A519 of this title.
13 Pa.C.S. § 7304 — PA Code / Title 13 / Chapter 73 / Section 7304
Tangible bills of lading in a set.
Status: in_force

(a) Prohibition.--Except as customary in international transportation, a tangible bill of lading may not be issued in a set of parts. The issuer is liable for damages caused by violation of this subsection.

(b) Single bill.--If a tangible bill of lading is lawfully issued in a set of parts, each of which contains an identification code and is expressed to be valid only if the goods have not been delivered against any other part, the whole of the parts constitutes one bill.

(c) Priority of title.--If a tangible negotiable bill of lading is lawfully issued in a set of parts and different parts are negotiated to different persons, the title of the holder to which the first due negotiation is made prevails as to both the document of title and the goods even if any later holder

may have received the goods from the carrier in good faith and discharged the carrier's obligation by surrendering its part.

(d) Liability.--A person that negotiates or transfers a single part of a tangible bill of lading issued in a set is liable to holders of that part as if it were the whole set.

(e) Bailee.--The bailee shall deliver in accordance with this chapter against the first presented part of a tangible bill of lading lawfully issued in a set. Delivery in this manner discharges the bailee's obligation on the whole bill.
13 Pa.C.S. § 9407 — PA Code / Title 13 / Chapter 94 / Section 9407
Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest.
Status: in_force

(a) Term restricting assignment generally ineffective.--Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:

(1) prohibits, restricts or requires the consent of a party to the lease to the assignment or transfer of, or the

creation, attachment, perfection or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor's residual interest in the goods; or

(2) provides that the assignment or transfer or the creation, attachment, perfection or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the lease.

(b) Effectiveness of certain terms.--Except as otherwise provided in section 2A303(g) (relating to requirements for prohibition of transfer in consumer lease), a term described in subsection (a)(2) is effective to the extent that there is:

(1) a transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or

(2) a delegation of a material performance of either party to the lease contract in violation of the term.

(c) Security interest not material impairment.--The creation, attachment, perfection or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer which materially impairs the lessee's prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of section 2A303(d) (relating to certain rights and remedies) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor. Cross References. Section 9407 is referred to in sections 2A303, 9401, 9406 of this title.
13 Pa.C.S. § 9205 — PA Code / Title 13 / Chapter 92 / Section 9205
Use or disposition of collateral permissible.
Status: in_force

(a) When security interest not invalid or fraudulent.--A security interest is not invalid or fraudulent against creditors solely because any of the following apply:

(1) The debtor has the right or ability to:

(i) use, commingle or dispose of all or part of the collateral, including returned or repossessed goods;

(ii) collect, compromise, enforce or otherwise deal with collateral;

(iii) accept the return of collateral or make repossessions; or

(iv) use, commingle or dispose of proceeds.

(2) The secured party fails to require the debtor to account for proceeds or replace collateral.

(b) Requirements of possession not relaxed.--This section does not relax the requirements of possession if attachment, perfection or enforcement of a security interest depends upon possession of the collateral by the secured party.
13 Pa.C.S. § 4A205 — PA Code / Title 13 / Chapter 4 / Section 4A205
Erroneous payment orders.
Status: in_force

(a) Types of erroneous payment orders.--

(1) The rules set forth under paragraph (2) apply if an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order:

(i) erroneously instructed payment to a beneficiary not intended by the sender;

(ii) erroneously instructed payment in an amount greater than the amount intended by the sender; or

(iii) was an erroneously transmitted duplicate of a payment order previously sent by the sender.

(2)

(i) If the sender proves that the sender or a person acting on behalf of the sender pursuant to section 4A206 (relating to transmission of payment order through funds-transfer or other communication system) complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in subparagraphs (ii) and (iii).

(ii) If the funds transfer is completed on the basis of an erroneous payment order described in paragraph

(1)(i) or (iii), the sender is not obliged to pay the order and the receiving 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.

(iii) If the funds transfer is completed on the basis of a payment order described in paragraph (1)(ii), the sender is not obliged to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution.

(b) Duty of sender.--If the sender of an erroneous payment order described in subsection (a) is not obliged to pay all or part of the order and the sender receives notification from the receiving bank that the order was accepted by the bank or that the sender's account was debited with respect to the order, the sender has a duty to exercise ordinary care, on the basis of information available to the sender, to discover the error with respect to the order and to advise the bank of the relevant facts within a reasonable time, not exceeding 90 days, after the bank's notification was received by the sender. If the bank proves that the sender failed to perform that duty, the sender is liable to the bank for the loss the bank proves it incurred as a result of the failure, but the liability of the sender may not exceed the amount of the sender's order.

(c) Amendments to payment orders.--This section applies to amendments to payment orders to the same extent it applies to payment orders. Cross References. Section 4A205 is referred to in section 4A402 of this title.
13 Pa.C.S. § 9326.1 — PA Code / Title 13 / Chapter 93 / Section 9326.1
Priority of security interest in controllable account, controllable electronic record and controllable payment intangible.
Status: in_force

A security interest in a controllable account, controllable electronic record or controllable payment intangible held 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. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9326.1. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.
13 Pa.C.S. § 3119 — PA Code / Title 13 / Chapter 31 / Section 3119
Notice of right to defend action.
Status: in_force

In an action for breach of an obligation for which a third person is answerable over pursuant to this division or Division 4 (relating to bank deposits and collections), the defendant may give the third person written notice of the litigation, and the person notified may then give similar notice to any other person who is answerable over. If the notice states that the person notified may come in and defend and that failure to do so will bind the person notified in an action later brought by the person giving the notice as to any determination of fact common to the two litigations, the person notified is so bound unless after seasonable receipt of the notice the person notified does come in and defend.
13 Pa.C.S. § 4A103 — PA Code / Title 13 / Chapter 4 / Section 4A103
Payment order; definitions.
Status: in_force

(a) Definition of "payment order" and related terms.--The following words and phrases when used in this division shall have the meanings given to them in this subsection:

(1)

"Payment order." An instruction of a sender to a receiving bank, transmitted orally 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 transmitted 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." The person to be paid by the beneficiary's bank.

(3)

"Beneficiary's bank." 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." The bank to which the sender's instruction is addressed.

(5)

"Sender." The person giving the instruction to the receiving bank.

(b) Instruction.--If an instruction complying with subsection (a)(1) is to make more than one payment to a beneficiary, the instruction is a separate payment order with respect to each payment.

(c) When payment order is issued.--A payment order is issued when it is sent to the receiving bank. (June 8, 2001, P.L.123, No.18, eff. July 1, 2001; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (a)(1) intro. par. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 4A103 is referred to in section 4A105 of this title.
13 Pa.C.S. § 9708 — PA Code / Title 13 / Chapter 97 / Section 9708
Persons entitled to file initial financing statement or continuation statement.
Status: in_force

A person may file an initial financing statement or a continuation statement under this chapter if all of the following paragraphs apply:

(1) The secured party of record authorizes the filing.

(2) The filing is necessary under this chapter:

(i) to continue the effectiveness of a financing statement filed before Revised Division 9 takes effect; or

(ii) to perfect or continue the perfection of a security interest. Cross References. Section 9708 is referred to in section 9702 of this title.
13 Pa.C.S. § 2A309 — PA Code / Title 13 / Chapter 2 / Section 2A309
Lessor's and lessee's rights when goods become fixtures.
Status: in_force

(a) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection:

"Construction mortgage." A mortgage is a construction mortgage to the extent it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if the recorded writing so indicates.

"Encumbrance." Includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests.

"Fixture filing." The filing, in the office where a record of a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and conforming to the requirements of section 9502(a) and (b) (relating to contents of financing statement; record of mortgage as financing statement; time of filing financing statement).

"Fixtures." Goods are fixtures when they become so related to particular real estate that an interest in them arises under real estate law.

"Purchase money lease." A lease is a purchase money lease unless the lessee has possession or use of the goods or the right to possession or use of the goods before the lease agreement is enforceable.

(b) Lease of goods that are fixtures.--Under this division, a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this division of ordinary building materials incorporated into an improvement on land.

(c) Lease under real estate law.--This division does not prevent creation of a lease of fixtures pursuant to real estate law.

(d) Priority of perfected interest of lessor of fixtures.--The perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if:

(1) the lease is a purchase money lease, the conflicting interest of the encumbrancer or owner arises before the goods become fixtures, the interest of the lessor is perfected by a fixture filing before the goods become fixtures or within ten days thereafter, and the lessee has an interest of record in the real estate or is in possession of the real estate; or

(2) the interest of the lessor is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, the lessor's interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the lessee has an interest of record in the real estate or is in possession of the real estate.

(e) Priority of interest of lessor of fixtures whether or not perfected.--The interest of a lessor of fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate if:

(1) the fixtures are readily removable factory or office machines, readily removable equipment that is not primarily used or leased for use in the operation of the real estate, or readily removable replacements of domestic appliances that are goods subject to a consumer lease, and before the goods become fixtures the lease contract is enforceable;

(2) the conflicting interest is a lien on the real estate obtained by legal or equitable proceedings after the lease contract is enforceable;

(3) the encumbrancer or owner has consented in writing to the lease or has disclaimed an interest in the goods as fixtures; or

(4) the lessee has a right to remove the goods as against the encumbrancer or owner.

If the lessee's right to remove terminates, the priority of the interest of the lessor continues for a reasonable time.

(f) Subordination to construction mortgage.--Notwithstanding subsection (d)(1) but otherwise subject to subsections (d) and

(e), the interest of a lessor of fixtures, including the lessor's residual interest, is subordinate to the conflicting interest of an encumbrancer of the real estate under a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent given to refinance a construction mortgage, the conflicting interest of an encumbrancer of the real estate under a mortgage has this priority to the same extent as the encumbrancer of the real estate under the construction mortgage.

(g) Priority of interest in other cases.--In cases not within the preceding subsections, priority between the interest of a lessor of fixtures, including the lessor's residual interest, and the conflicting interest of an encumbrancer or owner of the real estate who is not the lessee is determined by the priority rules governing conflicting interests in real estate.

(h) Removal of goods if interest of lessor has priority.--If the interest of a lessor of fixtures, including the lessor's residual interest, has priority over all conflicting interests of all owners and encumbrancers of the real estate, the lessor or the lessee may:

(1) on default, expiration, termination or cancellation of the lease agreement but subject to the lease agreement and this division; or

(2) if necessary to enforce other rights and remedies of the lessor or lessee under this division; remove the goods from the real estate, free and clear of all conflicting interests of all owners and encumbrancers of the real estate, but the lessor or lessee must reimburse any encumbrancer or owner of the real estate who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.

(i) Perfection of interest of lessor.--Even though the lease agreement does not create a security interest, the interest of a lessor of fixtures, including the lessor's residual interest, is perfected by filing a financing statement as a fixture filing for leased goods that are or are to become fixtures in accordance with the relevant provisions of Division 9 (relating to secured transactions). (June 8, 2001, P.L.123, No.18, eff. July 1, 2001) 2001 Amendment. Act 18 amended subsec. (a). Cross References. Section 2A309 is referred to in section 2A103 of this title.
13 Pa.C.S. § 3108 — PA Code / Title 13 / Chapter 31 / Section 3108
Payable on demand or at definite time.
Status: in_force

(a) Payable on demand.--A promise or order is "payable on demand" if it:

(1) states that it is payable on demand or at sight or otherwise indicates that it is payable at the will of the holder; or

(2) does not state any time of payment.

(b) Payable at a definite time.--A promise or order is "payable at a definite time" if it is payable on elapse of a definite period of time after sight or acceptance or at a fixed date or dates or at a time or times readily ascertainable at the time the promise or order is issued, subject to rights of:

(1) prepayment;

(2) acceleration;

(3) extension at the option of the holder; or

(4) extension to a further definite time at the option of the maker or acceptor or automatically upon or after a specified act or event.

(c) Payable upon demand made before fixed date.--If an instrument, payable at a fixed date, is also payable upon demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date. Cross References. Section 3108 is referred to in section 3103 of this title.
13 Pa.C.S. § 9313 — PA Code / Title 13 / Chapter 93 / Section 9313
When possession by or delivery to secured party perfects security interest without filing.
Status: in_force

(a) Perfection by possession or delivery.--Except as otherwise provided in subsection (b), a secured party may perfect a security interest in goods, instruments, negotiable tangible documents or money by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery under section 8301 (relating to delivery).

(b) Goods covered by certificate of title.--With respect to goods covered by a certificate of title issued by the Commonwealth, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in section 9316(d) (relating to effect of change in governing law).

(c) Collateral in possession of person other than debtor.--With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party or a lessee of the collateral from the debtor in the ordinary course of the debtor's business when:

(1) the person in possession signs a record acknowledging that the person holds possession of the collateral for the secured party's benefit; or

(2) the person takes possession of the collateral after having signed a record acknowledging that the person will hold possession of the collateral for the secured party's benefit.

(d) Time of perfection by possession; continuation of perfection.--If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs not earlier than the time the secured party takes possession and continues only while the secured party retains possession.

(e) Time of perfection by delivery; continuation of perfection.--A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under section 8301 and remains

perfected by delivery until the debtor obtains possession of the security certificate.

(f) Acknowledgment not required.--A person in possession of collateral is not required to acknowledge that the person holds possession for a secured party's benefit.

(g) Effectiveness of acknowledgment; no duties or confirmation.--If a person acknowledges that the person holds possession for the secured party's benefit:

(1) the acknowledgment is effective under subsection

(c) or section 8301(a) (relating to delivery of certificated security) even if the acknowledgment violates the rights of a debtor; and

(2) unless the person otherwise agrees or law other than this division 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) Secured party's delivery to person other than debtor.--A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor's business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:

(1) to hold possession of the collateral for the secured party's benefit; or

(2) to redeliver the collateral to the secured party.

(i) Effect of delivery under subsection (h); no duties or confirmation.--A secured party does not relinquish possession even if a delivery under subsection (h) violates the rights of a debtor. A person to which collateral is delivered under subsection (h) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this division otherwise provides. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsecs. (a), (c) and (d). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

Amendment . Act 30 amended subsec. (b). Cross References. Section 9313 is referred to in sections 9203, 9310, 9311, 9312, 9314.1, 9316, 9320, 9328 of this title.
13 Pa.C.S. § 2A108 — PA Code / Title 13 / Chapter 2 / Section 2A108
Unconscionability.
Status: in_force

(a) Unconscionable lease.--If the court as a matter of law finds a lease contract or any clause of a lease contract to have been unconscionable at the time it was made, the court may refuse to enforce the lease contract, or it may enforce the remainder of the lease contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

(b) Unconscionable conduct.--With respect to a consumer lease, if the court as a matter of law finds that a lease contract or any clause of a lease contract has been induced by unconscionable conduct or that unconscionable conduct has

occurred in the collection of a claim arising from a lease contract, the court may grant appropriate relief.

(c) Evidence by parties.--Before making a finding of unconscionability under subsection (a) or (b), the court, on its own motion or that of a party, shall afford the parties a reasonable opportunity to present evidence as to the setting, purpose and effect of the lease contract, or clause thereof, or of the conduct.

(d) Award of attorney fees.--In an action in which the lessee claims unconscionability with respect to a consumer lease:

(1) If the court finds unconscionability under subsection (a) or (b), the court shall award reasonable attorney fees to the lessee.

(2) If the court does not find unconscionability and the lessee claiming unconscionability has brought or maintained an action he knew to be groundless, the court shall award reasonable attorney fees to the party against whom the claim is made.

(3) In determining attorney fees, the amount of the recovery on behalf of the claimant under subsections (a) and

(b) is not controlling.
13 Pa.C.S. § 4A504 — PA Code / Title 13 / Chapter 4 / Section 4A504
Order in which items and payment orders may be charged to account; order of withdrawals from account.
Status: in_force

(a) Priority among obligations paid from account.--If a receiving bank has received more than one payment order of the

sender or one or more payment orders and other items that are payable from the sender's account, the bank may charge the sender's account with respect to the various orders and items in any sequence.

(b) Priority among withdrawals from account.--In determining whether a credit to an account has been withdrawn by the holder of the account or applied to a debt of the holder of the account, credits first made to the account are first withdrawn or applied.
13 Pa.C.S. § 9610 — PA Code / Title 13 / Chapter 96 / Section 9610
Disposition of collateral after default.
Status: in_force

(a) Disposition after default.--After default, a secured party may sell, lease, license or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.

(b) Commercially reasonable disposition.--Every aspect of a disposition of collateral, including the method, manner, time, place and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels and at any time and place and on any terms.

(c) Purchase by secured party.--A secured party may purchase collateral:

(1) at a public disposition; or

(2) at a private disposition only if the collateral is of a kind which is customarily sold on a recognized market or the subject of widely distributed standard price quotations.

(d) Warranties on disposition.--A contract for sale, lease, license or other disposition includes the warranties relating to title, possession, quiet enjoyment and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.

(e) Disclaimer of warranties.--A secured party may disclaim or modify warranties under subsection (d):

(1) in a manner which would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or

(2) by communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.

(f) Record sufficient to disclaim warranties.--A record is sufficient to disclaim warranties under subsection (e) if it indicates "There is no warranty relating to title, possession, quiet enjoyment or the like in this disposition" or uses words of similar import. Cross References. Section 9610 is referred to in sections 9408, 9602, 9609, 9611, 9615, 9616, 9618, 9620, 9623 of this title.
13 Pa.C.S. § 8106 — PA Code / Title 13 / Chapter 81 / Section 8106
Control.
Status: in_force

(a) "Control" of certificated security in bearer form.--A purchaser has "control" of a certificated security in bearer form if the certificated security is delivered to the purchaser.

(b) "Control" of certificated security in registered form.--A purchaser has "control" of a certificated security 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 indorsement; or

(2) the certificate is registered in the name of the purchaser, upon original issue or registration of transfer by the issuer.

(c) "Control" of uncertificated security.--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) "Control" of security entitlement.--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 entitlement orders originated by the purchaser without further consent by the entitlement holder; or

(3) another person, other than the transferor to the purchaser of an interest in the security entitlement:

(i) has control of the security entitlement and acknowledges that it has control on behalf of the purchaser; or

(ii) obtains control of the security entitlement after having acknowledged that it will obtain control of the security entitlement on behalf of the purchaser.

(e) Entitlement holder's securities intermediary.--If an interest in a security entitlement is granted by the entitlement holder to the entitlement holder's own securities intermediary, the securities intermediary has control.

(f) Purchaser under subsection (c) or (d).--A purchaser who has satisfied the requirements of subsection (c) or (d) has control even if the registered owner in the case of subsection

(c) or the entitlement holder in the case of subsection (d) 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) Agreement of issuer or securities intermediary under subsection (c)(2) or (d)(2).--An issuer or a securities intermediary may not enter into an agreement of the kind described in subsection (c)(2) or (d)(2) without the consent of the registered owner or entitlement holder, 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 agreement to another party unless requested to do so by the registered owner or entitlement holder.

(h) Acknowledgment not required.--A person that has control under this section is not required to acknowledge that it has control on behalf of another person.

(i) Duty to other parties.--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 division or Division 9 (relating to secured transactions) otherwise provides, the person does not owe any duty to the other person and is not required to confirm the acknowledgment to any other person. (June 8, 2001, P.L.123, No.18, eff. July 1, 2001; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (d)(3) and added subsecs. (h) and (i). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. 2001 Amendment. Act 18 amended subsecs. (d) and (f). Cross References. Section 8106 is referred to in sections 8102, 8107, 8510, 9106, 9208, 9328 of this title.
13 Pa.C.S. § 91132 — PA Code / Title 13 / Chapter 911 / Section 91132
Security interest perfected before effective date.
Status: in_force

(a) Continuing perfection; perfection requirements satisfied.--A security interest that is enforceable and perfected immediately before the effective date of this section is a perfected security interest under the act adding this chapter if, on the effective date of this section, the requirements for enforceability and perfection under the act adding this chapter are satisfied without further action.

(b) Continuing perfection; enforceability or perfection requirements not satisfied.--If a security interest is enforceable and perfected immediately before the effective date of this section, but the requirements for enforceability or perfection under the act adding this chapter are not satisfied on the effective date of this section, the security interest:

(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 section or the adjustment date;

(2) remains enforceable thereafter only if the security interest satisfies the requirements for enforceability under section 9203 (relating to attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites), as amended by the act adding this chapter, before the adjustment date; and

(3) remains perfected thereafter only if the requirements for perfection under the act adding this chapter are satisfied before the time specified in paragraph (1). Cross References. Section 91132 is referred to in section 91131 of this title.
13 Pa.C.S. § 3407 — PA Code / Title 13 / Chapter 34 / Section 3407
Alteration.
Status: in_force

(a) Definition of "alteration".--"Alteration" means:

(1) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party; or

(2) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.

(b) Fraudulent alteration; discharge.--Except as provided in subsection (c), an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.

(c) Certain persons not affected by discharge.--A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument according to its original terms or, in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed. Cross References. Section 3407 is referred to in sections 3103, 3115, 3412, 3413, 3414, 3415, 4104, 4207 of this title.
13 Pa.C.S. § 2208 — PA Code / Title 13 / Chapter 22 / Section 2208
Course of performance or practical construction (Deleted by amendment).
Status: in_force

2008 Amendment. Section 2208 was deleted by amendment April 16, 2008, P.L.57, No.13, effective in 60 days.
13 Pa.C.S. § 9701 — PA Code / Title 13 / Chapter 97 / Section 9701
Effective date.
Status: in_force

Revised Division 9 takes effect on July 1, 2001.
13 Pa.C.S. § 2A517 — PA Code / Title 13 / Chapter 2 / Section 2A517
Revocation of acceptance of goods.
Status: in_force

(a) General rule.--A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee has accepted it:

(1) except in the case of a finance lease, on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or

(2) without discovery of the nonconformity if the lessee's acceptance was reasonably induced either by the lessor's assurances or, except in the case of a finance lease, by the difficulty of discovery before acceptance.

(b) Revocation of acceptance if lessor defaults under lease contract.--Except in the case of a finance lease that is not a consumer lease, a lessee may revoke acceptance of a lot or commercial unit if the lessor defaults under the lease contract and the default substantially impairs the value of that lot or commercial unit to the lessee.

(c) Revocation for other defaults by lessor.--If the lease agreement so provides, the lessee may revoke acceptance of a lot or commercial unit because of other defaults by the lessor.

(d) Time and notice of revocation.--Revocation of acceptance must occur within a reasonable time after the lessee discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by the nonconformity. Revocation is not effective until the lessee notifies the lessor.

(e) Rights and duties of revoking lessee.--A lessee who so revokes has the same rights and duties with regard to the goods involved as if the lessee had rejected them. Cross References. Section 2A517 is referred to in section 2A508 of this title.
13 Pa.C.S. § 8102 — PA Code / Title 13 / Chapter 81 / Section 8102
Definitions and index of definitions.
Status: in_force

(a) Definitions.--The following words and phrases when used in this division shall have the meanings given to them in this subsection:

"Adverse claim." 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 person to hold, transfer or deal with the financial asset.

"Bearer form." As applied to a certificated security, a form in which the security is payable to the bearer of the security certificate according to its terms but not by reason of an indorsement.

"Broker." A person defined as a broker or dealer under the Federal securities laws, but without excluding a bank acting in that capacity.

"Certificated security." A security that is represented by a certificate.

"Clearing corporation." "Clearing corporation" means:

(1) a person that is registered as a "clearing agency" under the Federal securities laws;

(2) a Federal reserve bank; or

(3) 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.

"Communicate." "Communicate" means to:

(1) send a signed record; or

(2) transmit information by any mechanism agreed upon by the persons transmitting and receiving the information.

"Entitlement holder." A person identified in the records of a securities intermediary as the person having a security entitlement against the securities intermediary. If a person acquires a security entitlement by virtue of section 8501(b)(2) or (3) (relating to securities account; acquisition of security entitlement from securities intermediary), that person is the entitlement holder.

"Entitlement order." A notification communicated to a securities intermediary directing transfer or redemption of a financial asset to which the entitlement holder has a security entitlement.

"Financial asset." Except as otherwise provided in section 8103 (relating to rules for determining whether certain obligations and interests are securities or financial assets):

(1) a security;

(2) 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 which it is issued or dealt in as a medium for investment; or

(3) 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 division. 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.

"Good faith." (Deleted by amendment).

"Indorsement." 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.

"Instruction." 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.

"Registered form." As applied to a certificated security, a form in which:

(1) the security certificate specifies a person entitled to the security; and

(2) a transfer of the security may be registered upon books maintained for that purpose by or on behalf of the issuer, or the security certificate so states.

"Securities intermediary." "Securities intermediary" means:

(1) a clearing corporation; or

(2) 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.

"Security." Except as otherwise provided in section 8103 (relating to rules for determining whether certain obligations and interests are securities or financial assets), an obligation of an issuer or a share, participation or other interest in an issuer or in property or an enterprise of an issuer:

(1) which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;

(2) 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

(3) which:

(i) is, or is of a type, dealt in or traded on securities exchanges or securities markets; or

(ii) is a medium for investment and by its terms expressly provides that it is a security governed by this division.

"Security certificate." A certificate representing a security.

"Security entitlement." The rights and property interest of an entitlement holder with respect to a financial asset specified in Chapter 85 (relating to security entitlements).

"Uncertificated security." A security that is not represented by a certificate.

(b) Index of other definitions.--The following definitions applying in this division and other divisions are:

"Appropriate person." Section 8107.

"Control." Section 8106.

"Controllable account." Section 9102.

"Controllable electronic record." Section 12102.

"Controllable payment intangible." Section 9102.

"Delivery." Section 8301.

"Investment company security." Section 8103.

"Issuer." Section 8201.

"Overissue." Section 8210.

"Protected purchaser." Section 8303.

"Securities account." Section 8501.

(c) Applicability of general definitions and principles.--In addition, Division 1 (relating to general provisions) contains general definitions and principles of construction and interpretation applicable throughout this division.

(d) Characterizations of person, business or transaction limited.--The characterization of a person, business or transaction for purposes of this division does not determine the characterization of the person, business or transaction for purposes of any other law, regulation or rule. (June 8, 2001, P.L.123, No.18, eff. July 1, 2001; Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended the section heading, the def. of "communicate" in subsec. (a) and subsec. (b). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. 2008 Amendment. Act 13 deleted the def. of "good faith" in subsec. (a). 2001 Amendment. Act 18 amended subsec. (a) intro. par. Cross References. Section 8102 is referred to in sections 4104, 8103, 9102 of this title.
13 Pa.C.S. § 2303 — PA Code / Title 13 / Chapter 23 / Section 2303
Allocation or division of risks.
Status: in_force

Where this division allocates a risk or a burden as between the parties "unless otherwise agreed," the agreement may not only shift the allocation but may also divide the risk or burden.
13 Pa.C.S. § 3402 — PA Code / Title 13 / Chapter 34 / Section 3402
Signature by representative.
Status: in_force

(a) Represented person bound by signature.--If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the "authorized signature of the represented person" and the represented person is liable on the instrument, whether or not identified in the instrument.

(b) When representative is bound by signature.--If a representative signs the name of the representative to an instrument and the signature is an authorized signature of the represented person, the following rules apply:

(1) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument.

(2) Subject to subsection (c), if the form of the signature does not show unambiguously that the signature is made in a representative capacity or the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties did not intend the representative to be liable on the instrument.

(c) Checks.--If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account

of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person. Cross References. Section 3402 is referred to in sections 3308, 3401 of this title.
13 Pa.C.S. § 3103 — PA Code / Title 13 / Chapter 31 / Section 3103
Definitions and index of definitions.
Status: in_force

(a) Definitions.--The following words and phrases when used in this division shall have the meanings given to them in this subsection:

"Acceptor." A drawee who has accepted a draft.

"Drawee." A person ordered in a draft to make payment.

"Drawer." A person who signs or is identified in a draft as a person ordering payment.

"Good faith." (Deleted by amendment).

"Maker." A person who signs or is identified in a note as a person undertaking to pay.

"Order." A written instruction to pay money signed by the person giving the instruction. The instruction may be addressed to any person, including the person giving the instruction, or to one or more persons jointly or in the alternative but not in succession. An authorization to pay is not an order unless the person authorized to pay is also instructed to pay.

"Ordinary care." In the case of a person engaged in business, means observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged. In the case of a bank that takes an instrument for processing for collection or payment by automated means, reasonable commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank's prescribed procedures and the bank's procedures do not vary unreasonably from general banking usage not disapproved by this division or Division 4 (relating to bank deposits and collections).

"Party." A party to an instrument.

"Promise." A written undertaking to pay money signed by the person undertaking to pay. An acknowledgment of an obligation by the obligor is not a promise unless the obligor also undertakes to pay the obligation.

"Prove." With respect to a fact means to meet the burden of establishing the fact (section 1201(b)(8)).

"Remitter." A person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser.

(b) Index of other definitions in division.--Other definitions applying to this division and the sections in which they appear are:

"Acceptance." Section 3409.

"Accommodated party." Section 3419.

"Accommodation party." Section 3419.

"Alteration." Section 3407.

"Anomalous indorsement." Section 3205.

"Blank indorsement." Section 3205.

"Cashier's check." Section 3104.

"Certificate of deposit." Section 3104.

"Certified check." Section 3409.

"Check." Section 3104.

"Consideration." Section 3303.

"Draft." Section 3104.

"Holder in due course." Section 3302.

"Incomplete instrument." Section 3115.

"Indorsement." Section 3204.

"Indorser." Section 3204.

"Instrument." Section 3104.

"Issue." Section 3105.

"Issuer." Section 3105.

"Negotiable instrument." Section 3104.

"Negotiation." Section 3201.

"Note." Section 3104.

"Payable at a definite time." Section 3108.

"Payable on demand." Section 3108.

"Payable to bearer." Section 3109.

"Payable to order." Section 3109.

"Payment." Section 3602.

"Person entitled to enforce." Section 3301.

"Presentment." Section 3501.

"Reacquisition." Section 3207.

"Special indorsement." Section 3205.

"Teller's check." Section 3104.

"Transfer of instrument." Section 3203.

"Traveler's check." Section 3104.

"Value." Section 3303.

(c) Index of definitions in other divisions.--The following definitions in other divisions of this title apply to this division:

"Bank." Section 4105.

"Banking day." Section 4104.

"Clearing house." Section 4104.

"Collecting bank." Section 4105.

"Depositary bank." Section 4105.

"Documentary draft." Section 4104.

"Intermediary bank." Section 4105.

"Item." Section 4104.

"Payor bank." Section 4105.

"Suspends payments." Section 4104.

(d) Applicability of general definitions and principles.--In addition, Division 1 (relating to general provisions) contains general definitions and principles of construction and interpretation applicable throughout this division. (June 8, 2001, P.L.123, No.18, eff. July 1, 2001; Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 amended the def. of "prove" and deleted the def. of "good faith" in subsec. (a). 2001 Amendment. Act 18 amended subsec. (a) intro. par. Cross References. Section 3103 is referred to in sections 4104, 9102 of this title.
13 Pa.C.S. § 7207 — PA Code / Title 13 / Chapter 72 / Section 7207
Goods must be kept separate; fungible goods.
Status: in_force

(a) Separation.--

(1) Unless the warehouse receipt provides otherwise, except as set forth in paragraph (2), a warehouse shall keep separate the goods covered by each receipt so as to permit at all times identification and delivery of those goods.

(2) Different lots of fungible goods may be commingled.

(b) Fungible goods.--If different lots of fungible goods are commingled, the goods are owned in common by the persons entitled thereto, and the warehouse is severally liable to each owner for that owner's share. If, because of overissue, a mass of fungible goods is insufficient to meet all the receipts the warehouse has issued against it, the persons entitled include all holders to which overissued receipts have been duly negotiated.
13 Pa.C.S. § 2A513 — PA Code / Title 13 / Chapter 2 / Section 2A513
Cure by lessor of improper tender or delivery; replacement.
Status: in_force

(a) General rule.--If any tender or delivery by the lessor or the supplier is rejected because nonconforming and the time for performance has not yet expired, the lessor or the supplier may seasonably notify the lessee of the lessor's or the supplier's intention to cure and may then make a conforming delivery within the time provided in the lease contract.

(b) Substitution of conforming tender.--If the lessee rejects a nonconforming tender that the lessor or the supplier had reasonable grounds to believe would be acceptable with or without money allowance, the lessor or the supplier may have a further reasonable time to substitute a conforming tender if he seasonably notifies the lessee. Cross References. Section 2A513 is referred to in section 2A514 of this title.
13 Pa.C.S. § 9102 — PA Code / Title 13 / Chapter 91 / Section 9102
Definitions and index of definitions.
Status: in_force

(a) Division 9 definitions.--The following words and phrases when used in this division shall have the meanings given to them in this subsection:

"Accession." Goods which are physically united with other goods in such a manner that the identity of the original goods is not lost.

"Account."

(1) Except as used in "account for," "account statement," "account to," "commodity account," "customer's account," "deposit account," "on account of" and "statement of account," a right to payment of a monetary obligation, whether or not earned by performance:

(i) for property which has been or is to be sold, leased, licensed, assigned or otherwise disposed of;

(ii) for services rendered or to be rendered;

(iii) for a policy of insurance issued or to be issued;

(iv) for a secondary obligation incurred or to be incurred;

(v) for energy provided or to be provided;

(vi) for the use or hire of a vessel under a charter or other contract;

(vii) arising out of the use of a credit or charge card or information contained on or for use with the card; or

(viii) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state or person licensed or authorized to operate the game by a state or governmental unit of a state.

(2) The term includes controllable accounts and health-care-insurance receivables.

(3) The term does not include:

(i) chattel paper;

(ii) commercial tort claims;

(iii) deposit accounts;

(iv) investment property;

(v) letter-of-credit right or letters of credit;

(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.

"Account debtor." 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 evidences chattel paper.

"Accounting." Except as used in "accounting for," a record:

(1) signed by a secured party;

(2) indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and

(3) identifying the components of the obligations in reasonable detail.

"Agricultural lien." An interest in farm products:

(1) 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;

(2) which is created by statute in favor of a person that:

(i) in the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or

(ii) leased real property to a debtor in connection with the debtor's farming operation; and

(3) whose effectiveness does not depend on the person's possession of the personal property.

"As-extracted collateral." Any of the following:

(1) Oil, gas or other minerals which are subject to a security interest which:

(i) is created by a debtor having an interest in the minerals before extraction; and

(ii) attaches to the minerals as extracted.

(2) Accounts arising out of the sale at the wellhead or minehead of oil, gas or other minerals in which the debtor had an interest before extraction.

"Assignee." Except as used in "assignee for benefit of creditors," a person:

(1) 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

(2) 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.

"Assignor." A person that:

(1) under a security agreement creates or provides for a security interest that secures an obligation; or

(2) 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.

"Authenticate." (Deleted by amendment).

"Bank." An organization which is engaged in the business of banking. The term includes any savings bank, savings and loan association, credit union or trust company.

"Cash proceeds." Proceeds which are money, checks, deposit accounts or the like.

"Certificate of title." A certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest's obtaining priority over the

rights of a lien creditor with respect to the collateral. 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.

"Chattel paper." Either:

(1) 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

(2) 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 giving rise to the lease was to give the lessee the right to possession and use of the goods. The term does not include 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.

"Collateral." The property subject to a security interest or agricultural lien. The term includes:

(1) proceeds to which a security interest attaches;

(2) accounts, chattel paper, payment intangibles and promissory notes which have been sold; and

(3) goods which are the subject of a consignment.

"Commercial tort claim." A claim arising in tort with respect to which:

(1) the claimant is an organization; or

(2) the claimant is an individual and the claim:

(i) arose in the course of the claimant's business or profession; and

(ii) does not include damages arising out of personal injury to or the death of an individual.

"Commodity account." An account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.

"Commodity contract." A commodity futures contract, an option on a commodity futures contract, a commodity option or another contract if the contract or option is:

(1) traded on or subject to the rules of a board of trade which has been designated as a contract market for such a contract pursuant to Federal commodities laws; or

(2) traded on a foreign commodity board of trade, exchange or market and carried on the books of a commodity intermediary for a commodity customer.

"Commodity customer." A person for whom or which a commodity intermediary carries a commodity contract on its books.

"Commodity intermediary." A person that:

(1) is registered as a futures commission merchant under Federal commodities law; or

(2) in the ordinary course of its business provides clearance or settlement services for a board of trade which has been designated as a contract market pursuant to Federal commodities law.

"Communicate." Any of the following:

(1) To send a written or other tangible record.

(2) To transmit a record by any means agreed upon by the persons sending and receiving the record.

(3) 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.

"Consignee." A merchant to whom or which goods are delivered in a consignment.

"Consignment." A transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and all of the following apply:

(1) 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.

(2) With respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery.

(3) The goods are not consumer goods immediately before delivery.

(4) The transaction does not create a security interest which secures an obligation.

"Consignor." A person that delivers goods to a consignee in a consignment.

"Consumer debtor." A debtor in a consumer transaction.

"Consumer goods." Goods which are used or bought for use primarily for personal, family or household purposes.

"Consumer-goods transaction." A consumer transaction in which:

(1) an individual incurs an obligation primarily for personal, family or household purposes; and

(2) a security interest in consumer goods secures the obligation.

"Consumer obligor." An obligor who:

(1) is an individual; and

(2) incurred the obligation as part of a transaction entered into primarily for personal, family or household purposes.

"Consumer transaction." A transaction in which:

(1) an individual incurs an obligation primarily for personal, family or household purposes;

(2) a security interest secures the obligation; and

(3) the collateral is held or acquired primarily for personal, family or household purposes. The term includes consumer-goods transactions.

"Continuation statement." An amendment of a financing statement which:

(1) identifies, by its file number, the initial financing statement to which it relates; and

(2) indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

"Controllable account." An account evidenced by a controllable electronic record that provides that the account debtor undertakes to pay the person that has control under section 12105 (relating to control of controllable electronic record) of the controllable electronic record.

"Controllable payment intangible." 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 12105 of the controllable electronic record.

"Debtor." A:

(1) person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;

(2) seller of accounts, chattel paper, payment intangibles or promissory notes; or

(3) consignee.

"Deposit account." A demand, time, savings, passbook or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument.

"Document." A document of title or a receipt of the type described in section 7201(b) (relating to person that may issue a warehouse receipt; storage under bond).

"Electronic chattel paper." (Deleted by amendment).

"Encumbrance." A right, other than an ownership interest, in real property. The term includes a mortgage and any other lien on real property.

"Equipment." Goods other than inventory, farm products or consumer goods.

"Farm products." Goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are any of the following:

(1) Crops grown, growing or to be grown, including:

(i) crops produced on trees, vines and bushes; and

(ii) aquatic goods produced in aquacultural operations.

(2) Livestock, born or unborn, including aquatic goods produced in aquacultural operations.

(3) Supplies used or produced in a farming operation.

(4) Products of crops or livestock in their unmanufactured states.

"Farming operation." Raising, cultivating, propagating, fattening or grazing or any other farming, livestock or aquacultural operation.

"File number." The number assigned to an initial financing statement pursuant to section 9519(a) (relating to filing office duties).

"Filing office." An office designated in section 9501 (relating to filing office) as the place to file a financing statement.

"Filing-office rule." A rule adopted pursuant to section 9526 (relating to filing-office rules).

"Financing statement." A record or records composed of an initial financing statement and any filed record relating to the initial financing statement.

"Fixture filing." The filing of a financing statement:

(1) covering goods which are, or are to become, fixtures; and

(2) satisfying section 9502(a) (relating to sufficiency of financing statement) and (b) (relating to real-property-related financing statements). The term includes the filing of a financing statement covering goods of a transmitting utility which are, or are to become, fixtures.

"Fixtures." Goods which have become so related to particular real property that an interest in them arises under real property law.

"General intangible." Any personal property, including things in action, other than accounts, chattel paper, commercial

tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money and oil, gas or other minerals before extraction. The term includes controllable electronic records, payment intangibles and software.

"Good faith." (Deleted by amendment).

"Goods." All things which are movable when a security interest attaches.

(1) The term includes all of the following:

(i) Fixtures.

(ii) Standing timber which 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.

(v) Manufactured homes.

(vi) A computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if:

(A) the program is associated with the goods in such a manner that it customarily is considered part of the goods; or

(B) by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods. The term does not include a computer program embedded in goods which consist solely of the medium in which the program is embedded.

(2) The term does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money or oil, gas or other minerals before extraction.

"Governmental unit." A subdivision, agency, department, county, parish, municipality or other unit of the government of the United States, a state or a foreign country. The term includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States.

"Health-care-insurance receivable." An interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care goods or services provided or to be provided.

"Instrument." A negotiable instrument or any other writing which evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease and is of a type which in ordinary course of business is transferred by delivery with any necessary indorsement or assignment. The term does not include:

(1) investment property;

(2) letters of credit;

(3) writings which evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card; or

(4) writings that evidence chattel paper.

"Inventory." Goods, other than farm products, which:

(1) are leased by a person as lessor;

(2) are held by a person for sale or lease or to be furnished under a contract of service;

(3) are furnished by a person under a contract of service; or

(4) consist of raw materials, work in process or materials used or consumed in a business.

"Investment property." A security whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account.

"Jurisdiction of organization." With respect to a registered organization, the jurisdiction under whose law the organization is formed or organized.

"Letter-of-credit right." A right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit.

"Lien creditor." Any of the following:

(1) A creditor that has acquired a lien on the property involved by attachment, levy or the like.

(2) An assignee for benefit of creditors from the time of assignment.

(3) A trustee in bankruptcy from the date of the filing of the petition.

(4) A receiver in equity from the time of appointment.

"Manufactured home." A structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States Secretary of Housing and Urban Development and complies with the standards established under 42 U.S.C. (relating to public health and welfare).

"Manufactured-home transaction." A secured transaction:

(1) which creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or

(2) in which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.

"Money." Has the meaning in section 1201(b)(24) (relating to general definitions), but does not include a deposit account.

"Mortgage." A consensual interest in real property, including fixtures, which secures payment or performance of an obligation.

"New debtor." A person that becomes bound as debtor under section 9203(d) (relating to when person becomes bound by another person's security agreement) by a security agreement previously entered into by another person.

"New value." Any of the following:

(1) Money.

(2) Money's worth in property, services or new credit.

(3) Release by a transferee of an interest in property previously transferred to the transferee. The term does not include an obligation substituted for another obligation.

"Noncash proceeds." Proceeds other than cash proceeds.

"Obligor." A person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral:

(1) owes payment or other performance of the obligation;

(2) has provided property other than the collateral to secure payment or other performance of the obligation; or

(3) is otherwise accountable in whole or in part for payment or other performance of the obligation. The term does not include any issuer or nominated person under a letter of credit.

"Original debtor." Except as used in section 9310(c) (relating to assignment of perfected security interest), a person that, as debtor, entered into a security agreement to which a new debtor has become bound under section 9203(d) (relating to when person becomes bound by another person's security agreement).

"Payment intangible." A general intangible under which the account debtor's principal obligation is a monetary obligation. The term includes a controllable payment intangible.

"Person related to." One of the following:

(1) With respect to an individual:

(i) the spouse of the individual;

(ii) a brother, brother-in-law, sister or sister-in-law of the individual;

(iii) an ancestor or lineal descendant of the individual or the individual's spouse; or

(iv) any other relative, by blood or marriage, of the individual or the individual's spouse, who shares the same home with the individual.

(2) With respect to an organization:

(i) a person directly or indirectly controlling, controlled by or under common control with the organization;

(ii) an officer or director of or a person performing similar functions with respect to the organization;

(iii) an officer or director of or a person performing similar functions with respect to a person described in subparagraph (i);

(iv) the spouse of an individual described in subparagraph (i), (ii) or (iii); or

(v) an individual related by blood or marriage to an individual described in subparagraph (i), (ii), (iii) or (iv) who shares the same home with the individual.

"Proceeds." Except as used in section 9609(b) (relating to secured party's right to take possession after default), the following property:

(1) Whatever is acquired upon the sale, lease, license, exchange or other disposition of collateral.

(2) Whatever is collected on or distributed on account of collateral.

(3) Rights arising out of collateral.

(4) To the extent of the value of collateral, claims arising out of:

(i) loss of the collateral;

(ii) nonconformity of the collateral;

(iii) interference with the use of the collateral;

(iv) defects in the collateral;

(v) infringement of rights in the collateral; or

(vi) damage to the collateral.

(5) 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:

(i) loss of the collateral;

(ii) nonconformity of the collateral;

(iii) defects in the collateral;

(iv) infringement of rights in the collateral; or

(v) damage to the collateral.

"Promissory note." An instrument which:

(1) evidences a promise to pay a monetary obligation;

(2) does not evidence an order to pay; and

(3) does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.

"Proposal." A record 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 under sections 9620 (relating to acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral), 9621 (relating to notification of proposal to accept collateral) and 9622 (relating to effect of acceptance of collateral).

"Public organic record." A record that is available to the public for inspection and is:

(1) 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;

(2) 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 restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or

(3) a record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation and any record filed with or issued by the state or the United States which amends or restates the name of the organization.

"Public-finance transaction." A secured transaction in connection with which all of the following apply:

(1) Debt securities are issued.

(2) All or a portion of the securities issued have an initial stated maturity of at least 20 years.

(3) Any of the following is a state or a governmental unit of a state:

(i) The debtor.

(ii) The obligor.

(iii) The secured party.

(iv) The account debtor or other person obligated on collateral.

(v) The assignor or assignee of a secured obligation.

(vi) The assignor or assignee of a security interest.

"Pursuant to commitment." With respect to an advance made or other value given by a secured party, 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.

"Record." Except as used in "for record," "of record," "record or legal title" or "record owner," either of the following:

(1) Information which is inscribed on a tangible medium.

(2) Information which is:

(i) stored in an electronic or other medium; and

(ii) retrievable in perceivable form.

"Registered organization." 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 enactment of legislation by the state or the 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 a business trust's organic record be filed with the state.

"Secondary obligor." An obligor to the extent that:

(1) the obligor's obligation is secondary; or

(2) the obligor has a right of recourse with respect to an obligation secured by collateral against the debtor or another obligor or property of either.

"Secured party." Any of the following:

(1) 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.

(2) A person that holds an agricultural lien.

(3) A consignor.

(4) A person to whom or which accounts, chattel paper, payment intangibles or promissory notes have been sold.

(5) A trustee, indenture trustee, agent, collateral agent or other representative in whose favor a security interest or agricultural lien is created or provided for.

(6) A person that holds a security interest arising under section 2401 (relating to passing of title; reservation for security; limited application of section), 2505 (relating to shipment by seller under reservation), 2711(c) (relating to security interest of buyer in rejected goods), 2A508(e) (relating to security interest in goods in lessee's possession), 4210 (relating to security interest of collecting bank in items, accompanying documents and proceeds) or 5118 (relating to security interest of issuer or nominated person).

"Security agreement." An agreement which creates or provides for a security interest.

"Send." (Deleted by amendment).

"Software." 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 which is included in the definition of goods.

"State." 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.

"Supporting obligation." A letter-of-credit right or secondary obligation which supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument or investment property.

"Tangible chattel paper." (Deleted by amendment).

"Termination statement." An amendment of a financing statement which:

(1) identifies, by its file number, the initial financing statement to which it relates; and

(2) indicates either that it is a termination statement or that the identified financing statement is no longer effective.

"Transmitting utility." A person primarily engaged in the business of:

(1) operating a railroad, subway, street railway or trolley bus;

(2) transmitting communications electrically, electromagnetically or by light;

(3) transmitting goods by pipeline or sewer; or

(4) transmitting or producing and transmitting electricity, steam, gas or water.

(b) Definitions in other divisions.--The following definitions in other divisions apply to this division:

"Applicant." Section 5102.

"Beneficiary." Section 5102.

"Broker." Section 8102.

"Certificated security." Section 8102.

"Check." Section 3104.

"Clearing corporation." Section 8102.

"Contract for sale." Section 2106.

"Control." With respect to a document of title, section 7106.

"Controllable electronic record." Section 12102.

"Customer." Section 4104.

"Entitlement holder." Section 8102.

"Financial asset." Section 8102.

"Holder in due course." Section 3302.

"Issuer." With respect to a letter of credit or letter-of-credit right, section 5102.

"Issuer." With respect to a document of title, section 7102.

"Issuer." With respect to a security, section 8201.

"Lease." Section 2A103.

"Lease agreement." Section 2A103.

"Lease contract." Section 2A103.

"Leasehold interest." Section 2A103.

"Lessee." Section 2A103.

"Lessee in ordinary course of business." Section 2A103.

"Lessor." Section 2A103.

"Lessor's residual interest." Section 2A103.

"Letter of credit." Section 5102.

"Merchant." Section 2104.

"Negotiable instrument." Section 3104.

"Nominated person." Section 5102.

"Note." Section 3104.

"Proceeds of a letter of credit." Section 5114.

"Protected purchaser." Section 8303.

"Prove." Section 3103.

"Qualifying purchaser." Section 12102.

"Sale." Section 2106.

"Securities account." Section 8501.

"Securities intermediary." Section 8102.

"Security." Section 8102.

"Security certificate." Section 8102.

"Security entitlement." Section 8102.

"Uncertificated security." Section 8102.

(c) Division 1 definitions and principles.--Division 1 (relating to general provisions) contains general definitions and principles of construction and interpretation applicable throughout this division.

(Apr. 16, 2008, P.L.57, No.13, eff. 60 days; June 27, 2013, P.L.154, No.30, eff. July 1, 2013; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended the defs. of "account," "account debtor," "accounting," "chattel paper," "general intangible," "instrument," "payment intangible" and "proposal" in subsec. (a) and subsec. (b), added the defs. of "assignee," "assignor," "controllable account," "controllable payment intangible" and "money" in subsec. (a) and deleted the defs. of "authenticate," "electronic chattel paper," "send" and "tangible chattel paper" in subsec. (a). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

Amendment . Act 30 amended the defs. of "authenticate," "certificate of title," "jurisdiction of organization" and "registered organization" and added the def. of "public organic record" in subsec. (a). 2008 Amendment. Act 13 amended the defs. of "agricultural lien," "document" and "health-care-insurance receivable" and deleted the def. of "good faith" in subsec. (a) and added the defs. of "control" and "issuer" in subsec. (b). Cross References. Section 9102 is referred to in sections 2103, 2A103, 8102, 8103, 91102 of this title; section 2812 of Title 66 (Public Utilities).
13 Pa.C.S. § 2A525 — PA Code / Title 13 / Chapter 2 / Section 2A525
Lessor's right to possession of goods.
Status: in_force

(a) Insolvency of lessee.--If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods.

(b) Default by lessee.--After a default by the lessee under the lease contract of the type described in section 2A523(a) or (c)(1) (relating to lessor's remedies) or, if agreed, after other default by the lessee, the lessor has the right to take possession of the goods. If the lease contract so provides, the lessor may require the lessee to assemble the goods and make them available to the lessor at a place to be designated by the lessor which is reasonably convenient to both parties. Without removal, the lessor may render unusable any goods employed in

trade or business, and may dispose of goods on the lessee's premises (section 2A527).

(c) Method of proceeding on default.--The lessor may proceed under subsection (b) without judicial process if it can be done without breach of the peace or the lessor may proceed by action. Cross References. Section 2A525 is referred to in sections 2A504, 2A523, 2A527 of this title.
13 Pa.C.S. § 1309 — PA Code / Title 13 / Chapter 13 / Section 1309
Option to accelerate at will.
Status: in_force

A term providing that one party or that party's successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or when the party "deems itself insecure," or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.
13 Pa.C.S. § 7504 — PA Code / Title 13 / Chapter 75 / Section 7504
Rights acquired in absence of due negotiation; effect of diversion; stoppage of delivery.
Status: in_force

(a) Transferee.--A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that its transferor had or had actual authority to convey.

(b) Third parties.--In the case of a transfer of a nonnegotiable document of title, until but not after the bailee receives notice of the transfer, the rights of the transferee may be defeated:

(1) by those creditors of the transferor that could treat the transfer as void under section 2402 (relating to rights of creditors of seller against sold goods) or 2A308 (relating to special rights of creditors);

(2) by a buyer from the transferor in ordinary course of business if the bailee has delivered the goods to the buyer or received notification of the buyer's rights;

(3) by a lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee or received notification of the lessee's rights; or

(4) as against the bailee, by good faith dealings of the bailee with the transferor.

(c) Diversion or change by consignor.--A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver the goods to the consignee:

(1) defeats the consignee's title to the goods if the goods have been delivered to a buyer in ordinary course of business or a lessee in ordinary course of business; and

(2) in any event defeats the consignee's rights against the bailee.

(d) Stopping delivery.--Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under section 2705 (relating to stoppage by seller of delivery in transit or otherwise) or a lessor under section 2A526 (relating to lessor's stoppage of delivery in transit or otherwise), subject to the requirements of due notification in those sections. A bailee honoring the seller's or lessor's instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense. Cross References. Section 7504 is referred to in section 7503 of this title.
13 Pa.C.S. § 9706 — PA Code / Title 13 / Chapter 97 / Section 9706
When initial financing statement suffices to continue effectiveness of financing statement.
Status: in_force

(a) Initial financing statement in lieu of continuation statement.--The filing of an initial financing statement in the office specified in section 9501 of Revised Division 9 (relating to filing office) continues the effectiveness of a financing statement filed before Revised Division 9 takes effect if:

(1) the filing of an initial financing statement in that office would be effective to perfect a security interest under Revised Division 9;

(2) the pre-effective-date financing statement was filed in an office in another state or another office in this Commonwealth;

(3) the initial financing statement satisfies subsection

(c); and

(4) with respect to a pre-effective-date financing statement which, but for section 9705(c)(2) (relating to effectiveness of action taken before effective date), would cease to be effective after June 30, 2006, the initial financing statement is filed:

(i) after December 29, 2005; and

(ii) before July 1, 2006.

(b) Period of continued effectiveness.--The filing of an initial financing statement under subsection (a) continues the effectiveness of the pre-effective-date financing statement:

(1) if the initial financing statement is filed before Revised Division 9 takes effect, for the period provided in section 9403 of Former Division 9 (relating to what constitutes filing; duration of filing; effect of lapsed filing; duties of filing officer) with respect to a financing statement; and

(2) if the initial financing statement is filed after Revised Division 9 takes effect, for the period provided in section 9515 of Revised Division 9 (relating to duration and effectiveness of financing statement; effect of lapsed financing statement) with respect to an initial financing statement.

(c) Requirements for initial financing statement under subsection (a).--To be effective for purposes of subsection

(a), an initial financing statement must:

(1) satisfy the requirements of Chapter 95 of Revised Division 9 (relating to filing) for an initial financing statement;

(2) identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and

(3) indicate that the pre-effective-date financing statement remains effective. (June 30, 2006, P.L.290, No.64, eff. imd.) 2006 Amendment. Act 64 amended subsec. (a). Section 2 of Act 64 provided that nothing in the amendment of subsec. (a) shall render ineffective a continuation statement that was filed prior to the effective date of section 2. Cross References. Section 9706 is referred to in sections 9702, 9705, 9707 of this title.
13 Pa.C.S. § 3303 — PA Code / Title 13 / Chapter 33 / Section 3303
Value and consideration.
Status: in_force

(a) Value.--An instrument is issued or transferred for value if:

(1) the instrument is issued or transferred for a promise of performance, to the extent the promise has been performed;

(2) the transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding;

(3) the instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due;

(4) the instrument is issued or transferred in exchange for a negotiable instrument; or

(5) the instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument.

(b) Definition of "consideration".--"Consideration" means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection (a), the instrument is also issued for consideration. Cross References. Section 3303 is referred to in sections 3103, 3302, 5102, 9403, 12102 of this title.
13 Pa.C.S. § 4107 — PA Code / Title 13 / Chapter 41 / Section 4107
Separate office of a bank.
Status: in_force

A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notices or orders must be given under this division and under Division 3 (relating to negotiable instruments). (July 9, 1992, P.L.507, No.97, eff. one year) 1992 Amendment. Act 97 amended and renumbered former section 4106 to present section 4107 and renumbered former section 4107 to present section 4108.
13 Pa.C.S. § 9314 — PA Code / Title 13 / Chapter 93 / Section 9314
Perfection by control.
Status: in_force

(a) Perfection by control.--A security interest in 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 7106 (relating to control of electronic document of title), 9104 (relating to control of deposit account), 9106 (relating to control of investment property), 9107 (relating to control of letter-of-credit right) or 9107.1 (relating to control of controllable electronic record, controllable account or controllable payment intangible).

(b) Specified collateral: time of perfection by control; continuation of perfection.--A security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents or letter-of-credit rights is perfected by control under section 7106, 9104, 9107 or 9107.1 not earlier than the time the secured

party obtains control and remains perfected by control only while the secured party retains control.

(c) Investment property: time of perfection by control; continuation of perfection.--A security interest in investment property is perfected by control under section 9106 not earlier than the time the secured party obtains control and remains perfected by control until both of the following paragraphs apply:

(1) The secured party does not have control.

(2) One of the following occurs:

(i) If the collateral is a certificated security, the debtor has or acquires possession of the security certificate.

(ii) If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner.

(iii) If the collateral is a security entitlement, the debtor is or becomes the entitlement holder. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9314 is referred to in sections 9308, 9310, 9312, 9327, 9328, 9329 of this title.
13 Pa.C.S. § 4502 — PA Code / Title 13 / Chapter 45 / Section 4502
Presentment of "on arrival" drafts.
Status: in_force

If a draft or the relevant instructions require presentment "on arrival", "when goods arrive" or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arrived is not dishonor; the bank must notify its transferor of the refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods. (July 9, 1992, P.L.507, No.97, eff. one year)
13 Pa.C.S. § 7507 — PA Code / Title 13 / Chapter 75 / Section 7507
Warranties on negotiation or delivery of document of title.
Status: in_force

If a person negotiates or delivers a document of title for value, otherwise than as a mere intermediary under section 7508 (relating to warranties of collecting bank as to documents of title), unless otherwise agreed, the transferor warrants to its immediate purchaser only in addition to any warranty made in selling or leasing the goods that:

(1) the document is genuine;

(2) the transferor does not have knowledge of any fact that would impair the document's validity or worth; and

(3) the negotiation or delivery is rightful and fully effective with respect to the title to the document and the goods it represents.
13 Pa.C.S. § 9201 — PA Code / Title 13 / Chapter 92 / Section 9201
General effectiveness of security agreement.
Status: in_force

(a) General effectiveness.--Except as otherwise provided in this title, a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors.

(b) Applicable consumer laws and other law.--A transaction subject to this division is subject to:

(1) any applicable rule of law which establishes a different rule for consumers;

(2) any other statute or regulation of the Commonwealth which regulates the rates, charges, agreements and practices for loans, credit sales or other extensions of credit; and

(3) any consumer protection statute or regulation of the Commonwealth.

(c) Other applicable law controls.--In case of conflict between this division and a rule of law, statute or regulation described in subsection (b), the rule of law, statute or regulation controls. Failure to comply with a statute or regulation described in subsection (b) has only the effect the statute or regulation specifies.

(d) Further deference to other applicable law.--This division does not:

(1) validate any rate, charge, agreement or practice which violates a rule of law, statute or regulation described in subsection (b); or

(2) extend the application of the rule of law, statute or regulation to a transaction not otherwise subject to it.
13 Pa.C.S. § 1201 — PA Code / Title 13 / Chapter 12 / Section 1201
General definitions.
Status: in_force

(a) Definition provisions.--Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other divisions of this title that apply to particular divisions or chapters of this title, have the meanings stated.

(b) Definitions.--Subject to additional definitions contained in subsequent provisions of this title which are applicable to specific provisions of this title, the following words and phrases when used in this title shall have, unless the context clearly indicates otherwise, the meanings given to them in this subsection:

(1)

"Action." In the sense of a judicial proceeding, the term includes recoupment, counterclaim, set-off, suit in equity and any other proceeding in which rights are determined.

(2)

"Aggrieved party." A party entitled to pursue a remedy.

(3)

"Agreement." As distinguished from "contract" under paragraph (12), the term means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing or usage of trade as provided in section 1303 (relating to course of performance, course of dealing and usage of trade).

(4)

"Bank." A person engaged in the business of banking. The term includes a savings bank, savings and loan association, credit union and trust company.

(5)

"Bearer." A person in control of a negotiable electronic document of title or a person in possession of a negotiable instrument, negotiable tangible document of title or certificated security, that is payable to bearer or indorsed in blank.

(6)

"Bill of lading." 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 receipt.

(7)

"Branch." The term includes a separately incorporated foreign branch of a bank.

(8)

"Burden of establishing." As to a fact, the burden of persuading the trier of fact that the existence of the fact is more probable than its nonexistence.

(9)

"Buyer in ordinary course of business." 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 course from a person, other than a pawnbroker, in the business of selling goods of that kind.

(i) A person buys goods in the ordinary course of business 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.

(ii) 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.

(iii) 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.

(iv) Only a buyer that takes possession of the goods or has a right to recover the goods from the seller under Division 2 (relating to sales) may be a buyer in ordinary course of business. The term does not include a person that acquires goods in a transfer in bulk or as security for or in 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 which it is to operate ought to have noticed it. Whether a term is "conspicuous" or not is a decision for the court.

(i) (Deleted by amendment).

(ii) (Deleted by amendment).

(11)

"Consumer." An individual who enters into a transaction primarily for personal, family or household purposes.

(12)

"Contract." As distinguished from "agreement" in paragraph (3), the total legal obligation that results from the parties' agreement as determined by this title as supplemented by any other applicable laws.

(13)

"Creditor." The term includes a general creditor; a secured creditor; a lien creditor; a 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 document of title or an authoritative tangible copy of a record evidencing chattel paper, means voluntary transfer of possession.

(16)

"Document of title." A record that:

(i) in the regular course of business or financing is treated as adequately evidencing that the person in possession or control of the record is entitled to receive, control, hold and dispose of the record and the goods the record covers; or

(ii) purports to be issued by or addressed to a bailee and to cover goods in the bailee's possession 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.

(16.1)

"Electronic document of title." (Deleted by amendment).

(16.2)

"Electronic." Relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

(16.3)

"Electronic document of title." A document of title evidenced by a record consisting of information stored in an electronic medium.

(17)

"Fault." A default, breach or wrongful act or omission.

(18)

"Fungible goods." As follows:

(i) goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit; or

(ii) goods that by agreement are treated as equivalent.

(19)

"Genuine." Free of forgery or counterfeiting.

(20)

"Good faith." Except as otherwise provided in Division 5 (relating to letters of credit), honesty in fact and the observance of reasonable commercial standards of fair dealing.

(21)

"Holder." As follows:

(i) the person in possession of a negotiable instrument that is payable either to the bearer or to an identified person that is the person in possession;

(ii) the person in possession of a negotiable tangible document of title if the goods are deliverable either to the bearer or to the order of the person in possession; or

(iii) the person in control, other than under section 7106(g) (relating to control of electronic document of title), of a negotiable electronic document of title.

(22)

"Insolvency proceeding." Includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.

(23)

"Insolvent." As follows:

(i) having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;

(ii) being unable to pay debts as they become due; or

(iii) being insolvent within the meaning of Federal bankruptcy law.

(24)

"Money." A medium of exchange that is currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries. The term does not include a medium of exchange in an electronic form.

(25)

"Organization." A person other than an individual.

(26)

"Party." As distinguished from "third party," a person that has engaged in a transaction or made an agreement subject to this title.

(27)

"Person." Any individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency or instrumentality, or other legal or commercial entity. The term includes a protected series, however denominated, of an entity if the protected series is established under law other than this title which limits, or limits if conditions specified under that 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." The amount as of a date certain of one or more sums payable in the future, discounted to the date certain by use of either:

(i) an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into; or

(ii) 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." Taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift or other voluntary transaction creating an interest in property.

(30)

"Purchaser." A person that takes by purchase.

(31)

"Record." 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." Any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.

(33)

"Representative." A person empowered to act for another, including an agent; an officer of a corporation or association; and a trustee, executor or administrator of an estate.

(34)

"Right." Includes remedy.

(35)

"Security interest." An interest in personal property or fixtures which secures payment or performance of an obligation.

(i) The term 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 Division 9 (relating to secured transactions).

(ii) The term does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under section 2401 (relating to passing of title; reservation for security; limited application of section), but a buyer may also acquire a "security interest" by complying with Division 9 (relating to secured transactions).

(iii) Except as otherwise provided in section 2505 (relating to shipment by seller under reservation), the right of a seller or lessor of goods under Division 2 (relating to sales) or 2A (relating to leases) 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 Division 9. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under section 2401 is limited in effect to a reservation of a

"security interest."

(iv) Whether a transaction in the form of a lease creates a "security interest" is determined pursuant to section 1203 (relating to lease distinguished from security interest).

(36)

"Send." In connection with a record or notification:

(i) 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, and addressed to any address reasonable under the circumstances; or

(A) (Deleted by amendment).

(B) (Deleted by amendment).

(C) (Deleted by amendment).

(ii) to cause the record or notification to be received within the time it would have been received if properly sent under subparagraph (i).

(37)

"Signed." Means, with present intent to authenticate or adopt a record:

(i) execute or adopt a tangible symbol; or

(ii) attach to or logically associate with the record an electronic symbol, sound or process.

(38)

"State." 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.

(39)

"Surety." Includes a guarantor or other secondary obligor.

(39.1)

"Tangible document of title." A document of title evidenced by a record consisting of information that is inscribed on a tangible medium.

(40)

"Term." A portion of an agreement that relates to a particular matter.

(41)

"Unauthorized signature." A signature made without actual, implied or apparent authority. The term includes a forgery.

(42)

"Warehouse receipt." A document of title issued by a person engaged in the business of storing goods for hire.

(43)

"Writing." Includes printing, typewriting or any other intentional reduction to tangible form.

(44)

"Written." Includes printing, typewriting or any other intentional reduction to tangible form. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (b)(10), (15),

(21)(iii), (24), (27), (36) and (37), added subsec. (b)(16.2) and (16.3) and deleted subsec. (b)(16.1). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 1201 is referred to in sections 3103, 4A105, 8103, 9102 of this title; section 6202 of Title 12 (Commerce and Trade); section 6902 of Title 42 (Judiciary and Judicial Procedure); section 7315 of Title 51 (Military Affairs).
13 Pa.C.S. § 2A406 — PA Code / Title 13 / Chapter 2 / Section 2A406
Procedure on excused performance.
Status: in_force

(a) Right of lessee to terminate or modify contract.--If the lessee receives notification of a material or indefinite delay or an allocation justified under section 2A405 (relating to excused performance), the lessee may by written notification

to the lessor as to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (section 2A510):

(1) terminate the lease contract (section 2A505(b)); or

(2) except in a finance lease that is not a consumer lease, modify the lease contract by accepting the available quota in substitution, with due allowance from the rent payable for the balance of the lease term for the deficiency but without further right against the lessor.

(b) Time limitation on modification.--If, after receipt of a notification from the lessor under section 2A405, the lessee fails so to modify the lease agreement within a reasonable time not exceeding 30 days, the lease contract lapses with respect to any deliveries affected.
13 Pa.C.S. § 4A303 — PA Code / Title 13 / Chapter 4 / Section 4A303
Erroneous execution of payment order.
Status: in_force

(a) Issuance of payment order in amount greater than amount of sender's order.--A receiving bank that:

(1) executes the payment order of the sender by issuing a payment order in an amount greater than the amount of the sender's order; or

(2) issues a payment order in execution of the sender's order and then issues a duplicate order; is entitled to payment of the amount of the sender's order under section 4A402(c) (relating to obligation of sender to pay receiving bank) if that subsection is otherwise satisfied. The bank is entitled to recover from the beneficiary of the erroneous order the excess payment received to the extent allowed by the law governing mistake and restitution.

(b) Issuance of payment order in amount less than amount of sender's order.--A receiving bank that executes the payment order of the sender by issuing a payment order in an amount less than the amount of the sender's order is entitled to payment of the amount of the sender's order under section 4A402(c) if that subsection is otherwise satisfied and the bank corrects its mistake by issuing an additional payment order for the benefit of the beneficiary of the sender's order. If the error is not corrected, the issuer of the erroneous order is entitled to receive or retain payment from the sender of the order it accepted only to the extent of the amount of the erroneous order. This subsection does not apply if the receiving bank executes the sender's payment order by issuing a payment order in an amount less than the amount of the sender's order for the purpose of obtaining payment of its charges for services and expenses pursuant to instruction of the sender.

(c) Issuance of payment order to wrong beneficiary.--If a receiving bank executes the payment order of the sender by issuing a payment order to a beneficiary different from the beneficiary of the sender's order and the funds transfer is completed on the basis of that error, the sender of the payment

order that was erroneously executed and all previous senders in the funds transfer are not obliged to pay the payment orders they issued. The issuer of the erroneous order is entitled to recover from the beneficiary of the order the payment received to the extent allowed by the law governing mistake and restitution. Cross References. Section 4A303 is referred to in sections 4A304, 4A402 of this title.
13 Pa.C.S. § 2309 — PA Code / Title 13 / Chapter 23 / Section 2309
Absence of specific time provisions; notice of termination.
Status: in_force

(a) Shipment, delivery or other action.--The time for shipment or delivery or any other action under a contract if not provided in this division or agreed upon shall be a reasonable time.

(b) Duration of provision for successive performances.--Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.

(c) Notice of termination.--Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.
13 Pa.C.S. § 9703 — PA Code / Title 13 / Chapter 97 / Section 9703
Security interest perfected before effective date.
Status: in_force

(a) Continuing priority over lien creditor: perfection requirements satisfied.--A security interest which is enforceable immediately before the effective date of Revised Division 9 and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under Revised Division 9 if, when Revised Division 9 takes effect, the applicable requirements for enforceability and perfection under Revised Division 9 are satisfied without further action.

(b) Continuing priority over lien creditor: perfection requirements not satisfied.--Except as otherwise provided in section 9705 of Revised Division 9 (relating to effectiveness of action taken before effective date), if, immediately before Revised Division 9 takes effect, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under Revised Division 9 are not satisfied when Revised Division 9 takes effect, the security interest:

(1) is a perfected security interest for one year after Revised Division 9 takes effect;

(2) remains enforceable thereafter only if the security interest becomes enforceable under section 9203 of Revised Division 9 (relating to attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites) before the year expires; and

(3) remains perfected thereafter only if the applicable requirements for perfection under Revised Division 9 are satisfied before the year expires. Cross References. Section 9703 is referred to in section 9702 of this title.
13 Pa.C.S. § 9627 — PA Code / Title 13 / Chapter 96 / Section 9627
Determination of whether conduct was commercially reasonable.
Status: in_force

(a) Greater amount obtainable under other circumstances; no preclusion of commercial reasonableness.--The fact that a greater amount could have been obtained by a collection, enforcement, disposition or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition or acceptance was made in a commercially reasonable manner.

(b) Dispositions which are commercially reasonable.--A disposition of collateral is made in a commercially reasonable manner if the disposition is made:

(1) in the usual manner on any recognized market;

(2) at the price current in any recognized market at the time of the disposition; or

(3) otherwise in conformity with reasonable commercial practices among dealers in the type of property which was the subject of the disposition.

(c) Approval by court or on behalf of creditors.--A collection, enforcement, disposition or acceptance is commercially reasonable if it has been approved:

(1) in a judicial proceeding;

(2) by a bona fide creditors' committee;

(3) by a representative of creditors; or

(4) by an assignee for the benefit of creditors.

(d) Approval under subsection (c) not necessary; absence of approval has no effect.--Approval under subsection (c) need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition or acceptance is not commercially reasonable.
13 Pa.C.S. § 2323 — PA Code / Title 13 / Chapter 23 / Section 2323
Form of bill of lading required in overseas shipment;
Status: in_force

"overseas."

(a) General rule.--Where the contract contemplates overseas shipment and contains a term C.I.F., C. & F. or F.O.B. vessel, the seller unless otherwise agreed must obtain a negotiable bill of lading stating that the goods have been loaded on board or, in the case of a term C.I.F. or C. & F., received for shipment.

(b) Bill in set of parts.--Where in a case within subsection

(a) a tangible bill of lading has been issued in a set of parts, unless otherwise agreed if the documents are not to be sent from abroad the buyer may demand tender of the full set; otherwise only one part of the bill of lading need be tendered. Even if the agreement expressly requires a full set:

(1) due tender of a single part is acceptable within the provisions of this division on cure of improper delivery (section 2508(a)); and

(2) even though the full set is demanded, if the documents are sent from abroad the person tendering an incomplete set may nevertheless require payment upon furnishing an indemnity which the buyer in good faith deems adequate.

(c) Definition of "overseas".--A shipment by water or by air or a contract contemplating such shipment is "overseas" insofar as by usage of trade or agreement it is subject to the commercial, financing or shipping practices characteristic of international deep water commerce. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 amended subsec. (b). Cross References. Section 2323 is referred to in sections 2103, 2319, 2503 of this title.
13 Pa.C.S. § 2706 — PA Code / Title 13 / Chapter 27 / Section 2706
Resale by seller including contract for resale.
Status: in_force

(a) General rule.--Under the conditions stated in section 2703 (relating to remedies of seller in general), the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this division (section 2710), but less expenses saved in consequence of the breach by the buyer.

(b) Manner of resale.--Except as otherwise provided in subsection (c) or unless otherwise agreed resale may be at public or private sale including sale by way of one or more contracts to sell or of identification to an existing contract of the seller. Sale may be as a unit or in parcels and at any time and place and on any terms but every aspect of the sale including the method, manner, time, place and terms must be commercially reasonable. The resale must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach.

(c) Notice of private sale.--Where the resale is at private sale the seller must give the buyer reasonable notification of his intention to resell.

(d) Public sale.--Where the resale is at public sale:

(1) Only identified goods can be sold except where there is a recognized market for a public sale of futures in goods of the kind.

(2) It must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyer reasonable notice of the time and place of the resale.

(3) If the goods are not to be within the view of those attending the sale the notification of sale must state the

place where the goods are located and provide for their reasonable inspection by prospective bidders.

(4) The seller may buy.

(e) Rights of good faith purchaser.--A purchaser who buys in good faith at a resale takes the goods free of any rights of the original buyer even though the seller fails to comply with one or more of the requirements of this section.

(f) Accountability for profit.--The seller is not accountable to the buyer for any profit made on any resale. A person in the position of a seller (section 2707), or buyer who has rightfully rejected or justifiably revoked acceptance must account for any excess over the amount of his security interest, as defined in section 2711(c) (relating to remedies of buyer in general; security interest of buyer in rejected goods). Cross References. Section 2706 is referred to in sections 2703, 2707, 2711, 2718 of this title.
13 Pa.C.S. § 9306.2 — PA Code / Title 13 / Chapter 93 / Section 9306.2
Law governing perfection and priority of security interests in controllable accounts, controllable electronic records and controllable payment intangibles.
Status: in_force

(a) General rule.--Except as provided in subsection (b), the local law of the controllable electronic record's jurisdiction specified in section 12107(c) and (d) (relating to governing law) governs perfection, the effect of perfection or nonperfection and the priority of a security interest in a controllable electronic record and a security interest in a controllable account or controllable payment intangible evidenced by the controllable electronic record.

(b) When perfection governed by law of jurisdiction where debtor located.--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.

(2) Automatic perfection of a security interest in a controllable payment intangible created by a sale of the controllable payment intangible. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 added section 9306.2. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9306.2 is referred to in section 9316 of this title.
13 Pa.C.S. § 9335 — PA Code / Title 13 / Chapter 93 / Section 9335
Accessions.
Status: in_force

(a) Creation of security interest in accession.--A security interest may be created in an accession and continues in collateral which becomes an accession.

(b) Perfection of security interest.--If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.

(c) Priority of security interest.--Except as otherwise provided in subsection (d), the other provisions of this chapter determine the priority of a security interest in an accession.

(d) Compliance with certificate-of-title statute.--A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under section

9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties).

(e) Removal of accession after default.--After default, subject to Chapter 96 (relating to default), a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.

(f) Reimbursement following removal.--A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of, the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.
13 Pa.C.S. § 8510 — PA Code / Title 13 / Chapter 85 / Section 8510
Rights of purchaser of security entitlement from entitlement holder.
Status: in_force

(a) Action based on adverse claim to financial asset or security entitlement.--In a case not covered by the priority rules in Division 9 (relating to secured transactions) or the rules stated in subsection (c), an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim and obtains control.

(b) When adverse claim cannot be asserted.--If an adverse claim could not have been asserted against an entitlement holder under section 8502 (relating to assertion of adverse claim against entitlement holder), the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest therein, from the entitlement holder.

(c) Rules of priority.--In a case not covered by the priority rules in Division 9, a purchaser for value of a security entitlement, or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Except as otherwise provided in subsection (d), purchasers who have control rank according to priority in time of:

(1) the purchaser's becoming the person for whom the securities account, in which the security entitlement is carried, is maintained if the purchaser obtained control under section 8106(d)(1) (relating to control);

(2) the securities intermediary's agreement to comply with the purchaser's entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried if the purchaser obtained control under section 8106(d)(2); or

(3) if the purchaser obtained control through another person under section 8106(d)(3), the time on which priority would be based under this subsection if the other person were the secured party.

(d) Securities intermediary.--A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary. (June 8, 2001, P.L.123, No.18, eff. July 1, 2001)
13 Pa.C.S. § 9612 — PA Code / Title 13 / Chapter 96 / Section 9612
Timeliness of notification before disposition of collateral.
Status: in_force

(a) Reasonable time is question of fact.--Except as otherwise provided in subsection (b), whether a notification is sent within a reasonable time is a question of fact.

(b) Ten-day period sufficient in nonconsumer transaction.--In a transaction other than a consumer transaction, a notification of disposition sent after default and ten days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.
13 Pa.C.S. § 2304 — PA Code / Title 13 / Chapter 23 / Section 2304
Price payable in money, goods, realty or otherwise.
Status: in_force

(a) General rule.--The price can be made payable in money or otherwise. If it is payable in whole or in part in goods each party is a seller of the goods which he is to transfer.

(b) Realty.--Even though all or part of the price is payable in an interest in realty the transfer of the goods and the obligations of the seller with reference to them are subject to this division, but not the transfer of the interest in realty or the obligations of the transferor in connection therewith.
13 Pa.C.S. § 2A530 — PA Code / Title 13 / Chapter 2 / Section 2A530
Lessor's incidental damages.
Status: in_force

Incidental damages to an aggrieved lessor include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the lessee's default, in connection with return or disposition of the goods, or otherwise resulting from the default. Cross References. Section 2A530 is referred to in sections 2A527, 2A528, 2A529 of this title.
13 Pa.C.S. § 4404 — PA Code / Title 13 / Chapter 44 / Section 4404
Bank not obligated to pay check more than six months old.
Status: in_force

A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge the account of its customer for a payment made thereafter in good faith.
13 Pa.C.S. § 3304 — PA Code / Title 13 / Chapter 33 / Section 3304
Overdue instrument.
Status: in_force

(a) Instrument payable on demand.--An instrument payable on demand becomes overdue at the earliest of the following times:

(1) on the day after the day demand for payment is duly made;

(2) if the instrument is a check, 90 days after its date; or

(3) if the instrument is not a check, when the instrument has been outstanding for a period of time after its date which is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and usage of the trade.

(b) Instrument payable at a definite time.--With respect to an instrument payable at a definite time, the following rules apply:

(1) If the principal is payable in installments and a due date has not been accelerated, the instrument becomes overdue upon default under the instrument for nonpayment of an installment, and the instrument remains overdue until the default is cured.

(2) If the principal is not payable in installments and the due date has not been accelerated, the instrument becomes overdue on the day after the due date.

(3) If a due date with respect to principal has been accelerated, the instrument becomes overdue on the day after the accelerated due date.

(c) Instrument not overdue if default in payment of interest.--Unless the due date of principal has been accelerated, an instrument does not become overdue if there is default in payment of interest but no default in payment of principal.
13 Pa.C.S. § 1310 — PA Code / Title 13 / Chapter 13 / Section 1310
Subordinated obligations.
Status: in_force

An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against either the common debtor or a subordinated creditor. DIVISION 2 SALES Chapter 21. Short Title, General Construction and Subject Matter 22. Form, Formation and Readjustment of Contract 23. General Obligation and Construction of Contract 24. Title, Creditors and Good Faith Purchasers 25. Performance 26. Breach, Repudiation and Excuse 27. Remedies Enactment. Division 2 was added November 1, 1979, P.L.255, No.86, effective January 1, 1980.
13 Pa.C.S. § 2616 — PA Code / Title 13 / Chapter 26 / Section 2616
Procedure on notice claiming excuse.
Status: in_force

(a) Right of buyer to terminate or modify contract.--Where the buyer receives notification of a material or indefinite delay or an allocation justified under section 2615 (relating to excuse by failure of presupposed conditions) he may by written notification to the seller as to any delivery concerned, and where the prospective deficiency substantially impairs the value of the whole contract under the provisions of this division relating to breach of installment contracts (section 2612), then also as to the whole:

(1) terminate and thereby discharge any unexecuted portion of the contract; or

(2) modify the contract by agreeing to take his available quota in substitution.

(b) Time limitation on modification.--If after receipt of such notification from the seller the buyer fails so to modify the contract within a reasonable time not exceeding 30 days the contract lapses with respect to any deliveries affected.

(c) Effect of agreement on section.--The provisions of this section may not be negated by agreement except insofar as the seller has assumed a greater obligation under section 2615.
13 Pa.C.S. § 4A505 — PA Code / Title 13 / Chapter 4 / Section 4A505
Preclusion of objection to debit of customer's account.
Status: in_force

If a receiving bank has received payment from its customer with respect to a payment order issued in the name of the customer as sender and accepted by the bank and the customer received notification reasonably identifying the order, the customer is precluded from asserting that the bank is not entitled to retain the payment unless the customer notifies the bank of the customer's objection to the payment within one year after the notification was received by the customer.
13 Pa.C.S. § 1203 — PA Code / Title 13 / Chapter 12 / Section 1203
Lease distinguished from security interest.
Status: in_force

(a) Factual determination.--Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.

(b) Sufficient attributes for security interest.--A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and:

(1) the original term of the lease is equal to or greater than the remaining economic life of the goods;

(2) the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;

(3) the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or

(4) the lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

(c) Insufficient attributes for security interest.--A transaction in the form of a lease does not create a security interest merely because:

(1) the present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into;

(2) the lessee assumes risk of loss of the goods;

(3) the lessee agrees to pay, with respect to the goods, taxes, insurance, filing, recording or registration fees or service or maintenance costs;

(4) the lessee has an option to renew the lease or to become the owner of the goods;

(5) the lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for

the term of the renewal at the time the option is to be performed; or

(6) the lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.

(d) Nominal consideration.--Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if:

(1) when the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed; or

(2) when the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed.

(e) Remaining economic life and reasonable predictability.--The "remaining economic life of the goods" and "reasonably predictable" fair market rent, fair market value or cost of performing under the lease agreement shall be determined with reference to the facts and circumstances at the time the transaction is entered into. Cross References. Section 1203 is referred to in section 1201 of this title.
13 Pa.C.S. § 4A211 — PA Code / Title 13 / Chapter 4 / Section 4A211
Cancellation and amendment of payment order.
Status: in_force

(a) Communication.--A communication of the sender of a payment order canceling or amending the order may be transmitted to the receiving bank orally or in 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) Communication received before payment order accepted.--Subject to subsection (a), 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 at a time and in a manner affording the receiving bank a reasonable opportunity to act on the communication before the bank accepts the payment order.

(c) Communication received after payment order accepted.--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 cancellation 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 amendment 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 mistake 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.

(d) When unaccepted payment order canceled by operation of law.--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) Canceled payment order.--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 deemed 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) Liability of sender.--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 amendment is effective, is liable to the bank for any loss and expenses, including reasonable attorney fees, incurred by the bank as a result of the cancellation or amendment or attempted cancellation or amendment.

(g) When payment order revoked by death or incompetency.--A payment order is not revoked by the death or incompetency of the sender unless the receiving bank knows of the death or of an adjudication of incompetency under 20 Pa.C.S. Ch. 55 (relating to incapacitated persons) and has reasonable opportunity to act before acceptance of the order.

(h) When funds-transfer system rule not effective.--A funds-transfer system rule is not effective to the extent it conflicts with subsection (c)(2). (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (a). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 4A211 is referred to in sections 4A209, 4A210, 4A404, 4A406 of this title.
13 Pa.C.S. § 5113 — PA Code / Title 13 / Chapter 51 / Section 5113
Transfer by operation of law.
Status: in_force

(a) Undisclosed successor.--A successor of a beneficiary may consent to amendments, sign and present documents and receive payment or other items of value in the name of the beneficiary without disclosing its status as a successor.

(b) Disclosed successor.--A successor of a beneficiary may consent to amendments, sign and present documents and receive payment or other items of value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection (e), an issuer shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance with the requirements for

recognition by the issuer of a transfer of drawing rights by operation of law under the standard practice referred to in section 5108(e) (relating to standard practice) or, in the absence of such a practice, compliance with other reasonable procedures sufficient to protect the issuer.

(c) Determination of successor status, signature.--An issuer is not obliged to determine whether a purported successor is a successor of a beneficiary or whether the signature of a purported successor is genuine or authorized.

(d) Effect of honor of presentation by purported successor.--Honor of a purported successor's apparently complying presentation under subsection (a) or (b) has the consequences specified in section 5108(i) (relating to certain consequences of honor) even if the purported successor is not the successor of a beneficiary. Documents signed in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of the beneficiary are forged documents for the purposes of section 5109 (relating to fraud and forgery).

(e) Right to decline to recognize presentation.--An issuer whose rights of reimbursement are not covered by subsection (d) or substantially similar law and any confirmer or nominated person may decline to recognize a presentation under subsection

(b).

(f) Change of name.--A beneficiary whose name is changed after the issuance of a letter of credit has the same rights and obligations as a successor of a beneficiary under this section. Special Provisions in Appendix. See section 28 of Act 18 of 2001 in the appendix to this title for special provisions relating to applicability of transitional provisions. Cross References. Section 5113 is referred to in sections 5108, 5112, 9700 of this title.
13 Pa.C.S. § 7307 — PA Code / Title 13 / Chapter 73 / Section 7307
Lien of carrier.
Status: in_force

(a) Establishment.--

(1) Except as set forth in paragraph (2), a carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof in its possession for charges after the date of the carrier's receipt of the goods for storage or transportation, including demurrage and terminal charges, and for expenses necessary for preservation of the goods incident to their transportation or reasonably incurred in their sale pursuant to law.

(2) Against a purchaser for value of a negotiable bill of lading, a carrier's lien is limited to charges stated in the bill or the applicable tariffs or, if no charges are stated, a reasonable charge.

(b) Effectiveness.--A lien for charges and expenses under subsection (a) on goods that the carrier was required by law to receive for transportation is effective against the consignor or any person entitled to the goods unless the carrier had notice that the consignor lacked authority to subject the goods to those charges and expenses. Any other lien under subsection

(a) is effective against the consignor and any person that permitted the bailor to have control or possession of the goods unless the carrier had notice that the bailor lacked authority.

(c) Loss.--A carrier loses its lien on any goods that it voluntarily delivers or unjustifiably refuses to deliver.
13 Pa.C.S. § 7106 — PA Code / Title 13 / Chapter 71 / Section 7106
Control of electronic document of title.
Status: in_force

(a) Establishment.--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) Manner.--A system satisfies subsection (a) and a person has control of an electronic document of title if the document is created, stored and transferred in 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), unalterable;

(2) the authoritative copy identifies the person asserting control as:

(i) the person to which the document was issued; or

(ii) if the authoritative copy indicates that the document has been transferred, the person to which the document was most recently transferred;

(3) the authoritative copy is communicated to and maintained by the person asserting control or its designated custodian;

(4) copies or amendments that add or change an identified transferee of the authoritative copy can be made only with the consent of the person asserting control;

(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) Requirements.--A system satisfies subsection (a), 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 number, cryptographic key, office or account number, as the person to whom or to which each authoritative electronic copy was issued or transferred; and

(3) gives the person exclusive power, subject to subsection (d), to:

(i) prevent others from adding or changing the person to whom or to which each authoritative electronic copy has been issued or transferred; and

(ii) transfer control of each authoritative electronic copy.

(d) Exclusive power.--Subject to subsection (e), a power is exclusive under subsection (c)(3) 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 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) Shared power.--A power of a person is not shared with another person under subsection (d)(2) 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:

(i) can exercise the power without exercise of the power by the person; or

(ii) is the transferor to the person of an interest in the document of title.

(f) Presumption of exclusivity.--If a person has the powers specified in subsection (c)(3), the powers are presumed to be exclusive.

(g) Other parties.--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 the 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) Acknowledgment not required.--A person that has control under this section is not required to acknowledge that it has control on behalf of another person.

(i) Duty to other parties.--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 division or Division 9 (relating to secured transactions) otherwise provides, the person does not owe any duty to the other person and is not required to confirm the acknowledgment to any other person. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (b) intro. par. and

(4) and added subsecs. (c), (d), (e), (f), (g), (h) and (i). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 7106 is referred to in sections 1201, 2103, 4104, 9102, 9203, 9207, 9208, 9314, 9317, 9601 of this title.
13 Pa.C.S. § 5 — PA Code / Title 13 / Chapter 5 / Section 5
Required refilings.
Status: in_force

(a) General rule.--If a security interest is perfected or has priority when this act takes effect as to all persons or as to certain persons without any filing or recording, and if the filing of a financing statement would be required for the perfection or priority of the security interest against those persons after the effective date, the perfection and priority rights of the security interest continue until three years after the effective date of this act. The perfection will then lapse unless a financing statement is filed as provided in subsection

(d) or unless the security interest is perfected otherwise than by filing.

(b) Perfection under other law.--If a security interest is perfected when this act takes effect under a law other than the Uniform Commercial Code prior thereto which requires no further filing, refiling or recording to continue its perfection, perfection continues until and will lapse three years after the effective date of this act, unless a financing statement is filed as provided in subsection (d) or unless the security interest is perfected otherwise by filing, or unless under 13 Pa.C.S. § 9302(c) (relating to when filing provisions of division inapplicable) the other law continues to govern filing.

(c) Perfection under repealed acts.--If a security interest is perfected by a filing, refiling or recording under a law repealed by this act which required further filing, refiling or recording to continue its perfection, perfection continues and will lapse on the date provided by the law so repealed for such further filing, refiling or recording unless a financing statement is filed as provided in subsection (d) or unless the security interest is perfected otherwise than by filing.

(d) Filing before perfection lapses.--A financing statement may be filed within six months before the perfection of a security interest would otherwise lapse, if perfection had been obtained by a filing under a statute other than the Uniform Commercial Code prior to the effective date of this act, or a filing in an office which would be improper thereunder after the effective date of this act. Any such financing statement may be signed by either the debtor or the secured party. It shall identify the security agreement, statement or notice (however denominated in any statute or other law repealed or modified by this act), state the office where and the date when the last filing, refiling or recording, if any, was made with respect thereto, and the filing number, if any, or book and page, if any, of recording and further state that the security agreement, statement or notice, however denominated, in another filing office under the Uniform Commercial Code or under any statute or other law repealed or modified by this act is still effective. 13 Pa.C.S. § 9401 (relating to place of filing; erroneous filing; removal of collateral) and 13 Pa.C.S. § 9403 (relating to what constitutes filing; duration of filing; effect of lapsed filing; duties of filing officer) as amended by this act, determine the proper place to file such a financing statement. Except as specified in this subsection, the provisions of 13 Pa.C.S. § 9403(c) as amended by this act for continuation statements apply to such a financing statement.
13 Pa.C.S. § 4208 — PA Code / Title 13 / Chapter 42 / Section 4208
Presentment warranties.
Status: in_force

(a) General rule.--If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, the person obtaining payment or acceptance, at the time of presentment, and a previous transferor of the draft, at the time of transfer, warrant to the drawee that pays or accepts the draft in good faith that:

(1) the warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft;

(2) the draft has not been altered; and

(3) the warrantor has no knowledge that the signature of the purported drawer of the draft is unauthorized.

(b) Measure of damages for breach of warranty.--A drawee making payment may recover from a warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach. The right of the drawee to recover damages under this subsection is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft, breach of warranty is a defense to the obligation of the acceptor, and if the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from a warrantor for breach of warranty the amounts stated in this subsection.

(c) Defense.--If a drawee asserts a claim for breach of warranty under subsection (a) based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is

effective under section 3404 (relating to imposters; fictitious payees) or 3405 (relating to employer's responsibility for fraudulent indorsement by employee) or the drawer is precluded under section 3406 (relating to negligence contributing to forged signature or alteration of instrument) or 4406 (relating to duty of customer to discover and report unauthorized signature or alteration) from asserting against the drawee the unauthorized indorsement or alteration.

(d) Other warranties.--If a dishonored draft is presented for payment to the drawer or an indorser or any other item is presented for payment to a party obliged to pay the item, and the item is paid, the person obtaining payment and a prior transferor of the item warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the item, a person entitled to enforce the item or authorized to obtain payment on behalf of a person entitled to enforce the item. The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach.

(e) Prohibition against certain disclaimers and discharge.--The warranties stated in subsections (a) and (d) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within 30 days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(f) Cause of action.--A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach. (July 9, 1992, P.L.507, No.97, eff. one year) 1992 Amendment. Act 97 added present section 4208 and renumbered former section 4208 to present section 4210. Cross References. Section 4208 is referred to in sections 4302, 4406 of this title.
13 Pa.C.S. § 6 — PA Code / Title 13 / Chapter 6 / Section 6
Transition provisions as to priorities.
Status: in_force

Except as otherwise provided in the transition provisions of this act, the provisions of Title 13 of the Pennsylvania Consolidated Statutes (relating to commercial code) in effect prior to the effective date of this act shall apply to any questions of priority if the positions of the parties were fixed prior to the effective date of this act. In other cases, questions of priority shall be determined as provided by this act.
13 Pa.C.S. § 9326 — PA Code / Title 13 / Chapter 93 / Section 9326
Priority of security interests created by new debtor.
Status: in_force

(a) Subordination of security interest created by new debtor.--Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement which would be ineffective to perfect the security interest but for the application of section 9316(i)(1) (relating to effect of change in governing law) or 9508 (relating to effectiveness of financing statement if new debtor becomes bound by security agreement) is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.

(b) Priority under other provisions; multiple original debtors.--The other provisions of this chapter determine the priority among conflicting security interests in the same

collateral perfected by filed financing statements described in subsection (a). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor's having become bound. (June 27, 2013, P.L.154, No.30, eff. July 1, 2013)
13 Pa.C.S. § 3301 — PA Code / Title 13 / Chapter 33 / Section 3301
Person entitled to enforce instrument.
Status: in_force

"Person entitled to enforce" an instrument means:

(1) the holder of the instrument;

(2) a nonholder in possession of the instrument who has the rights of a holder; or

(3) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 3309 (relating to enforcement of lost, destroyed or stolen instrument) or 3418(d) (relating to payment or acceptance by mistake). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument. Cross References. Section 3301 is referred to in sections 3103, 3308, 4104 of this title.
13 Pa.C.S. § 9523 — PA Code / Title 13 / Chapter 95 / Section 9523
Information from filing office; sale or license of records.
Status: in_force

(a) Acknowledgment of filing written record.--If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to section 9519(a)(1) (relating to numbering, maintaining and indexing records; communicating information provided in records) and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead:

(1) note upon the copy the number assigned to the record pursuant to section 9519(a)(1) and the date and time of the filing of the record; and

(2) send the copy to the person.

(b) Acknowledgment of filing other record.--If a person files a record other than a written record, the filing office shall communicate to the person an acknowledgment which provides:

(1) the information in the record;

(2) the number assigned to the record pursuant to section 9519(a)(1); and

(3) the date and time of the filing of the record.

(c) Communication of requested information.--The filing office shall communicate or otherwise make available in a record the following information to any person that requests it:

(1) Whether there is on file on a date and time specified by the filing office, but not a date earlier than three business days before the filing office receives the request, any financing statement which:

(i) designates a particular debtor or, if the request so states, designates a particular debtor at the address specified in the request;

(ii) has not lapsed under section 9515 (relating to duration and effectiveness of financing statement; effect of lapsed financing statement) with respect to all secured parties of record; and

(iii) if the request so states, has lapsed under section 9515 and a record of which is maintained by the filing office under section 9522(a) (relating to post-lapse maintenance and retrieval of information).

(2) The date and time of filing of each financing statement.

(3) The information provided in each financing statement.

(d) Medium for communicating information.--In complying with its duty under subsection (c), the filing office may communicate information in any medium. However, if requested, the filing office shall communicate information by issuing its written certificate.

(e) Timeliness of filing office performance.--

(1) Except as set forth in paragraph (2), the filing office shall perform the acts required by subsections (a) through (d) at the time and in the manner prescribed by filing-office rule.

(2) A filing office described in section 9501(a)(2) (relating to filing offices) shall perform the acts required by subsections (a) through (d) not later than five business days after the filing office receives the request.

(f) Public availability of records.--At least weekly, the filing office described in section 9501(a)(2) shall offer to sell or license to the public on a nonexclusive basis, in bulk, copies of all records filed in it under this chapter in every medium from time to time available to the filing office. Cross References. Section 9523 is referred to in section 9513 of this title.
13 Pa.C.S. § 8508 — PA Code / Title 13 / Chapter 85 / Section 8508
Duty of securities intermediary to change entitlement holder's position to other form of security holding.
Status: in_force

A securities intermediary shall act at the direction of an entitlement holder to change a security entitlement into another available form of holding for which the entitlement holder is eligible or to cause the financial asset to be transferred to a securities account of the entitlement holder with another securities intermediary. A securities intermediary satisfies the duty if:

(1) the securities intermediary acts as agreed upon by the entitlement holder and the securities intermediary; or

(2) in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder. Cross References. Section 8508 is referred to in sections 8503, 8509 of this title.
13 Pa.C.S. § 3310 — PA Code / Title 13 / Chapter 33 / Section 3310
Effect of instrument on obligation for which taken.
Status: in_force

(a) Certified check, cashier's check or teller's check given in payment of obligation.--Unless otherwise agreed, if a certified check, cashier's check or teller's check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation. Discharge of the obligation does not affect any liability that the obligor may have as an indorser of the instrument.

(b) Note or uncertified check taken for obligation.--Unless otherwise agreed and except as provided in subsection (a), if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent the obligation would be discharged if an amount of money equal to the amount of the instrument were taken, and the following rules apply:

(1) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check.

(2) In the case of a note, suspension of the obligation continues until dishonor of the note or until it is paid. Payment of the note results in discharge of the obligation to the extent of the payment.

(3) Except as provided in paragraph (4), if the check or note is dishonored and the obligee of the obligation for which the instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the instrument or the obligation. In the case of an instrument of a third person which is negotiated to the obligee by the obligor, discharge of the obligor on the instrument also discharges the obligation.

(4) If the person entitled to enforce the instrument taken for an obligation is a person other than the obligee, the obligee may not enforce the obligation to the extent the obligation is suspended. If the obligee is the person entitled to enforce the instrument but no longer has possession of it because it was lost, stolen or destroyed, the obligation may not be enforced to the extent of the amount payable on the instrument, and to that extent the obligee's rights against the obligor are limited to enforcement of the instrument.

(c) Other instruments taken for obligation.--If an instrument other than one described in subsection (a) or (b) is taken for an obligation, the effect is:

(1) that stated in subsection (a) if the instrument is one on which a bank is liable as maker or acceptor; or

(2) that stated in subsection (b) in any other case. Cross References. Section 3310 is referred to in section 2511 of this title.
13 Pa.C.S. § 3 — PA Code / Title 13 / Chapter 3 / Section 3
Transition provision on change of requirement on filing.
Status: in_force

A security interest for the perfection of which filing or the taking of possession was required prior to this act and which attached prior to the effective date of this act but was not perfected shall be deemed perfected on the effective date of this act if this act permits perfection without filing or authorizes filing in the office where a prior ineffective filing was made.
13 Pa.C.S. § 4504 — PA Code / Title 13 / Chapter 45 / Section 4504
Privilege of presenting bank to deal with goods; security interest for expenses.
Status: in_force

(a) Dealing with goods following dishonor of documentary draft.--A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell or otherwise deal with the goods in any reasonable manner.

(b) Security interest for expenses.--For its reasonable expenses incurred by action under subsection (a), the presenting bank has a lien upon the goods or their proceeds, which may be foreclosed in the same manner as an unpaid lien of a seller. (July 9, 1992, P.L.507, No.97, eff. one year) DIVISION 4A FUNDS TRANSFERS Chapter 4A1. Subject Matter and Definitions 4A2. Issue and Acceptance of Payment Order 4A3. Execution of Sender's Payment Order by Receiving Bank 4A4. Payment 4A5. Miscellaneous Provisions Enactment. Division 4A was added July 9, 1992, P.L.507, No.97, effective in one year.
13 Pa.C.S. § 2702 — PA Code / Title 13 / Chapter 27 / Section 2702
Remedies of seller on discovery of insolvency of buyer.
Status: in_force

(a) Right to refuse or stop delivery.--Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered under the contract and stop delivery under this division (section 2705).

(b) Reclamation of goods on credit.--Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within ten days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within three months before delivery the ten-day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer's fraudulent or innocent misrepresentation of solvency or of intent to pay.

(c) Limitations on right of reclamation.--The right of the seller to reclaim under subsection (b) is subject to the rights of a buyer in ordinary course or other good faith purchaser under this division (section 2403). Successful reclamation of goods excludes all other remedies with respect to them.

(Nov. 26, 1982, P.L.696, No.201, eff. 180 days) Cross References. Section 2702 is referred to in section 2705 of this title.
13 Pa.C.S. § 2325 — PA Code / Title 13 / Chapter 23 / Section 2325
"Letter of credit" term; "confirmed credit."
Status: in_force

(a) Failure to furnish letter.--Failure of the buyer seasonably to furnish an agreed letter of credit is a breach of the contract for sale.

(b) Effect of delivering letter.--The delivery to seller of a proper letter of credit suspends the obligation of the buyer to pay. If the letter of credit is dishonored, the seller may on seasonable notification to the buyer require payment directly from him.

(c) Definitions.--Unless otherwise agreed the term "letter of credit" or "banker's credit" in a contract for sale means an irrevocable credit issued by a financing agency of good repute and, where the shipment is overseas, of good international repute. The term "confirmed credit" means that the credit must also carry the direct obligation of such an agency which does business in the financial market of the seller. Cross References. Section 2325 is referred to in section 2103 of this title.
13 Pa.C.S. § 2A307 — PA Code / Title 13 / Chapter 2 / Section 2A307
Priority of liens arising by attachment or levy on, security interests in, and other claims to goods.
Status: in_force

(a) Creditor of lessee.--Except as otherwise provided in section 2A306 (relating to priority of certain liens arising by operation of law), a creditor of a lessee takes subject to the lease contract.

(b) Creditor of lessor.--Except as otherwise provided in subsection (c) and in sections 2A306 and 2A308 (relating to special rights of creditors), a creditor of a lessor takes subject to the lease contract unless the creditor holds a lien that attached to the goods before the lease contract became enforceable.

(c) Lessee.--Except as otherwise provided in sections 9317 (relating to interests which take priority over or take free of security interest or agricultural lien), 9321 (relating to licensee of general intangible and lessee of goods in ordinary course of business) and 9323 (relating to future advances), a lessee takes a leasehold interest subject to a security interest held by a creditor of the lessor.

(d) Lessee not in ordinary course of business.--(Deleted by amendment). (June 8, 2001, P.L.123, No.18, eff. July 1, 2001)
13 Pa.C.S. § 2506 — PA Code / Title 13 / Chapter 25 / Section 2506
Rights of financing agency.
Status: in_force

(a) General rule.--A financing agency by paying or purchasing for value a draft which relates to a shipment of

goods acquires to the extent of the payment or purchase and in addition to its own rights under the draft and any document of title securing it any rights of the shipper in the goods including the right to stop delivery and the right of the shipper to have the draft honored by the buyer.

(b) Right to reimbursement unimpaired by latent defect.--The right to reimbursement of a financing agency which has in good faith honored or purchased the draft under commitment to or authority from the buyer is not impaired by subsequent discovery of defects with reference to any relevant document which was apparently regular. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 amended subsec. (b).
13 Pa.C.S. § 8307 — PA Code / Title 13 / Chapter 83 / Section 8307
Purchaser's right to requisites for registration of transfer.
Status: in_force

Unless otherwise agreed, the transferor of a security on due demand shall supply the purchaser with proof of authority to transfer or with any other requisite necessary to obtain registration of the transfer of the security, but, if the transfer is not for value, a transferor need not comply unless the purchaser pays the necessary expenses. If the transferor fails within a reasonable time to comply with the demand, the purchaser may reject or rescind the transfer.
13 Pa.C.S. § 3117 — PA Code / Title 13 / Chapter 31 / Section 3117
Other agreements affecting instrument.
Status: in_force

Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented or nullified by an agreement under this section, the agreement is a defense to the obligation.
13 Pa.C.S. § 28 — PA Code / Title 13 / Chapter 28 / Section 28
Applicability of transitional provisions.
Status: in_force

The following transitional provisions apply only to the addition of 13 Pa.C.S. §§ 5101 through 5117:

(1) A transaction arising out of or associated with a letter of credit that was issued before the effective date of this act and the rights, obligations and interests flowing from that transaction are governed by any statute or other law amended or repealed by this act as if repeal or amendment had not occurred and may be terminated, completed, consummated or enforced under that statute or other law.

(2) This act applies to a letter of credit that is issued on or after the effective date of this act. This act does not apply to a transaction, event, obligation or duty arising out of or associated with a letter of credit that was issued before the effective date of this act. 2001, JUNE 22, P.L.418, NO.34
13 Pa.C.S. § 3415 — PA Code / Title 13 / Chapter 34 / Section 3415
Obligation of indorser.
Status: in_force

(a) General rule.--Subject to subsections (b), (c) and (d) and to section 3419(d) (relating to instruments signed for accommodation), if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument:

(1) according to the terms of the instrument at the time it was indorsed; or

(2) if the indorser indorsed an incomplete instrument, according to its terms when completed, to the extent stated in sections 3115 (relating to incomplete instrument) and 3407 (relating to alteration). The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser who paid the instrument under this section.

(b) Disclaimer of liability.--If an indorsement states that it is made "without recourse" or otherwise disclaims liability of the indorser, the indorser is not liable under subsection

(a) to pay the instrument.

(c) Notice of dishonor.--If notice of dishonor of an instrument is required by section 3503 (relating to notice of dishonor) and notice of dishonor complying with that section is not given to an indorser, the liability of the indorser under subsection (a) is discharged.

(d) Draft accepted by bank.--If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under subsection (a) is discharged.

(e) Discharge of liability.--If an indorser of a check is liable under subsection (a) and the check is not presented for payment, or given to a depositary bank for collection, within 30 days after the day the indorsement was made, the liability of the indorser under subsection (a) is discharged. Cross References. Section 3415 is referred to in sections 3412, 3413, 3414, 3503, 5108 of this title.
13 Pa.C.S. § 2605 — PA Code / Title 13 / Chapter 26 / Section 2605
Waiver of objections of buyer by failure to particularize.
Status: in_force

(a) General rule.--The failure of the buyer to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on the unstated defect to justify rejection or to establish breach:

(1) where the seller could have cured it if stated seasonably; or

(2) between merchants when the seller has after rejection made a request in writing for a full and final written statement of all defects on which the buyer proposes to rely.

(b) Payment against defective documents.--Payment against documents made without reservation of rights precludes recovery of the payment for defects apparent in the documents. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days) 2008 Amendment. Act 13 amended subsec. (b).
13 Pa.C.S. § 8108 — PA Code / Title 13 / Chapter 81 / Section 8108
Warranties in direct holding.
Status: in_force

(a) Warranties of person transferring certificated security.--A person who transfers a certificated security to a purchaser for value warrants to the purchaser, and an indorser, if the transfer is by indorsement, warrants to any subsequent purchaser, that:

(1) the certificate is genuine and has not been materially altered;

(2) the transferor or indorser does not know of any fact that might impair the validity of the security;

(3) there is no adverse claim to the security;

(4) the transfer does not violate any restriction on transfer;

(5) if the transfer is by indorsement, the indorsement is made by an appropriate person, or if the indorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and

(6) the transfer is otherwise effective and rightful.

(b) Warranties of person originating instruction for registration of transfer of uncertificated security.--A person who originates an instruction for registration of transfer of an uncertificated security to a purchaser for value warrants to the purchaser that:

(1) the instruction is made by an appropriate person, or if the instruction is by an agent, the agent has actual authority to act on behalf of the appropriate person;

(2) the security is valid;

(3) there is no adverse claim to the security; and

(4) at the time the instruction is presented to the issuer:

(i) the purchaser will be entitled to the registration of transfer;

(ii) the transfer will be registered by the issuer free from all liens, security interests, restrictions and claims other than those specified in the instruction;

(iii) the transfer will not violate any restriction on transfer; and

(iv) the requested transfer will otherwise be effective and rightful.

(c) Warranties of person transferring uncertificated security not originating instruction.--A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants that:

(1) the uncertificated security is valid;

(2) there is no adverse claim to the security;

(3) the transfer does not violate any restriction on transfer; and

(4) the transfer is otherwise effective and rightful.

(d) Warranties of person indorsing security certificate.--A person who indorses a security certificate warrants to the issuer that:

(1) there is no adverse claim to the security; and

(2) the indorsement is effective.

(e) Warranties of person originating instruction for registration of transfer of uncertificated security.--A person who originates an instruction for registration of transfer of an uncertificated security warrants to the issuer that:

(1) the instruction is effective; and

(2) at the time the instruction is presented to the issuer the purchaser will be entitled to the registration of transfer.

(f) Warranties of person presenting certificated security.--A person who presents a certificated security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, but a purchaser for value and without notice of adverse claims to whom transfer is registered warrants only that the person has no knowledge of any unauthorized signature in a necessary indorsement.

(g) Warranties of agent delivering certificated security.--If a person acts as agent of another in delivering a certificated security to a purchaser, the identity of the principal was known to the person to whom the certificate was delivered and the certificate delivered by the agent was received by the agent from the principal or received by the agent from another person at the direction of the principal, the person delivering the security certificate warrants only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security.

(h) Warranties of secured party.--A secured party who redelivers a security certificate received, or after payment and on order of the debtor delivers the security certificate to another person, makes only the warranties of an agent under subsection (g).

(i) Warranties, rights and privileges of broker.--Except as otherwise provided in subsection (g), a broker acting for a customer makes to the issuer and a purchaser the warranties provided in subsections (a) through (f). A broker that delivers a security certificate to its customer or causes its customer to be registered as the owner of an uncertificated security makes to the customer the warranties provided in subsection (a) or (b) and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of the customer. Cross References. Section 8108 is referred to in sections 8109, 8304, 8305 of this title.
13 Pa.C.S. § 9628 — PA Code / Title 13 / Chapter 96 / Section 9628
Nonliability and limitation on liability of secured party; liability of secondary obligor.
Status: in_force

(a) Limitation of liability of secured party for noncompliance with division.--Subject to subsection (f), 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 filed a financing statement against the person for failure to comply with this division; and

(2) the secured party's failure to comply with this division does not affect the liability of the person for a deficiency.

(b) Limitation of liability based on status as secured party.--Subject to subsection (f), a secured party is not liable because of its status as secured party to any of the following:

(1) A person that is a debtor or obligor unless the secured party knows:

(i) that the person is a debtor or obligor;

(ii) the identity of the person; and

(iii) how to communicate with the person.

(2) A secured party or lienholder that has filed a financing statement against a person unless the secured party knows:

(i) that the person is a debtor; and

(ii) the identity of the person.

(c) Limitation of liability if reasonable belief that transaction not a consumer-goods transaction or consumer transaction.--A secured party is not liable to any person, and a person's liability for a deficiency is not affected, because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods if the secured party's belief is based on its reasonable reliance on:

(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) Limitation of liability for statutory damages.--A secured party is not liable to any person under section 9625(c)(2) (relating to remedies for secured party's failure to comply with division) for its failure to comply with section 9616 (relating to explanation of calculation of surplus or deficiency).

(e) Limitation of multiple liability for statutory damages.--A secured party is not liable under section 9625(c)(2) more than once with respect to any one secured obligation.

(f) Exception: limitation of liability under subsections

(a) and (b) does not apply.--Subsections (a) and (b) do not apply to limit the liability of 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 intangible 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 subsection (b)(1) relating to the 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. (July 1, 2024, P.L.450, No.41, eff. 60 days)

2024 Amendment. Act 41 amended subsecs. (a) and (b) and added subsec. (f). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9628 is referred to in sections 9625, 9626 of this title.