An Act to Adopt the National 2022 Amendments to the unffdrm Commercial Code
Maine Legislature, Session 131, LD 0091
Committee Amendment CA_A_H964 (House)
Amends: 11 MRSA §1, 11 MRSA §2, 11 MRSA §3, 11 MRSA §4, 11 MRSA §5, 11 MRSA §7, 11 MRSA §8, 11 MRSA §9

COMMITTEE AMENDMENT "/J, "to H.P. 59, L.D. 91, "An Act to Adopt the 
National 2022 Amendments to the unffdrm Commercial Code" 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'PART A 
PREFATORY NOTE 
1. Background. In 2019, the Uniform Law Commission and The American Law 
Institute (the Sponsors) appointed a Joint Committee to consider whether changes to the 
UCC are advisable to accommodate emerging technologies, such as artificial intelligence, 
distributed ledger technology, and virtual currency. The Joint Committee was initially 
formed as a study committee, but subsequently was constituted as the Drafting Committee 
to prepare amendments to the UCC. 
The Drafting Committee held 18 meetings from October 2019 to March 2022. It also 
met with ULC commissioners in advance of the ULC Annual Meetings in 2021 and 2022. 
Several informal working groups were formed and these groups provided substantial input 
to the Drafting Committee. 
More than 300 observers to the Drafting Committee 
participated in the process. During the process members of the Drafting Committee and 
observers reached out to industry groups and other stakeholders for input and also 
participated in many CLE presentations and meetings to educate members of the bar and 
other interested constituencies. 
The work of the Drafting Committee focused primarily on the following areas 
concerning the UCC: digital assets (controllable electronic records), electronic money, 
chattel paper, 
11bundled
or "hybrid" transactions ( consisting of the sale or lease of goods 
together with the sale, lease, or licensing of other property and the provision of services as 
an integrated transaction), documents of title, payment systems, miscellaneous UCC 
amendments, and consumer issues. 
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J~.os. 
COMMITTEE AMENDMENT" A• to H.P. 59, L.D. 91 
The ALI approved Tentative Draft No. 1 (April 2022) of the Uniform Commercial 
Code and Emerging Technologies draft, subject to the usual caveats, at its annual meeting 
in May 2022. The ULC approved the Uniform Commercial Code Amendments (2022) 
(2022 Amendments) at its annual meeting in July 2022. 
2. Overview of 2022 Amendments. 
a. New UCC Article 12-Controllable electronic records, controllable accounts, 
controllable payment intangibles. The 2022 Amendments include a new UCC Article 
that governs the transfer of property rights in certain intangible digital assets 
("controllable electronic records") that have been or may be created and may involve the 
use of new technologies. These assets include, for example, certain types of (non-fiat) 
virtual currency and nonfungible tokens (NFTs). "Control" of controllable electronic 
records is a central organizing concept under Article 12. Controllable electronic records are 
defined to include only those electronic records that can be subjected to control. Control is 
best understood in a general sense as a functional equivalent of "possession" of a 
controllable electronic record and a necessa1y condition for protection as a good faith 
purchaser for value (a "qualifying purchaser") of a controllable electronic record. Article 
confers an attribute of negotiability on controllable electronic records because a 
qualifying purchaser takes its interest free of conflicting property claims to the record. 
Controllable electronic records also provide a mechanism for evidencing certain rights 
to payment-controllable accounts and controllable payment intangibles. An account 
debtor ( obligor) on such a right to payment agrees to make payments to the person that has 
control of the controllable electronic record that evidences the right to payment. 
Assignments and other aspects of these rights to payment are governed by revisions to UCC 
A1ticle 9, discussed below, as well as Article 12. Because a qualifying purchaser of a 
controllable account or controllable payment intangible will take free of competing 
property claims, these rights to payment also would have this attribute of negotiability. 
Article 12 provides special rules with respect to the payment obligations and conditions of 
discharge of account debtors on controllable accounts and controllable payment 
obligations. 
Article 12 includes a choice-of-law rule for the matters that it covers in connection with 
transactions in controllable electronic records. 
b. Secured transactions amendments-DCC Article 9. 
Article 12 conforming and other amendments. The 2022 Amendments include 
extensive amendments to UCC Article 9. Several of these amendments address security 
interests in controllable electronic records and in the rights to payment that are embedded 
in, or tethered to, controllable electronic records-controllable accounts and controllable 
payment intangibles. Perfection (i.e., essentially, enforceability against third parties) of 
security interests in these assets may be achieved by a secured party obtaining control of 
the asset or filing a financing statement in the appropriate jurisdiction's filing office. A 
security interest perfected by control has priority over a security interest perfected by filing. 
The amendments also provide special rules for the law governing perfection and priority 
for security interests in controllable electronic records, controllable accounts, and 
controllable payment intangibles. These rules draw on the Article 12 choice-of-law rule. 
Chattel paper. UCC Article 9 affords special treatment to "chattel paper" ( e.g., 
installment sale contracts and personal property leases). The amendments redefine "chattel 
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paper" and update the relevant Article 9 provisions. The revised definition resolves 
uncertainty that has arisen under the previous definition and more accurately reflects the 
distinction between the seller's or lessor's rightto payment and the record (e.g., installment 
sale contract or lease) evidencing that right. The revised definition also resolves unce1tainty 
that has arisen when goods are leased as part of a hybrid transaction involving services or 
non-goods property as well as specific goods. The amendments address additional issues 
relating to hybrid transactions, mentioned in 2.d., below, and provide an amended 
definition of "control" of an authoritative electronic copy of a record evidencing chattel 
paper, which reflects a more accurate and technologically flexible approach than the 
previous definition. 
Money. The amendments include a revised definition of 
11money
in Article 1, which 
applies throughout the UCC unless otherwise provided. They also include amendments that 
define "electronic money" and provide a definition of "control" of electronic money that 
tracks the corresponding definition for control of controllable electronic records. Perfection 
of a security interest in electronic money (a subset of money) as original collateral must be 
by control, not filing. The amendments provide a revised Article 9 definition of "money" 
that excludes deposit accounts (which could in the future be adopted by a government as 
money) and money in an electronic form that cannot be subjected to control. The 
amendments also update and clarify the take-free rules for transferees of money-both 
electronic money and tangible money-and transferees of funds from deposit accounts. 
Control through another person. Revisions to the provisions on control in Sections 
9-104 (control of deposit accounts), 9-105 (control of authoritative electronic copy of 
record evidencing chattel paper), and 9-105A (control of electronic money) and a 
conforming modification to Section 8-106(d)(3) (control of security entitlement) address 
control through the acknowledgment of a person in control. For similar provisions, see 
Sections 7-106 ( control of electronic document oftitle) and 12-105 ( control ofcontrollable 
electronic record). For a discussion relevant to these revisions, see Section 12-105, 
Comment 8. 
Assignments. The amendments contain new Article 9 definitions of the terms 
"assignee" and "assignor," which conform to the descriptions in the pre-2022 official 
comments. 
c. Payments amendments-UCC Articles 3 (negotiable instruments), 4 (bank 
deposits and collections), and 4A (funds transfers). The amendments include several 
revisions to Articles 3, 4 and 4A or their official comments. The amendments relate to 
negotiability, remote deposit capture, statements of account, the scope of Article 4A 
(definition of payment order), and security procedures. The amendments also replace 
references to a "writing" with references to a "record." Many of the changes are to the 
official comments and are intended to further clarify the statutory text. 
d. Other emerging technologies-related amendments. The amendments contain a 
revised definition of "conspicuous" in Article 1 and a revised and an updated official 
comment on that term. They also add to Article 1 the standard definition of "electronic" 
used by the ULC and adopt revised Article 1 definitions of "send" and "sign," which 
address records other than writings. 
The amendments also amend Sections 2-102 and 2A-102 and related definitions to 
clarify the scope of Articles 2 and 2A with respect to hybrid transactions. They also include 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
amendments to several provisions of Articles 2 and 2A to change previous references to a 
"writing" or "written" communication to refer instead to a "record." 
The amendments include a revised Section 7-106, defining "control" for electronic 
documents of title. The revised section retains the general rule and the safe harbor under 
the previous provision and adds an additional safe harbor along the lines of the revised 
section on control of chattel paper. The amendments also include revisions to the official 
comments to several provisions of Articles 7 and 9, in particular to clarify the treatment of 
nonnegotiable documents of title. 
Finally, the amendments include several revisions to the official comments to Article 
(investment securities), in particular to make clear that a controllable electronic record 
may be a "financial asset" credited to a securities account. 
e. Miscellaneous amendments. The Article 1 definition of "person" is amended to 
include a protected series established under non-UCC law. 
Amendments to Section 5-116 cure an ambiguity relating to the separate status of bank 
branches in the former provision and to reject incorrectly decided case law arising from 
that ambiguity. 
f. Official Comments. The amendments include additional revisions of the official 
comments to many sections. The amended official comments remove certain references to 
obsolete and withdrawn UCC provisions and other uniform laws except as may be 
necessa1y or useful to explain particular issues. 
Maine Comment: 
The UCC amendments as adopted by Maine do not include provisions related to 
electronic money. All references to electronic money in the official comments therefore 
may be disregarded. 
Sec. A-1. 11 MRSA §1-1201, sub-§(10), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
(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. Goaspiel¼ous teffil:s iaelude the following: 
(a). ,\ headmg H'I. eapitals eql¼al to or greatef iH: si2,e thaH: the Sl¼ffOl¼Bdiag t~, Of H'I. 
ooR-tl'astiflg type, feat of eolof to tl½e senol¼fl:ding te~lt ofthe same of lessef si2,e; aaa 
(a). Laagaage iR the bodjr of a reeofa or display iR largef type th.as tl½e surrol¼BdH'lg 
te=xt, Of H'I. eoBtrastiag type, feat of oolof to tl½e Sl¼ffOl¼ndH'lg t~c.t of ilie same si2,e, of set 
off from Sl¼ffOl¼Baiag te'K.t of the same si2,e by symbols Of othef mal'k:s iliat call atteBtioa 
to the laageage. 
Sec. A-2. 11 MRSA §1-1201, sub-§(15), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
(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 fill 
authoritative tangible copy of a record evidencing chattel paper, means voluntary transfer 
of possession. 
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COMMITTEE AMENDMENT" A,, to H.P. 59, L.D. 91 
Sec. A-3. 11 MRSA §1-1201, sub-§(16-A) is enacted to read: 
(16-A). "Electronic" means relating to technology having electrical. digital. magnetic, 
Ros" wireless, optical, electromagnetic or similar capabilities, 
Sec. A-4. 11 MRSA §1-1201, sub-§(21), 1(c), as enacted by PL 2009, c. 325, Pt. 
A, §2 and affected by §4, is amended to read: 
(c). The person in control, other than pursuant to section 7-1106, of a negotiable 
electronic document of title. 
Sec. A-5. 11 MRSA §1-1201, sub-§(24), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
(24). "Money" means a medium of exchange that is currently authorized or adopted 
by a domestic or foreign government and is not in an electronic form. The term includes a 
monetary unit of account established by an intergovernmental organization or by agreement 
between 2 or more countries. 
Sec. A-6. 11 MRSA §1-1201, sub-§(27), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
(27), 
"Person" means an individual, corporation, business trust, estate, trust, 
partnership, limited liability company, association, joint venture, government, 
governmental subdivision, agency or instrumentality, flablie em:pora:tioa or any other legal 
or commercial entity, "Person" includes a protected series. however denominated, of an 
entity if the protected series is established under law other than the Uniform Commercial 
Code that limits, or limits if conditions specified under the law are satisfied, the ability of 
a creditor of the entity or of any other protected series of the entity to satisfy a claim from 
assets of the protected series. 
Sec. A-7. 11 MRSA §1-1201, sub-§(36), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
(36), "Send~" in connection with a v1ritiHg, record or Hetiee notification, means: 
(a), To deposit in the mail Of~ deliver for transmission or transmit by any other usual 
means of communication~ with postage or cost of transmission provided for afHl 
proi')efly addressed aad, iH the ease of aH mstfl:lmeHt, to aH address speeified thereoa or 
otherwise agreed, or if there be HOHe. addressed to any address reasonable under the 
circumstances; or 
(b), lH aay other way to To cause to be reeeived aay the record or Hetiee notification 
to be received within the time it would have arrh•ed been received if properly sent 
under paragraph (a), 
Sec. A-8. 11 MRSA §1-1201, sub-§(37), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is repealed. 
Sec. A-9. 11 MRSA §1-1201, sub-§(37-A) is enacted to read: 
(37-A). "Sign" means. with present intent to authenticate or adopt a record: 
(a). To execute or adopt a tangible symbol: or 
(b). To attach to or logically associate with the record an electronic symbol. sound or 
process. 
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COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
"Signed." "signing" and "signature" have corresponding meanings. 
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Official Comment 
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3. 
"Agreement." Derived from fo1mer Section 1-201. As used in the Uniform 
Commercial Code the word is intended to include full recognition of usage of trade, course 
of dealing, course of performance and the surrounding circumstances as effective parts 
thereof, and of any agreement permitted under the provisions of the Uniform Commercial 
Code to displace a stated rule of law. Whether an agreement has legal consequences is 
determined by applicable provisions of the Uniform Commercial Code and, to the extent 
provided in Section 1-103, by the law of contracts. Concerning developments in 
technology, including. for example, contract formation in electronic environments. 
automated transactions, and electronic agents. see Section 1-103. Comment 2. 
* * * 
10. "Conspicuous." Derived from former Section 1-201(10). This defmition states the 
general standard that to be conspicuous a te1m ought to be noticed by a reasonable person 
against which the term is to operate. Whether a term is conspicuous is an issue for the court. 
gabpaFagraphs (lL) and (B) set mit several methods for ma-k:iH.g a term conspicuous. 
Ri:!quiriH.g that a term be conspicuous blends a notice funetion (the term ought to be noticed) 
and a plan-Bing function (giving guidance to the party relyiH.g on the term regaFdiH.g how 
that result can be aehie•,<ed). Although, these paFagraphs ifldicate some of the methods for 
makiH.g a term attention calling, the test is whether attention can reasonably be ~Ef)eoted to 
be called. to it. The statutmy language should not be construed to permit a result that is 
inconsistent w4th. that test. Whether the appearance and presentation of a particular term 
satisfy this standard is determined by reference to the totality of the circumstances and 
requires a case-by-case analysis. 
Historically. contract terms were presented in writing, making the use of standards that 
relate to the size and appearance of type relevant to the determination of conspicuousness. 
Today terms in a record are frequently communicated electronically. New technologies 
0 
have created opportunities for terms to be displayed or presented in novel ways. such as by 
the use of pop-up windows. text balloons. dynamically expanding or dynamically 
magnifying text, and non-visual elements such as vibrations, to name a few. 
The definition has been revised in the Uniform Commercial Code Amendments (2022) 
(2022 Amendments) by deleting the statutory examples relating to the appearance of type 
5 
and instead indicating in these comments a broader universe of factors that are applicable 
to both written and electronic presentations. This approach is intended to be both more 
7 
protective of consumers and more useful to drafters by providing more clarity and 
8 
flexibility in the methods that may be used to call attention to a term. 
The attributes of a reasonable person against which a term is to operate can vary 
depending upon the nature of the transaction and the market in which the transaction 
occurs. For example. assume that a merchant of goods wishes to enter into a transaction for 
the sale or lease of goods which does not include an implied warranty of merchantability 
or fitness for particular purpose. Depending on the particular transaction. the person against 
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COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
which the term excluding implied warranties is to operate may be a large business buyer or 
lessee, a small business. or a consumer. Similarly, the determination of whether a term is 
conspicuous may, depending on the context, yield a different conclusion when the term is 
used in a standard form agreement than when terms of the agreement are the subject of 
negotiation or discussion. 
Terms presented in an online record raise issues that differ in some respects from the 
issues associated with presenting the same terms in a writing. For example, how a term 
appears depends to some extent on the equipment and settings used by the person presented 
with the term. 
The test of whether a term is conspicuous remains constant notwithstanding the 
different contexts referenced above. A term is conspicuous if its awearance and 
presentation are such that it ought to be noticed by a reasonable person against which the 
term is to operate. If the term is in a standard form intended for use in many agreements. 
the determination of whether the term is conspicuous may be made with reference to typical 
likely parties to the agreements. taking into account all aspects of the transaction. the range 
of likely equipment and settings used by such parties, and the education. sophistication, 
disabilities, and other attributes of such parties. If the term is not in a standard form. the 
determination of whether it is conspicuous should be made with reference to a reasonable 
person in the position of the actual person against which it is to operate. 
Factors relevant to whether a term is conspicuous include. but are not limited to. the 
following: 
(i) The use of headings and text that contrast with the surrounding text. For example. a 
term is likely to be conspicuous if it is introduced by a heading in uppercase letters equal 
to or greater in size than the surrounding text. Similarly, a term is likely to be conspicuous 
if set out in language in the body of a record or display in larger type than the surrounding 
text. or in contrasting type. font. or color to the surrounding text of the same size. or set off 
from surrounding text of the same size by symbols or other marks that call attention to the 
language. However. even with those characteristics. for a term to be conspicuous the overall 
statutory test must always be met. For example, even if in bold. uppercase letters, a term 
might not be conspicuous if placed among other terms also in bold. uppercase letters so 
there is no contrast with the surrounding text or if the application of other factors causes 
the term not to be provided such that a reasonable person against which it is to operate 
ought to have noticed it. 
(ii) The placement of the term in the record. A term appearing at, or hyperlinked from. 
text at the beginning of a record, or near the place where the person against which the term 
is to operate must signify assent, is more likely to be conspicuous than a term in the middle 
of a lengthy record absent the use of a method reasonably designed to draw the person's 
attention to the term in middle of the record (for example, by providing separate reasonable 
notice of the term before presenting the record containing the term to the person for assent 
or forcing the person to stop on a screen highlighting the term during the presentation of 
the record for assent). 
(iii) If terms are available only through the use of a hyperlink. in addition to the 
placement of the hyperlink as described above. factors to be considered include whether 
there is language drawing attention to the hyperlink and describing its function. and the 
size and color of the text used for the hyperlink and any related language. 
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COMMITTEE AMENDMENT" A,, to H.P. 59, L.D. 91 
(iv) The language of the heading, if any. A misleading heading- such as the heading 
"Warranty" for a paragraph that contains a disclaimer of warranties - might cause a 
reasonable person to fail to notice the language that would disclaim warranties, so that the 
term would not be conspicuous. 
(v) The effort needed to access the term. The process and flow of the display and 
presentation is also relevant. For example, a term accessible only by triggering multiple 
hyperlinks is less likely to be conspicuous than a term accessible from a single hyperlink. 
(vi) Whether the person against which the term is to operate must separately assent to 
or acknowledge the term. Obtaining separate assent or acknowledgment of a term is 
generally sufficient to make the term conspicuous. 
As noted above. the evolution of technology has led to an evolution in the ways in 
which terms in an electronic record are displayed or presented. A term displayed or 
presented in a novel way utilizing emerging technologies is, of course, conspicuous if the 
effect of the display or presentation is that a reasonable person against which the term is to 
operate ought to have noticed it. 
This definition deals only with requirements that a term be conspicuous (or noted 
conspicuously) that are stated in particular provisions of the Uniform Commercial Code. 
Other protective doctrines designed to assure that assent is meaningful that are found in 
law outside the UCC may also apply. See Section 1-103(b). 
* * * 
15. "Delivery." Derived from former Section 1-201. The reference to certificated 
securities has been in a pre-2022 version was deleted in light of the more specific treatment 
of the matter in Section 8-301. The definition has been also was revised to accommodate 
electronic documents of title. Control of an electronic document of title is defined in Article 
(Section 7-106). Another revision in the 2022 Amendments conformed the reference to 
chattel paper to the revised definition of that term and the revised methods of perfection. 
See Sections 9-102(a){l l) ( defining "chattel paper"): 9-3 l 4A (perfection by possession and 
control of chattel paper). 
16. "Documentoftitle." * * * 
* * * 
A document of title may be either tangible or electronic. Tangible Paper documents of 
title sho~lld be eonstrued to mean traditional paper documents. are "tangible documents of 
title." Electronic documents of title are documents that are stored in an electronic medium 
instead of in tangible form. The eoneept of an eleetronie medium should be eonstrued 
5 
liberally to inelude eleetronie, digital, magnetie, optical, eleetromagnetie, or any other 
eurrent or similar emerging teehnologies. "Electronic" is defined in paragraph 16A. As to 
reissuing a document of title in an alternative medium, see Article 7, Section 7-105. Control 
for electronic documents of title is defined in Article 7 (Section 7-106). 
16A. "Electronic." The basic nature of most modem technologies and the need for a 
recognized, single term warrants the use of "electronic" as the defined term. even though 
not all technologies listed may be technically "electronic" in nature. The definition is 
intended to be applied broadly as new technologies develop. The term must be construed 
broadly in light of developing technologies in order to validate commercial transactions 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A» to HP. 59, L.D. 91 
regardless of the medium used by the parties to document them. See generally Uniform 
Electronic Transactions Act, Section 2. Comment 4. 
* * * 
20. "Good faith." * * * 
Over time, however, amendments to the Uniform Commercial Code brought the 
Article 2 merchant concept of good faith (subjective honesty and objective commercial 
reasonableness standards of fair dealing) into other Articles. First, Article 2A explicitly 
incorporated the Article 2 standard. See See-tion 2A 103 (7). Then, other Articles broadened 
the applicability of that standard by adopting it for all parties rather than just for merchants. 
See, e.g., Sections 3 103(a)(4), 4}z 105(a)(6), 7 102(a)(6), 8 102(a)(10), and 9 102(a)(43). 
Finally, Articles 2 and 2A were amended so as to apply the standard to non-merchants as 
well as merchants. See Sestions 2 103(1)0), 2A 103(1)(m). All of these definitions are 
comprised of two elements-honesty in fact and the observance of reasonable commercial 
standards of fair dealing. Only revised Article 5 defines continued to define "good faith" 
solely in terms of subjective honesty, and Oflfj' Article 6 (in the few states that have not 
chosen to delete the Article) is without a definition of good faith. * * * 
* * * 
21. "Holder." Del:'i-ved from fofffier Section 1 201. The defmition has been reorganized 
for clarity and amended to provide for electronic negotiable documents of title. The 
defmition excludes persons who have control of an electronic document of title pursuant to 
Section 7-106(g) through the acknowledgment by a person in control. This ensures that an 
issuer of a document can ascertain who is entitled to delivery from the document itself or 
from the system in which the document is recorded. without any obligation to look behind 
the document or the system to ascertain the identity of an undisclosed principal. 
* * * 
24. "Money." Substafl-ti-vel-y identieal to fofffier Seetion 1 201. The test is that of 
sanstion of go•1ernment, whether ay a-u-thori2,atiofl before issae or adoptiofl. afterward, 
vIBieh reeogfli2,es the eirealatiH:g mediam as a part of the offieial earreney of that 
g01,remn'l:ent. The narrow view that money is limited to legal tender is rejeeted. The 
defmition of "money" applies to the term only as used in the Uniform Commercial Code. 
The definition does not determine whether an asset constitutes "money" for other purposes. 
Only something currently authorized or adopted as a medium of exchange by a government 
can be money. As further elaborated in the second sentence of the definition. adoption by 
a government may occur through establishment by an intergovernmental organization or 
pursuant to an agreement between governments. Coins and paper currency previously. but 
not currently. authorized or adopted as a medium of exchange by a government. and 
currently owned and traded only for their numismatic or historical value. are not money. 
An electronic medium of exchange established pursuant to a country's law and that is 
recorded and transferable in a system that did not exist and did not operate for that medium 
of exchange before the electronic medium of exchange was authorized or adopted by the 
country's government also constitutes money. This is so even if ownership is established 
or maintained through a system not operated by the government. In contrast. an existing 
medium of exchange created or distributed by one or more private persons is not money 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
solely because the government of one or more countries later authorizes or adopts the pre-
existing medium of exchange. 
Although the term "money" is used in several articles, the definition is particularly 
significant under Article 9. Under the pre-2022 version of this definition, money was 
generally understood to include only tangible coins, bills, notes, and the like. although the 
statutory text did not explicitly so limit the term. This worked well under Article 9, which 
provided that the only method of perfecting a security interest in money as original 
collateral was by taking possession of it. See pre-2022 Section 9-312(b)(3). The 2022 
revised definition of money in Section l-20l(b)(24) is broader and includes both "tangible 
money" and "electronic money" (new defined types of collateral under the 2022 revisions 
to Article 9). As under the pre-2022 Article 9, a security interest in tangible money as 
original collateral may be perfected only by possession. Section 9-3 l 2(b )(3). A security 
interest in electronic money as original collateral may be perfected only by control. Section 
102(a)(31A) (defining "electronic money"): 9-312(b)( 4) (perfection by control for 
electronic money). Note that the definition of "money" in Section 9-102(a)(54A) is 
narrower in two respects than the definition in this section-the Article 9 definition 
excludes deposit accounts and money in electronic form that cannot be subjected to control 
under Section 9-105A. See Section 9-102(a)(54A). 
Examples: The following examples illustrate the definition of "money. 
Example 1: Nation A enacts legislation authorizing or adopting an existing 
cryptocurrency (spitcoin), created on a private blockchain, as a medium of 
exchange. Because spitcoin was recorded and transferable in a system that existed 
and operated for that cryptocun-ency before the electronic record was authorized 
or adopted by Nation A, spitcoin does not become "money" under this definition 
as a result of Nation Ns legislation. 
Example 2: Nation B creates a new cryptocurrency {beebuck) and authorizes or 
adopts it as a medium of exchange. Beebuck is "money." Beebuck is not recorded 
and transferable in a system that existed and operated for that cryptocurrency 
before the electronic record was authorized or adopted by Nation B. 
Example 3: Nation C enacts legislation authorizing or adopting as a medium of 
exchange beebuck. the cryptocurrency previously adopted by Nation B in Example 
2. Although beebuck is recorded and transferable in a system that existed and 
operated for beebuck before it was authorized or adopted by Nation C, beebuck 
was already money when authorized or adopted by Nation C. Consequently, 
beebuck is "money. 
Nation C's action had no relevance or effect on the 
characterization ofbeebuck as money. 
* * * 
27. "Person." The former definition ofthls 1.vord A previous definition of this term ha& 
aeea was replaced with the standard defmition language used in acts prepared by the 
National Conference of Commissioners on Uniform State Laws. A proteeted series formed 
under the Uaiform Proteeted Series Aet (2017) is a "person." See PEB Commentary No. 
23, dated February 24, 2021. The Commentwy is a11ailable at https://vr.1Pu.ali.or§'peb uee. 
This definition recognizes the wide range of subjects that can enjoy legal rights and possess 
legal duties, including the catchall residual category of "any other legal or commercial 
entity." See, e.g., JOHN CHIPMAN GRAY, THE NATURE AND SOURCES OF THE 
COMMITTEE AMENDMENT 
RGS 
COMMITTEE AMENDMENT ,A,, to H.P. 59, L.D. 91 
LAW 27 (Roland Gray rev .. 2d ed .• The MacMillan Co. 1931) ("a 'person' is a subject of 
legal rights and duties"). For additional authorities. see PEB Commentary No. 23. n. 5, The 
reference to a "public corporation" in the pre-2022 text of the definition has been deleted 
as unnecessary and duplicative of other examples in the defmition of entities that are 
persons. 
The second sentence of the definition provides needed clarity as to the status of a 
protected series for purposes of the Uniform Commercial Code. See PEB Commentary No. 
23. Several states have enacted statutes that provide for protected series within a limited 
liability company or other unincorporated organization. These statutes afford rights and 
impose duties upon a protected series and generally empower a protected series to conduct 
its own activities under its own name. The types of protected series that are included as 
persons under the defmition include. but are not limited to. those established under the 
Uniform Protected Series Act. 
Providing that a protected series is a "person" for purposes of the enacting state's 
Uniform Commercial Code will expressly permit a protected series. whether created under 
the law of the enacting state or of another jurisdiction. to be a "seller" or a "buyer" under 
Article 2. a "lessor" or a "lessee" under Article 2A. or an "organization." It also permits a 
protected series to be a "debtor" under Article 9. and. if the law under which the protected 
series is organized requires a public filing for the protected series to be recognized under 
that law. a "registered organization" under Article 9. 
* * * 
33. "Representative." DeFived from fofffl:ef Seetioa 1 2Ql. R-eorgaRi2:ed, aRd :fo:fffl 
ehaRged from "iaell¼des" to "meaas." Concerning developments in technology. including. 
for example. contract formation in electronic environments. automated transactions. and 
electronic agents. see Section 1-103. Comment 2. 
* * * 
36. "Send." Derived from fonner Seetioa 1 2Ql. Compare "aotifies". The definition of 
"send" adopts pre-2022 Section 9-102(a)(75). The explicit statement in the previous text of 
this defmition on the appropriateness of sending to an agreed-upon address or to an 
"address reasonable under the circumstances" was limited to "the case of an instrument." 
The defmition no longer includes that limitation relating to an instrument. Moreover. it is 
common for parties to rely on their agreement as to appropriate addresses for purposes of 
notifications and communications. Nothing in the definition or in the Uniform Commercial 
Code limits the effectiveness of sending a record or notification to an address that has been 
agreed upon by affected persons. See generally Sections 1-103 and 1-302. 
37. "Sigaed." "Sign." DeFi-¥ed from :former Seeti-oa 1 2Ql. Form6:f Seetioa 1 2Ql 
Fefuned to "iat0Btioa to autheatieate"; beeause otheF artieles aow use the te:fffl 
"autheatiea-te," the laRguage has beea ehaaged to "iateatioa to adopt Of aeeept." The lattef 
:fo:fffl:Ula-tioa is deFir;ed from the defiaitioa of "authefltiea-te" ifl Seetioa 9 1Q2(a)(7). This 
pFovisioa Fefurs oaly to WFitings, beeause the teFm "sigaed," as used in some artieles, FefuFs 
oaly to 'i't'Fitiags. The definition of "sign" adopted in the 2022 Amendments is broad-it 
encompasses the authentication or adoption of all records. not just writings. The definition 
replaces the definition of "signed" in pre-2022 texts of this Article. This prn•lisioa 
definition also makes it clear that, as the t6:fmterms "sign," "signed," is and "signature" are 
used in the Uniform Commercial Code, a complete signature is not necessary. The A 
COMMITTEE AMENDMENT 
Ros 1 
-
COMMITTEE AMENDMENT "A "to H.P. 59, L,D, 91 
symbol may be printed, staatped stamped, or written on, or electronically attached or 
associated with, a record;.# It may be by initials or by thumbprint or by electronic symbol, 
sound, or process. It may be on any part of.the doeum.ent a writing or other record and in 
appropriate cases may be found in a billhead or letterhead. No catalog of possible situations 
can be complete and the court must use common sense and commercial experience in 
passing upon these matters. The question always is whether the symbol, sound, or process 
was executed or adopted by the party with present intention to authenticate or adopt er 
~ 
the writing record. 
A "writing, 
which necessarily is in tangible form. must exist at the time it is signed 
and must be signed by the execution or adoption of a tangible symbol to qualify as a signed 
writing. A writing adopted only by use of an electronic symbol, sound, or process would 
not be a signed writing until and unless it results in a tangible symbol being on or affixed 
to the writing. Moreover, if an electronic record is electronically signed and subsequently 
printed in tangible form, the resulting writing would not constitute a signed writing unless 
and until some action is taken with "present intent to authenticate or adopt" the writing. 
Concerning developments in technology, including, for example, contract formation in 
electronic environments. automated transactions, and electronic agents, see also Section 1-
103, Comment 2. 
* * * 
43. 
"Written" or "writing." Unehanged from. formef Seetioa 1 2Ql. Several 
amendments to the Uniform Commercial Code over the years have replaced the terms 
"written" and "writing" with the term "record," defined in paragraph (31) and also in some 
other Articles. Pursuant to the 2022 Amendments, additional references to the terms 
"writing," "writings," and "written" have been replaced by "record. 
For example, the 2022 
revisions to Articles 2 and 2A made these changes in provisions where an affected parjy 
may be assumed to have assented to the use of a record that is not a writing. Where 
references to those terms remain in Articles 2 and 2-A. the use by parties of a record other 
than a writing may be given effect for purposes of those Articles under law other than the 
Uniform Commercial Code, such as the Electronic Signatures in Global and National 
Commerce Act. 15 U.S.C. Section 7001 et seq .. and the Uniform Electronic Transactions 
Act. See Sections 2-207. Comment 8; 2A-102, Comment (g). 
* * * 
Sec. A-10. 11 MRSA §1-1204, first 1, as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
Except as otherwise provided in Articles 3-A, 4 and., 5-A and 12, a person gives value 
for rights if the person acquires them: 
* * * 
Official Comment 
* * * 
1. All the Historically, most Uniform Acts in the commercial law field (e01rnept the 
Uaifofffi Conditional Sales Aet) have carried definitions of "value. 
l. .. 11 those Those 
definitions provided that value was any consideration sufficient to support a simple 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
contract, including the taking of property in satisfaction of or as security for a pre-existing 
claim. Subsections (1), (2), and (4) in substance continue the definitions of "value" in the 
earlier acts. Subsection (3) makes explicit that "value" is also given in a third situation: 
where a buyer by taking delivery under a pre-existing contract converts a contingent into a 
fixed obligation. 
This definition is not applicable to Articles 3 and 4, but the express inclusion of 
immediately available credit as value follows the separate definitions in those articles. See 
Sections 4-208, 4-209, 3-303. A bank or other financing agency which in good faith makes 
advances against property held as collateral becomes a bona fide purchaser of that property 
even though provision may be made for charge-back in case of trouble. Checking credit is 
"immediately available" within the meaning of this section if the bank would be subject to 
an action for slander of credit in case checks drawn against the credit were dishonored, and 
when a charge-back is not discretionaiy with the bank, but may only be made when 
difficulties in collection arise in connection with the specific transaction involved. Article 
adopts the substance of the Article 3 definition. See Section 12-102(a)(4). 
Sec. A-11. 11 MRSA §1-1301, sub-§(3), as enacted by PL 2009, c. 325, Pt. A, §2 
and affected by §4, is amended to read: 
(3). If one of the following provisions of the Uniform Commercial Code specifies the 
applicable law that provision governs and a contraiy agreement is effective only to the 
extent permitted by the law so specified: 
(a). Section 2-402; 
(b). Sections 2-1105 and 2-1106; 
(c). Section 4-102; 
(d). Section 4-1507; 
(e). Section 5-1116; 
(f). Section 8-1110; afHi. 
(g). Sections 9-1301 to 9-1307.: and 
(h). Section 12-107. 
Official Comment 
* * * 
5. Sections 9-301 through 9-307 should be consulted as to the rules for perfection of 
security interests and agricultural liens and the effect of perfection and nonperfection and 
priority. In transactions to which the Hague Securities Convention applies, the 
requirements for foreclosure and the like, the characterization of a transfer as being outright 
or by way of security, and certain other issues will generally be governed by the law 
specified in the account agreement. See PEB Commentary No. 19, doted April 11, 2017. 
Sec. A-12. 11 MRSA §1-1306, as enacted by PL 2009, c. 325, Pt. A, §2 and affected 
by §4, is amended to read: 
§1-1306, Waiver or renunciation of claim or right after breach 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
A claim or right arising out of an alleged breach may be discharged in whole or in part 
without consideration by agreement of the aggrieved party in afl. aeth0R~ated a signed 
record. 
Official Comment 
* * * 
Changes from former law: This seetion ehafl.ges former lav1 in two respeets. First, 
fofn½ef Former Section 1-107, requiring the "delivery" of a "written waiver or renunciation" 
merges merged the separate concepts of the aggrieved party's agreement to forego rights 
and the manifestation of that agreement. This section separates those concepts, and 
explicitly requires agreement of the aggrieved party. Second, the revised section re:fleets 
de>1elopments in electronic commerce by pro11iding for memoriali.sation in an aethenticated 
record. 1n this cont~t, a party may "authenticate" a record by (i) sigamg a record that is a 
•.vriting or (ii) attaching to or logically associating with a record that is not a vlfiti.ng afl. 
electronic soood, symbol or process with the present intent to adopt or accept the record. 
Seetions 1 201(b)(37) afl.d 9 102(a)(7). 
1. This section makes consideration unnecessary to the effective renunciation or 
waiver of rights or claims arising out of an alleged breach of a commercial contract where 
the agreement effecting such renunciation is memorialized in a record authenticated signed 
by the aggrieved party. Its provisions, however, must be read in conjunction with the 
section imposing an obligation of good faith~ (Section 1-304). 
2. Consistent with the revised definition of "sign" in Section 1-201, the cognate term 
"signed" replaces the reference to "authenticated" in the pre-2022 text of this section. 
Sec, A-13. 11 MRSA §2-102 is repealed and the following enacted in its place: 
§2-102. Scope; certain security and other transactions excluded from this Article 
(1). Unless the context otherwise requires, and except as provided in subsection 
(3), this Article applies to transactions in goods and, in the case of a hybrid transaction, 
it applies to the extent provided in subsection (2). 
{2). In a hybrid transaction: 
{a). If the aspects of the transaction that relate to the sale of goods do not predominate. 
only the provisions of this Article that relate primarily to those aspects of the 
transaction apply and the provisions that relate primarily to the transaction as a whole 
do not apply. 
(b). If the aspects of the transaction that relate to the sale of goods predominate. this 
Article applies to the transaction but does not preclude application in appropriate 
circumstances of other law to aspects of the transaction that do not relate to the sale of 
goods. 
{3). This Article does not: 
{a). Apply to a transaction that. even though in the form of an unconditional contract 
to sell or present sale. operates only to create a security interest; or 
(b ). Impair or repeal a statute regulating sales to consumers. farmers or other specified 
classes of buyers. 
COMMITTEE AMENDMENT 
ROS 2 
COMMITTEE AMENDMENT "A "to H.P. 59, L,D, 91 
Official Comment 
* * * 
Purposes ef Chaegcs aed New Ma-ttc:r: 
.L_To ffl.ake it elea-r that: The artiele lea•;es suastafltiaUy ueaffeeted the la.vi relatieg to 
pUTehase HI.one;' seeerity seeh as eonditioeal sale or ehattel ffl.ortgage thoegh it regelates 
the geReral sales aspeets of seeh traesaetions. "Seeerity traH:saetion'' is used in the Saffl.e 
seRse as in the artiele on Seeered TraH:saetions (Artiele 9). Subsection (3) makes it clear 
that this Article does not govern aspects of a transaction that, although in the form of a sale 
or contract to sell, create a security interest. See Sections 1-201(b)(35): 9-109(a)(l). Of 
course, this Article does apply to any sales aspects of such a transaction. 
2. Many ordinary transactions involve both a sale of goods and the provision of 
services, a lease of other goods, or a sale, lease, or license of property other than goods. In 
its original formulation, Article 2 provided no guidance on whether or to what extent the 
Article applied to such a hybrid transaction, although by defining a sale" as "the passing of 
title [to goods] from the seller to the buyer for a price." Section 1-206 arguably regarded 
such transactions as sales. This section was substantially revised to address hybrid 
transactions pursuant to the Uniform Commercial Code Amendments (2022) (2022 
Amendments). See Section 2-106(5) (defining "hybrid transaction"). 
In dealing with the issue of whether and to what extent, under the pre-2022 version of 
this section. Article 2 applied to hybrid transactions. most courts used some version of a 
"predominant purpose" test. Under those tests, Article 2 applied either in full or not at all, 
depending on whether the hybrid transaction, at its inception, was predominantly about the 
goods. In some cases, courts looked instead to the "gravamen of the claim," applying 
Article 2 to issues relating to the goods and applying other law to issues relating to other 
aspects of the transaction. Still other courts used what was sometimes referred to as the 
"bifurcation approach," under which Article 2 applied to the sale-of-goods aspect of a 
hybrid transaction and other law applied to the other aspects of the transaction. The 
bifurcation approach was similar to the gravamen of the claim, but instead of applying all 
of Article 2 to some, but not all, types of claims relating to a hybrid transaction, it 
distinguished the provisions in Article 2 that deal with the goods from those that deal with 
the transaction as a whole, and applied only the former in a hybrid transaction. 
Subsection (2) codifies aspects of the predominant purpose test and the bifurcation 
approach, establishing a two-tiered test. If the sale-of-goods aspects of a hybrid transaction 
predominate, then Article 2 applies. If the other aspects of the hybrid transaction 
predominate, then the provisions of Article 2 which relate primarily to the sale of goods, 
as opposed to those that relate to the transaction as a whole. apply. This approach has the 
benefit, for example, of ensuring that a person acquiring ownership of goods in a 
transaction in which the sale-of-goods aspects do not predominate is a buyer that benefits 
from the warranty: provisions of this Article and may have a right to recover the goods from 
the seller and thereby may qualify as a buyer in ordinary course of business under Section 
1-20Hb)(9). 
3. It is important to note that, in contrast to the frequent reference (under prior case 
law in many states) to the predominant purpose of a hybrid transaction, subsection (2) 
focuses on which aspect of the transaction predominates without requiring a finding of the 
"purpose" of either or both parties (although that purpose, when evident. may be a relevant 
COMMITTEE AMENDMENT 
RO$ 
---·· 
s·· 
COMMITTEE AMENDMENT" A 
"to H.P. 59, L.D. 91 
factor in deciding which aspect predominates). The determination of which aspect of a 
hybrid transaction predominates is left to the court. which should evaluate each transaction 
on a case-by-case basis without the necessity of applying any particular formula. Factors 
that may be relevant to that determination include. but are not limited to, the language of 
the agreement. the portion of the total price that is attributable to the sale of goods (as to 
which an agreed-upon allocation will ordinarily be binding on the parties). the purposes of 
the parties in entering into the transaction (when that is ascertainable), and the nature of the 
businesses of the parties (such as whether the seller is in the business of selling goods of 
that kind). Because the definition of "goods" expressly includes "specially manufactured 
goods," services involved in manufacturing goods are normally attributable to the sale-of-
goods aspects of the transaction. Services in designing specially manufactured goods. 
however. would not normally be attributable to the sale-of-goods aspects of the transaction. 
4. If the sale-of-goods aspects of a hybrid transaction predominate, then this Article 
applies to the transaction. However, the application of this Article to a hybrid transaction 
does not preclude the application of principles of law and equity to supplement the 
provisions of this Article. see Section 1-103(b). nor does it preclude. in appropriate 
circumstances. the application of other law to the non-sale-of-goods aspects of the 
transaction. Whether it is appropriate to apply such other law will depend in part on what 
purposes the other law is designed to achieve and whether application of the other law 
would be likely to interfere with the application of this Article. 
Example 1. Owner hires Contractor to replace the roof on a structure. As part of 
the transaction, Contractor promises to remove the existing shingles and install 
new shingles. which Contractor is providing, The transaction is a hybrid 
transaction because it involves the passing of title to the new shingles and the 
provision of services. If the sale-of-goods aspects of the transaction predominate. 
this Article applies to the transaction. 
Example 2. Same facts as in Example 1. Even if the sale-of-goods aspects of the 
transaction predominate. other law might apply to the services aspects of the 
transaction. For example. if applicable law regulates the provision of roofing 
services. such as by requiring the roofer to be licensed, requiring specified 
disclosures, requiring or implying a warranty with respect to the quality of services, 
or giving the property owner a brief period of time to cancel the contract. such 
other law might apply. 
Example 3. In a single transaction, Seller agrees to sell a warehouse full of goods 
to Buyer. The transaction includes the goods contained in the warehouse. the 
warehouse itself, and the real property on which the warehouse is situated. Assume 
the goods aspects of the transaction predominate. The application of this Article to 
the transaction does not preclude the application of real property law to the real-
property aspects of the transaction. Accordingly. whether the sale of the real 
property complies with the applicable requirements of real property law is 
determined by law other than this Article. Other law will also determine whether 
consummation of the sale of the real property is a condition to the parties' 
obligations to buy and sell the goods. 
5. If the sale-of-goods aspects of a hybrid transaction do not predominate, under 
subsection (2), the provisions of this Article relating primarily to the sale of goods, as 
opposed to the transaction as a whole, apply. These provisions include those relating to 
COMMITTEE AMENDMENT 
JlQ.§. 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
warranties under Sections 2-312. 2-313. 2-314, 2-315. 2-316, 2-317, 2-318: tender of 
delivery and risk of loss under Sections 2-503, 2-504. 2-509. 2-510: acceptance. rejection. 
and cure under Sections 2-508. 2-601, 2-602, 2-603, 2-604, 2-605, 2-606: and remedies for 
non-delivery of the goods or for tender of nonconforming goods under Sections 2-711, 
7-712, 7-713, 2-714. 2-715, 2-716. In contrast. the provisions of this Article dealing with 
the transaction as a whole do not apply. These provisions include those relating to: the 
requirement of a signed record, Section 2-201: contract formation, Sections 2-204 through 
2-207: and whether consideration is needed to modify the agreement. Section 2-209. 
Example 4. Owner sends a purchase order to Contractor offering to enter into a 
contract with Contractor to replace the roof on a structure. The proposed 
transaction involves Contractor removing the existing shingles and installing new 
shingles, which Contractor is to provide. Contractor responds with a confirmation 
purporting to accept but containing additional and different terms. The transaction 
is a hybrid transaction because it involves the passing of title to the new shingles 
and the provision of services. If the sale-of-goods aspects of the transaction do not 
predominate, this Article does not apply to determine whether a contract was 
formed. That issue is governed by other law. 
Example 5. Under the facts of Example 1. assume that the sale-of-goods aspects 
of the transaction do not predominate. The agreement provides that the job will be 
completed by December 31. Due to unforeseen circumstances affecting the 
availability of supplies and labor, the job is not completed by the agreed-upon 
deadline. Whether Contractor's failure to perform on time is excused is determined 
by general contract law. rather than by this Article (Section 2-615), 
Example 6. Under the facts of Example 1, assume that the sale-of-goods aspects 
of the transaction do not predominate. A dispute between the parties arises and 
during litigation one party seeks to admit evidence of usage of trade to supplement 
or explain the parties' written agreement. If the proffered evidence relates to the 
sale-of-goods aspects of the transaction, the parol evidence rule in this Article, 
Section 2-202 applies. If the proffered evidence relates to the other aspects of the 
transaction or to the transaction as a whole. other law will govern the admissibility 
of the evidence. 
Example 7. Restaurateur hires Remodeler to remodel Restaurateur's kitchen. The 
transaction requires Remodeler to supply a new oven meeting detailed 
specifications, but the services aspects of the transaction predominate. The oven 
supplied does not meet a minor aspect of those specifications (but does 
substantially satisfy the specifications as a whole). Whether Restaurateur may 
reject the oven (or must retain it subject to price adjustment), whether Restaurateur 
has a right to cover by purchasing a substitute oven, and the measure of 
Restaurateur's damages for the oven's nonconformity to the specifications are 
determined by this Article. 
Example 8. Restaurateur hires Remodeler to remodel Restaurateur's kitchen by a 
specified completion date. The transaction requires Remodeler to supply a new 
oven, but the services aspects of the transaction predominate. Remodel er breaches 
by failing to complete the project by the specified date. The measure of 
Restaurateur's damages for Remodeler's failure to timely complete the project is 
not determined by this Article. 
COMMITTEE AMENDMENT 
ROS1 
COMMITTEE AMENDMENT" A» to H.P. 59, L.D. 91 
6. The rules of subsections (1) and (2) are essentially gap fillers that apply when the 
parties' agreement is silent on what legal rules govern the different aspects of their 
transaction. In general, parties are free to preclude the application of this Article to the 
aspects of their transaction that are not about the sale of goods. 
Example 9. Robotics Manufacturer contracts to design. build. and sell customized 
robotics to Car Maker. The transaction includes a sale of goods and the provision 
of services and is therefore a hybrid transaction. Assume that the sale-of-goods 
aspects predominate. The parties may, in their agreement. provide that Article 2 
does not govern the services aspects of the transaction. 
As Example 9 illustrates, parties may agree that Article 2 will not govern non-goods 
aspects of a hybrid transaction, even though the sale-of-goods aspects predominate. But. 
when sale-of-goods aspects predominate. the parties cannot agree that Article 2 does not 
govern matters that relate to the transaction as a whole, such as contract formation and 
enforceability. For example. in a situation such as Example 9. if the reguirements of the 
Section 2-201 statute of frauds are not satisfied, it would make little sense to hold that the 
services aspects of the transaction are enforceable when the provision of services is clearly 
dependent on the existence of the sale-of-goods aspects. Of course, even when this article 
applies, its provisions may be varied by agreement to the extent provided in section 1-302. 
Sec. A-14. 11 MRSA §2-106 is amended by amending the section headnote to read: 
§2-106. Definitions: "contract"; "agreement"; "contract for sale"; "sale"; "present 
sale"; "conforming" to contract; "termination"; "cancellation"; "hybrid 
transaction" 
Official Comment 
* * * 
Purposes af Ckaages aad New MatteF 
* * * 
4. In some transactions, the passing of title to goods from the seller to the buyer in 
return for a price is part of a larger transaction. The other aspects of the transaction might 
involve the seller providing services to the buyer. the seller leasing other goods to the buyer, 
or the seller transferring to the buyer rights to property other than goods. Such a transaction 
is a "hybrid transaction," as defined in subsection (5). Section 2-102 indicates the extent to 
which this Article applies to a hybrid transaction. 
5. A hybrid transaction is a single transaction. If contracting parties enter into separate 
agreements at the same time, each agreement creating a separate transaction. each 
transaction must be evaluated separately to determine if it is a hybrid transaction. 
Example 1. To sell an ongoing business, Seller and Buyer enter into three separate 
written agreements: (i) a sale of goods used in the business: (ii) an agreement for 
Seller to provide consulting services to Buyer for a period of six months: and (iii) 
a sale of intangible assets associated with the business. Each agreement creates a 
separate transaction. None of those transactions involves both a sale of goods and 
the provision of services. the lease of other goods, or the sale, lease. or license of 
COMMITTEE AMENDMENT 
RO~ .. 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
property other than goods. Thus, none of the separate transactions constitutes a 
hybrid transaction. 
Example 2. To sell an ongoing business, Seller and Buyer enter into two separate 
written agreements: (i) a sale of goods and intangible assets used in the business; 
and (ii) an agreement for Seller to provide consulting services to Buyer for a period 
of six months. and not to compete with Buyer for a period of one year. The 
agreement to sell goods and intangible assets creates a hybrid transaction. The 
agreement for consulting services, a separate transaction, is not a hybrid 
transaction. 
Even when contracting parties enter into a single agreement involving both a sale 
of goods and a sale, lease, or license of other property or the provision of services, the 
elements of the single agreement may be so independent that they create separate 
transactions. In that case, no hybrid transaction would exist merely because the 
separate transactions arose out of the same agreement. 
Example 3. Farmer A and Farmer B sign a written agreement pursuant to which 
Farmer A will sell a tractor to Farmer B and Farmer A will board and feed Farmer 
B's cattle until the cattle are sold. The agreement specifies a price for the tractor, 
which is due upon delivery, and specifies a mechanism for determining the price 
for Farmer A's services, which is to be paid when the cattle are sold. The parties 
would have entered into an agreement to buy and sell the tractor even if they had 
not entered into an agreement to board and feed the cattle, and vice versa. Two 
separate transactions arise from the single agreement, neither of which is a hybrid 
transaction. Article 2 applies to the sale of the tractor. Other law applies to the 
agreement to board and feed the cattle. 
Example 4. In a single record, Landscaper agrees to sell plants to Homeowner and 
to install the plants on Homeowner's property. The agreement specifies a total price 
but provides no mechanism for determining what portion of the price is allocable 
to the sale of plants and what portion is allocable to the installation services. 
Because the terms of the agreement relating to the sale of goods and those relating 
to services are not severable, the transaction is a hybrid transaction. 
Sec. A-15. 11 MRSA §2-106, sub-§(5) is enacted to read: 
(5). Hybrid transaction. "Hybrid transaction" means a single transaction involving 
a sale of goods and: 
(a). The provision of services; 
(b). A lease of other goods; or 
(c). A sale, lease or license of property other than goods. 
Sec. A-16. 11 MRSA §2-201, sub-§(1) is amended to read: 
(1). Except as otherwise provided in this section, a contract for the sale of goods for 
the price of $500 or more is not enforceable by way of action or defense unless there is 
some writing a record sufficient to indicate that a contract for sale has been made between 
the parties and signed by the party against whom enforcement is sought or by his the party's 
authorized agent or broker. A •nrriting record is not insufficient because it omits or 
COMMITTEE AMENDMENT 
"' 
ROS 
. COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
incorrectly states a term agreed upon but the contract is not enforceable under this 
subsection beyond the quantity of goods shown in sueh v,rritmg the record. 
Sec. A-17. 11 MRSA §2-201, sub-§(2) is amended to read: 
(2). Between merchants if within a reasonable time a writing record in confirmation 
of the contract and sufficient against the sender is received and the party receiving it has 
reason to know its contents, it satisfies the requirements of subsection (1) against s,ueh the 
party unless vll·itten notice in a record of objection to its contents is given within 10 days 
after it is received. 
* * * 
Official Comment 
* * * 
Pu.Fposes of Changes: The ehanged phraseology of this Purposes: This section is 
intended to make it clear that: 
1. The required vlfitiag record need not contain all the material terms of the contract 
and such material terms as are stated need not be precisely stated. All that is required is that 
the v,rriting record afford a basis for believing that the offered oral evidence rests on a real 
transaction. It may be written in lead pencil on a scratch pad or another medium. It need 
not indicate which party is the buyer and which the seller. The only term which must appear 
is the quantity term which need not be accurately stated but recovery is limited to the 
amount stated. The price, time and place of payment or delivery, the general quality of the 
goods, or any particular warranties may all be omitted. 
Special emphasis must be placed on the permissibility of omitting the price term in 
view of the insistence of some courts on the express inclusion of this term even where the 
parties have contracted on the basis of a published price list. In many valid contracts for 
sale the parties do not mention the price in express terms, the buyer being bound to pay and 
the seller to accept a reasonable price which the trier of the fact may well be trusted to 
determine. Again, frequently the price is not mentioned since the parties have based their 
agreement on a price list or catalogue known to both of them and this list serves as an 
efficient safeguard against perjury. Finally, "market" prices and valuations that are current 
in the vicinity constitute a similar check. Thus, if the price is not stated in the ll'l:ell'l:ofandum 
record evidencing the contract it can normally be supplied without danger of fraud. Of 
course, if the "price" consists of goods rather than money the quantity of goods must be 
stated. 
Only three definite and invariable requirements as to the ffiell'l:Ofandum record are made 
by this subsection. First, it must evidence a contract for the sale of goods; second, it must 
be "signed", a word which includes any authentication which identifies the party to be 
charged; and third, it must specify a quantity. 
* * * 
3. Between merchants, failure to answer a vlfitten oonfifll'l:ation of record confirming 
a contract within ten days ofreceipt is tantamount to a \Yritiag record under subsection (2) 
and is sufficient against both parties under subsection (1). The only effect, however, is to 
take away from the party who fails to answer the defense of the Statute of Frauds; the 
COMMITTEE AMENDMENT 
JS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
burden of persuading the trier of fact that a contract was in fact made orally prior to the 
written eoBfinna-tion giving a record confirming a contract is unaffected. Compare the 
effect of a failure to reply under Section 2-207. 
* * * 
5. The requirement of "signing" is discussed in the Commen-t to Section 1-201.,_ 
Comment 37. 
6. It For putposes of subsection {l), it is not necessary that the vtritiflg record be 
delivered to anybody. It need not be signed by both parties but it is, of course, not sufficient 
against one who has not signed it. Prior to a dispute no one can determine which party's 
signing of the memorandum may be necessary but from the time of contracting each party 
should be aware that to him it is signing by the other which is important. 
7. If the making of a contract is admitted in court, either in a written pleading, by 
stipulation or by oral statement before the court, no additional writiag record is necessary 
for protection against fraud. Under this section it is no longer possible to admit the contract 
in court and still treat the Statute as a defense. However, the contract is not thus 
conclusively established. The admission so made by a party is itself evidential against him 
of the truth of the facts so admitted and of nothing more; as against the other party, it is not 
evidential at all. 
8. In furtherance of medium neutrality, references to "writing" and "written" in the 
pre-2022 text of this section have been changed to refer to a "record." 
Sec. A-18. 11 MRSA §2-202, as amended by PL 2009, c. 325, Pt. B, §5 and affected 
by §27, is further amended to read: 
§2-202. Final wl'itten expression: parol or extrinsic evidence 
Terms with respect to which the confirmatory memoranda of the parties agree or Wffiel½ 
that are otherwise set forth in a writing record intended by the parties as a final expression 
of their agreement with respect to such terms as are included therein may not be 
contradicted by evidence of any prior agreement or of a contemporaneous oral agreement 
but may be explained or supplemented~ 
(1). By course of performance, course of dealing or usage of trade (section 1-1303); 
and 
(2). 
By evidence of consistent additional terms unless the court finds the writing 
record to have been intended also as a complete and exclusive statement of the terms of the 
agreement. 
Official Comment 
* * * 
Purposes: 
1. This section definitely rejects: 
(a) Any assumption that because a vt'fitiflg record has been worked out which is final 
on some matters, it is to be taken as including all the matters agreed upon; 
* * * 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT •A "to H.P. 59, L.D. 91 
2. Paragraph (a) makes admissible evidence of course of dealing, usage of trade and 
course of performance to explain or supplement the terms of any v,r-riting record stating the 
agreement of the parties in order that the true understanding of the parties as to the 
agreement may be reached. Such writings records are to be read on the assumption that the 
course of prior dealings between the parties and the usages of trade were taken for granted 
when the document was phrased, Unless carefully negated they have become an element 
of the meaning of the words used. Similarly, the course of actual performance by the parties 
is considered the best indication of what they intended the 1.vritin.g record to mean. 
3. Under paragraph (b) consistent additional terms, not reduced to w-ritiag a record, 
may be proved unless the comt finds that the w-ritrag record was intended by both parties 
as a complete and exclusive statement of all the terms. If the additional terms are such that, 
if agreed upon, they would certainly have been included in the doeume:Ht record in the view 
of the court, then evidence of their alleged making must be kept from the trier of fact. 
4. In furtherance of medium neutrality. references to a "writing" in the pre-2022 text 
of this section have been changed to refer to a "record. 
Sec. A-19, 11 MRSA §2-203 is amended to read: 
§2-203, Seals inoperative 
The affixing of a seal to a w-ritiag record evidencing a contract for sale or an offer to 
buy or sell goods does not eoastitute render the vlfiting record a sealed instrument and the 
law with respect to sealed instruments does not apply to such a contract or offer. 
Official Comment 
* * * 
3. In furtherance of medium neutrality. the reference to a "writing" in the pre-2022 
text of this section has been changed to refer to a "record. 
Sec. A-20. 11 MRSA §2-205 is amended to read: 
§2-205, Firm offers 
An offer by a merchant to buy or sell goods in a signed Vlfiting vmi6fl record that by 
its terms gives assurance that it will be held open is not revocable, for lack of consideration, 
during the time stated or if no time is stated for a reasonable time, but in no event may such 
period of irrevocability exceed 3 months; but any such term of assurance on a form supplied 
by the offeree must be separately signed by the offeror. 
Official Comment 
* * * 
Purposes of Changes: Purposes: 
1. This section is intended to modify the former rule which required that "firm offers" 
be sustained by consideration in order to bind, and to require instead that they must merely 
be characterized as such and expressed in signed 1.vritiags records. 
2. The primary purpose of this section is to give effect to the deliberate intention of a 
merchant to make a current firm offer binding. The deliberation is shown in the case of an 
individualized document by the merchant's signature to the offer, and in the case of an offer 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" A» to H.P. 59, L.D. 91 
included on a form supplied by the other party to the transaction by the separate signing of 
the particular clause which contains the offer. "Signed" here also includes authentication 
but the reasonableness of the authentication herein allowed must be determined in the light 
of the purpose of the section. The circumstances surrounding the signing may justify 
something less than a formal signature or initialing but typically the kind of authentication 
involved here would consist of a minimum of initialing of the clause involved. A 
handwritten memorandum on the writer's letterhead purporting in its terms to "confirm" a 
firm offer already made would be enough to satisfy this section, although not subscribed, 
since under the circumstances it could not be considered a memorandum of mere 
negotiation and it would adequately show its own authenticity. Similarly, an authorized 
telegram will suffice, and this is true even though the original draft contained only a 
typewritten signature. See generally Section 1-20l(b)(37) (defining "sign") and Comment 
37. However, despite settled courses of dealing or usages of the trade whereby firm offers 
are made by oral communication and relied upon without more evidence, such offers 
remain revocable under this Article since authentication by a vnitiag record is the essence 
of this section. 
* * * 
6. In furtherance of medium neutrality. the reference to a "writing" in the pre-2022 
text of this section has been changed to refer to a "record. 
* * * 
Sec, A-21. 11 MRSA §2-209, sub-§(2) is amended to read: 
(2). A signed agreement whieh that excludes modification or rescission except by a 
signed writing eaimet or other signed record may not be otherwise modified or rescinded, 
but except as between merchants such a requirement on a form supplied by the merchant 
must be separately signed by the other party. 
* * * 
Official Comment 
* * * 
Subsection (2) permits the parties in effect to make their own Statute of Frauds as 
regards any future modification of the contract by giving effect to a clause in a signed 
agreement which expressly requires any modification to be by signed writing or other 
signed record. But note that if a consumer is to be held to such a clause on a form supplied 
by a merchant it must be separately signed. 
4. Subsection (4) is intended, despite the provisions of subsections (2) and (3), to 
prevent contractual provisions excluding modification except by a signed v,rritiag record 
from limiting in other respects the legal effect of the parties' actual later conduct. The effect 
of such conduct as a waiver is further regulated in subsection (5). 
5. In furtherance of medium neutrality. the reference to a signed "writing" in the pre-
2022 text of this section has been supplemented to refer as well to a signed "record." 
* * * 
Sec. A-22. 11 MRSA §2-1102, as enacted by PL 1991, c. 805, §4, is repealed and 
the following enacted in its place: 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
§2-1102, Scope 
1. This Article applies to any transaction, regardless of form, that creates a lease and, 
in the case of a hybrid lease, it applies to the extent provided in subsection (2). 
2. In a hybrid lease: 
(a). If the aspects of the lease that relate to the lease of goods do not predominate: 
(i) Only the provisions of this Article that relate primarily to those aspects of the 
transaction apply and the provisions that relate primarily to the transaction as a 
whole do not apply: 
(ii) Section 2-1209 applies if the lease is a finance lease: and 
(iii) Section 2-1407 applies to the promises of the lessee in a finance lease to the 
extent the promises are consideration for the right to possession and use of the 
leased goods: and 
(b ). If the aspects of the lease that relate to the lease of goods predominate, this Article 
applies to the transaction but does not preclude application in appropriate 
circumstances ofother law to aspects of the lease that do not relate to the lease of goods. 
Official Comment 
* * * 
Purposes: 
.L * * * 
To achieve that end it was necessary to provide that this Article applies to any 
transaction, regardless of form, that creates a lease. Since lease is def med as a transfer of 
an interest in goods (Section 2A-103(1 )G)) and goods is defined to include fixtures (Section 
2A-l 03(1 )(h)), application is limited to the extent the transaction relates to goods, including 
fixtures. Further, since the definition oflease does not include a sale (Section 2-106(1)) or 
retention or creation of a security interest (Section 1 201(37) l-201(b)(35)), application is 
further limited; sales and security interests are governed by other Articles of this Act. 
2. Fi-flally, ia In recognition of the diversity of the transactions to be governed, the 
sophistication of many of the parties to these transactions, and the common law tradition 
as it applies to the bailment for hire or lease, freedom of contract has been preserved. 
DeKoven, Proceedings After Default by the Lessee Under a True Lease of Equipment, in 
C P. Coogan, W. Hogan, D. Vagts, Secured Transactions Under the Uniform Commercial 
Code, § 29B.02[2] (1986). Thus, despite the extensive regulatory scheme established by 
this Article, the parties to a lease will be able to create private rules to govern their 
transaction. Sections 2A-103(4) and 1-102(3). However, there are special rules in this 
Article governing consumer leases, as well as other state and federal statutes, that may 
further limit freedom of contract with respect to consumer leases. 
l. A court may apply this Article by analogy to any transaction, regardless of form, 
that creates a lease of personal property other than goods, taking into account the expressed 
intentions of the parties to the transaction and any differences between a lease of goods and 
a lease of other property. * * * 
COMMITTEE AMENDMENT 
BQ~ 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
Further, parties to a transaction creating a lease of personal property other than goods, 
or a bailment of personal property~ may provide by agreement that this Article applies. 
Upholding the parties" choice is consistent with the spirit of this Article. 
4. If the lease-of-goods aspects of a hybrid lease do not predominate, under subsection 
(2)(a)(i) the provisions of this Article which relate primarily to the lease-of-goods aspects 
of the transaction apply and those that relate primarily to the transaction as a whole do not 
apply. Under subsection (2)(b), if the lease-of-goods aspects of a hybrid lease predominate, 
this Article applies to the transaction. 
5. Relevant factors in determining whether the lease-of-goods aspects of a hybrid lease 
predominate include the language of the agreement and the portion of the total price that is 
attributable to the lease of goods, although neither is determinative. An agreed-upon 
allocation of a portion of the total price to the right to possession and use of the goods is 
ordinarily binding on the parties, as is an agreement that the transaction includes or does 
not include a finance lease. 
6. A finance lease, defined in Section 2A-103(1)(g), may be included in a hybrid lease 
in which the lease-of-goods aspects of the transaction do not predominate. In such a 
situation, subsection (2)(a)(ii) makes Section 2.A-209 applicable and subsection (2)(a)(iii) 
addresses the application of Section 2.A-407 to the promises made by the lessee under the 
finance lease. That latter section applies to those promises that are consideration for the 
lessee's right to possession and use of the leased goods. Whether a promise of a lessee so 
qualifies is a question of fact but an agreed-upon allocation of a portion of the total price 
to the right to possession and use of the leased goods is ordinarily binding on the parties. 
The fact that subsection (2)(a)(ii) and (iii) expressly make Sections 2.A-209 and 2.A-407 
applicable if the lease is a finance lease does not prevent application of other provisions of 
this Article relating to finance leases pursuant to subsection (2)(b). 
Example 1. Lessor and Customer enter into a contract that provides for Lessor to: 
(i) lease equipment to Customer: and (ii) provide to Customer a variety of 
maintenance and consulting services. The services aspects of the transaction 
predominate. Lessor did not select. manufacture, or supply the goods: instead. the 
goods were selected by Customer, and Lessor acquired the goods from Supplier 
for the sole purpose of leasing the goods to Customer. Assume that the lease 
aspects of the transaction involve a finance lease under Section 2A-103(l)(g). 
Pursuant to subsection (3)(a), Sections 2.A-212 and 2.A-213 apply. Under those 
sections. because the lease aspect of the transaction is a finance lease. Lessor makes 
no implied warranty of merchantability or implied warranty of fitness for particular 
put:pose. Pursuant to subsection (2)(a)(ii), Section 2A-209 applies. Under that 
section, all warranties made by Supplier to Lessor extend to Customer. 
Example 2. Same facts as Example 1. As consideration for Lessor's obligations 
under the contract, Customer promises to pay a single monthly fee of a specified 
amount. The contract does not indicate what portion of the monthly fee is 
consideration for the services or what portion is consideration for possession and 
use of the equipment. Section 2A-407 applies to the lessee's promises that are 
consideration for the lessee's right to possession and use of the equipment. In an 
action involving the application of Section 2.A-407, the determination of what 
portion of the monthly fee is for the right to possession and use of the equipment 
is a question of fact. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
Example 3. Same facts as Example 1 except that the lease-of-goods aspects of the 
transaction predominate. Section 2A-407 applies to all of the lessee's promises 
under the transaction. 
7. Even if the lease-of-goods aspects of a hybrid lease predominate and this Article 
applies to the transaction, the application of this Article to a hybrid lease does not preclude 
the application of principles of law and equity to supplement the provisions of this Article, 
see Section 1-103 (b ), nor does it preclude, in appropriate circumstances. the application of 
other law to the non-lease-of-goods aspects of the transaction. Whether it is appropriate to 
apply such other law will depend in part on what purposes the other law is designed to 
achieve and whether application of the other law would be likely to interfere with the 
application of this Article. 
Example 4. Same facts as Example 3 (the lease-of-goods aspects of the transaction 
predominate) except that the lease is not a finance lease. This Article applies to the 
transaction. Nevertheless, because principles of law and equity also apply unless 
displaced by particular provisions the Uniform Commercial Code, see Section 
1-103(b), and this Article does not displace other law relating to whether Lessor's 
performance of services conforms to the contract, other law determines whether 
the services conform to the contract. 
8. The rules of subsections (2)(a) and (2)(b) are essentially gap fillers that apply when 
the parties' agreement is silent on what legal rules govern the different aspects of their 
transaction. In general, parties are free to preclude the application of this Article to the 
aspects of their transaction that are not about the lease of goods. See Section 2-102. 
Comment 6. 
Sec. A-23. 11 MRSA §2-1103, sub-§(1), 1(h-1) is enacted to read: 
(h-1). "Hybrid lease" means a single transaction involving a lease of goods and: 
(i) The provision of services; 
(ii) A sale of other goods; or 
(iii) A sale, lease or license of property other than goods. 
Sec. A-24. 11 MRSA §2-1103, sub-§(3), as amended by PL 2009, c. 325, Pt. B, 
§7 and affected by §27, is further amended to read: 
(3). 
The following definitions in other Articles apply to this Article: 
"Account." Section 9-1102, subsection (2). 
"Between merchants." Section 2-104, subsection (3 ). 
"Buyer." Section 2-103, subsection (1), paragraph (a). 
"Chattel paper." Section 9-1102, subsection fl-B (11-A). 
"Consumer goods." Section 9-1102, subsection (23). 
"Document." Section 9-1102, subsection (30). 
"Entrusting." Section 2-403, subsection (3). 
"General intangible.,_" Section 9-1102, subsection ( 42). 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
''Instrument." Section 9-1102, subsection (47). 
"Merchant." Section 2-104, subsection (1 ). 
"Mortgage." Section 9-1102, subsection (55). 
"Pursuant to commitment." Section 9-1102, subsection ( 60). 
"Receipt." Section 2-103, subsection (1 ), paragraph ( c ). 
"Sale." Section 2-106, subsection (1 ). 
"Sale on approval." Section 2-326. 
"Sale or return." Section 2-326. 
"Seller." Section 2-103, subsection (1), paragraph (d). 
Official Comment 
* * * 
(e) "Consumer lease". * * * 
* * * 
This definition focuses on the parties as well as the transaction. If a lease is within this 
definition, the lessor must be regularly engaged in the business of leasing or selling, and 
the lessee must be an individual, not an organization; note that a lease to two or more 
individuals having a common interest through marriage or the like is not excluded as a lease 
to an organization under Section 1 201(28) 1-201(b)(25). The lessee must take the interest 
primarily for a personal, family or household purpose. If required by the enacting state, 
total payments under the lease contract, excluding payments for options to renew or buy, 
cannot exceed the figure designated. 
(f) "Fault". Section 1 201(1G) 1-201(6)(17). 
(g) "Finance Lease". * * * 
* * * 
Pursuant to the Uniform Commercial Code Amendments (2022) (2022 Amendments), 
some references in this Article to the terms "writing," "writings." or "written" have been 
changed to refer to a "record." These changes are made in provisions where an affected 
party may be assumed to have assented to the use of a record that is not a writing. For 
example. Section 2A-201 involves a record signed by an affected party and Section 2A-
0 
refers to a record intended by parties to be a final expression of their agreement. Where 
such references remain in this Article, the use by parties of a record other than a writing 
may be given effect for pur_poses of this Article under law other than the Uniform 
Commercial Code. such as the Electronic Signatures in Global and National Commerce 
Act. 15 U.S.C. Section 7001 et seq .• and the Uniform Electronic Transactions Act. 
* * * 
(h.1) "Hybrid lease". In some transactions. the transfer of the right to possession and 
use of goods for a term in return for consideration (i.e .• a lease). is part of a larger 
8 
transaction. The other aspects of the transaction might involve the provision of services. a 
sale of other goods, or a transfer of rights to property other than goods. Such a transaction 
COMMITTEE AMENDMENT 
''" 
ROS 1 
~ 
..... ____...-,. 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
is a hybrid lease. Section 2A 102 indicates the extent to which this Article applies to a 
hybrid lease. 
A hybrid lease is a single transaction. If contracting parties enter into separate 
agreements at the same time, each agreement must be evaluated separately to determine if 
it is a hybrid lease. 
Example 1. Lessor and Customer A enter into a single agreement that provides for 
Lessor, in return for periodic payments from Customer A, to: (i) lease a 
photocopier to Customer A for twelve months: (ii) supply all the paper, staples, 
and toner needed to operate the copier during that period, and (iii) provide routine 
maintenance and repair services needed to keep the copier operating during that 
period. The transaction is a hybrid lease because it involves a lease of goods (the 
copier), a sale of goods (the paper, staples, and toner), and the provision of services. 
Example 2. Lessor and Customer B enter into three separate written agreements at 
the same time: (i) a lease of a photocopier to Customer B for twelve months: (ii) a 
contract for Lessor to supply Customer B with all the paper, staples, and toner 
needed to operate the copier during that period, and (iii) a contract for Lessor to 
provide routine maintenance and repair services needed to keep the copier 
operating during that period. Because the parties executed three separate 
agreements, and the lease does not involve a sale, lease, or license of other property 
or the provision of services, the lease is not a hybrid lease. 
Even when contracting parties enter into a single agreement involving both a lease of 
goods and a sale, lease, or license of other property or the provision of services. the 
agreement may involve separate transactions and not a single transaction. In that situation, 
the lease transaction would not be a hybrid lease if the lease of goods is unrelated to the 
other aspects of the agreement and the terms of the agreement relating to the lease of goods 
are readily severable from the terms of the agreement relating to the other transactions. 
Example 3. Farmer A and Farmer B sign a written agreement pursuant to which 
Farmer A will lease a tractor to Farmer B for one year and Farmer B will board 
and feed Farmer A's cattle until the cattle are sold. The agreement specifies a rental 
payment for the tractor, which is due monthly. and a mechanism for determining 
the price for Farmer B's services, which is to be paid when the cattle are sold. The 
parties would have entered into an agreement to lease the tractor even if they had 
not entered into an agreement to board and feed the cattle, and vice versa. The 
transaction is not a hybrid lease. Article 2A applies to the lease of the tractor. Other 
law applies to the agreement to board and feed the cattle. 
* * * 
Sec. A-25. 11 MRSA §2-1107, as enacted by PL 1991, c. 805, §4, is amended to 
read: 
§2-1107. Waiver or renunciation of claim or right after default 
Any claim or right arising out of an alleged default or breach of warranty may be 
discharged in whole or in part without consideration by a Vil'itten waiver or renunciation in 
ft signed aft4 record delivered by the aggrieved party. 
Official Comment 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
* * * 
Changes: 
.L Revised to reflect leasing practices and terminology. * * * 
2. In furtherance of medium neutrality, the reference to a signed "written" waiver or 
renunciation in the pre-2022 text of this section has been changed to refer to a waiver in a 
signed "record." 
Sec. A-26. 11 MRSA §2-1201, sub-§(1), 1(b), as enacted by PL 1991, c. 805, §4, 
is amended to read: 
(b ). There is a v,zritiRg record, signed by the party against whom enforcement is sought 
or by that party's authorized agent, sufficient to indicate that a lease contract has been 
made between the parties and to describe the goods leased and the lease term. 
Sec. A-27. 11 MRSA §2-1201, sub-§(3), as enacted by PL 1991, c. 805, §4, is 
amended to read: 
(3). A wd-tieg record is not insufficient because it omits or incorrectly states a term 
agreed upon, but the lease contract is not enforceable under subsection (1), paragraph (b) 
beyond the lease term and the quantity of goods shown in the wtltieg record. 
Sec. A-28. 11 MRSA §2-1201, sub-§(5), 1(a), as enacted by PL 1991, c. 805, §4, 
is amended to read: 
(a). If there is a vffitieg record signed by the party against whom enforcement is sought 
or by that party's authorized agent specifying the lease term, the term so specified; 
Official Comment 
* * * 
Changes: 
.L This section is modeled on Section 2-201, with changes to reflect the differences 
between a lease contract and a contract for the sale of goods. In particular, subsection (1 )(b) 
adds a requirement that the vlfitiag record "describe the goods leased and the lease term", 
borrowing that concept, with revisions, from the provisions of Section 9-203(1)(a). 
Subsection (2), relying on the statutory analogue in Section 9-110, sets forth the minimum 
criterion for satisfying that requirement. 
2. In furtherance of medium neutrality, the references to a "writing" in the pre-2022 
text of this section have been changed to refer to a "record." 
* * * 
Sec. A-29. 11 MRSA §2-1202, as enacted by PL 1991, c. 805, §4, is amended to 
read: 
§2-1202. Final writtee expression; parol or extrinsic evidence 
6 
Terms with respect to which the confirmatory memoranda of the parties agree or whieh 
7 
that are otherwise set forth in a writieg record intended by the parties as a final expression 
8 
of their agreement with respect to such terms as are included therein may not be 
COMMITTEE AMENDMENT 
~--- ... ~-
ROS 
.,.,_ ______ 
COMMITIEE AMENDMENT "A" to H.P. 59, L.D. 91 
contradicted by evidence of any prior agreement or of a contemporaneous oral agreement 
but may be explained or supplemented: 
(1). By course of dealing or usage of trade or by course of performance; and 
(2). 
By evidence of consistent additional terms unless the court finds the v,rfitiH:g 
record to have been intended also as a complete and exclusive statement of the terms of 
the agreement. 
Official Comment 
* * * 
Changes: In furtherance of medium neutrality, the references to a "writing" have been 
changed to refer to a "record." 
* * * 
Sec. A-30. 11 MRSA §2-1203, as enacted by PL 1991, c. 805, §4, is amended to 
read: 
§2-1203. Seals inoperative 
The affixing of a seal to a 'i'lfitiH:g record evidencing a lease contract or an offer to enter 
into a lease contract does not render the vlfitiH:g record a sealed instrument and the law with 
respect to sealed instruments does not apply to the lease contract or offer. 
Official Comment 
* * * 
Changes: Revised to reflect leasing practices and terminology. In furtherance of 
medium neutrality, the references to a "writing" have been changed to refer to a "record." 
* * * 
Sec. A-31. 11 MRSA §2-1205, as enacted by PL 1991, c. 805, §4, is amended to 
read: 
§2-1205. Firm offers 
An offer by a merchant to lease goods to or from another person in a signed Vlfitin:g 
record that by its terms gives assurance it will be held open is not revocable, for lack of 
consideration, during the time stated or, if no time is stated, for a reasonable time, but in 
no event may the period of irrevocability exceed 3 months. Any such term of assurance on 
a form supplied by the offeree must be separately signed by the offeror. 
Official Comment 
* * * 
Changes: Revised to reflect leasing practices and terminology. In furtherance of 
medium neutrality, the reference to a signed "writing" in the pre-2022 text of this section 
has been changed to refer to a signed "record. 
Sec. A-32. 11 MRSA §2-1208, sub-§(2), as enacted by PL 1991, c. 805, §4, is 
amended to read: 
COMMITTEE AMENDMENT 
,.._ __ ,__, 
ROS 1 
_, 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
(2). A signed lease agreement that excludes modification or rescission except by a 
signed 'i'tritifl:g record may not be otherwise modified or rescinded, but, except as between 
merchants, such a requirement on a form supplied by a merchant must be separately signed 
by the other party. 
Official Comment 
* * * 
Changes: 
1. Revised to reflect leasing practices and terminology, except that the provisions of 
subsection 2-209(3) were omitted. 
2. In furtherance of medium neutrality. the reference to a signed "writing" in the pre-
2022 text of this section has been changed to refer to a signed "record." 
* * * 
Sec. A-33. 11 MRSA §3-1104, sub-§(1), 1(c), as enacted by PL 1993, c. 293, Pt. 
A, §2, is amended to read: 
(c). Does not state any other undertaking or instruction by the person promising or 
ordering payment to do any act in addition to the payment of money, but the promise 
or order may contain: 
(i) An undertaking or power to give, maintain or protect collateral to secure 
payment; 
(ii) An authorization or power to the holder to confess judgment or realize on or 
dispose of collateral; er 
(iii) A waiver of the benefit of any law intended for the advantage or protection of 
an obligor';'; 
(iv) A term that specifies the law that governs the promise or order; or 
(v) An undertaking to resolve in a specified forum a dispute concerning the 
promise or order. 
Official Comment 
1. The definition of "negotiable instrument" defines the scope of Article 3 since 
Section 3-102 states: "This Article applies to negotiable instruments." The definition in 
Section 3-104(a) incorporates other definitions in Article 3. An instrument is either a 
"promise," defined in Section 3-103(a)(l2), or "order," defined in Section 3-103(a)(8). A 
promise is a written undertaking to pay money signed by the person undertaking to pay. 
An order is a written instruction to pay money signed by the person giving the instruction. 
Thus, the term "negotiable instrument" is limited to a signed writing that orders or promises 
payment of money. "Money" is defined in Section 1-20l(b)(24) and is not limited to United 
States dollars. It also includes a medium of exchange established by a foreign government 
or monetary units of account established by an intergovernmental organization or by 
agreement between two or more nations. Five other requirements are stated in Section 3-
104(a): First, the promise or order must be "unconditional." The quoted term is explained 
in Section 3-106. Second, the amount of money must be "a fixed amount ... with or without 
COMMITTEE AMENDMENT 
ROS 
k..,.....' 
_:, 
COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
interest or other charges described in the promise or order." Section 3-112(b) relates to 
"interest." Third, the promise or order must be "payable to bearer or to order." The quoted 
phrase is explained in Section 3-109. An exception to this requirement is stated in 
subsection ( c ). Fourth, the promise or order must be payable "on demand or at a definite 
time.
The quoted phrase is explained in Section 3-108. Fifth, the promise or order may not 
state "any other undertaking or instruction by the person promising or ordering payment to 
do any act in addition to the payment of money" with thf.ee five exceptions. The quoted 
phrase is based on the first sentence ofN.I.L. Section 5 which is the precursor of "no other 
promise, order, obligation or power given by the maker or drawer" appearing in former 
Section 3-104(1 )(b ). The words "instruction" and "undertaking" are used instead of "order" 
and "promise" that are used in the N.I.L. formulation because the latter words are defined 
terms that include only orders or promises to pay money. The first three exceptions stated 
in Section 3-104(a)(3) are based on and are intended to have the same meaning as former 
Section 3-112(1)(b), (c), (d), and (e), as well as N.I.L. § 5(1), (2), and (3). The final two 
exceptions stated in Section 3-104(a)(3 ). added pursuant to the Uniform Commercial Code 
Amendments (2022). deal with choice-of-law and choice-of-forum clauses. The latter of 
these includes an agreement to arbitrate. Subsection (b) states that "instrument" means a 
"negotiable instrument." This follows former Section 3-102(1)(e) which treated the two 
terms as synonymous. 
Sec. A-34. 11 MRSA §3-1105, sub-§(1), as enacted by PL 1993, c. 293, Pt. A, §2, 
is repealed and the following enacted in its place: 
(1), 
11Issue
means: 
(a). The first delivery of an instrument by the maker or drawer, whether to a holder or 
nonholder. for the purpose of giving rights on the instrument to any person: or 
(b). If agreed to by the payee, the first transmission by the drawer to the payee of an 
image of an item and information derived from the item that enables the depositary 
bank to collect the item by transferring or presenting under federal law an electronic 
check. 
Official Comment 
1. Under former Section 3-102(l)(a) 
11issue
was defined as the first delivery to a 
"holder or a remitter
but the term "remitter" was neither defined nor otherwise used. In 
revised Article 3, Section 3-105(a) defines "issue" more broadly to include the first 
delivery to anyone by the drawer or maker for the purpose of giving rights to anyone on 
the instrument. "Delivery" with respect to instruments is defined in Section 1 201(14) 
Section 1-20l(b)(15) as meaning "voluntary transfer of possession." The reference in 
subsection (a)(2) to transmission of an image of an item and information derived from the 
item is derived from Section 4-1 l0(a). dealing with electronic presentment. 
Subsection (a) permits an instrument to be issued by an electronic transmission of an 
image of and information derived from the instrument by maker and drawer, rather than by 
delivery. Thus. for example, a drawer might, with the permission of the payee, write and 
sign a check, take a photograph of the check. send the photograph to the payee for 
processing electronically, and destroy the original check. If the electronic image and the 
information derived from it can be processed as an "electronic check" under Regulation 
COMMITTEE AMENDMENT 
ROS 1 
COMMITTEE AMENDMENT 'A" to H.P. 59, L,D, 91 
CC, see 12 C.F.R. § 229.2(ggg), the check is "issued" and hence can be enforced pursuant 
to this Article. 
* * * 
Sec. A-35. 11 MRSA §3-1401, as corrected by RR 2011, c. 1, § 13, is amended by 
amending the section headnote to read: 
§3-1401. Signature necessary for liability on instrument 
Sec. A-36. 11 MRSA §3-1401, sub-§(2), as enacted by PL 1993, c. 293, Pt. A, §2, 
is repealed. 
Official Comment 
1. Obligatiofl This section provides the fundamental rule that an obligation on an 
instrument depends on a signature that is binding on the obligor. The signature may be 
made by the obligor personally or by an agent or other representative authorized to act for 
the obligor. Signature by agents and other representatives is covered by Section 3-402. It 
is not necessary that the name of the obligor appear on the instrument, so long as there is a 
signature that binds the obligor. Sigaamre iH:cludes afl ifldorsemeat. These obligations 
include those on an "order" (Section 3-103(a)(6)) and a "promise" (Section 3-103(a)(9)) 
and those of an "issuer," "maker," or "drawer" (Sections 3-103(a)(5) and (7), 3-105(c), 3-
412. and 3-414). an "acceptor" (Sections 3-409 and 3-413). and an indorser (Sections 3-
204(b) and 3-415). 
2. A sigflatare may be aafld-'rmittefl, typed, priated or made ifl afl)' other m8¼1:l½er. It fleed 
flot be sabscribed, afld may appear ifl the body of the instrameflt, as ifl the case of "I, Johfl 
Doe, promise to pay*** "withol:lt aey other sigaamre. It may be made ey mark, or e•1ea by 
thumbpriflt. It may be made ifl afl)' flame, mcludrng af1Y trade flame or assumed flame, 
how0¥er false aad fictitious, >tvhich is adopted for the purpose. :Parol e>t'ideflce is admissiele 
to ideatify the sigaer, aad whefl the sigfler is ideatified the sigaamre is eftecth•e. 
Iadorsemeat ia a a.ame other thafl that of the ifldorser is go>,•emed by Sectiofl 3 204(d). 
Subsection (b) of the pre-2022 text of this section has been deleted as unnecessary in view 
of the 2022 revision of the definition of "sign." See Section l-20l(b)(37) and Comment 37. 
Although former subsection (b) had not proven to be problematic. its deletion eliminates 
any implication that the revised definition of "sign" is inadequate for purposes of this 
Article. For example. former subsection (b) provided examples of the means of making a 
signature with the present intention of authenticating a writing. such as by means of a 
device or machine. by the use of a trade name or assumed name. or by the use of a word. 
mark. or symbol. These means now are encompassed by the broad, general terms of the 
revised definition of "sign." A signature may appear in the body of the instrument. as in the 
case of "I, John Doe, promise to pay***" without any other signature. It may be made in 
any name. including a name other than a designated payee. However, to be signed an 
instrument (a writing) must exist at the time it is signed by the execution or adoption of a 
tangible symbol on the instrument. The deletion of former subsection (b) effected no 
change in the law. 
This sectiofl is aot ia.teflded to aftect anj' other lav1 re(iuiriH:g a sigflature by .mark to be 
witflessed, or anj' siga.ature to be otherwise autheaticated, or re(iuiriH:g anj' form of proof. 
COMMITTEE AMENDMENT 
. 
ROS2 
COMMITTEE AMENDJ:vlENT 'A "to H.P. 59, L.D. 91 
Sec. A-37. 11 MRSA §3-1604, sub-§(1), 1(b), as enacted by PL 1993, c. 293, Pt. 
A, §2, is amended to read: 
(b ). By agreeing not to sue or otherwise renouncing rights against the party by a signed 
1.vritiag record. 
Sec. A-38. 11 MRSA §3-1604, sub-§(1) as enacted by PL 1993, c. 293, Pt. A, §2, 
is amended by enacting at the end a new first blocked paragraph to read: 
The obligation of a party to pay a check is not discharged solely by destruction of the check 
in connection with a process in which information is extracted from the check and an image 
of the check is made and, subsequently, the information and image are transmitted for 
payment. 
Official Comment 
.L. Section 3-604 replaces former Section 3-605. 
2. The destruction of a check in connection with a truncation process in which 
information is extracted from the check and an image of the check is made, and then such 
information and image are transmitted for payment is not within the scope of this section 
and does not by itself discharge the obligation of a party to pay the instrument. The 
destruction of the check also does not affect whether the check has been issued. See Section 
3-105(a) and Comment 1. 
3. Former subsection (c) has been deleted as unnecessary in view of the revised 
definition of "sign" in Section 1-201. 
Sec, A-39. 11 MRSA §4-1103, sub-§(1), 1(a), as enacted by PL 1991, c. 812, §2, 
is amended to read: 
(a). "Payment order" means an instruction of a sender to a receiving bank, transmitted 
orally, eleotroaieally or in v,1ritiag 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; 
* * * 
Official Comment 
.L. This section is discussed in the Comment following Section 4A-104. 
2. Pursuant to the Uniform Commercial Code Amendments (2022) and in furtherance 
of medium neutrality, the reference to "electronically, or in writing" in the pre-2022 text of 
this section has been changed to refer to "in a record." 
COMMITTEE AMENDMENT 
~OS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
Sec, A-40. 11 MRSA §4-1201, last 1, as enacted by PL 1991, c. 812, §2, is 
amended to read: 
A security procedure may impose an obligation on the receiving bank or the customer 
and may require the use of~ algorithms or other codes;; identifying words ef.,_ numbers, 
symbols or sounds; biometric identifiers; encryption;; callback procedures; or similar 
security devices. Comparison of a signature on a payment order or communication with 
an authorized specimen signature of the customer or requiring a payment order to be sent 
from a known e-mail address, Internet protocol address or telephone number is not by itself 
a security procedure. 
Official Comment 
LA large percentage of payment orders and communications amending or cancelling 
payment orders are transmitted electronically and it is standard practice to use security 
procedures that are designed to assure the authenticity of the message through steps 
designed to assure the identity of the sender. the integrity of the message. or both. Security 
procedures can also be used to detect error in the content of messages or to detect payment 
orders that are transmitted by mistake as in the case of multiple transmission of the same 
payment order. Security procedures might also apply to communications that are 
transmitted by telephone or in vi1ri:ting a record. Section 4A-201 defmes these security 
procedures. The second sentence of the definition provides several examples of a security 
procedure, but this list is not exhaustive. The inclusion of the phrase "or similar security 
devices" means that. as new technologies emerge, what can be a security procedure will 
evolve. The definition of security procedure limits the term to a procedure "established by 
agreement of a customer and a receiving bank. 
The term does not apply to procedures that 
the receiving bank may follow unilaterally in processing payment orders. The question of 
whether loss that may result from the transmission of a spurious or erroneous payment 
order will be borne by the receiving bank or the sender or purported sender is affected by 
whether a security procedure was or was not in effect and whether there was or was not 
compliance with the procedure. Security procedures are referred to in Sections 4A-202 and 
4A-203, which deal with authorized and verified payment orders, and Section 4A-205, 
which deals with erroneous payment orders. 
Requiring that a payment order be sent from a known email. IP address or phone 
number is not by itself a "security procedure" within the meaning of this section because it 
is possible to make a payment order with a different origin appear to have been sent from 
such an address or phone number. However. requiring that a payment order have such an 
apparent origin in combination with other security protocols might be a security procedure. 
2. Several revisions to the pre-2022 text of this section were made in furtherance of 
medium neutrality. Other 2022 revisions were made for clarification. 
Sec. A-41. 11 MRSA §4-1202, sub-§(2), 1(b), as enacted by PL 1991, c. 812, §2, 
is amended to read: 
(b ). The bank proves that it accepted the payment order in good faith and in compliance 
with the bank's obligations under the security procedure and any vRi-ttea agreement or 
instruction of the customer. evidenced by a record. restricting acceptance of payment 
orders issued in the name of the customer. The bank is not required to follow an 
instruction that violates a wri-ttea an agreement with the customer. evidenced by a 
COMMITTEE AMENDMENT 
ROS 1 
COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
record, or notice of which is not received at a time and in a manner affording the bank 
a reasonable opportunity to act on it before the payment order is accepted. 
Sec. A-42. 11 MRSA §4-1202, sub-§(3), 1(b), as enacted by PL 1991, c. 812, §2, 
is amended to read: 
(b ). The customer expressly agreed in vi1riting a record to be bound by any payment 
order, whether or not authorized, issued in its name and accepted by the bank in 
compliance with the bank's obligations under the security procedure chosen by the 
customer. 
Official Comment 
.1. This section is discussed in the Comment following Section 4A-203. 
2. In furtherance of medium neutrality. references to "written" and "writing" have been 
changed to refer to a "evidenced by a record" and "a record." Other 2022 revisions were 
made for clarification. 
Sec. A-43. 11 MRSA §4-1203, sub-§(1), ,r(a), as enacted by PL 1991, c. 812, §2, 
is amended to read: 
(a). By expresi; •.vritteH. agreement, evidenced by a record, the receiving bank may limit 
the extent to which it is entitled to enforce or retain payment of the payment order. 
Official Comment 
* * * 
3. Subsection (b) of Section 4A-202 is based on the assumption that losses due to 
:fraudulent payment orders can best be avoided by the use of commercially reasonable 
security procedures, and that the use of such procedures should be encouraged. The 
subsection is designed to protect both the customer and the receiving bank. A receiving 
bank needs to be able to rely on objective criteria to determine whether it can safely act on 
a payment order. Employees of the bank can be trained to "test" a payment order according 
to the various steps specified in the security procedure. The bank is responsible for the acts 
of these employees. Subsection (b )(ii) requires the bank to prove that it accepted the 
payment order in good faith and "in compliance with the bank's obligations under the 
security procedure." If the fraud was not detected because the bank's employee did not 
perform the acts required by the security procedure, the bank has not complied. Subsection 
(b )(ii) also requires the bank to prove that it complied with any agreement or instruction 
that restricts acceptance of payment orders issued in the name of the customer. If an 
agreement establishing a security procedure places obligations on both the sender and the 
receiving bank, the receiving bank need prove only that it complied with the obligations 
placed on the receiving bank. A customer may want to protect itself by imposing limitations 
on acceptance of payment orders by the bank. For example, the customer may prohibit the 
bank from accepting a payment order that is not payable from an authorized account, that 
exceeds the credit balance in specified accounts of the customer, or that exceeds some other 
amount. Another limitation may relate to the beneficiary. The customer may provide the 
bank with a list of authorized beneficiaries and prohibit acceptance of any payment order 
to a beneficiary not appearing on the list. Such limitations may be incorporated into the 
security procedure itself or they may be covered by a separate agreement or instruction. In 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
either case, the bank must comply with the limitations if the conditions stated in subsection 
(b) are met. Normally limitations on acceptance would be incorporated into an agreement 
between the customer and the receiving bank, but in some cases the instruction might be 
unilaterally given by the customer. If standing instructions or an agreement state limitations 
on the ability of the receiving bank to act, provision must be made for later modification of 
the limitations. Normally this would be done by an agreement that specifies particular 
procedures to be followed. Thus, subsection (b) states that the receiving bank is not required 
to follow an instruction that violates a vi1rittea ill! agreement evidenced by a record. The 
receiving bank is not bound by an instruction unless it has adequate notice of it. Subseotioas 
(25), (26), aad (27) of Seotioa 1 201 apply Section 1-202 applies. 
* * * 
4. The principal issue that is likely to arise in litigation involving subsection (b) is 
whether the security procedure in effect when a fraudulent payment order was accepted 
was commercially reasonable. In considering this issue. a court will need to consider the 
totality of the security procedure. including each party's obligations under the procedure. 
The concept of what is commercially reasonable in a given case is flexible. Verification 
entails labor and equipment costs that can vary greatly depending upon the degree of 
security that is sought. A customer that transmits very large numbers of payment orders in 
very large amounts may desire and may reasonably expect to be provided with state-of-the-
art procedures that provide maximum security. But the expense involved may make use of 
a state-of-the-art procedure infeasible for a customer that normally transmits payment 
orders infrequently or in relatively low amounts. Another variable is the type of receiving 
bank. It is reasonable to require large money center banks to make available state-of-the-
art security procedures. On the other hand, the same requirement may not be reasonable for 
a small country bank. A receiving bank might have several security procedures that are 
designed to meet the varying needs of different customers. The type of payment order is 
another variable. For example, in a wholesale wire transfer, each payment order is normally 
transmitted electronically and individually. A testing procedure will be individually applied 
to each payment order. In funds transfers to be made by means of an automated clearing 
house many payment orders are incorporated into an electronic device such as a magnetic 
tape that is physically delivered. Testing of the individual payment orders is not feasible. 
Thus, a different kind of security procedure must be adopted to take into account the 
different mode of transmission. 
The issue of whether a particular security procedure is commercially reasonable is a 
question of law. Whether the receiving bank complied with the procedure is a question of 
fact. It is appropriate to make the finding concerning commercial reasonability a matter of 
law because security procedures are likely to be standardized in the banking industry and 
a question of law standard leads to more predictability concerning the level of security that 
a bank must offer to its customers. The purpose of subsection (b) is to encourage banks to 
institute reasonable safeguards against fraud but not to make them· insurers against fraud. 
A security procedure is not commercially unreasonable simply because another procedure 
might have been better or because the judge deciding the question would have opted for a 
more stringent procedure. For example. the use of a computer program to detect fraud is 
not commercially unreasonable merely because it does not detect all fraud or because 
another system or approach might be more successful at detecting fraud. The standard is 
not whether the security procedure is the best available. Rather it is whether the procedure 
COMMITTEE AMENDMENT 
ROS_, 
COMMITTEE AMENDMENT «A "to H.P. 59, L,D, 91 
is reasonable for the particular customer and the particular bank, which is a lower standard. 
What is reasonable for a particular customer reguires the court to consider the 
circumstances of the customer known to the bank, including the size, type, and freguency 
of payment orders normally issued by the customer to the bank. Article 4A does not create 
an affirmative obligation on the receiving bank to obtain information about its customer. 
However, whatever knowledge the bank does have about the customer is relevant in 
determining the commercial reasonableness of the security procedure. Oa the other hand, 
a A security procedure that fails to meet prevailing standards of good banking practice 
applicable to the particular bank and customer should not be held to be commercially 
reasonable. Subsection ( c) states factors to be considered by the judge in making the 
determination of commercial reasonableness. The reasonableness of a security procedure 
is to be determined at the time that a payment order is processed, not at the time the 
customer and the bank agree to the security procedure. Accordingly, a security procedure 
that was reasonable when agreed to might become unreasonable as technologies emerge, 
prevailing practices change, or the bank acquires knowledge about the customer. 
Sometimes an informed customer refuses a security procedure that is commercially 
reasonable and suitable for that customer and insists on using a higher-risk procedure 
because it is more convenient or cheaper. In that case, under the last sentence of subsection 
( c ), the customer has voluntarily assumed the risk of failure of the procedure and cannot 
shift the loss to the bank. But this result follows only if the customer expressly agrees in 
wri-tiH:g a record to assume that risk. It is implicit in the last sentence of subsection ( c) that 
a bank that accedes to the wishes of its customer in this regard is not acting in bad faith by 
so doing so long as the customer is made aware of the risk. In all cases, however, a receiving 
bank cannot get the benefit of subsection (b) unless it has made available to the customer 
a security procedure that is commercially reasonable and suitable for use by that customer. 
In most cases, the mutual interest of bank and customer to protect against fraud should lead 
to agreement to a security procedure which is commercially reasonable. 
4A. Subsection (b) generally allows a receiving bank to treat a payment order as 
authorized by the customer if the bank accepts the payment order in good faith and in 
compliance with the bank's obligations under a commercially reasonable, agreed-upon 
security procedure. For this purpose, "good faith" requires the exercise of reasonable 
commercial standards of fair dealing, see Section 4A-105(a)(6), not the absence of 
negligence. Consequently, the bank has no duty, beyond that to which the bank has agreed, 
to investigate suspicious activity or to advise its customer of such activity. However, a bank 
that obtains knowledge that a customer's operations have been infiltrated or knowledge that 
the customer is the victim of identity fraud might not be acting in good faith if the bank, 
without receiving some assurance from the customer that the issue has been remediated, 
thereafter accepts a payment order. 
* * * 
8. In furtherance of medium neutrality, the reference to "written" in the pre-2022 text 
of this section has been changed to refer to "evidenced by a record." 
Sec. A-44. 11 MRSA §4-1207, sub-§(3), 1(b), as enacted by PL 1991, c. 812, §2, 
is amended to read: 
(b ). If the originator is not a bank and proves that the person identified by number was 
not entitled to receive payment from the originator, the originator is not obliged to pay 
COMMITTEE AMENDMENT 
R0~-
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
its order unless the originator's bank proves that the originator, before acceptance of 
the originator's order, had notice that payment of a payment order issued by the 
originator might be made by the beneficiary's bank on the basis of an identifying or 
bank account number even if it identifies a person different from the named 
beneficiary. Proof of notice may be made by any admissible evidence. The originator's 
bank satisfies the burden of proof if it proves that the originator, before the payment 
order was accepted, signed a v,rritmg record stating the information to which the notice 
relates. 
Official Comment 
* * * 
2. * * * "Know" is "Knowledge" and "knows" are defined in Section 1 201(25) 1-
202(b) to mean actual knowledge, and Section 1 201(27) 1-202(t) states rules for 
determining when an organization has knowledge of information received by the 
organization. The time of payment is the pertinent time at which knowledge or lack of 
knowledge must be determined. 
* * * 
4. In furtherance of medium neutrality. the reference to a "writing" in the pre-2022 
text of this s~ction has been changed to refer to a "record." 
Sec. A-45. 11 MRSA §4-1208, sub-§(2), 1(b), as enacted by PL 1991, c. 812, §2, 
is amended to read: 
(b). If the sender is not a bank and the receiving bank proves that the sender, before 
the payment order was accepted, had notice that the receiving bank might rely on the 
number as the proper identification of the intermediary or beneficiary's bank even if it 
identifies a person different from the bank identified by name, the rights and 
obligations of the sender and the receiving bank are governed by paragraph (a), as 
though the sender were a bank. Proof of notice may be made by any admissible 
evidence. The receiving bank satisfies the burden of proof if it proves that the sender, 
before the payment order was accepted, signed a writing record stating the information 
to which the notice relates. 
Official Comment 
* * * 
4. In furtherance of medium neutrality, the reference to a "writing" in the pre-2022 
text of this section has been changed to refer to a "record." 
Sec. A-46. 11 MRSA §4-1210, sub-§(1), as enacted by PL 1991, c. 812, §2, is 
amended to read: 
(1). 
A payment order is rejected by the receiving bank by a notice of rejection 
transmitted to the sender orally, eleetfonieally or in writing a record. A notice ofrejection 
need not use any particular words and is sufficient if it indicates that the receiving bank is 
rejecting the order or will not execute or pay the order. Rejection is effective when the 
notice is given if transmission is by a means that is reasonable in the circumstances. If 
notice of rejection is given by a means that is not reasonable, rejection is effective when 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
the notice is received. If an agreement of the sender and receiving bank establishes the 
means to be used to reject a payment order, any means complying with the agreement is 
reasonable and any means not complying is not reasonable unless no significant delay in 
receipt of the notice resulted from the use of the noncomplying means. 
Official Comment 
* * * 
2. A payment order to the beneficiary's bank can be accepted by inaction of the bank. 
Section 4A-209(b )(2) and (3). To prevent acceptance under those provisions it is necessary 
for the receiving bank to send notice ofrejection before acceptance occurs. Subsection (a) 
of Section 4A-210 states the rule that rejection is accomplished by giving notice of 
rejection. This incorporates the definitions in Section 1 201(26) 1-202(d). * * * 
3. * * * Subsection (b) obliges the receiving bank to pay interest to the sender as 
restitution unless the sender receives notice of rejection on the execution date. The time of 
receipt of notice is determined pursuant to § 1 201(27) Section l-202(e) and 0). The rate 
of interest is stated in Section 4A-506. If the sender receives notice on the day after the 
execution date, the sender is entitled to one day's interest. If receipt of notice is delayed 
for more than one day, the sender is entitled to interest for each additional day of delay. 
* * * 
5. In furtherance of medium neutrality, the reference to "electronically" in the pre-
2022 text of this section has been deleted as unnecessary and the reference to a "writing" 
in the pre-2022 text has been changed to refer to a "record." 
Sec. A-47. 11 MRSA §4-1211, sub-§(1), as enacted by PL 1991, c. 812, §2, is 
amended to read: 
(1). A communication of the sender of a payment order cancelling or amending the 
order may be transmitted to the receiving bank orally, eleotroaieally or in vffiting 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. 
Official Comment 
* * * 
2. Subsection (a) allows a cancellation or amendment of a payment order to be 
communicated to the receiving bank "orally, eleetronieally, or in writing a record." The 
quoted phrase is consistent with the language of Section 4A-103(a) applicable to payment 
orders. Cancellations and amendments are normally subject to verification pursuant to 
security procedures to the same extent as payment orders. Subsection (a) recognizes this 
fact by providing that in cases in which there is a security procedure in effect between the 
sender and the receiving bank the bank is not bound by a communication cancelling or 
amending an order unless verification has been made. This is necessaty to protect the bank 
because under subsection (b) a cancellation or amendment can be effective by unilateral 
action of the sender. Without verification the bank cannot be sure whether the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
communication was or was not effective to cancel or amend a previously verified payment 
order. 
* * * 
9. In furtherance of medium neutrality, the reference to "electronically" in the pre-
2022 text of this section has been deleted as unnecessary and the reference to a "writing" 
in the pre-2022 text has been changed to refer to a "record." 
Sec, A-48. 11 MRSA §4-1305, sub-§(3), as enacted by PL 1991, c. 812, §2, is 
amended to read: 
(3). 
In addition to the amounts payable under subsections (1) and (2), damages, 
including consequential damages, are recoverable to the extent provided in an express 
wri-tt0fl agreement of the receiving bank, evidenced by a record. 
Sec. A-49. 11 MRSA §4-1305, sub-§(4), as enacted by PL 1991, c. 812, §2, is 
amended to read: 
(4). If a receiving bank fails to execute a payment order it was obliged by express 
agreement to execute, the receiving bank is liable to the sender for its expenses in the 
transaction and for incidental expenses and interest losses resulting from the failure to 
execute. Additional damages, including consequential damages, are recoverable to the 
extent provided in an express wri-tt0fl agreement of the receiving bank, evidenced by a 
record. but are not otherwise recoverable. 
Official Comment 
* * * 
Subsection ( c) allows the measure of damages in subsection (b) to be increased by an 
express wri-tt0fl agreement of the receiving bank. evidenced by a record. An originator's 
bank might be willing to assume additional responsibilities and incur additional liability in 
exchange for a higher fee. 
3. Subsection ( d) governs cases in which a receiving bank has obligated itself by 
express agreement to accept payment orders of a sender. In the absence of such an 
agreement there is no obligation by a receiving bank to accept a payment order. Section 
4A-212. The measure of damages for breach of an agreement to accept a payment order is 
the same as that stated in subsection (b). As in the case of subsection (b ), additional 
damages, including consequential damages, may be recovered to the extent stated in an 
express Vffi-tteR agreement of the receiving bank. evidenced by a record. 
4. Reasonable attorney's fees are recoverable only in cases in which damages are 
limited to statutory damages stated in subsection (a), (b) and ( d). If additional damages are 
recoverable because provided for by an express 1mi-ttefl: agreement, evidenced by a record, 
attorney's fees are not recoverable. The rationale is that there is no need for statutory 
attorney's fees in the latter case, because the parties have agreed to a measure of damages 
which may or may not provide for attorney's fees. 
* * * 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
-
6. In furtherance of medium neutrality, references to a "written" agreement have been 
changed to refer to an agreement "evidenced by a record. 
Sec. A-50. 11 MRSA §5-1104, as enacted by PL 1997, c. 429, Pt. A, §2 and affected 
by §4, is amended to read: 
§5-1104. Formal requirements 
A letter of credit, confirmation, advice, transfer, amendment or cancellation may be 
issued in any form that is a signed record aad is authenticated by a sigaatl:lre or ia 
accordaace with the agreem:en-t of the parties or the standard practice referred to iH sectioa 
1108, subsectioa (5). 
Official Comment 
* * * 
2. This section was revised pursuant to the Uniform Commercial Code Amendments 
(2022). The reference in the pre-2022 text of this section to authentication by agreement of 
the parties or standard practice referred to in Section 5-108{e) is no longer necessary. Those 
forms of authentication are subsumed by the revised and expanded definition of "sign
in 
Section 1-20l(b)(37), which is broad and flexible. The authentication: requirement that a 
record be signed as specified in this section is authentication or adoption only of the identity 
of the issuer, confirmer, or adviser. 
1'\n authenticatioa agreem:ent m:ay be by Sj'stem: rule, bj• stan:dard practice, or by direct 
agreem:ent between: the parties. The referen:ce to practice is inteaded to iacerperate fu.tt¼fe 
de>;elopm:ents in. the UG:P aad other practice rules as 
1Nell as these that m:ay arise 
spentaaeously ia commercial practice. 
* * * 
Sec. A-51. 11 MRSA §5-1116, sub-§(1), as enacted by PL 1997, c. 429, Pt. A, §2 
and affected by §4, is amended to read: 
(1). The liability of an issuer, nominated person or adviser for action or omission is 
governed by the law of the jurisdiction chosen by an agreement in the form of a record 
signed er otherwise authenticated by the affected parties ia the m:anner pr011ided in. sectioa 
1104 or by a provision in the person's letter of credit, confirmation or other undertaking. 
The jurisdiction whose law is chosen need not bear any relation to the transaction. 
Sec. A-52. 11 MRSA §5-1116, sub-§(2), as enacted by PL 1997, c. 429, Pt. A, §2 
and affected by §4, is amended to read: 
(2), 
Unless subsection (1) applies, the liability of an issuer, nominated person or 
adviser for action or omission is governed by the law of the jurisdiction in which the person 
is located. The person is considered to be located at the address indicated in the person's 
undertaking. If more than one address is indicated, the person is considered to be located 
at the address from which the person's undertaking was issued. For the purpose of 
8 
jurisdiction, choice of law and recognition of interbranch letters of credit, but not 
9 
enforcement of a judgment, all branches of a bank are considered separate juridical entities 
and a bank is considered to be located at the place where its relevant branch is considered 
to be located under th4e subsection (2-A). 
COMMITTEE AMENDMENT 
ROS 
~,., .... ~ . .__.--..: 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
Sec. A-53. 11 MRSA §5-1106, sub-§(2-A) is enacted to read: 
(2-A). A branch of a bank is considered to be located at the address indicated in the 
branch's undertaking. If more than one address is indicated, the branch is considered to be 
located at the address from which the undertaking was issued. 
Official Comment 
1. Subsection (a) refers to a record signed by the affected parties. The reference in the 
pre-2022 text of subsection Ca) to an authentication pursuant to an agreement of the parties 
or standard practice is no longer necessary in view of the 2022 revision of "sign" in Section 
1-201. See Section 5-104. Comment 2. 
Although it would be possible for the parties to agree otherwise, the law normally 
chosen by agreement under subsection (a) and that provided in the absence of agreement 
under subsection (b) is the substantive law of a particular jurisdiction not including the 
choice of law principles of that jurisdiction. * * * 
* * * 
lA. The last sentence ofpre-2022 subsection (b) is now in a new subsection (c) and a 
new subsection (d) has been added. These revisions were necessary to eliminate a potential 
ambiguity arising from the first sentence of subsection (b). The first sentence has been 
construed incorrectly as meaning that the last sentence, which recognizes the separateness 
of bank branches for the specified put:poses, is inapplicable when a governing law has been 
chosen pursuant to subsection (a). These revisions reject that construction and reject 
decisions such as Zeeco, Inc. v. JPMorgan Chase Bank. Case No. 17 -CV-384-JED-FHM, 
2018 WL 1414119 {N.D. Okla. Mar. 21. 2018), amending opinion dated March 20, 2018, 
both opinions vacated, 2019 WL 3543081. 2019 U.S. Dist. LEXIS 133756 (Feb. 8. 2019). 
* * * 
3.* * * 
Even though Article 5 is generally consistent with UCP 500, it is not necessarily 
consistent with other rules or with versions of the UCP that may be adopted after Article 
S's revision, or with other practices that may develop. The phrase in subsection 5-116(e), 
"rules of custom or practice, such as the Uniform Customs and Practice for Documentary 
Credits," includes the International Standby Practices and the Uniform Rules for Demand 
Guarantees, as well as the Supplement to the Uniform Customs and Practice for 
Documentary Credits for Electronic Presentation. Rules of practice incorporated in the 
letter of credit or other undertaking are those in effect when the letter of credit or other 
undertaking is issued. Except in the unusual cases discussed in the immediately preceding 
paragraph, practice adopted in a letter of credit will override the rules of Article 5 and the 
parties to letter of credit transactions must be familiar with practice (such as fittHre versioes 
of the UGI?) that is explicitly adopted in letters of credit. 
* * * 
5. Subsection fe1 .(g} must be read in conjunction with existing law governing subject 
matter jurisdiction. If the local law restricts a court to certain subject matter jurisdiction 
not including letter of credit disputes, subsection W .(g} does not authorize parties to choose 
COMMITTEE AMENDMENT 
'"Ros 
i.:.. .. ~_l 
COMMITTEE AMENDMENT" A» to H.P. S9, L.D. 91 
that forum. For example, the parties' agreement under Section 5 116(e) 5-116(g) would 
not confer jurisdiction on a probate court to decide a letter of credit case. 
If the parties choose a forum under subsection Ce, (g), and if-because of other law-
that forum will not take jurisdiction, the parties' agreement or unde1taking should then be 
construed (for the purpose of forum selection) as though it did not contain a clause choosing 
a particular forum. That result is necessary to avoid sentencing the parties to eternal 
purgatory where neither the chosen State nor the State which would have jurisdiction but 
for the clause will take jurisdiction-the former in disregard of the clause and the latter in 
honor of the clause. 
Sec. A-54. 11 MRSA §7-1102, sub-§(1), ~f(j), as enacted by PL 2009, c. 324, Pt. 
A, §2 and affected by §4, is repealed. 
Sec. A-55. 11 MRSA §7-1102, sub-§(1), 1(k}, as enacted by PL 2009, c. 324, Pt. 
A, §2 and affected by §4, is repealed. 
*** 
Official Comment 
* * * 
5. The defmitions of "reeord" at1:d "siga" !H'e ineladed to faeilita-te eleetronie mediums. 
See eommeat 9 to Seetion 9 10:1 diseussing "reeord" at1:d the eommeflt to !H'flended Seetion 
:1103 diseussiflg "siga." Pursuant to the Uniform Commercial Code Amendments (2022) 
(2022 Amendments), paragraphs (10) and (11) of subsection (a) have been deleted as 
unnecessary. Section 1-201 includes substantially eguivalent defmitions of "record" and 
~ 
6. * * * 
In the case of a negotiable document of title, the person entitled is the holder. See 
Section l-201(b)(21) (defining "holder"). For a nonnegotiable document of title, the person 
entitled is the person provided in the terms of the document or instructions under the 
document. A transferee of a nonnegotiable document to which the document has been 
delivered acguires the transferee's rights and rights that the transferor had actual authority 
to convey. Section 7-504(a). However, until but not after the bailee receives notice of a 
transfer, such a transferee's rights are subject to those of persons identified in Section 
7-504(b), including "as against the bailee, by good faith dealings of the bailee with the 
transferor." Moreover, such a transferee is not a person entitled under the document unless 
so provided in the document or in instructions under the document. 
Article 7 does not explain what constitutes an "instruction under" a nonnegotiable 
document, but instead leaves it to commercial practice, including usage of trade (Section 
1-303(c)). In practice the term is generally understood to include a delivery order or other 
instruction to the bailee, by the person named in the document, to deliver the goods to a 
transferee of the document or to another person. A delivery order or other instruction under 
a nonnegotiable document should be distinguished from a mere "notice" or "notification" 
to the bailee of a transfer or security interest, as contemplated by Sections 7-504(b) and 
9-312(d)(2). However, an instruction could, functionally, also constitute such a notice. 
*** 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT •A" to H.P. 59, L.D. 91 
Sec, A-56. 11 MRSA §7-1106, as enacted by PL 2009, c. 324, Pt. A, §2 and affected 
by §4, is amended to read: 
§7-1106. Control of electronic document of title 
(1). 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. 
(2), A system satisfies subsection (1), and a person is deemed to baye has control of 
an electronic document of title, if the document is created, stored and assigaed transferred 
in saeh a manner that: 
(a). A single authoritative copy of the document exists that is unique, identifiable and, 
except as otherwise provided in paragraphs (d), (e) and (f), unalterable; 
(b ). 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; 
( c ). The authoritative copy is communicated to and maintained by the person asserting 
control or its designated custodian; 
(d). Copies or amendments that add or change an identified assigaee transferee of the 
authoritative copy can be made only with the consent of the person asserting control; 
(e). 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 
(f). Any amendment of the authoritative copy is readily identifiable as authorized or 
unauthorized. 
{3). 
A system satisfies subsection (1), 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: 
{a). 
Enables the person readily to identify each electronic copy as either an 
authoritative copy or a nonauthoritative copy; 
(b). 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 
which each authoritative electronic copy was issued or transferred; and 
(c). Gives the person exclusive power. subject to subsection (4). to: 
(i) Prevent others from adding or changing the person to which each authoritative 
electronic copy has been issued or transferred; and 
(ii) Transfer control of each authoritative electronic copy. 
{4). Subject to subsection (5), a power is exclusive under subsection (3), paragraph 
(c). subparagraphs (i) and (ii) even if: 
(a). 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 
COMMITTEE AMENDMENT 
ROS 1 
.;;:...: ___ ~ 2 
COMMITIEEAMENDMENT"A"toH.P. 59,L.D. 91 
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 
(b). The power is shared with another person. 
(5). 
A power of a person is not shared with another person under subsection (4), 
paragraph (b) and the person's power is not exclusive if: 
(a). The person can exercise the power only if the power also is exercised by the other 
person: and 
(b). 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. 
(6). 
If a person has the powers specified in subsection (3), paragraph (c). 
subparagraphs (i) and {ii), the powers are presumed to be exclusive. 
(7). 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: 
(a), Has control of the document and acknowledges that it has control on behalf of the 
person; or 
(b). Obtains control of the document after having acknowledged that it will obtain 
control of the document on behalf of the person. 
(8). A person that has control under this section is not required to acknowledge that it 
has control on behalf of another person. 
(9). If a person acknowledges that it has or will obtain control on behalf of another 
person, unless the person otherwise agrees or law other than this Article or Article 9-A 
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. 
* * * 
Pu:rpase: 
Official Comment 
1. The 2022 revision of this section on control of electronic documents of title 
preserves subsection {a), the general rule. and subsection (b), the "safe harbor" from the 
pre-2022 section. The minor stylistic revisions are not substantive. The other revisions add 
a second "safe harbor" in subsection (c), explanatory provisions relating to exclusivity of 
powers in subsections ( d) and ( e ). a presumption of exclusivity of powers in subsection (f). 
and a new subsection (g) on control through another person, The requirements for obtaining 
control under subsection (c) were inspired by Section 12-105 on control of controllable 
electronic records. See Section 12-105 and Comments. 
+he This section defines "control" for electronic documents of title. Subsections (a) 
and (b) cm:d derives its rules derive from the Uniform Electronic Transactions Act-§- Section 
on transferrable records. Unlike under UETA-§- Section 16, however, a document of 
title may be reissued in an alternative medium pursuant to Section 7-105. At any point in 
time in which a document of title is in electronic form, the control concept of this section 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
is relevant. As under UETA-§- Section 16, the control concept embodied in this section 
provides the legal framework for developing systems for electronic documents of title. 
2. Control of an electronic document of title substitutes for the concept of indorsement 
(for negotiable documents) and possession ia the taagible dool¼HleBt of title ooate~rt (for 
tangible documents of title). See Section 7-501. A person with a tangible document of title 
delivers the document by voluntarily transferring possession and a person with an 
electronic document of title delivers the document by voluntarily transferring control. 
(Delivery is defined in Section 1-20l(b)(15)). 
3. Subsection (a) sets forth the general rule that the "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." The key to having a 
system that satisfies this test is that identity of the person to which the document was issued 
or transferred must be reliably established. Of great importance to the functioning of the 
control concept under subsection (a), as well as under the safe harbors in subsections (b) 
and (c), is to be able to demonstrate and identify, at any point in time, the person entitled 
under the electronic document. For example, a carrier may issue an electronic bill of lading 
by having the required information in a database that is encrypted and accessible by virtue 
of a password. If the computer system in which the required information is maintained 
identifies the person as the person to which the electronic bill of lading was issued or 
transferred, that person has control of the electronic document of title. That identification 
may be by virtue of passwords or other encryption methods. Registry systems may satisfy 
this test. For example, see the electronic warehouse receipt system established pursuant to 
C.F.R. Part 735. This Article leaves to the market place the development of sufficient 
technologies and business practices that will meet the test. 
An electronic document of title is evidenced by a record consisting of information 
stored in an electronic medium. See Section l-20l(b)(l6A) (defining "electronic") and (31) 
(defining "record"). For example, a record in a computer database could be an electronic 
document of title assuming that it otherwise meets the definition of document of title. To 
the extent that third parties wish to deal in paper mediums, Section 7-105 provides a 
mechanism for exiting the electronic environment by having the issuer reissue the 
document of title in a tangible medium. Thus if a person entitled to enforce an electronic 
document of title causes the information in the record to be printed onto paper without the 
issuer's involvement in issuing the document of title pursuant to Section 7-105, that paper 
is not a document of title. 
4. Subsection (a) sets forth the general test for control. S'l:1-0seotioa Subsections (b) and 
{£)__sea set forth a safe harbor test tests that~ if satisfied, feffi:Hts. result in control under the 
general test in subsection (a). The safe harbor in subsection (b) requires the existence of 
only one authoritative copy of the document but the safe harbor in subsection (c) allows 
for either a single authoritative copy or multiple authoritative copies. 
The test in sebseetioa (b) is also esed ill Seotioa 9 105 althoegh. Seetion 9 105 does 
Hot inclade the geneFal test of sHeseotion (a). Under subsection (b ), at any point in time, a 
party should be able to identify the single authoritative copy which is unique and 
identifiable as the authoritative copy. This does not mean that once created that the 
authoritative copy need be static and never moved or copied from its original location. To 
the extent that backup systems exist which result in multiple copies, the key to this idea is 
that at any point in time, the one authoritative copy needs to be unique and identifiable. 
COMMITTEE AMENDMENT 
-Rqs 
COMM11TEE AMENDMENT 'A "to H.P. 59, L.D. 91. 
Parties may not by coRtract pro11ide that control ~ists. The test for control is a factual 
test that depends upon whether the general test in sl¼bseetion (a) or the safe hlll·bor in 
sl¼bsection (b) is satisfied. 
5. Article 7 has historically provided for rights under documents of title and rights of 
transferees of documents of title as those rights relate to the goods covered by the 
document. Third parties may possess or have control of documents of title. While 
misfeasance or negligence in failure to transfer or mis delivery of the document by those 
third patties may create serious issues, this Article has never dealt with those issues as it 
relates to tangible documents of title, preferring to leave those issues to the law of contracts, 
agency and tort law. In the electronic document of title regime, third party registry systems 
ate just begiBning to de1relop. It is 1rery difficult to v,ri-te rules regulating those third parties 
v,i-thout some defmi-tiire sense of how the third party registry systems will be strnctured. 
Systems that ate evolYing to date tend to be "closed" systems in vihich all patticipaRts must 
sign on to the master agreement vihich prn1rides for rights as against the registry system as 
well as rights among the members. In those elosed systems, the doeument of title ne1,ter 
leaves the system so the plllties rely upon the master agreemeRt as to Fights against the 
registry for i-ts failures in dealing with the document. This artiele contemplates that those 
"closed" systems vt'ill eontinue to eirolve and that the eontFol mechanism in this statute 
pro1Ades a method for the participants in the elosed system to achieve the benefits of 
obtaining eontFol allo1t11ed by this article. 
This article also contemplates that patties will eirowe open systems where parties need 
not be subject to a master agreemeRt. In an open system a party that is ~pecting to obtain 
rights through an electronic doeumeRt may not be a party to the master agreemeRt. continue 
to evolve. To the extent that open these systems evolve by use of the control concept 
concepts contained in this section, the law of contracts, agency, and torts as it applies to the 
registry's misfeasance or negligence concerning the transfer of control of the electronic 
document will allocate the risks and liabilities of the parties as that other law now does so 
for third parties who hold tangible documents and fail to deliver the documents. 
6. The subsection {c) "safe harbor" generally follows Section 12-105 for control of 
controllable electronic records as well as revised Section 9-105 on control of chattel paper 
evidenced by electronic records. See generally Sections 9-105 and 12-105 and Comments. 
It differs from subsection (b), which {as noted above) is based on a "single authoritative 
copy" of an electronic document of title and so is unavailable when the relevant record is 
maintained on a blockchain or another distributed ledger. The utility of distributed ledger 
technology depends on there being multiple authoritative copies of an electronic record. It 
is important to note that compliance with the conditions for control in subsection (c) also 
would satisfy the conditions provided in subsection (b). However, subsection (b) was 
retained out of an abundance of caution and to provide assurances that existing systems for 
control of electronic documents of title continue to be viable. The conditions for "control" 
in subsection ( c) reflect the functions that possession serves with respect to writings, but in 
a more accurate and technologically flexible way than do the conditions in subsection (b). 
7. Under subsection (c), to obtain control of an electronic document of title a person 
must be able to identify each electronic copy as authoritative or nonauthoritative and 
identify itself as the person to which each authoritative electronic copy has been issued or 
transferred. As to the means of identification, see Section 12-105. Comment 7. In addition, 
the person must have the exclusive powers, first, to prevent others from adding or changing 
COMMITTEE AMENDMENT 
_RqS 
COMMITTEE AMENDMENT •A" to H.P. 59, L.D. 91 
an identified person to which each authoritative electronic copy has been issued or 
transferred and. second. to transfer control of each authoritative copy. However. once it is 
established that a person has received those powers. subsection (f) provides a presumption 
of exclusivity. Consequently, a person asserting control need not prove exclusivity in order 
to make out a prima facie case. Application of the presumption will be governed also by 
Section 1-206 (effects of a presumption under the UCC) and applicable non-UCC law 
(including rules of procedure and evidence). In addition. subsection (d) contains two 
qualifications of the term "exclusive" as used in subsection (c)(3). A power can be 
"exclusive" under subsection (c)(3) even if one or both of these qualifications apply. 
Subsection (e) provides that in certain circumstances a power is not shared within the 
meaning of subsection (d)(2). the relaxation of the exclusivity requirement provided by 
subsection (d)(2) does not apply, and. consequently. a person's power is not exclusive. 
Subsection ( e) provides that a person does not share an exclusive power with another person 
if the person can exercise the power only with the other person's cooperation (subsection 
(e)(l)) but the other person either (i) can exercise of the power without the person's 
cooperation (subsection (e)(2)(A)) or (ii) is the transferor to the person (transferee) of an 
interest in the document of title (subsection (e)(2)(B)). It follows that a person to which 
subsection (e) applies does not have control based on its exclusive powers (although it 
might have control through another person under subsection (g), discussed below, or if 
another person having control is acting as the person's agent). As to the rationale for 
disqualifying a transferee (which includes a secured party in a secured transaction) from 
the benefit of shared control under subsection (d)(2), as provided in subsection (e)(2)(B), 
and for examples of the operation of subsection ( e) (in the context of the similar provision 
in Section 12-105), see Section 12-105, Comments 5 and 9. 
8. Subsection (g) provides for a person to obtain control through the control of another 
person. It follows revisions to the corresponding provisions for control of a security 
entitlement (Section 8-106( d)(3 )). control of deposit accounts (Section 9-104(a)( 4 )), 
control of authoritative electronic copies of records evidencing chattel paper (Section 9-
105(g)), control of electronic money (Section 9-105A(e)), and control of controllable 
electronic records (Section 12-105(e)). For a brief discussion and background, see Section 
12-105, Comment 8. Under subsection (g) for an acknowledgment by another person to be 
effective to confer control on a person, the other person making the acknowledgment must 
be one "other than the transferor of an interest in the electronic record" to the person. The 
rationale for this limitation is discussed in Section 12-105, Comment 9. Control based on 
an acknowledgment under subsection (g) by another person having control continues only 
while the other person retains control. This result necessarily follows because such control 
derives solely from the other person's continued control. 
Subsections (h) and (i) derive from Section 9-313(0 and (g). Subsection (h) makes 
clear that a person that has control under this section has no duty to acknowledge that it has 
or will obtain control on behalf of another person. Arrangements for a person to 
acknowledge that it has or will obtain control on behalf of another person are not 
standardized. Accordingly, subsection (i) leaves to the agreement of the parties and to any 
other applicable law (other than this Article or Article 9) any duties of a person that does 
acknowledge that it has or will obtain control on behalf of another person and provides that 
a person making an acknowledgment is not required to confirm the acknowledgment to 
another person. For example, subsection (g) would apply to give control to a person. Alpha, 
COMMITTEE AMENDMENT 
~§_ 
COMMITTEE AMENDMENT 'A" to H.P. 59, L,D. 91 
when another person. Beta. has control of each authoritative electronic document of title 
and acknowledges that it has control on behalf of Alpha, However. under subsection (h), 
Beta is not required to so acknowledge. And under subsection (i), even if Beta does so 
acknowledge, Beta owes no duty to Alpha, unless Beta agrees or other law so provides, and 
Beta is not required to confirm its acknowledgment to any other person. 
9, This section applies to both negotiable and nonnegotiable electronic documents of 
title, For negotiable electronic documents of title, "delivery" is a necessary condition for 
negotiation. and therefore for due negotiation, under Section 7-50l(b). "Delivery" of an 
electronic document of title is defined in Section 1-201(b)(l5) as the "voluntary transfer of 
control." The person in control of a negotiable document. other than pursuant to subsection 
(g). also is a "holder." as defined in Section l-201(b)(21)(C). Of course. nonnegotiable 
documents cannot be negotiated, 
A security interest in an electronic document of title, whether negotiable or 
nonnegotiable. may be perfected by control. Section 9-314(a). But perfection of a security 
interest by control in a nonnegotiable document does not perfect a security interest in goods 
covered by the document and does not confer on a secured party or other purchaser the 
status of a person entitled under the document. See Section 7-102(a)(9) (defining "person 
entitled under the document") and Comment 6. This distinction arises from the differing 
rights conferred by a negotiable document and a nonnegotiable document. Both types serve 
as a receipt for the goods delivered to the bailee and a contract of storage (in the case of a 
warehouse receipt) or contract of carriage (in the case of a bill of lading), However, a 
negotiable document is also a representation of the goods themselves, whereas a 
nonnegotiable document confers only the right to receive possession of the goods. (On 
perfection of security interests in negotiable documents of title and goods covered by 
negotiable and nonnegotiable documents of title. see generally Section 9-312(a). (c). and 
(g) and Comment 7 ,) 
Sec. A-57. 11 MRSA §8-1102, sub-§(1), 1(f), as enacted by PL 1997, c. 429, Pt. 
B, §2, is amended by amending subparagraph (i) to read: 
(i) Send a signed v1ri-tmg record; or 
Sec. A-58. 11 MRSA §8-1102, sub-§(2), as enacted by PL 1997, c. 429, Pt. B, §2, 
is amended to read: 
(2). Gther The following definitions applymg to in this Article and the sections in 
•,vhieh. th~• appear are other Articles apply to this Article: 
Appropriate person 
Section 8-1107 
Control 
Section 8-1106 
Controllable account 
Section 9-1102 
Controllable electronic record 
Section 12-102 
Controllable payment intangible 
Section 9-1102 
Delivery 
Section 8-1301 
Investment company security 
Section 8-1103 
Issuer 
Section 8-1201 
Overissue 
Section 8-1210 
Protected purchaser 
Section 8-1303 
Securities account 
Section 8-1501 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
Official Comment 
*** 
6. "Communicate." The term "communicate" assures that the Article 8 rules will be 
sufficiently flexible to adapt to changes in information technology. Sending a signed 
writing always suffices as a communication, but the pai1ies can agree that a different means 
of transmitting information is to be used. Agreement is defined in Section 1 201(3) 1: 
20Hb)(3) as "the bargain of the parties in fact as found-in their language or by implication 
from other circumstances including course of dealing or usage of trade or course of 
performance." Thus, use of an information transmission method might be found to be 
authorized by agreement, even though the parties have not explicitly so specified in a 
formal agreement. The term communicate is used in Sections 8-102(a)(7) (definition of 
entitlement order), 8-102( a)( 11) ( definition of instruction), and 8-403 ( demand that issuer 
not register transfer). Also in furtherance of medium neutrality. pursuant to the Uniform 
Commercial Code Amendments (2022) (2022 Amendments) the reference in paragraph 
(6)(i) to a "signed writing" has been changed to refer to a "signed record." 
9. "Financial asset." * * * 
* * * 
It is not necessary for all of the Part 5 rules to be relevant to a particular financial asset 
for the relevant property to qualify as a "financial asset" credited to a securities account. 
Many of the duties set forth in Part 5 will often be relevant to a digital asset such as a 
"controllable electronic record" (Section 12-102). or a "controllable account" or 
"controllable payment intangible" (Section 9-102) evidenced by a controllable electronic 
record. treated as a financial asset credited to a securities account. These duties include the 
duty to exercise rights as directed by the entitlement holder. comply with the entitlement 
holder's entitlement orders. and change the position to another form of holding. 
If the parties agree to treat a digital asset as a financial asset under Article 8 and the 
digital asset is in fact held in a securities account for an entitlement holder. the rules 
applicable to controllable electronic records under Article 12 would not apply to the 
entitlement holder's security entitlement related to the financial asset. If the financial asset 
itself is a controllable electronic record. however, then the rules in Article 12 could apply 
to the securities intermediary's rights with respect to the controllable electronic record if 
the intermediary holds the asset directly. 
* * * 
14. "Securities intermediary." A "securities intermediary" is a person that in the 
ordinary course of its business maintains securities accounts for others and is acting in that 
capacity. The most common examples of securities inte1mediaries would be clearing 
corporations holding securities for their participants, banks acting as securities custodians, 
and brokers holding securities on behalf of their customers. However. a person need not be 
such an entity in order to be a securities intermediary. Because a "securities account" is an 
account to which a financial asset is or may be credited under Section 8-501(a) and the 
definition of "financial asset" is not limited to securities. a person may be a "securities 
intermediary" even if that person does not credit "securities" (as defined in Article 8) to the 
account. Rather. the securities accounts that a securities intermediary maintains may consist 
exclusively of financial assets described in Section 8-102(a)(9)(ii) and (iii). For example, 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
a cryptocurrency exchange that holds only cryptocurrencies (and not securities) for 
customers might be a securities intermediary. Clearing corporations are listed separately as 
a category of securities intermediary in subparagraph (i) even though in most circumstances 
they would fall within the general definition in subparagraph (ii). The reason is to simplify 
the analysis of arrangements such as the NSCC-DTC system in which NSCC performs the 
comparison, clearance, and netting function, while DTC acts as the depository. Because 
NSCC is a registered clearing agency under the federal securities laws, it is a clearing 
corporation and hence a securities intermediary under Article 8, regardless of whether it is 
at any particular time or in any particular aspect of its operations holding securities on 
behalf of its participants. 
* * * 
The definition of securities intermediary includes the requirement that the person in 
question "in the ordinary course of its business maintain securities accounts for others", 
This "ordinary course" requirement does not have a fixed quantitative requirement and is 
determined by the facts of each case. Thus, a person need not necessarily satisfy a specified 
threshold of activity or necessarily have a minimum number of customers. Law other than 
the UCC may determine wh.o may legally engage in such a business. 
* * * 
18. "Uncertificated security." The term "uncertificated security" means a security that 
is not represented by a security certificate-Le,, a paper certificate. This is so even if, for 
example, the organic documents relating to the security refer to it as being "certificated" or 
refer to the electronic record evidencing the security as an "electronic certificate." For 
uncertificated securities, there is no need to draw any distinction between the underlying 
asset and the means by which a direct holder's interest in that asset is evidenced, Compare 
"certificated security" and "security certificate," 
As discussed above in Comment 9, a controllable electronic record may be a "financial 
asset." However, a controllable electronic record is not itself a "security," defined in part 
in Section 8-102(a)(l 5) as "an obligation of an issuer or a share, participation, or other 
interest in an issuer or in property or an enterprise of an issuer." It also is not "a share or 
similar equity interest," an "investment company security," or "an interest in a partnership 
or limited liability company." See Section 8-103(a). (b), and (c). Of course. a controllable 
electronic record might be involved in the issuance and distribution of something that is a 
security for other, non-Article 8 purposes. including the federal securities laws. For 
example, a controllable electronic record (perhaps labeled as a "token" or "coin") might 
provide a mechanism for facilitating investments in such securities, As Section 8-102(d) 
makes clear. however, characterization under Article 8 does not determine characterization 
for other purposes, The converse is also true--characterization for other purposes does not 
determine characterization under Article 8. 
Although not itself an Article 8 security. a controllable electronic record might play a 
role in the facilitating transactions in Article 8 securities, The following examples address 
situations in which controllable electronic records may have such a role as well as situations 
in which investment property is not involved. 
Example 1 (corporate shares: Article 8 uncertificated securities; token as 
instruction). A Delaware corporation (D Corp) issues shares of stock and 
maintains books and records evidencing the registered ownership of the shares, 
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COMMIITEEAMENDMENT"A"toH.P. 59,L.D. 91 
Because the shares are not represented by security certificates. they are 
uncertificated securities. Pursuant to the applicable law and the organic 
documentation of D Corp. D Corp creates. or causes to be created. controllable 
electronic records (CERs}="tokens"-to facilitate transfers of the shares. Also 
pursuant to that law and documentation. the transfer of control of a token on the 
platform on which the token is recorded constitutes an instruction to D Corp. as 
issuer. for the transfer ofregistration of the share(s) represented by the token to the 
transferee of control. Following receipt of the instruction upon transfer of control 
of a token. D Corp transfers registration of the share(s) on its books and records. 
See Sections 8-102(a)(l 2) ( defining "instruction"): 8-401 ( duty of issuer to register 
transfer). Although Article 12 governs the tokens (as CERs) and the transfer of 
control thereof, other law. including Delaware corporate law and Delaware Article 
(and Article 9 of the relevant jurisdiction. if applicable) governs rights in the 
uncertificated securities and the transfer of registration. See Sections 8-11 0(a): 12-
1.Qfil1. 
Example 2 (LLC membership interests: Article 8 uncertificated securities; 
token as instruction). A Delaware limited liability company (LLC) issues 
membership interests that are dealt in or traded on securities exchanges or in 
securities markets and which by their terms are securities governed by Article 8. 
See Section 8-103(c). LLC maintains books and records evidencing the registered 
ownership of the interests. Because the interests are not represented by security 
certificates, they are uncertificated securities. Pursuant to the applicable law and 
the organic documentation of LLC, LLC creates. or causes to be created, 
controllable electronic records (CERs)-"tokens"-to facilitate transfers of the 
interests. Also pursuant to that law and documentation. the transfer of control of a 
token on the platform on which the token is recorded constitutes an instruction to 
LLC. as issuer, for the transfer of registration of the interest(s) represented by the 
token to the transferee of control. Following receipt of the instruction upon transfer 
of control of a token. LLC transfers registration of the interest(s) on its books and 
records. See Sections 8-102(a)(l2) (defining "instruction"): 8-401 (duty of issuer 
to register transfer). Although Article 12 governs the tokens (as CERs) and the 
transfer of control thereof. other law. including Delaware LLC law and Delaware 
Article 8 (and Article 9 of the relevant jurisdiction. if applicable). governs rights 
in the uncertificated securities and the transfer of registration. See Sections 8-
110(a): 12-104(f). 
Example 3 (LLC membership interests not covered by Article 8; interests are 
general intangibles). A Delaware limited liability company issues membership 
interests that are not securities governed by UCC Article 8 and. consequently. are 
not investment property. See Section 8-103(c). Instead. the membership interests 
are general intangibles. LLC maintains books and records evidencing ownership 
of the interests. Pursuant to the applicable law and the organic documentation of 
LLC. LLC creates. or causes to be created, controllable electronic records 
(CERs):--:"tokens"-to facilitate transfers of the interests. Also pursuant to that law 
and documentation. the transfer of control of a token on the platform on which the 
token is recorded constitutes a request to LLC. as issuer. for the transfer of the 
interest(s) related to the token. Following receipt of the request upon transfer of 
control of a token, LLC transfers the interest(s) on its books and records. Although 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ;,A,, to H.P. 59, L.D. 91 
Article 12 governs the tokens (as CERs) and the transfer of control, other law 
(including Article 9 or the relevant jurisdiction. if applicable. but not Article 8) 
governs rights in the interests (general intangibles). See Section 12-104(f). 
Examples 1 and 2 posit that controllable electronic records function as instructions to 
the issuers. For an analogous example in another context, see Section 4A-104, Comment 3 
("An instruction to pay might be a component of a computer program or a transaction 
protocol intended to execute automatically under specified circumstances."). The central 
point is that the roles of the controllable electronic records must comply with the organic 
corporate and LLC laws and documentation as well as the Article 8 regime for 
uncertificated securities. Although controllable electronic records might be structured to 
functionally "represent" the underlying uncertificated securities, Article 8 makes no 
provision for such a "representation" for uncertificated securities (unlike the role of security 
certificates for certificated securities). Whether it would be possible and feasible to expand 
the structure contemplated in Examples 1 and 2 so that transfer of control of a controllable 
electronic record would. ipso facto, constitute a transfer ofregistration on the issuer's books 
and records would depend on the terms of and compliance with both the underlying organic 
laws and documentation for the uncertificated securities, the requirements of Article 8, and. 
where applicable. other law. 
If the securities issued by D Corp or LLC in Examples 1 and 2 were payment 
obligations of the issuers that met the definition of "security" in Section 8-102(a)0 5)=i.e., 
debt securities-the same analysis discussed in those examples as to the applicability and 
scope of Articles 8 and 12 would apply. However. if the debt obligations were not A1ticle 
securities (as in Example 3) but were obligations of account debtors on controllable 
accounts or controllable payment intangibles. then the relevant provisions of Articles 9 and 
12. and not those of Article 8, would apply. See, e.g .. Sections 9-107A: 9-306B: 9-314: 12-
104(a), (b), and (e) and Comments 6- 10: Article 12. Prefatory Note 4. 
Sec. A-59. 11 MRSA §8-1103, sub-§(8) is enacted to read: 
(8). 
A controllable account. controllable electronic record or controllable payment 
intangible is not a financial asset unless section 8-1102, subsection (1). paragraph (i). 
subparagraph (iii) applies. 
Official Comment 
* * * 
8. Subsection (g) allows a document of title to be a financial asset and thus subject to 
the indirect holding system rules of Part 5 only to the extent that the intermediary and the 
person entitled under the document so agree to do so pursuant to Section 8-102(a)(9)(iii). 
Subsection (h). added pursuant to the 2022 Amendments. adopts the same approach for a 
controllable account. controllable electronic record. or controllable payment intangible. 
This is to prevent the inadvertent application of the Part 5 rules to intermediaries who may 
hold either electronic or tangible documents of title or controllable accounts. controllable 
electronic records. or controllable payment intangibles. 
Sec. A-60. 11 MRSA §8-1106, sub-§(4), 1(c), as enacted by PL 1999, c. 699, Pt. 
B, §21 and affected by §28, is amended to read: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to H.P. 59, L,D. 91 
( c ). Another person has eontrol of the seearity entitlement on behalf of the rnwehaser 
or, haying 13re>tioasly aequired eontl'Ol of the see1:1rity entitlement, aekn.owledges that 
it has eontrol on behalf of the 13arehaser .• 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. 
Sec. A-61. 11 MRSA §8-1106, sub-§(8) is enacted to read: 
(8). A person that has control under this section is not required to acknowledge that it 
has control on behalf of a purchaser. 
Sec. A-62. 11 MRSA §8-1106, sub-§(9) is enacted to read: 
(9). If a person acknowledges that it has or will obtain control on behalf of a purchaser, 
unless the person otherwise agrees or law other than this Article or Article 9-A otherwise 
provides, the person does not owe any duty to the purchaser and is not required to confirm 
the acknowledgment to any other person. 
Official Comment 
1. The concept of 
11control
plays a key role in various provisions dealing with the 
rights of purchasers, including secured parties. See Sections 8-303 (protected purchasers); 
8-503(e) (purchasers from securities intermediaries); 8-510 (purchasers of security 
entitlements from entitlement holders); 9-203(b)(3)(D) (attachment of security interests); 
9-314 (perfection of security interests); 9-328 (priorities among conflicting security 
interests). 
Obtaining "control" means that the purchaser has taken whatever steps are necessary, 
given the manner in which the securities or other financial assets are held, to place itself in 
a position where it can have the securities or other financial assets sold, without further 
action by the owner. registered owner, entitlement holder, transferor, or other person with 
an interest in the securities or other financial assets. 
* * * 
4. Subsection (d) specifies the means by which a purchaser can obtain control of a 
security entitlement. Three mechanisms are possible, analogous to those provided in 
subsection ( c) for uncertificated securities. Under subsection ( d)(l ), a purchaser has control 
if it is the entitlement holder. This subsection would apply whether the purchaser holds 
through the same intermediary that the debtor used, or has the securities position transferred 
to its own intermediary. Subsection (d)(2) provides that a purchaser has control if the 
securities intermediary has agreed to act on entitlement orders originated by the purchaser 
if no further consent by the entitlement holder is required. Under subsection ( d)(2), control 
may be achieved even though the original entitlement holder remains as the entitlement 
holder. Finally, a purchaser may obtain control under subsection (d)(3) if another person 
has control and the person acknowledges that it has control on the purchaser's behalf. 
Control In general, control under subsection (d)(3) parallels the delivery of certificated 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
securities and uncertificated securities under Section 8-301. Of eourse, the aeknov,rledging 
persoa eanflot be the debtor. See the discussion of subsection ( d)(3) in Comment 4A. below. 
This seetioR Subsection (d) specifies only the minimum requirements that such an 
arrangement must meet to confer "control" of a security entitlement; the details of the 
arrangement can be specified by agreement. The arrangement might cover all of the 
positions in a particular account or subaccount, or only specified positions. There is no 
requirement that the control party's right to give entitlement orders be exclusive. The 
arrangement might provide. for example, that only the control party can give entitlement 
orders, er that either the entitlement holder or the control party can give entitlement orders .. 
that more than one person has unilateral control, or that two or more persons share control. 
The essential factor is whether a person may originate entitlement orders without further 
consent of the entitlement holder. See subsection (f), 
The following examples illustrate the application of subsection ( d): 
* * * 
Example 9. Debtor grants Alpha Bank a security interest in a security entitlement 
that includes 1000 shares of XYZ Co. stock that Debtor holds through an account 
with Able & Co. Beta Bank agrees with Alpha to act as Alpha's collateral agent 
with respect to the security entitlement. Debtor, Able, and Beta enter into an 
agreement under which Debtor will continue to receive dividends and distributions, 
and will continue to have the right to direct dispositions, but Beta also has the right 
to direct dispositions. Because Able has agreed that it will comply with entitlement 
orders originated by Beta without further consent by Debtor, Beta has control of 
the security entitlement (see Example 3). Because Beta has acknowledged that it 
has control on behalf of Alpha, Alpha also has control under subsection (d)(3). It 
is not necessary for Able to enter into an agreement directly with Alpha or for Able 
to be aware of Beta's ageRey relationship with Alpha. 
* * * 
4A. Pursuant to the 2022 Amendments, subsection (d)(3) was revised to conform the 
provision for control through another person to the cotTesponding provisions for control of 
other types of assets. See Section 12-105, Comment 8; see also Sections 7-106(g) (control 
of electronic document of title); 9-104(a)( 4) (control of deposit account); 9-105(g) (control 
of authoritative electronic copy of a record evidencing chattel paper); 9-105A(e) (control 
of electronic money). Control based on an acknowledgment under subsection (d)(3) by 
another person having control continues only while the other person retains control. This 
result necessarily follows because such control derives solely from the other person's 
continued control. Under subsection (d)(3), for an acknowledgment to be effective to 
confer control, it must be made by a person "other than the transferor of an interest in the 
security entitlement." See Section 12-105. Comment 9 (discussing the rationale for this 
requirement). Subsections (h) and (i) derive from Section 9-313(f) and (g). Subsection (h) 
makes clear that a person that has control under this section has no duty to acknowledge 
that it has or will obtain control on behalf of a purchaser. Arrangements for a person to 
acknowledge that it has or will obtain control on behalf of another person are not 
standardized. Accordingly, subsection (i) leaves to the agreement of the parties and to any 
other applicable law (other than this Article or Article 9) any duties of a person that does 
acknowledge that it has or will obtain control on behalf of a purchaser and provides that a 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT •A "to H.P. 59, L.D. 91 
person making an acknowledgment is not required to confirm the acknowledgment to any 
other person. 
* * * 
Sec. A-63. 11 MRSA §8-1110, sub-§(7) is enacted to read: 
(7). 
The local law of the issuer's jurisdiction or the securities inte1mediary's 
jurisdiction governs a matter or transaction specified in subsection (1) or (2) even if the 
matter or transaction does not bear any relation to the jurisdiction. 
Official Comment 
1. * * * 
* * * See Comments 3 and 5 through 7 below and PEB Commentary No. 19~ 
.April 11, 2017. 
* * * 
3. * * * 
Where the Hague Securities Convention applies, the foregoing provisions of an account 
agreement effectively determine the applicable law only if the intermediary, at the time of 
the agreement, had an office in the designated jurisdiction (which may be anywhere in the 
United States if the account agreement specifies a state of the United States) that is engaged 
in a regular activity of maintaining securities accounts (a "Qualifying Office"). However, 
because the policy of this section and the Convention is to enable parties to determine, in 
advance and with certainty, what law will apply to transactions governed by this Article, 
the validation of the parties' selection of governing law by agreement is not conditioned 
upon a determination that the jurisdiction whose law is chosen bear a "reasonable relation" 
to a matter or the transaction. ~ 
Subsection (g) makes this explicit. See Comment SA; 
see also Section 4A-507; compare Section 1 105(1) (R-e:'!ised Seetion 1-30l(a)), That is 
also true with respect to the similar provisions in subsection ( d) of this section and in 
Section 9-305. The remaining paragraphs in subsection ( e) and Convention article 5 contain 
additional default rules for determining the applicable law. 
* * * 
SA. 
Subsection (g) reflects what is stated in Comment 3-that the local law of the 
issuer's jurisdiction or securities intermediary's jurisdiction governs even if a matter or 
transaction bears no relation to that jurisdiction. This also is implicit in Section l-301(c), 
which provides that the applicable law provided in this section (and other specified 
provisions) governs. 
* * * 
Sec. A-64. 11 MRSA §8-1303, sub-§(2), as enacted by PL 1997, c, 429, Pt. B, §2, 
is amended to read: 
(2). In addition to aequiring the rights of a purehaser, a A protected purchaser alse 
acquires its interest in the security free of any adverse claim. 
Official Comment 
* * * 
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COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
2. To qualify as a protected purchaser under subsection (a), a purchaser must give 
value, take without notice of any adverse claim, and obtain control. Value is used in the 
broad sense defined in Section 1-201(44) 1-204. See also Section 8-116 (securities 
intermediary as purchaser for value). Adverse claim is defined in Section 8-102(a)(l). 
Section 8-105 specifies whether a purchaser has notice of an adverse claim. Control is 
defined in Section 8-106. To qualify as a protected purchaser under subsection (b ), there 
must be a time at which all of the requirements are satisfied. Thus if a purchaser obtains 
notice of an adverse claim before giving value or satisfying the requirements for control, 
the purchaser cannot be a protected purchaser. See also Section 8-304(d). 
The requirement that a protected purchaser obtain control expresses the point that to 
qualify for the adverse claim cut-off rule a purchaser must take through a transaction that 
is implemented by the appropriate mechanism. By contrast, the rules in Part 2 provide that 
any purchaser for value of a security without notice of a defense may take free of the issuer's 
defense based on that defense. See Section 8-202. 
The reference to the acquisition of the rights of a purchaser in the pre-2022 text of 
subsection (b) has been deleted. However. because a protected purchaser acquires the rights 
of a purchaser under Section 8-302. the revised text does not diminish a protected 
purchaser's rights. That revision aligned the text more closely to that of Section 12-104(e) 
on the rights of a qualifying purchaser of a controllable electronic record. controllable 
account, or controllable payment intangible. 
* * * 
Official Comment 
1. Sauree. This Artiele supersedes fefffier Uniferm. GoffiH.lercial Gode (UGG) Article 
9. f,s did its predeeessor, it pmvides a oom.prehensive sohem.e fer the regalation ofseOl:lfity 
interests iH personal property and fultares. For the most part thls f,rtiole fellovrs the general 
approaoh and retaiHs IH:l:loh of the tefffiiHology of fefffier Article 9. In. addition to desoribiHg 
many aspects of the operation and interp1·etation of thls f.rtiole, these Comments ~Eplam 
the ma-terial ohanges that this Artiele makes to fofll'l:er f.trtiele 9. Form.er .Article 9 
saperseded the wide variety of pre UGC seoarity d6"1ioes. Unlike the Comments to farm.er 
A.rtiole 9, how6"1er, these Comments dwell very little on the pre UGG state of the law. For 
that reason, the CoffiH.lents to fefll'l:er Artiole 9 1.vill remain of substantial historieal 11all:le 
and interest. They also -..vm remain aseful iH anderstanding the baekgroand and general 
eoneeptual approach of this Artiole. 
Gita-tions to "llankraptoy Code Seetion " in these CoffiH.lents are to Title 11 of the 
UH.ited States Code as iH effeot on July 1, 2010. 
2. 1. Source, Background., and History. In 1990, the Permanent Editorial Board for 
the UCC with the support of its sponsors, The American Law Institute and the National 
Conference of Commissioners on Uniform State Laws, established a committee to study 
Uniform Commercial Code (UCC) Article 9 of the UCC. The study committee issued its 
report as of December 1, 1992, recommending the creation of a drafting committee for the 
revision of Article 9 and also recommending numerous specific changes to Article 9. 
Organized in 1993, a drafting committee met fifteen times from 1993 to 1998. Thia 
Extensive revisions of this Article wa& ~ 
approved by its sponsors in 1998 (1998 
Revisions). Thia The Article was conformed to revised Article 1 in 2001 and to 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
amendments to Article 7 in 2003. The sponsors approved amendments to selected sections 
of this Article in 2010. 
The 1998 Revisions superseded former Article 9 (pre-1998 Article 9) and, as did their 
predecessor. provided a comprehensive scheme for the regulation of security interests in 
personal property and fixtures. For the most part the 1998 Article 9 followed the general 
approach and retains much of the terminology of pre-1998 Article 9. Comment 3 describes 
the material changes made by the 1998 Revisions. Pre-1998 Article 9 superseded the wide 
variety of pre-UCC security devices. Unlike the Comments to pre-1998 Article 9. however. 
these Comments dwell very little on the pre-UCC state of the law. For that reason. the 
Comments to pre-1998 Article 9 will remain of substantial historical value and interest. 
They also will remain useful in understanding the background and general conceptual 
approach of this Article. 
Article 9 was again extensively revised in 2022 (2022 Article 9 Revisions) pursuant to 
the Uniform Commercial Code Amendments (2022) (2022 Amendments). In particular. 
the 2022 Article 9 Revisions conform and adapt Article 9 to Atticle 12. covering 
controllable electronic records and rights to payment that are tethered to controllable 
electronic records-controllable accounts and controllable payment intangibles. For a brief 
summary of the 2022 Article 9 Revisions. see Comment 4, below. Except as noted in 
Comments 3 and 4 below. the 1998 Article 9 remains substantially unchanged following 
the 2022 Article 9 Revisions. 
Note also that citations to "Bankruptcy Code Section" in these Comments are to Title 
of the United States Code as in effect on July 1. 2022. 
"'2_. 1998 Revisions: Reorganization and Renumbering; Captions; Style. +his 
Artiele l'efleets a The 1998 Revisions embraced a substantial reorganization of former 
Article 9 and renumbering of most sections of Article 9 . ..--New including a new Part 4 aeals 
dealing with several aspects of third-party rights and duties that are unrelated to perfection 
and priority. Some of these were covered by Part 3 of femler pre-1998 Article 9, Also 
added was a new Part 5._ aeals dealing with filing (formerly covered by femler pre-1998 
Part 4 ) .. and Part 6._ aeals dealing with default and enforcement (formerly covered by femler 
pre-1998 Part 5). Appeadhl I eoRtaias eonfoffflffig l'e:visioas to othel' artieles of the UCC, 
and AppeRdHE H eoataffis model p1'o¥isioas fol' pl'odsetioa mosey p1'io1'ity. This Artiele 
The 1998 Revisions also iaeludes include headings for the subsections as an aid to readers. 
Unlike section captions, which are part of the UCC, see Section 1-107, subsection headings 
are not a part of the official text itself and have not been approved by the sponsors. :gaeJi 
jul'isdietioa ia whieh. th.is Artiele is iatmdseed may eoasid01' v,rh.ethel' to adopt the headiags 
as a part of the statute and wh.eth.el' to adopt a p1'0¥isioa elal'ifymg the effeet, if allj', to be 
gi¥0R to the headffigs. This A.rtiele also has beeR eoafofffled to S:U1'1'0Rt style eoR¥eRtioas. 
J,. Summary of 1998 Revisions. Following is a brief summary of some of the more 
significant l'e>tisioas features of the 1998 Revisions of Atticle 9 th.at al'e iaeluded ia the 
1998 l'e>tisioa of th.is .Artiele. 
a. Scope of Article 9. This Artiele e~c.pands The 1998 Revisions expanded the scope 
of Article 9 in several respects. 
Deposit accounts. Section 9-109 includes within this Article's scope deposit accounts 
as original collateral, except in consumer transactions. Fol'ffiel' Pre-1998 Article 9 dealt 
with deposit accounts only as proceeds of other collateral. 
COMMITTEE AMENDMENT 
ROS 
-.~-----·· 1 
COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
Sales of payment intangibles and promissory notes. Section 9-109 also includes within 
the scope of this Article most sales of "payment intangibles" ( defined in Section 9-102 as 
general intangibles under which an account debtor's principal obligation is monetary) and 
"promissory notes" (also defined in Section 9-102). Foffi'l:el:' Pre-1998 Article 9 included 
sales of accounts and chattel paper, but not sales of payment intangibles or promissory 
notes. In its inclusion of sales of payment intangibles and promissory notes, this Article 
continues the drafting convention found in feffi'l:el' pre-1998 Article 9; it prnyides that the 
sale of accounts, chattel paper, payment intangibles, or promissory notes creates a "security 
interest." The definition of "account" in Section 9-102 also has beei'l was expanded to 
include various rights to payment that were general intangibles under feffi'l:el' pre-1998 
Article 9. 
* * * 
Consignments. Section 9-109 prnvides that added "true" consignments-bailments for 
the purpose of sale by the bailee a1:1e se6-l¾1:1ity iBtel:'ests eove1:1ed by to the scope of Article 9, 
with certain exceptions. See Section 9-102 ( defining "consignment"). GurreBtly Under the 
pre-1998 UCC, many consignments ai'e were subject to Article 9's filing requirements by 
operation of feffi'l:el' pre-1998 Section 2-326. 
Supporting obligations and property securing rights to payment. This }..rtiele The 
1998 Revisions also addl:'esses addressed explicitly (i) obligations, such as guaranties and 
letters of credit, that support payment or performance of collateral such as accounts, chattel 
paper, and payment intangibles, and (ii) any property (including real property) that secures 
a right to payment or performance that is subject to an Article 9 security interest. See 
Sections 9-203, 9-308. 
Commercial tort claims, Section 9-109 expands the scope of Article 9 to include the 
assignment of commercial tort claims by narrowing the exclusion of tort claims generally. 
However, this 1\rtiele eoBtinues Article 9 continues to exclude tort claims for bodily injury 
and other non-business tort claims of a natural person. See Section 9-102 ( defining 
"commercial tort claim"). 
Transfers by States and governmental units of States. Section 9-109 narrows the 
exclusion of transfers by States and their governmental units. It e~(eludes by excluding 
only transfers covered by another statute ( other than a statute generally applicable to 
security interests) to the extent the statute governs the creation, perfection, priority, or 
enforcement of security interests. 
Nonassignable general intangibles, promissory notes, 
health-care-insurance 
receivables, and letter-ofcredit rights. This }..rtiele emwles The 1998 Revisions enabled a 
security interest to attach to letter-of-credit rights, health-care-insurance receivables, 
promissory notes, and general intangibles, including contracts, permits, licenses, and 
franchises, notwithstanding a contractual or statutory prohibition against or limitation on 
assignment. This The revised Article explicitly protects third parties against any adverse 
effect of the creation or attempted enforcement of the security interest. See Sections 9-
408, 9-409. 
* * * 
b. Duties of Secured Party. This Artiele prnYides The 1998 Revisions provided for 
expanded duties of secured parties. 
COMMITTEE AMENDMENT 
RO~:} 
COMMITTEE AMENDMENT •A "to H.P. 59, L.D. 91 
* * * 
c. Choice of Law. The choice-of-law rules included in the 1998 Revisions for the law 
governing perfection, the effect of perfection or nonperfection, and priority are found in 
Part 3, Subpart 1 (Sections 9-301 through 9-307). See also Section 9-316. 
Where to file: Location of debtor. This Artiele eha-ages The 1998 Revisions changed 
the choice-of-law rule governing perfection (i.e., where to file) for most collateral to the 
law of the jurisdiction where the debtor is located. See Section 9-301. Under fefffi8¼' pre-
1998 Atiicle 9, the jurisdiction of the debtor's location governed only perfection and 
priority of a security interest in accounts, general intangibles, mobile goods, and, for 
purposes of perfection by filing, chattel paper and investment property. 
Determining debtor's location. As a baseline rule, Section 9-307 follows fefffi8¼' pre-
1998 Section 9-103, under which the location of the debtor is the debtor's place of business 
(or chief executive office, if the debtor has more than one place of business). Section 9-307 
contains three major exceptions. First, a "registered organization," such as a corporation or 
limited liability company, is located in the State under whose law the debtor is organized, 
e.g., a corporate debtor's State of incorporation. Second, an individual debtor is located at 
his or her principal residence. Third, there are special rules for determining the location of 
the United States and registered organizations organized under the law of the United States. 
* * * 
Priority. For tangible collateral such as goods and instruments, Section 9-301 provides 
that the law applicable to priority and the effect of perfection or nonperfection will remain 
the law of the jurisdiction where the collateral is located, as under fefffi8¼' pre-1998 Section 
9-103 (but without the confusing "last event" test). For intangible collateral, such as 
accounts, the applicable law for priority w.iJl...se is that of the jurisdiction in which the debtor 
is located. 
* * * 
Goods covered by certificates of title; deposit accounts; letter-of-credit rights,· 
investment property. This }&tiele ineludes The 1998 Revisions to Article 9 included 
several refinements to the treatment of choice-of-law matters for goods covered by 
certificates of title. See Section 9-303. It-The revision also provides provided special 
choice-of-law rules, similar to those for investment property under Articles 8 and 9, for 
deposit accounts (Section 9-304), investment property (Section 9-305), and letter-of-credit 
rights (Section 9-306). 
* * * 
d. Perfection. The 1998 revised rules governing perfection of security interests and 
agricultural liens are found in Part 3, Subpart 2 (Sections 9-308 through 9-316). 
Deposit accounts; letter-ofcredit rights. With certain exceptions, this Artiele provides 
the 1998 Revisions provided that a security interest in a deposit account or a letter-of-credit 
right may be perfected only by the secured party's acquiring "control" of the deposit account 
or letter-of-credit right. See Sections 9-312, 9-314. Under Section 9-104, a secured party 
has "control" of a deposit account when, with the consent of the debtor, the secured party 
obtains the depositary bank's agreement to act on the secured party's instructions (including 
when the secured party becomes the account holder) or when the secured party is itself the 
depositary bank. The control requirements are patterned on Section 8-106, which specifies 
COMMITTEE AMENDMENT 
~~b§_ 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
the requirements for control of certain investment property. Under Section 9-107, "control" 
of a letter-of-credit right occurs when the issuer or nominated person consents to an 
assignment of proceeds under Section 5-114. 
Electronic chattel paper and tangible chattel paper definitions deleted in 2022 Article 
Revisions. Section 9-102 mclades of the 1998 Revisions included a new defined t0fffi 
terms: "electronic chattel paper." paper" and "tangible chattel paper." EleetfoRic chattel 
paper is a record or records consisting of information stored m an eleetroRic medium (i.e., 
it is Rot Vl-rittefl). POFfeetiofl: of a security iflterest ia electroaic chattel papOF may be by 
coatrol or fi1mg. See Sectiofl:s 9 105 (sui geROFis definition of cofltrol of electroRic chattel 
paper), 9 312 (perfectioR by filiag), 9 314 (pOFfectiofl: by eoatrol). However. the 2022 
Article 9 Revisions deleted those terms and modified the definition of "chattel paper" and 
the rules for chattel paper evidenced by electronic records. as discussed in Comment 4 and 
Section 9-102. Comment 5 .b. 
Investment property. 
The 1998 Revisions left the perfection requirements for 
"investment property" (defined in Section 9-102), including perfection by control under 
Section 9-106, remaia substantially unchanged. However, a new provision in Section 9-
is designed to ensure that a secured party retains control in "repledge" transactions that 
are typical in the securities markets. 
Instruments, flg}'ieultw<al liene, and commercial tort claims. This 1 .. rticle ~c.pands The 
1998 Revisions expanded the types of collateral in which a security interest may be 
perfected by filing to include instruments. See Section 9-312. 1 .. griculmral Under the 
revised Article lieas and security interests in commercial tort claims also are perfected by 
filing URdOF this ,'\rticle. See Sections 9-308, 9-310. 
Sales of payment intangibles and promissory notes. Although farmer pre-1998 Article 
covered the outright sale of accounts and chattel paper, under the revised Article sales of 
most other types of receivables also are financing transactions to which Article 9 should 
apply. Accordingly, Section 9-102 expanded the definition of "account" to include many 
types of receivables (including "health-care-insurance receivables," defined in Section 
9-102) that farmer pre-1998 Article 9 classified as "general intangibles." It thereby subjects 
to Article 9's filing system sales of more types of receivables than did farmer pre-1998 
Article 9. 
Certain sales of payment intangibles-primarily bank loan participation 
transactions-should not be subject to the Article 9 filing rules. These transactions fall~ 
placed in a residual category of collateral, "payment intangibles" (general intangibles under 
which the account debtor's principal obligation is monetary), the sale of which is exempt 
from the filing requirements of Article 9. See Sections 9-102, 9-109, 9-309 (perfection 
upon attachment). The perfection rules for sales of promissory notes are the same as those 
for sales of payment intangibles. 
Possessory security interests. Several provisions of 1998 Article 2. address aspects of 
security interests involving a secured party or a third party who is in possession of the 
collateral. In particular, Section 9-313 resolves a number of uncertainties under farmer 
pre-1998 Section 9-305. It provides that a security interest in collateral in the possession 
of a third party is perfected when the third party acknowledges in an autheflticated a signed 
record that it holds for the secured party's benefit. Section 9-313 also provides that a third 
party need not so acknowledge and that its acknowledgment does not impose any duties on 
it, unless it otherwise agrees. A special rule in Section 9-313 provides that if a secured 
party already is in possession of collateral, its security interest remains perfected by 
COMMITTEE AMENDMENT 
3-~ 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
possession if it delivers the collateral to a third party and the collateral is accompanied by 
instructions to hold it for the secured party or to redeliver it to the secured party. Section 
9-313 also clarifies the limited circumstances under which a security interest in goods 
covered by a certificate of title may be perfected by the secured party's taking possession. 
Automatic perfection. The 1998 Revisions added Section 9-309, which lists various 
types of security interests as to which no public-notice step is required for perfection ( e.g., 
purchase-money security interests in consumer goods other than automobiles). This 
automatic perfection also extends to a transfer of a health-care-insurance receivable to a 
health-care provider. Those transfers normally will be made by natural persons who 
receive health-care services; there is little value in requiring filing for perfection in that 
context. Automatic perfection also applies to security interests created by sales of payment 
intangibles and promissory notes. Section 9-308 provides that a perfected security interest 
in collateral supported by a "supporting obligation" (such as an account supported by a 
guaranty) also is a perfected security interest in the supporting obligation, and that a 
perfected security interest in an obligation secured by a security interest or lien on property 
(e.g., a real-property mortgage) also is a perfected security interest in the security interest 
or lien. 
e. Priority; Special Rules for Banks and Deposit Accounts. The rules governing 
priority of security interests and agricultural liens under the 1998 Revisions are found in 
Part 3, Subpart 3 (Sections 9-317 through 9-342). +hls-The revised Attic le includes several 
new priority rules and some special rules relating to banks and deposit accounts (Sections 
9-340 through 9-342). 
Purchase-money security interests: 
General; consumer-goods transactions,· 
inventory. Section 9-103 substantially rewrites the definition of purchase-money security 
interest (PMSI) (although the term is not formally "defined"). The substantive changes, 
however, apply only to non-consumer-goods transactions. (Consumer transactions and 
consumer-goods transactions are discussed below in Comment 4.j.) For non-consumer-
goods transactions, Section 9-103 makes clear that a security interest in collateral may be 
(to some extent) both a PMSI as well as a non-PMSI, in accord with the "dual status" rule 
applied by some courts under fermeF pre-1998 Article 9 (thereby rejecting the 
"transformation" rule). The revised definition provides an even broader conception of a 
PMSI in inventory, yielding a result that accords with private agreements entered into in 
response to the uncertainty under fermeF pre-1998 Article 9. It also treats consignments as 
purchase-money security interests in inventory. Section 9-324 re:vises clarifies the PMSI 
priority rules, but for the most part without material change in substance. Section 9-324 
also clarifies the priority rules for competing PMSis in the same collateral. 
Purchase-money security interests in livestock,· agricultural liens. 
Section 9-324 
provides a special PMSI priority, similar to the inventory PMSI priority rule, for livestock. 
Section 9-322 (vihieh eontai.Hs the baseline first-to-file-or-perfect priority rule) also 
recognizes special non-Article 9 priority rules for agricultural liens, which can override the 
baseline first-in-time rule. 
Purchase-money security interests in software. Section 9-324 contains a new priority 
rule for a software purchase-money security interest. (Section 9-102 includes a definition 
of "software.") Under Section 9-103, a software PMSI includes a PMSI in software that is 
used in goods that are also subject to a PMSI. (Note also that the ee&itioR of "ehattel 
COMMITTEE AMENDMENT 
Ros 
~------
COMMITTEE AMENDMENT" A 
to H.P. 59, L.D. 91 
papeF" has beel'l also is ~'f)anded to illclude FecoFds that evidellce a molletafj' obligatioll 
and a secuFity inteFest ill specific goods and softwaFe used ill the goods.) 
Investment property. The 1998 priority rules for investment property are substantially 
similar to the priority rules found in fofmeF pre-1998 Section 9-115, which was added in 
conjunction with the 1994 revisions to UCC Article 8. Under Section 9-328, if a secured 
party has control of investment property (Sections 8-106, 9-106), its security interest is 
senior to a security interest perfected in another manner ( e.g., by filing). Also under Section 
9-328, security interests perfected by control generally rank according to the time that 
control is obtained or, in the case of a security entitlement or a commodity contract carried 
in a commodity account, the time when the control arrangement is entered into. This is 
That was a change from fermerpre-1998 Section 9-115, under which the security interests 
ranked equally. However, as between a securities intermediary's security interest in a 
security entitlement that it maintains for the debtor and a security interest held by another 
secured party, the securities intermediary's security interest is senior. 
Deposit accounts. This Article's The 1998 priority rules applicable to deposit accounts 
are found in Section 9-327. They and are patterned on and aFe similar to those for 
investment property in foFmeF pre-1998 Section 9-115 and Section 9-328 of this Article. 
Under Section 9-327, if a secured party has control of a deposit account, its security interest 
is senior to a security interest perfected in another manner (i.e., as cash proceeds). Also 
under Section 9-327, security interests perfected by control rank according to the time that 
control is obtained, but as between a depositary bank's security interest and one held by 
another secured party, the depositary bank's security interest is senior. A corresponding 
rule in Section 9-340 makes a depositary bank's right of set-off generally senior to a security 
interest held by another secured party. However, if the other secured party becomes the 
depositary bank's customer with respect to the deposit account, then its security interest is 
senior to the depositary bank's security interest and right of set-off. Sections 9-327, 9-340. 
Letter-ofcredit rights. The 1998 priority rules for security interests in letter-of-credit 
rights are feU1ld set out in Section 9-329. They are somewhat analogous to those for deposit 
accounts. A security interest perfected by control has priority over one perfected in another 
manner (i.e., as a supporting obligation for the collateral in which a security interest is 
perfected). Security interests in a letter-of-credit right perfected by control rank according 
to the time that control is obtained. However, the rights of a transferee beneficiary or a 
nominated person are independent and superior to the extent provided in Section 5-114. 
See Section 9-109(c)(4). 
Chattel paper and instruments. Section 9-330 is the 1998 successor to fofmeF pre-
1998 Section 9-308. As under fofmeF pre-1998 Section 9-308, under the 1998 Revisions 
differing priority rules apply to purchasers of chattel paper who give new value and take 
possession ( or, in the case of electronic chattel paper, obtain control) of the collateral • 
depending on whether a conflicting security interest in the collateral is claimed merely as 
proceeds. The principal change Fe1-ates related to the role of knowledge and the effect of 
an indication of a previous assignment of the collateral. 1998 Section 9-330 also affoFds 
afforded priority to purchasers of instruments who take possession in good faith and 
without knowledge that the purchase violates the rights of the competing secured party. In 
addition, to qualify for priority, purchasers of chattel paper, but not of instruments, must 
purchase in the ordinary course of business. The 2022 Article 9 Revisions eliminated the 
defined terms "electronic chattel paper" and "tangible chattel paper." revised the definition 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
of "chattel paper" in Section 9-102 and modified the Section 9-330 priority rule 
accordingly. See Comment 4.b. and Section 9-102. Comment 5.b. 
Proceeds. 1998 Section 9-322 contains new priority rules that clarify when a special 
priority of a security interest in collateral continues or does not continue with respect to 
proceeds of the collateral. Other 1998 refinements to the priority rules for proceeds are 
included in Sections 9-324 (purchase-money security interest priority) and 9-330 (priority 
of certain purchasers of chattel paper and instruments). 
Miscellaneous priority provisions. This Article also iaeluEles The 1998 Revisions to 
Article 9 also included (i) clarifications of selected good-faith-purchase and similar issues 
(Sections 9-317, 9-331 ); (ii) new priority rules to deal with the "double debtor" problem 
arising when a debtor creates a security interest in collateral acquired by the debtor subject 
to a security interest created by another person (Section 9-325); (iii) new priority rules to 
deal with the problems created when a change in corporate structure or the like results in a 
new entity that has become bound by the original debtor's after-acquired property 
agreement (Section 9-326); (iv) a provision enabling most transferees of funds from a 
deposit account or money to take free of a security interest (Section 9-332); (v) substantially 
rewritten and refined priority rules dealing with accessions and commingled goods 
(Sections 9-335, 9-336); (vi) revised priority rules for security interests in goods covered 
by a certificate of title (Section 9-337); and (vii) provisions designed to ensure that security 
interests in deposit accounts will not extend to most transferees of funds on deposit or 
payees from deposit accounts and will not otherwise "clog" the payments system (Sections 
9-341, 9-342). 
Model provisions relating to production-money security interests. Appendix II to this 
fnticle coHtaias the 1998 Revisions contained model definitions and priority rules relating 
to "production-money security interests" held by secured parties who give new value used 
in the production of crops. Because no consensus emerged on the wisdom of these 
provisions during the drafting process, the sponsors make made no recommendation on 
whether these model provisions should be enacted. 
f. Proceeds. Revised Section 9-102 coataias provides an expanded definition of 
"proceeds" of collateral, which includes additional rights and property that arise out of 
collateral, such as distributions on account of collateral and claims arising out of the loss 
or nonconformity of, defects in, or damage to collateral. The term also mcluEles revised 
definition of "proceeds" also includes collections on account of "supporting obligations," 
such as guarantees. 
g. Part 4: Additional Provisions Relating to Third-Party Rights. New The 1998 
Revisions added a new Part 4 coB:tains that includes several provisions relating to the 
relationships between certain third parties and the parties to secured transactions. It 
coataias Part 4 contains new Sections 9-401 (replacing fer.mer pre-1998 Section 9-311) 
(alienability of debtor's rights), 9-402 (replacing fer.mer pre-1998 Section 9-317) (secured 
party not obligated on debtor's contracts), 9-403 (replacing fer.mer pre-1998 Section 9-206) 
(agreement not to assert defenses against assignee), 9-404, 9-405, and 9-406 (replacing 
fer.mer pre-1998 Section 9-318) (rights acquired by assignee, modification of assigned 
contract, discharge of account debtor, restrictions on assignment of account, chattel paper, 
promissory note, or payment intangible ineffective), 9-407 (replacing some provisions of 
fer.mer pre-1998 Section 2A-303) (restrictions on creation or enforcement of security 
interest in leasehold interest or lessor's residual interest ineffective), It New Part 4 also 
COMMITTEE AMENDMENT 
Ro~,~ 
COMMITTEE AMENDMENT" A» to H.P. 59, L.D. 91 
eontains added new Sections 9-408 (restrictions on assignment of promissory notes, health-
care-insurance receivables ineffective, and certain general intangibles ineffective) and 9-
(restrictions on assignment of letter-of-credit rights ineffective), vt'h.ieh are disel:lssed 
abe¥e. See Comment 3.a. 
h. Filing. New Part 5 (formerly replacing pre-1998 Part 4) of Article 9 has been™ 
substantially rewritten to simplify the statutory text and to deal with numerous problems of 
interpretation and implementation that have arisen over the years. 
Medium-neutrality. This f1.rtiele Part 5 is "medium-neutral"; that is, it makes clear that 
parties may file and otherwise communicate with a filing office by means of records 
communicated and stored in media other than on paper. 
Identity of person who files a record; authorization. Part 5 also is largely indifferent as 
to the person who effects a filing. Instead, it addresses whose authorization is necessary 
for a person to file a record with a filing office. The filing scheme does not contemplate 
that the identity of a "filer" will be a part of the searchable records. This approach is 
consistent with, and a necessary aspect of, eliminating signatures or other evidence of 
authorization from the system ( except to the extent that filing offices may choose to employ 
authentication procedures in connection with electronic communications), As long as the 
appropriate person authorizes the filing, or, in the case of a termination statement, the 
debtor is entitled to the termination, it is largely insignificant whether the secured party or 
another person files any given record. 
* * * 
Financing statement formal requisites. The formal requisites for a financing statement 
under the 1998 Revisions are set out in Section 9-502. A financing statement must provide 
the name of the debtor and the secured party and an indication of the collateral that it covers. 
Sections 9-503 and 9-506 address the sufficiency of a name provided on a financing 
statement and clarify when a debtor's name is correct and when an incorrect name is 
insufficient. Section 9-504 addresses the indication of collateral covered, Under Section 
9-504, a super-generic description (e.g., "all assets" or "all personal property") in a 
financing statement is a sufficient indication of the collateral. (Note, however, that a super-
generic description is inadequate for purposes of a security agreement. See Sections 9-108, 
9-203.) To facilitate electronic filing, this Article does not require that the debtor's 
signature or other authorization appear on a financing statement. Instead, it prohibits the 
filing of unauthorized financing statements and imposes liability upon those who violate 
the prohibition. See Sections 9-509, 9-626. 
Filing-office operations. The 1998 Part 5 contains introduced several provisions 
governing filing operations. First, it prohibits the filing office from rejecting an initial 
financing statement or other record for a reason other than one of the few that are specified. 
See Sections 9-520, 9-516. Second, the filing office is obliged to link all subsequent 
records (e.g., assignments, continuation statements, etc.) to the initial financing statement 
to which they relate. See Section 9-519. Third, the filing office may delete a financing 
statement and related records from the files no earlier than one year after lapse (lapse 
normally is five years after the filing date), and then only if a continuation statement has 
not been filed. See Sections 9-515, 9-519, 9-522. Thus, a financing statement and related 
records would be discovered by a search of the files even after the filing of a termination 
statement. This approach helps eliminate filing-office discretion and also eases problems 
COMMITTEE AMENDMENT 
R~\ 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
associated with multiple secured parties and multiple partial assignments. Fourth, Part 5 
mandates performance standards for filing offices. See Sections 9-519, 9-520, 9-523. 
Fifth, it provides for the promulgation of filing-office rules to deal with details best left out 
of the statute and requires the filing office to submit periodic reports. See Sections 9-526, 
9-527. 
Defaulting or missing secured parties and fraudulent filings. In some areas of the 
country, serious problems ha¥e had arisen from fraudulent financing statements tha-t are 
filed against public officials and other persons. +his The 1998 A1ticle .2. aadresses 
addressed the fraud problem by providing the opportunity for a debtor to file a termination 
statement when a secured party wrongfully refuses or fails to provide a termination 
statement. See Section 9-509. This opportunity also addresses the problem of secured 
parties that simply disappear through mergers or liquidations. In addition, Section 9-518 
affords provides a statutory method by which a debtor who believes that a filed record is 
inaccurate or was wrongfully filed may indicate that fact in the files, albeit without 
affecting the efficacy, if any, of the challenged record. 
* * * 
i. Default and Enforcement. Part 6 of the 1998 Revisions to Article 9 extensively 
~ 
revised and replaced feR:e:er pre-1998 Part 5. Provisions relating to enforcement of 
consumer-goods transactions and consumer transactions are discussed in Comment 4.j. 
Debtor, secondary obligor; waiver. Section 9-602 clarifies the identity of persons who 
have rights and persons to whom a secured party owes specified duties under Part 6. Under 
that section, the rights and duties are enjoyed by and run to the "debtor," defined in Section 
9-102 to mean any person with a non-lien property interest in collateral, and to any 
"obligor." However, with one exception (Section 9-616, as it relates to a consumer 
obligor), the rights and duties concerned affect non-debtor obligors only if they are 
"secondary obligors." "Secondary obligor" is defmed in Section 9-102 to include one who 
is secondarily obligated on the secured obligation, e.g., a guarantor, or one who has a right 
of recourse against the debtor or another obligor with respect to an obligation secured by 
collateral. However, under 8eetioB Sections 9-605 and 9-628, the secured party is relieved 
from any dmy or liaeili-ty duties and liabilities to any person unless the secured party knows 
that the person is a debtor or obligor, (The 2022 Article 9 Revisions have modified Sections 
9-605 and 9-628. See 2022 Section 9-605, Comments 2 and 3 .) Resolving an issue on which 
courts disagreed under feR:e:er pre-1998 Article 9, this Artiele revised Article 9 generally 
prohibits waiver by a secondary obligor of its rights and a secured party's duties under Part 
6. See Section 9-602. However, Section 9-624 permits a secondary obligor or debtor to 
waive the right to notification of disposition of collateral and, in a non-consumer 
transaction, the right to redeem collateral, if the secondary obligor or debtor agrees to do 
so after default. 
Rights of collection and enforcement of collateral. Section 9-607 explains in greater 
detail than :fefffieF pre-1998 Section 9-502 the rights of a secured party who seeks to collect 
or enforce collateral, including accounts, chattel paper, and payment intangibles. It also 
sets forth the enforcement rights of a depositary bank holding a security interest in a deposit 
account maintained with the depositary bank. Section 9-607 relates solely to the rights of 
a secured party vis-a-vis a debtor with respect to collections and enforcement. It does not 
affect the rights or duties of third parties, such as account debtors on collateral, which are 
COMMITTEE AMENDMENT 
ROS 
~··~1..£.!t 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
addressed elsewhere ( e.g., new Section 9-406). Section 9-608 clarifies the manner in which 
proceeds of collection or enforcement are to be applied. 
* * * 
Rights and duties of secondary obligor. Section 9-618 provides that a secondary 
obligor obtains the rights and assumes the duties of a secured party if the secondary obligor 
receives an assignment of a secured obligation, agrees to assume the secured party's rights 
and duties upon a transfer to it of collateral, or becomes subrogated to the rights of the 
secured party with respect to the collateral. The assumption, transfer, or subrogation is not 
a disposition of collateral under Section 9-610, but it does relieve the former secured party 
of further duties. Former Pre-1998 Section 9-504(5) did not address whether a secured 
party was relieved of its duties in this situation. 
* * * 
Strict foreclosure. Section 9-620, unlike feffil:ell pre-1998 Section 9-505, permits a 
secured party to accept collateral in partial satisfaction, as well as full satisfaction, of the 
obligations secured. This right of strict foreclosure extends to intangible as well as tangible 
property. Section 9-622 clarifies the effects of an acceptance of collateral on the rights of 
junior claimants. It rejects the approach taken by some courts-deeming a secured party to 
have constructively retained collateral in satisfaction of the secured obligations-in the case 
of a secured party's unreasonable delay in the disposition of collateral. 
Instead, 
unreasonable delay is relevant when determining whether a disposition under Section 9-
is commercially reasonable. 
* * * 
j. 
Consumer Goods, 
Consumer-Goods Transactions, and Consumer 
Transactions. This Artiele The 1998 Revisions (including the accompanying conforming 
revisions (see Appendix I)) meludes included several special rules for "consumer goods," 
"consumer transactions," and "consumer-goods transactions." Each term is defined in 
Section 9-102. 
(i) Revised Sections 2-502 and 2-716 provide a buyer of consumer goods with 
enhanced rights to possession of the goods, thereby accelerating and enhancing the 
opportunity to achieve "buyer in ordinary course of business" status under Section 1-
201. 
(ii) Section 9-103( e) ( allocation of payments for determining extent of purchase-money 
status), (f) (purchase-money status not affected by cross-collateralization, refinancing, 
restructuring, or the like), and (g) (secured party has burden of establishing extent of 
purchase-money status) do not apply to consumer-goods transactions. Seetioas Section 
9-103 also provides that the limitation of those provisions to transactions other than 
consumer-goods transactions leaves to the courts the proper rules for consumer-goods 
transactions and prohibits the courts from drawing inferences from that limitation. 
* * * 
(ix) Section 9-620 prohibits partial strict foreclosure with respect to consumer goods 
collateral and, unless the debtor agrees to waive the requirement in aa !Rttheatieated g 
signed record after default, in certain cases requires the secured party to dispose of 
consumer goods collateral which has been repossessed. 
COMMITTEE AMENDMENT 
'"R.Q"§ 
COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
* * * 
k. Good Faith. 8eotiofl: 9 H)2 ooRtaies The 1998 Revisions added in Section 9-102 a 
new definition of "good faith" that inoludes included not only "honesty in fact" but also 
"the observance of reasonable commercial standards of fair dealing." Tho definitioa is 
similtlf to the oaes adopted in conBectioa with othef, Feceatly completed Fevisioas of the 
tJGG. That definition was deleted by the conforming amendments to the 2001 revision of 
Article 1 as unnecessary, given the revised definition in Section 1-201(b)(20). 
1. Traesi-tioe Pro:visioes. Poo 7 (8eotioas 9 701 thfough 9 709) coataies tfallsitioll 
pmvisioas. Tfaasition from fofftlef Artiole 9 to this Article will be particul1Hly challoagiag 
ie vie:w of its OKpaadod soopo, its modificatioa of ohoico of llf'+v rules fof poFfoctioa aad 
pFioFity, aad its o~Epallsioa of tho methods of poFfoctioa. Amendment tippro,;ed by the 
Permffflent Editori<:1l Bo~·d far Uniform Conmwreif:ll Code Deeemher 31, 2()()1. 
[Reserved.] 
m. Conforming and Related Amendments to Other UCC Articles. Appendix I to 
the 1998 Revisions coataias contained several revisions to the provisions and Comments 
of other UCC articles. For the most part the those revisions are explained in the Comments 
to the prnposod Fovisioes 1998 Revisions. CFoss Foforoneos ia othef UCC articles to 
sootions of Article 9 also harro bee:a fo-visod. 
Article 1. Revised Section 1-201 coataies provides revisions to the definitions of 
"buyer in ordinary course of business," "purchaser," and "security interest." 
Articles 2 and 2A. Sections 2-210, 2-326, 2-502, 2-716, 2A-303, and 2A-307 ha¥e 
beea are revised to address the intersection between Articles 2 and 2A and Article 9. 
* * * 
Article 8. Revisions to Section 8-106, which deals with "control" of securities and 
security entitlements, conform it to Section 8-302, which deals with "delivery." Revisions 
to Section 8-110, which deals with a "securities intermediary's jurisdiction," conform itto 
the revised treatment of a "commodity intermediary's jurisdiction" in Section 9-305, 
Sections 8-301 and 8-302 have been~ revised for clarification. Section 8-510 has booa 
.lli. revised to conform it to the revised priority rules of Section 9-328. Several Comments 
in Article 8 also ha·ro boon ~ 
revised. 
4. Summary of 2022 Article 9 Revisions. Following is a brief summary of some of 
the more significant revisions that are included in the 2022 Article 9 Revisions. The 2022 
amendments to Article 9 are extensive. Many of the amendments are necessary to conform 
Article 9 to new Article 12, which (along with its Comments) should be read along with 
the Article 9 amendments and Comments. Other material amendments include those 
relating to chattel paper and money. among other matters. 
a. Article 12-Related Revisions. Article 12-related amendments to Article 9 include 
the addition of two new kinds of collateral under Article 9: controllable account (a subset 
of account) and controllable payment intangible (a subset of payment intangible. which is 
a subset of general intangible). A controllable account or controllable payment intangible 
is created when the account or payment intangible is evidenced by a controllable electronic 
record (defined in Section 12-l02(a)(l). and a subset of general intangible), which results 
if the account debtor obligated on the account or payment intangible has agreed to pay the 
person in control of the controllable electronic record. Perfection of a security interest in a 
COMMITTEE AMENDMENT 
RO§ 
COMMITTEE AMENDMENT" A 
"to H.P. 59, L.D. 91 
controllable electronic record. controllable account. or controllable payment intangible 
may be by control or by filing a financing statement. Control of a controllable electronic 
record is determined under Section 12-105. Control of a controllable account or 
controllable payment intangible is achieved by obtaining control of the controllable 
electronic record that evidences the account or payment intangible. Section 9-107A(b). A 
security interest in a controllable account, controllable electronic record. or controllable 
payment intangible which is perfected by control has priority over a security interest held 
by a secured party that does not have control. Section 9-326A. 
As is the case for secured parties protected by take-free rules under other articles, the 
rights of a secured party that takes free of competing property interests under Section 12-
104( e) or that is protected from certain actions under Section 12-104(g). as a qualifying 
purchaser of a controllable account. controllable electronic record, or controllable payment 
intangible. are respected under Article 9. Section 9-331. 
The law of the controllable electronic record's jurisdiction under Section 12-107 
governs perfection by control and priority of a security interest in a controllable account. 
controllable electronic record. or controllable payment intangible. Section 9-306B(a). The 
law of the jurisdiction in which a debtor is located governs perfection by filing (but not 
priority) for such collateral. Section 9-306B(b). 
The 2022 Article 9 Revisions also contain several other Article 12-related conforming 
amendments to Article 9. 
b. Chattel Paper-Related Amendments. These amendments primarily address two 
issues that have arisen under the pre-2022 Article 9 with respect to transactions in chattel 
paper. 
First. the definition of "chattel paper" created uncertainty in "bundled" or "hybrid" 
transactions in which monetary obligations exist not only under a lease of goods but also 
with respect to other property and services relating to the leased goods. Frequently. the 
value of the non-goods aspect of a transaction is substantially greater than the value of the 
lessee's rights under the lease of goods. Uncertainty existed among those who finance 
chattel paper and other rights to payment as to whether these transactions give rise to chattel 
paper. The revisions resolve this issue by treating only those transactions whose 
predominant purpose was to give the obligor (lessee) the right to possession and use of the 
goods as giving rise to "chattel paper. 
Some similar issues arise in connection with chattel 
paper that includes a security interest securing specific goods. 
See Section 9-102. 
Comment 5.b. 
Second. the pre-2022 statutory distinction between "tangible chattel paper" and 
"electronic chattel paper" caused practical problems. As to tangible chattel paper (i.e .. 
evidenced by writings). problems arose in the case of multiple originals of writings and 
situations in which separate writings covered different components of chattel paper. 
Official comments issued in connection with the 1998 Revisions addressed. but did not 
entirely resolve, these issues. As to electronic chattel paper, the safe harbor for control was 
based on a "single authoritative copy" of the chattel paper. Moreover. in some situations 
tangible chattel paper is conve1ted to electronic form and electronic chattel paper is 
converted to tangible form. Additional unce1tainty existed when one or more records 
comprised one or more authoritative tangible copies of the records that evidenced the right 
COMMITTEE AMENDMENT 
.Rosi 
!,;;.. 
COMMITTEE AMENDMENT 'A" to H.P. 59, L.D. 91 
to payment and rights in related property and one or more authoritative electronic copies 
of those records also existed. 
The 2022 Article 9 Revisions provide a single rule, under which a security interest in 
chattel paper can be perfected by taking possession of the authoritative tangible copies, if 
any, and obtaining control of the electronic authoritative copies, if any. This single rule 
addresses cases where some records evidencing chattel paper are electronic and some are 
tangible or where a record in one medium is replaced by a record in another. 
The 2022 Article 9 Revisions also define chattel paper more accurately. as the right to 
payment of a monetazy obligation that is secured by a security interest in specific goods or 
owed under a lease of specific goods. if the right to payment and interest in the goods are 
evidenced by a record, 
Finally, the 2022 Article 9 Revisions provide a new choice-of-law rule for perfection 
and priority of security interests in chattel paper that is evidenced by authoritative 
electronic copies of records or by such electronic copies and authoritative tangible copies. 
For such chattel paper. Section 9-306A provides that perfection by control and possession 
of authoritative copies and priority are governed by the law of the "chattel paper's 
jurisdiction, 
based loosely on Sections 8-110 and 9-305. For chattel paper evidenced only 
by authoritative tangible copies, Section 9-306A(d) provides that perfection by possession 
and priority are governed by the law of the location of the authoritative tangible copies. 
Perfection by filing continues to be governed by the law of the location of the debtor for 
all chattel paper. 
c. Money-Related Amendments. 
Section 1-20l(b)(24) defines "money" as including "a medium of exchange currently 
authorized or adopted by a domestic or foreign government . . . . " There is no way of 
knowing how money in an intangible form might develop, but there are indications that 
some countries might authorize or adopt intangible tokens as a medium of exchange and 
others might authorize or adopt deposit accounts with a central bank as money. (These 
tokens or accounts sometimes are referred to as central bank digital currency or CBDC.) 
For many purposes, there is no need for the UCC to distinguish among types of money. For 
Article 9 purposes, however, distinctions must be drawn. Only tangible money is 
susceptible of perfection by possession. And the steps needed for perfection by control with 
respect to intangible tokens. such as controllable electronic records. will not work for 
deposit accounts with a central bank. and vice versa. For this reason, the revisions provide 
an Article 9 defmition of "money" that is narrower than the Article 1 definition. The Article 
defmition expressly excludes deposit accounts (but not CBDC that is a token), Thus. 
"electronic money." defined in Section 9-102 as "money in an electronic form," would not 
include deposit accounts. The Article 9 definition of "money" also excludes money in an 
electronic form that cannot be subjected to control under Section 9-105A. 
The Article 9 provisions governing "deposit accounts" would remain suitable for 
accounts with a central bank. even if a government has adopted these accounts as money. 
The revisions leave Article 9's treatment of deposit accounts largely unchanged. Under the 
revisions. a security interest in electronic money as original collateral can be perfected only 
by control. The requirements for obtaining control of electronic money under Section 9-
105A are essentially the same as those for obtaining control of a controllable electronic 
record under Article 12. 
COMMITTEE AMENDMENT 
.. ~C?.? 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
The 2022 Article 9 Revisions also make changes to Section 9-332, the take-free rules 
for transferees of money. including the addition of a new rule applicable to electronic 
money, and transferees of funds from deposit accounts. 
d. 
Transitional Rules. Article A to the 2022 Amendments provides important 
transitional rules. These rules are designed to protect the expectations of parties to 
transactions entered into before the effective date of a state's enactment of the revisions. 
They also provide for an adequate period of time for parties to pre-effective date 
transactions to make adjustments so as to preserve certain pre-effective date priorities. 
Sec. A-65. 11 MRSA §9-1102, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, §2 
and affected §4, is amended to read: 
(2). 
"Account," except as used in "account for," "account statement," "account to," 
"commodity account" in subsection (14), "customer's account." "deposit account" in 
subsection (29). "on account of" and "statement of account." means a right to payment of 
a monetary obligation, whether or not earned by performance: 
(a). For property that has been or is to be sold, leased, licensed, assigned or otherwise 
disposed of; 
(b ). For services rendered or to be rendered; 
( c ). For a policy of insurance issued or to be issued; 
(d). For a secondary obligation incurred or to be incurred; 
( e ). For energy provided or to be provided; 
(f). For the use or hire of a vessel under a charter or other contract; 
(g). Arising out of the use of a credit or charge card or information contained on or for 
use with the card; or 
(h). 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. 
"Account" includes controllable accounts and health-care-insurance receivables. 
"Account" does not include: rights to payment; e>tideneed hr chattel paper or an instrument;; 
commercial tort claims; deposit accounts; investment property; letter-of-credit rights or 
letters of credit; er 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 rights to payment evidenced by an instrument. 
Sec. A-66. 11 MRSA §9-1102, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
(3). "Account debtor" means a person obligated on an account, chattel paper or general 
intangible. "Account debtor" does not include persons obligated to pay a negotiable 
instrument, even if the negotiable instrument eonsti-tates part of evidences chattel paper. 
Sec. A-67. 11 MRSA §9-1102, sub-§(4), 1(a), as enacted by PL 1999, c. 699, Pt. 
A, §2 and affected by §4, is amended to read: 
(a). f .. li-thentieated Sigped by a secured party; 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D, 91 
Sec. A-68. 11 MRSA §9-1102, sub-§(7), as corrected by RR 2013, c. 1, §21, is 
repealed. 
Sec. A-69. 11 MRSA §9-1102, sub-§(7-A) is enacted to read: 
(7-A). 
"Assignee." except as used in "assignee for benefit of creditors," means a 
person: 
(a). In whose favor a security interest that secures an obligation is created or provided 
for under a security agreement. whether or not the obligation is outstanding: or 
(b). To which an account. chattel paper. payment intangible or promissory note has 
been sold. "Assignee" includes a person to which a security interest has been 
transferred by a secured party. 
Sec. A-70. 11 MRSA §9-1102, sub-§(7-B) is enacted to read: 
(7-B). "Assignor" means a person that: 
(a). Under a security agreement creates or provides for a security interest that secures 
an obligation: or 
(b). Sells an account, chattel paper. payment intangible or promissory note. 
"Assignor" includes a secured party that has transferred a security interest to another 
person. 
Sec. A-71. 11 MRSA §9-1102, sub-§(11), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is repealed. 
Sec. A-72. 11 MRSA §9-1102, sub-§(11-A) is enacted to read: 
(11-A). "Chattel paper" means: 
(a). A right to payment of a monetary obligation secured by specific goods. if the right 
to payment and security agreement are evidenced by a record: or 
(b). A right to payment of a monetary obligation owed by a lessee under a lease 
agreement with respect to specific goods. and a monetary obligation owed by the lessee 
in connection with the transaction giving rise to the lease. if: 
(i) The right to payment and lease agreement are evidenced by a record: and 
(ii) The predominant purpose of the transaction giving rise to the lease was to give 
the lessee the right to possession and use of the goods. 
"Chattel paper" 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. 
Sec. A-73. 11 MRSA §9-1102, sub-§(27-A) is enacted to read: 
(27-A). 
"Controllable account" means an account evidenced by a controllable 
electronic record that provides that the account debtor unde1takes to pay the person that has 
control under section 12-105 of the controllable electronic record. 
Sec. A-74. 11 MRSA §9-1102, sub-§(27-B) is enacted to read: 
COMMITTEE AMENDMENT 
~ot:f 1 
•••• 
-----> 2 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
(27-B). "Controllable payment intangible" means a payment intangible evidenced by 
a controllable electronic record that provides that the account debtor undertakes to pay the 
person that has control under section 12-105 of the controllable electronic record. 
Sec. A-75. 11 MRSA §9-1102, sub-§(31), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is repealed. 
Sec. A-76. 11 MRSA §9-1102, sub-§(42), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(42). "General intangible" means 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. "General intangible" includes controllable 
electronic records, payment intangibles and software. 
Sec. A-77. 11 MRSA §9-1102, sub-§(47), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected §4, is amended to read: 
( 47). "Instrument" means a negotiable instrument or any other writing that evidences 
a right to the payment of a monetary obligation, is not itself a security agreement or lease 
and is of a type that in the ordinary course of business is transferred by delivery with any 
necessary indorsement or assignment. "Instrument" does not include: 
(a). Investment property; 
(b ). Letters of credit; er 
( c ). Writings that 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 cardT_;_m: 
(d). Writings that evidence chattel paper. 
Sec. A-78. 11 MRSA §9-1102, sub-§(54-A) is enacted to read: 
(54-A). 
"Money" has the same meaning as in section 1-1201, subsection (24), but 
does not include a deposit account. 
Sec. A-79. 11 MRSA §9-1102, sub-§(61), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(61). 
"Payment intangible" means a general intangible under which the account 
debtor's principal obligation is a monetary obligation. "Payment intangible" includes a 
controllable payment intangible. 
Sec. A-80. 11 MRSA §9-1102, sub-§(66), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by, §4, is amended to read: 
(66). "Proposal" means a record oothemieated 3igned by a secured party that includes 
the terms on which the secured party is willing to accept collateral in full or partial 
satisfaction of the obligation it secures pursuant to sections 9-1620, 9-1621 and 9-1622. 
Sec. A-81. 11 MRSA §9-1102, sub-§(74), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is repealed. 
Sec. A-82. 11 MRSA §9-1102, sub-§(78), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is repealed. 
COMMITTEE AMENDMENT 
ROS 
1...,,., 
COMMITTEE AMENDMENT" A» to H.P. 59, L.D. 91 
Sec. A-83. 11 MRSA §9-1102, sub-§(80), ,(d), as amended by PL 2013, c. 317, 
Pt. A, §8, is further amended by amending the first blocked paragraph to read: 
"Control" as provided in section 7-1106 and the following defmitions in other 
Articles apply to this Article: 
"Applicant" 
"Beneficiary" 
"Broker" 
"Certificated security" 
"Check" 
"Clearing corporation" 
"Contract for sale" 
"Controllable electronic record" 
"Customer" 
"Entitlement holder" 
"Financial asset" 
"Holder in due course" 
"Issuer" (with respect to a letter of 
credit or letter-of-credit right) 
"Issuer" (with respect to a security) 
"Issuer" (with respect to documents of 
title) 
"Lease" 
"Lease agreement" 
"Lease contract" 
"Leasehold interest" 
''Lessee" 
"Lessee in ordinary course of 
business" 
"Lessor" 
"Lessor's residual interest" 
"Letter of credit" 
"Merchant" 
"Negotiable instrument" 
"Nominated person" 
"Note" 
"Proceeds of a letter of credit" 
"Protected purchaser" 
"Prove" 
"Qualifying purchaser" 
"Sale" 
"Securities account" 
"Securities intermediary" 
"Security" 
"Security certificate" 
"Security entitlement" 
"Uncertificated security" 
Section 5-1102. 
Section 5-1102. 
Section 8-1102. 
Section 8-1102. 
Section 3-1104. 
Section 8-1102. 
Section 2-106. 
Section 12-1 02. 
Section 4-104. 
Section 8-1102. 
Section 8-1102. 
Section 3-1302. 
Section 5-1102. 
Section 8-1201. 
Section 7-1102. 
Section 2-1103. 
Section 2-1103. 
Section 2-1103. 
Section 2-1103. 
Section 2-1103. 
Section 2-1103. 
Section 2-1103. 
Section 2-1103. 
Section 5-1102. 
Section 2-104. 
Section 3-1104. 
Section 5-1102. 
Section 3-1104. 
Section 5-114. 
Section 8-1303. 
Section 3-1103. 
Section 12-102. 
Section 2-106. 
Section 8-1501. 
Section 8-1102. 
Section 8-1102. 
Section 8-1102. 
Section 8-1102. 
Section 8-1102. 
COMMITTEE AMENDMENT 
~Rf)s 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
Official Comment 
1. Source. All terms that are defined in Article 9 and used in more than one section 
are consolidated in this section. Note that the definition of "security interest" is found in 
Section 1-201, not in this Article, B:fld has been re>lised. See Appendix I. Many of the 
definitions in this section are ne,;.11; mB:fly othefs derive from those in farmer pre-1998 
Section 9-105. The followmg CommeR-ts also indieate other sections of formef },.rtiole 9 
that defined (or ~cplained) terms. Other definitions were added by the 1998 Revisions or 
modified or added by the 2022 Article 9 Revisions. 
2. Parties to Secured Transactions. 
a. "Debtor"; "Obligor"; "Secondary Obligor." Determining whether a person was 
a "debtor" under former pre-1998 Section 9-105(l)(d) required a close examination of the 
context in which the term was used. To reduce the need for this examination, this Article 
redefines the 1998 Revisions redefined "debtor" and adas added new defined terms, 
"secondary obligor
and "obligor.
In the context of Part 6 ( default and enforcement), these 
definitions distinguish among three classes of persons: (i) those persons who may have a 
stake in the proper enforcement of a security interest by virtue of their non-lien property 
interest (typically, an ownership interest) in the collateral, (ii) those persons who may have 
a stake in the proper enforcement of the security interest because of their obligation to pay 
the secured debt, and (iii) those persons who have an obligation to pay the secured debt but 
have no stake in the proper enforcement of the security interest. Persons in the first class 
are debtors. Persons in the second class are secondary obligors if any portion of the 
obligation is secondary or if the obligor has a right of recourse against the debtor or another 
obligor with respect to an obligation secured by collateral. One must consult the law of 
suretyship to determine whether an obligation is secondary. 
The Restatement (3d), 
Suretyship and Guaranty§ 1 (1996), contains a useful explanation of the concept. Obligors 
in the third class are neither debtors nor secondary obligors. With one exception (Section 
9-616, as it relates to a consumer obligor), the rights and duties provided by Part 6 affect 
non-debtor obligors only if they are "secondary obligors.
By including in the definition of "debtor" all persons with a property interest ( other 
than a security interest in or other lien on collateral), the definition includes transferees of 
collateral, whether or not the secured party knows of the transfer or the transferee's identity. 
Exculpatory provisions in Part 6 protect the secured party in that circumstance. See 
Sections 9-605 and 9-628. The definition renders unnecessary former pre-1998 Section 9-
112, which governed situations in which collateral was not owned by the debtor. The 
definition also includes a "consignee/ as defined in this section, as well as a seller of 
accounts, chattel paper, payment intangibles, or promissory notes. 
* * * 
If a security interest is granted by a protected series of a limited liability company 
formed, for example. under the Uniform Protected Series Act (2017), the debtor is the 
protected series. See PEB Commentary No. 23, dated Febraary 24, 202 l. The Commentary 
is available at https://:wvrH.ali.org/peb uoo, The 2022 definition of "person" in Section 1 -
20l(b)(27) includes a protected series. 
b. "Secured Party." * * * 
* * * 
COMMITTEE AMENDMENT 
'ROS 2 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D, 91 
b.1. "Assignee"; "Assignor." Instead ofreferring to a "debtor," "secured party," and 
"security interest," all of which are defined terms, several provisions of Article 9, including 
Part 4, refer to the II assignment" or the "transfer" of property interests and some refer to an 
"assignor, 
"assignee, 
or "assigned contract." None of those terms are defined in the UCC. 
Some courts have read the undefined terms in an unduly narrow way. In 2020, the 
Permanent Editorial Board for the UCC issued a Commentary clarifying the meanings of 
these terms and amended the official comments accordingly. PEB Commentary No. 21. 
This Article generally follows common usage by using the terms "assignment" and "assign" 
to refer to transfers of rights to payment, claims, and liens and other security interests. It 
generally uses the term "transfer" to refer to other transfers of interests in property. Except 
when used in connection with a letter-of-credit transaction {see Section 9-107, Comment 
4), no significance should be placed on the use of one term or the other. Depending on the 
substance of the transaction, each term as used in this Article refers to the assignment or 
transfer of an outright ownership interest or to the assignment or transfer of a limited 
interest, such as a security interest. or both. 
The 2022 Article 9 Revisions added new definitions of "assignee" and "assignor." 
Parag;raph 7A defines "assignee" as a person in whose favor a security interest securing an 
obligation is created or to which an account. chattel paper, a payment intangible. or a 
promissory note has been sold. Paragraph 7B defines "assignor" as creating a security 
interest securing an obligation or that sells an account, chattel paper. a payment intangible, 
or a promissory note. 
These definitions incorporate the essence of the 2020 PEB 
Commentary into the statutory text. The definitions also specify that an "assignor" includes 
a secured party that transfers a security interest to another person and an "assignee" includes 
a person to which a security interest has been transferred by a secured party. By their terms, 
the defined te1ms "assignee" and "assignor" contemplate assignments in particular 
contexts. However. several references in this article to "assigned." "assignment" and 
"assignee" include transfers in broader contexts than those addressed in the defined terms. 
See. e.g.. subsection (a)(2) ("assigned." in definition of "account") and (a)( 47) 
{"assignment." in definition of "instrument") and Sections 9-109, 9-408, 9-409, and 9-519. 
Absent a contrary agreement. an assignee obtains the rights and powers of an assignor 
as against an account debtor on assigned collateral (e.g .. under Section 9-406) and as 
between the assignee and the assignor {debtor) {e.g., under Section 9-607). See also 
Restatement {Second) of Contracts§ 317(1) (1981) (emphasis added): 
An assignment of a right is a manifestation of the assignor's intention to transfer it by 
virtue of which the assignor's right to performance by the obligor is extinguished in 
whole or in part and the assignee acquires a right to such performance. 
Several provisions of this Article and its official comments also refer to the "transfer" 
of property interests. Although that term and its cognates are not defined. depending on 
the context it may include an II assignment." Moreover. a transfer of property is not limited 
to transactions of "purchase" and may include the transfer of a limited interest. See also 
Section 9-332, Comment 2A. 
* * * 
3. Definitions Relating to Creation of a Security Interest. 
a. "Collateral." As under fer.m.ei,pre-1998 Section 9-105, "collateral" is the property 
subject to a security interest and includes accounts~ aa4 chattel paper, payment intangibles. 
COMMITTEE AMENDMENT 
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u ..... h•••-•-•• 
COMMITIEEAMENDMENT"A"toH.P. 59,L.D. 91 
and promissory notes that have been sold. It has beeR eKpaB:ded iil this .Artiele. The 1998 
Revisions expanded the term H:0W e~q3lieitly iH:elades to include proceeds subject to a 
security interest. It also fefleets the and also broadened the scope of the Article. It iilelades 
to include as collateral property subject to an agricultural lien as well as payment 
intangibles and promissory notes that have been sold. 
b. "Security Agreement." The definition of "security agreement" is substantially the 
same as under feEHe1' pre-1998 Section 9-105-an agreement that creates or provides for a 
security interest. However, the term frequently was used colloquially in feEHe1' pre-1998 
Article 9 to refer to the document or writing that contained a debtor's security agreement. 
This Artiele elim.iilates The 1998 Article 9 eliminated that usage, reserving the term for the 
more precise meaning specified in the defmition. 
* * * 
4. Goods-Related Definitions. 
a. "Goods"; "Consumer Goods"; "Equipment"; "Farm Products"; "Farming 
Operation"; "Inventory." The definition of "goods" is substantially the same as the 
defmition in feEHe1' pre-1998 Section 9-105. 
This Article also retains the four 
mutually-exclusive "types" of collateral that consist of goods: "consumer goods," 
"equipment," "farm products," and "inventory." The revisions are primarily for 
clarification. 
The classes of goods are mutually exclusive. For example, the same property cannot 
simultaneously be both equipment and inventory. In borderline cases-a physician's car or 
a farmer's truck that might be either consumer goods or equipment-the principal use to 
which the property is put is determinative. Goods can fall into different classes at different 
times. For example, a radio may be inventory in the hands of a dealer and consumer goods 
in the hands of a consumer. As under fofmef pre-1998 Article 9, goods are "equipment" if 
they do not fall into another category. 
The defmition of "consumer goods" follows fofmef pre-1998 Section 9-109. The 
classification turns on whether the debtor uses or bought the goods for use "primarily for 
personal, family, or household purposes." 
Goods are inventory if they are leased by a lessor or held by a person for sale or lease. 
The revised definition of "inventory" makes clear that the term includes goods leased by 
the debtor to others as well as goods held for lease. (The same result should have obtained 
under the fofmef pre-1998 definition.) Goods to be furnished or furnished under a service 
contract, raw materials, and work in process also are inventory. Implicit in the definition 
is the criterion that the sales or leases are or will be in the ordinary course of business. For 
example, machinery used in manufacturing is equipment, not inventory, even though it is 
the policy of the debtor to sell machinery when it becomes obsolete or worn. Inventory 
also includes goods that are consumed in a business (e.g., fuel used in operations). In 
general, goods used in a business are equipment if they are fixed assets or have, as 
identifiable units, a relatively long period of use, but are inventory, even though not held 
for sale or lease, if they are used up or consumed in a short period of time in producing a 
product or providing a service. 
* * * 
COMMITTEE AMENDMENT 
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,~ 
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COMMITTEE AMENDME><r ·A" to H.P. 59, L.D. 91 
Crops, livestock, and their products cease to be "farm products" when the debtor ceases 
to be engaged in farming operations with respect to them. If, for example, they come into 
the possession of a marketing agency for sale or distribution or of a manufacturer or 
processor as raw materials, they become inventory. Products of crops or livestock, even 
though they remain in the possession of a person engaged in farming operations, lose their 
status as farm products if they are subjected to a manufacturing process. What is and what 
is not a manufacturing operation process is not specified in this Article. At one end of the 
spectrum, some processes are so closely connected with farming-such as pasteurizing milk 
or boiling sap to produce maple syrup or sugar-that they would not constitute 
manufacturing. On the other hand an extensive canning operation would be manufacturing. 
Once farm products have been subjected to a manufacturing operation process. they 
normally become inventory. 
* * * 
c. 
As-Extracted Collateral. 11 Under this Article, oil, gas, and other minerals that 
have not been extracted from the ground are treated as real property, to which this Article 
does not apply. Upon extraction, minerals become personal property (goods) and eligible 
to be collateral under this Article. See the definition of "goods," which excludes "oil, gas, 
and other minerals before extraction.
To take account of financing practices reflecting the 
shift from real to personal property, this Article contains special rules for perfecting 
security interests in minerals which attach upon extraction and in accounts resulting from 
the sale of minerals at the wellhead or minehead. See, e.g., Sections 9-301(4) (law 
governing perfection and priority); 9-501 (place of filing), 9-502 (contents of financing 
statement), 9-519 (indexing ofrecords). The ReWterm, "as-extracted collateral," added by 
the 1998 Revisions, refers to the minerals and related accounts to which the special rules 
apply. The term 
11at the wellhead" encompasses arrangements based on a sale of the 
prodaee product (goods) at the moment that it issues from the ground and is measured, 
without technical distinctions as to whether title passes at the "Christmas tree" of a well, 
the far side of a gathering tank, or at some other point. The term 
11at the minehead
is 
comparable. 
The following examples explain the operation of these provisions. 
Example 5: Debtor owns an interest in oil that is to be extracted. To secure 
Debtor's obligations to Lender, Debtor enters into an a-athentieated a signed 
agreement granting Lender an interest in the oil. Although Lender may acquire an 
interest in the oil under real-property law, Lender does not acquire a security 
interest under this Article until the oil becomes personal property, i.e., until it is 
extracted and becomes "goods" to which this Article applies. Because Debtor had 
an interest in the oil before extraction and Lender's security interest attached to the 
oil as extracted, the oil is "as-extracted collateral. 
Example 6: Debtor owns an interest in oil that is to be extracted and contracts to 
sell the oil to Buyer at the wellhead. In an a:a-thentieated a signed agreement, 
Debtor agrees to sell to Lender the right to payment from Buyer. This right to 
payment is an account that constitutes "as-extracted collateral.
If Lender then 
resells the account to Financer, Financer acquires a security interest. However, 
inasmuch as the debtor-seller in that transaction, Lender, had no interest in the oil 
before extraction, Financer's collateral (the account it owns) is not 
11as-extracted 
collateral." 
COMMITTEE AMENDMENT 
Rosi 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
* * * 
.Receivables-related Definitions. 
a. "Account"; "Health-Care-Insurance Receivable"; "As-Extracted Collateral." 
The defmition of 
11account
has been expanded and reformulated. It is no longer limited to 
rights to payment relating to goods or services. Many categories of rights to payment that 
were classified as general intangibles under fefmer pre-1998 Article 9 are accounts under 
this Article. Thus, if they are sold, a financing statement must be filed to perfectthe buyer's 
interest in them. As used in the definition of "account," 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" is 
the right of a card issuer to payment from its cardholder. A credit-card or charge-card 
transaction may give rise to other rights to payments; however, those other rights do not 
"arise out of the use" of the card or information contained on or for use with the card. 
Among the types of property that are expressly excluded from the definition of account is 
11a right to payment for money or funds advanced or sold." As defined in Section 1 201, 
11mon~'
is limited essentially to curren~'. As used in the exclusion from the definition of 
"account," howe¥eF, "funds" is a broader concept than money (although the term is not 
defined). For example, when a bank-lender credits a borrower's deposit account for the 
amount of a loan, the bank's advance of funds is not a transaction giving rise to an account. 
The 2022 Article 9 Revisions amended the defmition of "money" in Section 1-201(b)(24) 
and added a new, more narrow, definition of 
11money
in Section 9-102(a)(54A). See 
Comment 12A. 
* * * 
The 2022 Article 9 Revisions amended the definition of "account" to reflect the 2022 
revised definition of "chattel paper,
discussed in Comment 5.b. The revised definition of 
11account
also includes some additional exceptions that accommodate the use of the term 
11account
in other provisions. These new exceptions were implicit in the former definition. 
Moreover, the exceptions for the defmed terms "commodity account" and "deposit 
account" implicitly apply to all uses of those terms in this Article. 
b. "Chattel Paper:."; "Eleetrenie Chattel Paper"; "Tangilile Chattel Paper.'! 
"Chattel p&peF
consists of a moaetaty obligation together with a security interest in or a 
lease of specific goods if the obligation and seCl:lrity ifl:terest Of lease are e•lidenced by 
11a 
record Of records. 
• The definition has been expanded :from that found m former Article 9 
to mclude records that e•lidence a monetary obligation and a secl1rity interest in specific 
goods and software used in the goods, a seCl:lrity mterest in specific goods and license of 
software used m the goods, or a lease of specific goods and license of software used in the 
goods. The ~i:panded defmition covers tfansactioas is vkich the dehtor's or lessee's 
moaetary obligation includes amoufl:ts o•Ned with. respect to sofu.11are used m the goods. 
The monetary obligatioa with respect to the software seed Rot he O''Ned uader a licease 
:from the secUred patty or lessor, and the secUred patty or lessor need not be a patty to the 
licease tfansactioa itself. l..mong the types of monetary oblig&tioas that are iacluded in 
"chattel paper" are amoufl:ts that hav:e heen ad>1anced by the secured party or lessor to enable 
the dehtor or lessee to acqui-re or obtain financmg for a licease of the software used in the 
goods. The definition also mafoes clear that rights to pay-meat arising out of credit cat·d 
tfansactioas are not chattel paper. "Chattel paper" consists of a monetary obligation that is 
either secured by specific goods or arises in connection with a lease of specific goods, in 
each case if the obligation and security interest or lease is evidenced by a record. The 
COMMITTEE AMENDMENT 
ftQS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
monetruy obligation itself need not be related to the goods. For example, a loan secured by 
specific goods and evidenced by one or more records creates chattel paper regardless of the 
purpose of the loan. 
Rights to payment arising out of Ghartefs charters of vessels or the use of credit or 
charge cards are expressly excluded from the definition of chattel paper; they are accounts. 
The term "charter" as used in this section includes bareboat charters, time charters, 
successive voyage charters, contracts of affreightment, contracts of carriage, and all other 
arrangements for the use of vessels. Undef form01· geetioB 9 105, oaly if the e>lideace of 
as oaligatioa coasisted of "a v,rfitiag of v,rfitiRgs" eo\:lld aa oaligatios EJ:Ualify as chattel 
paf)ef, Is this Article, traditiosal, VlfitteB ehattel paf)ef is iacl\:lded iH. the defiaitioa of 
"taagible ehattel paf>er." "Eleetl'Oruc chattel paper" is ehattel paf)ef that is stofed ia aB 
electroaie medi\:lm isstead of is taagilile form. 
The ooacept of as electfoaic medi\:lm sho\:lld be coastrued liberally to iacl\:lde electrical, 
digital, magsetic, optical, electromagsetic, of asy otheF C\:lffel'lt of simile£ emeFgiH.g 
teehtiologies. 
What distinguishes chattel paper from other rights to payment is the fact that creditor 
has an interest in specific goods to enforce the right to payment. For example, the fact that 
a secured party also has an interest in other property does not prevent the right to payment 
from being chattel paper, provided that the specific goods are the primacy: collateral. 
Example 8. To secure a loan, Borrower grants Lender a security interest in a 
specified item of equipment and a deposit account. The loan and the security 
interest are evidenced by one or more records. The right to payment is chattel 
paper, assuming the equipment is the primary collateral. 
In Example 8. the inclusion of some incidental collateral, such as a deposit account. 
does not prevent characterization of the right to payment as chattel paper. Another typical 
example would be the inclusion of after-acquired replacement parts to be installed on the 
specific goods. On the other hand, to be chattel paper, a right to payment must be 
accompanied by a security interest in specific goods or a lease of specific goods. A right to 
payment secured by a security interest in rotating collateral is not chattel paper. 
Example 9. To secure a loan, Borrower grants Lender a security interest in all of 
Borrower's existing and after-acquired inventory. The loan and the security interest 
are evidenced by one or more records. The right to payment is not chattel paper. 
Example 10. To secure a loan. Borrower grants Lender a security interest in a 
specifically described item of equipment. which is not the primary collateral, and 
also in all of Borrower's existing and after-acquired equipment. The loan and the 
security interest are evidenced by one or more records. The right to payment is not 
chattel paper. 
Example 9 is the easy case because no "specific goods" are identified. As to Example 
10, it is true that the monetary obligation is secured by "specific goods" and the definition 
of chattel paper does not specify that the obligation must be secured only by specific goods. 
However, if the right to payment in Example 10 were to be characterized as chattel paper. 
it would be possible to convert virtually any monetary obligation evidenced by records and 
secured by any collateral into chattel paper merely by including as collateral a specific item 
of goods (whether inventory, equipment, consumer goods, or farm products). The special 
COMMITTEE AMENDMENT 
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i..~.~~1 
COMMITTEE AMENDMENT" A,, to H.P. 59, L.D. 91 
rules for chattel paper contemplate that specific goods are the primary collateral, even if 
some incidental property also might be included. If additional goods or other property are 
included and the specific goods are not the primary collateral, then classification as chattel 
paper would not be appropriate. Of course, there may be close cases. In those situations, 
parties should take appropriate precautions. 
A right to payment arising from a lease of specific goods gives rise to chattel paper 
only if the predominant purpose of the transaction is to provide the lessee the right to 
possession and use of the goods. Therefore. under paragraph (ll)(B)(ii), when a lease of 
specific goods is combined with an obligation to provide or right to receive other property 
or services, the resulting right to payment will be chattel paper only if the goods aspect of 
the transaction predominates. 
Example 11. Customer and Car Dealer enter into a transaction, evidenced by one 
or more records, pursuant to-which, in exchange for a payment of $2,000 per 
month: (i) Customer is entitled to possession of a specific vehicle for 36 months: 
(ii) Car Dealer will provide round-the-clock monitoring of the vehicle's location 
and condition, and alert authorities to provide road-side assistance in the event of 
a malfunction or accident: and (iii) Car Dealer will, from time to time, remotely 
update the vehicle's operating system. The value of the right to possess and use the 
vehicle is significantly greater than the value of the monitoring service and updates. 
Because the goods aspect of the transaction predominates, under paragraph 
(l l)(B)(ii) Customer's monetary obligation, including the portion attributable to 
Car Dealer's obligation to provide monitoring and updates, constitutes chattel 
paper. 
Example 12. Customer and Cableco enter into a transaction, evidenced by one or 
more records, pursuant to which, in exchange for a payment of $200 per month, 
Cableco will provide Customer with specified television programming and a 
device needed to access the programming (a "lease" of the device). If the 
components of the transaction were priced separately, the price for the 
programming would be substantially more than the price for possession and use of 
the device. Because the goods aspect of this transaction does not predominate, 
under paragraph (l l)(B)(ii) Customer's monetary obligation does not constitute 
chattel paper. 
The 2022 revision to the definition of chattel paper omits the references to "software 
used in the goods" and a "license of software used in the goods" as superfluous, inasmuch 
as there is no reason to single out software. Other types of property may secure an 
obligation or be included in a transaction involving a lease, as discussed above. See also 
Sections 2-102 (scope of Article 2): 2-106(5) (defining "hybrid transaction"): 2A-102 
(scope of Article 2A): 2A-103(l)(h.1) (definition of "hybrid lease"). These references were 
omitted from the definition of chattel paper for clarification and did not result in any change 
in the scope of the definition. 
The 2022 revision to the definition of "chattel paper" also changed the language from 
"a record or records that evidence a monetary obligation" to "a right to payment of a 
monetary obligation evidenced by a record." This semantic change was for clarification 
purposes only: it does not imply a change in meaning. Chattel paper is and has always been 
a right to payment of a moneta1y obligation. Because the revised definition is based on the 
obligation, rather than the record, the definition no longer includes the following statement, 
COMMITTEE AMENDMENT 
ROSI 
COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
which was included in the previous definition: "If a transaction is evidenced by records that 
include an instrument or series of instruments. the group of records taken together 
constitutes chattel paper." The omission of that statement also does not imply a change in 
meaning. except that writings evidencing chattel paper are excluded from the definition of 
"instrument" under Section 9-102(a)(47). Although the definition refers to "a record," 
chattel paper can be evidenced by one or more records because, under Section 1-106, unless 
the statutory context otherwise requires. words in the singular number include the plural. 
Finally. the revised definition of "chattel paper" and the approach to perfection of a 
security interest by possession and control under Section 9-314A have eliminated the need 
to have separate definitions of "electronic chattel paper" and "tangible chattel paper" in 
Section 9-102. Consequently. those definitions have been deleted. 
c. "Instrument"; "Promissory Note." The definition of "instrument" includes a 
negotiable instrument. As under fefmerpre-1998 Section 9-105, it also includes any other 
right to payment of a monetary obligation that is evidenced by a writing of a type that in 
ordinary course of business is transferred by delivery (and, if necessary, an indorsement or 
assignment). The 2022 revised definition of "instrument" explicitly excludes a writing that 
evidences a right to payment that is chattel paper. This revision clarifies and makes explicit 
the understanding before the revision that an obligation on an instrument that evidences 
chattel paper is to be treated (e.g .. under Section 9-330) as an obligation on chattel paper 
and not on an instrument. ~Ecept in the ease of chattel paper With that exception, the fact 
that an instrument is secured by a security interest or encumbrance on property does not 
change the character of the instrument as such or convert the combination of the instrument 
and collateral into a separate classification of personal property. The definition also makes 
clear that rights to payment arising out of credit-card transactions are not instruments. The 
definition of "promissory note," added in the 1998 Revisions, is new,™ necessitated by 
the inclusion of sales of promissory notes within the scope of Article 9. It explicitly 
excludes obligations arising out of "orders" to pay (e.g., checks) as opposed to "promises" 
to pay. See Section 3-104. Under the 2022 Article 9 Revisions. Sections 9-406(d) and 9-
408(g) adopt a modified meaning of "promissory note" as that term is used in Sections 9-
406(d) and 9-408(a) through (d). See Comment 5.h.; see also Sections 9-406. Comment 5; 
9-408, Comment 11. 
d. 
"General Intangible"; "Payment Intangible." 
"General intangible" is the 
residual category of personal property, including things in action, that is not included in the 
other defined types of collateral. Examples are various categories of intellectual property 
and the right to payment of a loan of funds that is not evidenced by chattel paper or an 
instrument. As used in the definition of "general intangible," "things in action" includes 
rights that arise under a license of intellectual property, including the right to exploit the 
intellectual property without liability for infringement. The definition has been revised was 
revised in 1998 to exclude commercial tort claims, deposit accounts, and letter-of-credit 
rights. Each of the three is a separate type of collateral. One important consequence of 
this exclusion is that tortfeasors ( commercial tort claims), banks ( deposit accounts), and 
persons obligated on letters of credit (letter-of-credit rights) are not "account debtors" 
having the rights and obligations set forth in Sections 9-404, 9-405, and 9-406. In 
particular, tortfeasors, banks, and persons obligated on letters of credit are not obligated to 
pay an assignee (secured party) upon receipt of the notification described in Section 9-
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
404(a). See Comment 5.h. Another important consequence relates to the adequacy of the 
description in the security agreement. See Section 9-108. 
"Payment intangible" is a subset of the definition of "general intangible" The sale of a 
payment intangible is subject to this Article. See Section 9-109(a)(3). Virtually any 
intangible right could give rise to a right to payment of money once one hypothesizes, for 
example, that the account debtor is in breach of its obligation. The term "payment 
intangible," however, embraces only those general intangibles "under which the account 
debtor's principal obligation is a monetary obligation." (Emphasis added.) A debtor's right 
to payment from another person of amounts received by the other person on the debtor's 
behalf, including the right of a merchant in a credit-card, debit-card, prepaid-card, or other 
payment-card transaction to payment of amounts received by its bank from the card system 
in settlement of the transaction, is a "payment intangible." (In contrast, the right of a credit-
card issuer to payment arising out of the use of a credit card is an "account.") If a bank is 
the obligor on a monetary obligation not evidenced by an instrument or chattel paper. the 
obligation or the right to payment of the obligation may be a deposit account. an account. 
a payment intangible. or another type of collateral depending on the facts and 
circumstances. Of course, the classification of a monetary obligation or a right to payment 
of the obligation for purposes of this Article would not necessarily affect the application of 
laws regulating. for example. banking, securities. commodities, money transmission. and 
taxation. 
* * * 
d.1. 
"Controllable Account"; "Controllable Payment Intangible." Article 9 
affords special treatment for security interests in controllable accounts and controllable 
payment intangibles, i.e .. those accounts and payment intangibles that are evidenced by a 
controllable electronic record and as to which the account debtor (obligor) undertakes to 
pay the person having control of the controllable electronic record. Of course. a person 
would be an account debtor only if it were actually obligated on the account or payment 
intangible evidenced by the controllable electronic record. Although the definitions refer 
to a controllable electronic record that "provides" for an account debtor's undertaking, an 
account debtor's promise to pay normally would arise and be evidenced apart from the 
controllable electronic record itself. 
However. the definitions contemplate that a 
controllable electronic record evidencing an account or payment intangible (or an 
associated record) would indicate in some fashion an account debtor's obligation and that 
the controllable electronic record evidences the account or payment intangible. If a bank is 
the obligor on a monetary obligation payable to the person in control of a controllable 
electronic record. the obligation or the right to payment of the obligation may be a deposit 
account, a controllable account, a controllable payment intangible, or another type of 
collateral depending on the facts and circumstances. The classification of a monetary 
obligation or a right to payment of the obligation for purposes of this Article would not 
necessarily affect the application of laws regulating. for example. banking. securities, 
commodities. money transmission, and taxation. 
An undertaking to pay the "person that has control" means an undertaking to pay the 
person that has control at the time payment is made. However. an undertaking to pay Smith. 
even though Smith happens to have control of the relevant controllable electronic record at 
the time the undertaking was made, is not an undertaking to pay the person that has control. 
COMMITTEE AMENDMENT 
J\OS 
COMMITTEE AMENDMENT" A» to H.P. 59, L.D. 91 
The special treatment for controllable accounts and controllable payment intangibles 
includes the following: 
1. Perfection of a security interest in a controllable account or controllable payment 
intangible can be achieved by filing a financing statement or by obtaining control of the 
controllable electronic record that evidences the controllable account or controllable 
payment intangible. Sections 9-312(a); 9-314(a); 9-107A(b). 
2. A security interest in a controllable electronic record, controllable account, or 
controllable payment intangible that is perfected by control has priority over a conflicting 
security interest that is perfected by another method. Section 9-326A. 
3. The benefit of the take-free and no-action rules for qualifying purchasers (including 
secured parties) of controllable electronic records also extends to qualifying purchasers of 
controllable accounts and controllable payment intangibles, whether or not the qualifying 
purchaser also purchases the related controllable electronic record. See Section 12-104(a) 
and Comments 5 through 8. 
* * * 
g. "Commercial Tort Claim." This term is Rew. A tort claim may serve as original 
collateral under this Article only if it is a "commercial tort claim." See Section 9-109( d). 
Although security interests in commercial tort claims are within its scope, this Article does 
not override other applicable law restricting the assignability of a tort claim. See Section 
9-401. A security interest in a tort claim also may exist under this Article if the claim is 
proceeds of other collateral. See Section 9-204(b.1) and Comment 4A. 
h. "Account Debtor." An "account debtor" is a person obligated on an account, 
chattel paper, or general intangible. The account debtor's obligation often is a monetary 
obligation; however, this is not always the case. For example, if a franchisee uses its rights 
under a franchise agreement (a general intangible) as collateral, then the franchisor is an 
"account debtor." As a general matter, Article 3, and not Article 9, governs obligations on 
negotiable instruments. Accordingly, the definition of "account debtor" excludes obligors 
on negotiable instruments constituting part of chattel paper. The principal effect of this 
change from the definition in farmer pre-1998 Article 9 is that the rules in Sections 9-403, 
9-404, 9-405, and 9-406, dealing with the rights of an assignee and duties of an account 
debtor, do not apply to an assignment of chattel paper in which the obligation to pay is 
evidenced by a negotiable instrument. 
(Section 9-406(d), however, does apply to 
promissory Rotes, iH:ol-uaiH:g Regoti&ble promissory Rotes a negotiable instrument that is a 
"promissozynote," as that term is used in the 2022 revision of subsection(d). See Comment 
.c.) Rather, the assigeee's rights of an assignee of a negotiable instrument are governed by 
Article 3. Similarly, the duties of an obligor on a nonnegotiable instrument are governed 
by non-Article 9 law unless the nonnegotiable instrument is a part of chattel paper, in which 
case the obligor is an account debtor. 
The definition of "account debtor" was revised in 2022 to add the modifier "negotiable" 
to the second reference to "instrument." making it clear that an obligor on a negotiable 
instrument is not an account debtor. This amendment (which is intended to clarify and not 
to change the meaning of the definition) is useful because the definition of "instrument" 
has been revised to exclude writings that evidence chattel paper. However. the definition 
COMMITTEE AMENDMENT 
$OS 
COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
of "negotiable instrument" in Section 1-201 continues to apply under Article 9. See Section 
9-102(a)( 4 7) and (b ); Comment 5 .c. Of course. a record or records evidencing chattel paper 
must evidence either a security agreement or lease agreement in addition to a right to 
payment of a monetary obligation. 
* * * 
6. 
Investment-Property-Related 
Definitions: 
"Commodity 
Account"; 
"Commodity Contract"; "Commodity Customer"; "Commodity Intermediary"; 
"Investment Property." These defmitions are substantially the same as the conesponding 
defmitions in fel'ffl:el' pre-1998 Section 9-115. "Investment property" includes securities, 
both certificated and uncertificated, securities accounts, security entitlements, commodity 
accounts, and commodity contracts. The term investment property includes a "securities 
account" in order to facilitate transactions in which a debtor wishes to create a security 
interest in all of the investment positions held through a particular account rather than in 
particular positions carried in the account. Fol'lll:er Pre-1998 Section 9-115 was added in 
conjunction with Revised Article 8 and contained a variety of rules applicable to security 
interests in investment property. These rules hav:e been The 1998 Revisions relocated these 
rules to the appropriate sections of Article 9. See, e.g., Sections 9-203 (attachment), 9-314 
(perfection by control), 9-328 (priority). 
The terms "security," "security entitlement," and related terms are defmed in Section 
8-102, and the term "securities account" is defined in Section 8-501. 
The terms 
"commodity account," "commodity contract," "commodity customer," and "commodity 
intermediary" are defined in this section. Commodity contracts are not "securities" or 
"financial assets" under Atticle 8. See Section 8-103(f). Thus, the relationship between 
commodity intermediaries and commodity customers is not govemed by the indirect-
holding-system rules of Part 5 of Article 8. For securities, Article 9 contains rules on 
security interests, and A1ticle 8 contains rules on the rights of transferees, including secured 
parties, on such matters as the rights of a transferee if the transfer was itself wrongful and 
gives rise to an adverse claim. For commodity contracts, Article 9 establishes rules on 
security interests, but questions relating to commodity contracts of the sort dealt with in 
Article 8 for securities are left to other law. 
* * * 
7. Consumer-Related Definitions: "Consumer Debtor"; "Consumer Goods"; 
"Consumer-goods transaction"; "Consumer Obligor"; "Consumer Transaction." 
The definition of "consumer goods" (discussed above) is substantially the same as the 
defmition in fel'ffl:el' pre-1998 Section 9-109. The 1998 Revisions added the definitions of 
"consumer debtor," "consumer obligor,
"consumer-goods transaction," and "consumer 
transaction" have been added in connection with various ne·w (and old) 1998 and pre-1998 
consumer-related provisions and to designate certain provisions that are inapplicable in 
consumer transactions. 
* * *104 
8. 
Filing-Related Definitions: 
"Continuation Statement"; "File Number"; 
"Filing Office"; "Filing-office Rule"; "Financing Statement"; "Fixture Filing"; 
"Manufactured-Home Transaction"; "New Debtor"; "Original Debtor"; "Public-
Finance Transaction"; "Termination Statement"; "Transmitting Utility." * * * 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT «A "to H.P. 59, L.D. 91 
<... 
The definition of "transmitting utility" has beefl Fe•lised to embFaee embraces the 
Roausiness of transmitting communications generally to take account of new and future types 
~--of communications technology. The term designates a special class of debtors for whom 
separate filing rules are provided in Part 5, thereby obviating the many local fixture filings 
that would be necessary under the rules of Section 9-501 for a far-flung public-utility 
debtor. A transmitting utility will not necessarily be regulated by or operating as such in a 
jurisdiction where fixtures are located. For example, a utility might own transmission lines 
in a jurisdiction, although the utility generates no power and has no customers in the 
jurisdiction. Of course, the definition applies only for purposes of this Article and not for 
purposes of any other law, regulation, or rule. 
9. Definitions Relating to Medium Neutrality. 
a. "Record." In raaay, bet aot all, iflstaaees, general the term "record" replaces the 
term "writing" and "written." A "record" includes information that is in intangible form 
(e.g., electronically stored) as well as tangible form (e.g., written on paper). Section 9-
102(a)(70). Given the rapid development and commercial adoption of modern 
communication and storage technologies, requirements that documents or communications 
be "written," "in writing," or otherwise in tangible form do not necessarily reflect or aid 
commercial practices. 
A "record" need not be permanent or indestructible, but the term does not include any 
oral or other communication that is not stored or preserved by any means. The information 
must be stored on paper or in some other medium. Information that has not been retained 
other than through human memory does not qualify as a record. Examples of modern 
technologies commercially used to communicate or store information include, but are not 
limited to, magnetic media, optical discs, digital voice messaging systems, electronic mail, 
audio tapes, and photographic media, as well as paper. "Record" is an inclusive term that 
includes all of these methods of storing or communicating information. Any "writing" is a 
record. A record may be al:!thefltieated signed. See Comment 9 .b. A record may be created 
without the knowledge or intent of a particular person. 
* * * 
b. "f.,ethentieate"; "Sign"; "Communicate"; "Send." The teFm:s defined term 
"authenticate" has been deleted in the 2022 Article 9 Revisions. That term and 
"authenticated" were generally Feplaee used in Article 9 instead of "sign" and "signed." 
11Au-thefltieated
Feplaees aad bFoadeas the defiflitioa of "sigaed," However, the 2022 
revised definition of "sign" in Section 1-201, to eaeompass encompasses authentication of 
all records, not just writings. Accordingly, "sign" and "signed" are now used in Article 9. 
(References to amhefltieatioa signing of, e.g., an agreement, demand, or notification mean, 
of course, allthefltieatioa signing of a record containing an agreement, demand, or 
notification.) The terms "communicate" and "send" also contemplate the possibility of 
communication by nonwritten media. These definitions include the act of transmitting both 
tangible and intangible records. The 2022 Amendments deleted the definition of "send" 
Feplaees, fol' peFposes of this A.rtiele, the eonespoadiag teffil in Seetioa 1 201. The 
FefeFeaee to "esual raeaas of eorarauaieatioa" ifl that defiflitioa eefltemplates aa iaquiry 
into the apprnpfiateaess ef the raethed oftraasraission esed in the partieulaF efreurastaaees 
iwte:rted in this section and added a corresponding definition to Section 1-201, replacing 
the pre-2022 definition in that section. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
10. Scope-Related Definitions. 
a. Expanded Scope of Article: "Agricultural Lien"; "Consignment"; "Payment 
Intangible"; "Promissory Note." These Bew definitions reflect the expanded scope of 
1998 Article 9, as provided in Section 9-109(a). 
b. Reduced Scope of Exclusions: "Governmental Unit"; "Health-Care-Insurance 
Receivable"; "Commercial Tort Claims." These Bew definitions reflect the reduced 
scope of the 1998 exclusions, provided in Section 9-109(c) and (d), of transfers by 
governmental debtors and assignments of interests in insurance policies and commercial 
tort claims. 
11. Choice-of-Law-Related Definitions: "Certificate of Title"; "Governmental 
Unit"; "Jurisdiction of Organization"; "Public Organic Record;" "Registered 
Organization"; "State." These Bew definitions reflect the changes in the law governing 
perfection and priority of security interests and agricultural liens provided in Part 3, Subpart 
of the 1998 Revisions. 
*** 
12. Deposit-Account-Related Definitions: "DepositAccount"; "Bank." The 1998 
revised definition of "deposit account" incorporates the definition of "bank," which is new. 
The new definition derives from the definitions of "bank" in Sections 4-105(1) and 4A-
105(a)(2), which focus on whether the organization is "engaged in the business of banking." 
Deposit accounts evidenced by Article 9 "instruments" are excluded from the term 
"deposit account." In contrast, fefffieF pre-1998 Section 9-105 excluded from the definition 
"an account evidenced by a certificate of deposit." The revised definition clarifies the 
proper treatment of nonnegotiable or uncertificated certificates of deposit. Under the 
definition, an uncertificated certificate of deposit would be a deposit account (assuming 
there is no writing evidencing the bank's obligation to pay) whereas a nonnegotiable 
certificate of deposit would be a deposit account only if it is not an "instrument" as defined 
in this section (a question that turns on whether the nonnegotiable certificate of deposit is 
"of a type that in ordinary course of business is transferred by delivery with any necessary 
indorsement or assignment.") 
A deposit account evidenced by an instrument is subject to the rules applicable to 
instruments generally. As a consequence, a security interest in such an instrument cannot 
be perfected by "control" (see Section 9-104), and the special priority rules applicable to 
deposit accounts (see Sections 9-327 and 9-340) do not apply. If a bank is the obligor on a 
monetary obligation not evidenced by an instrument or chattel paper, the obligation or the 
right to payment of the obligation may be a deposit account. an account, a payment 
intangible, or another type of collateral depending on the facts and circumstances. Of 
course. the classification of a monetary obligation or a right to payment of the obligation 
for purposes of this Article would not necessarily affect the application of laws regulating, 
for example, banking, securities, commodities, money transmission, and taxation. 
* * * 
12A. 
Money-Related Definitions and Terms: "Money"; "Electronic Money"; 
"Tangible Money"; "Funds"; "Monetary Obligation." The Article 9 defmition of 
"money" in subsection (a)(54A), added by the 2022 Article 9 Revisions, is a subset of the 
defmition of "money" as defmed in Section 1-20l(b)(24). It follows that cryptocurrencies, 
COMMITTEE AMENDMENT 
COMMITIEE AMENDMENT ·A "to H.P. 59, L.D. 91 
such as bitcoin, that are not "money" as defined in Section 1-201 because they were in 
existence and used before adoption by a government, also are not Atticle 9 money. An 
obligation to pay in such cryptocurrencies would not be an account, chattel paper, or a 
payment intangible or an obligation on an instrument because the obligation would not be 
a "monetary obligation" or an obligation to pay money. One purpose of the Article 9 
definition is to ensure that even if some deposit accounts were to become "money" as 
defined in Article 1, the provisions relating to perfection and priority for security interests 
in deposit accounts, and not those for money, will apply to that collateral. Some countries 
may authorize or adopt deposit accounts with a central bank as a form of "money." See 
Section 9-101, Comment 4.c. However, the Article 9 provisions governing "deposit 
accounts" would remain suitable for such accounts with a central bank, even if a 
government has adopted these accounts as money. The 2022 Article 9 Revisions leave 
Article 9's treatment of deposit accounts largely unchanged. However, for purposes of 
Article 9 and in the interest of clarity, the definition of "money" in Section 9-102(a)(31A) 
excludes deposit accounts. Under this definition, deposit accounts would not be money for 
Article 9 purposes even if they were to become money under the Article 1 definition. 
Another purpose of the Article 9 definition of "money" is to exclude from that definition 
money (as defined in Section 1-20l(b)(24)) in an electronic form that cannot be subjected 
to control under Section 9-105A. Such property would be a general intangible, governed 
by the perfection and priority rules for that type of collateral. 
Some countries may authorize or adopt intangible tokens as a medium of exchange that 
would be "money" as defined in both Article 1 and Article 9. See Section 9-101, Comment 
4.c. Such intangible tokens would be "electronic money," as defined in Section 9-
102(a)(31A). A security interest in electronic money as original collateral can be perfected 
only by control. Sections 9-312(b)(4): 9-314; 9-105A. The requirements for obtaining 
control of electronic money are essentially the same as those for obtaining control of a 
controllable electronic record under Article 12. Sections 9-105A; 12-105. The definition 
of "tangible money" in Section 9-102(a)(79A) uses the word "tangible" with its normal 
meaning (as something that has physical or corporeal existence, such as goods). 
"Monetary obligation" as used in the Uniform Commercial Code (including in Article 
9) is not a defined term. The term contemplates an obligation to pay "money" as defined in 
Section l-20l(b)(24). Consequently, for example, a right to payment of money in an 
electronic form that cannot be subjected to control, excluded from the Article 9 definition 
of "money" in subsection (a)(54A), would be a monetary obligation. It follows that such a 
right to payment could be an account, chattel paper, a payment intangible, or an 
instrument-including a negotiable instrument, which is defined to include a promise to 
pay "money" as the term is defined in Section 1-201. See Section 3-104(a) (defining 
"negotiable instrument"). Also, the term "funds" (like "monetary obligation," an undefined 
term), as used in the Uniform Commercial Code includes a right to payment of money as 
defined in Section 1-20l(b)(24). As mentioned above, because cryptocurrencies such as 
bitcoin are not "money" as defined in Section 1-201 (unless they were not in existence and 
used before adoption by a government), a cryptocurrency or an obligation to pay in 
cryptocurrency would not be a "monetary obligation" or "funds." 
13. 
Proceeds-Related Definitions: 
"Cash Proceeds"; "Noncash Proceeds"; 
"Proceeds." The revised definition of "proceeds" eKpafl:ds expanded the definition beyond 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
that contained in :ferm:ef pre-1998 Section 9-306 and resolves ambiguities in the former 
section definition. 
a. Distributions on Account of Collateral. The phrase "whatever is collected on, or 
distributed on account of, collateral," in subparagraph (B), is broad enough to cover cash 
or stock dividends distributed on account of securities or other investment property that is 
original collateral. 
Compare fefffier pre-1998 Section 9-306 ("Any payments or 
distributions made with respect to investment property collateral are proceeds."). This 
section rejects the holding of Hastie v. FDIC, 2 F.3d 1042 (10th Cir. 1993) (postpetition 
cash dividends on stock subject to a prepetition pledge are not "proceeds" under 
Bankruptcy Code Section 5 52(6) ), to the extent the holding relies on the Article 9 definition 
of "proceeds." 
* * * 
d. Proceeds Received by Person Who Did Not Create Security Interest. When 
collateral is sold subject to a security interest and the buyer then resells the collateral, a 
question arose under fefffier pre-1998 Article 9 concerning whether the "debtor" had 
"received" what the buyer received on resale and, therefore, whether those receipts were 
"proceeds" under farmer pre-1998 Section 9-306(2). This Article contains no requirement 
that property be "received" by the debtor for the property to qualify as proceeds. It is 
necessary only that the property be traceable, directly or indirectly, to the original collateral. 
e. Cash Proceeds and Noncash Proceeds. The definition of "cash proceeds" is 
substantially the same as the corresponding definition in fefffier pre-1998 Section 9-306. 
The phrase "and the like" covers property that is functionally equivalent to "money, checks, 
or deposit accounts," such as some money-market accounts that are securities or part of 
securities entitlements. Proceeds other than cash proceeds are noncash proceeds. 
f. Forks and Airdrops for Controllable Electronic Records. Sometimes there 
occurs a change in the software (code) of a system (sometimes referred to as a "protocol" 
or "platform") in which a controllable electronic record is recorded. When such a change 
occurs in a blockchain platform. the blockchain may remain intact. no new blockchain may 
result. and the change sometimes is colloquially referred to as a "soft fork." If, instead, such 
a change results in a new, separate blockchain that exists alongside the original blockchain 
and a new controllable electronic record is created, the change is sometimes referred to as 
a "hard fork." But the terms "fork," "soft fork." and "hard fork" are ambiguous and not used 
consistently. Even in a hard fork situation the pre-fork controllable electronic record 
typically would remain intact (although its value might be affected). A person in control of 
the original record may not automatically obtain control of a new record. Additional steps 
may be required for the person in control of the original record to obtain control of the new 
record. 
Depending on the nature and structure of the fork. a new controllable electronic record 
arising under a hard fork may be property "distributed on account of" the original record or 
"rights arising out of' the original record. thereby constituting proceeds of the original 
record under subparagraph (B) or (C), or both. of the definition of "proceeds." If the new 
record is identifiable "proceeds, 
then the rules on attachment. perfection. priority under 
Sections 9-203(±), 9-315. and 9-322 would apply. If a security interest in the original record 
is perfected by control. the creation of the new record in connection with a hard fork 
typically results in the secured party obtaining control (or having the opportunity to obtain 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to ILP. 59, L.D. 91 
control) of the new record. If that is not the case and perfection of the security interest in 
the original record is only by control, however. then perfection would continue in the new 
record only until the 21st day after the security interest attaches to the new record, unless 
one of the exceptions under subsection (d) applies. Section 9-315(c), (d). For this reason. a 
secured party may wish also to perfect its security interest by filing so that the perfection 
would continue thereafter in any proceeds under Section 9-315(d)O). A secured party that 
does so may. to ensure the priority of its perfected security interest. also wish to consider 
obtaining a release or subordination from any earlier filed secured party whose financing 
statement covers the same type of property. Even if that is achieved. a security interest in 
the record that is perfected by control (even if control is later obtained) would have priority 
over a security interest perfected only by filing. Section 9-326A. 
New controllable electronic records also may be provided to persons in control of 
existing records by way of an "airdrop" that does not involve a fork in an existing 
blockchain. Depending on the circumstances, these new records may or may not be 
proceeds of the existing. original record. 
If the original record were a financial asset credited to a securities account. the new 
record might become proceeds of a security entitlement for the reasons described above. 
Concerning the duties. if any, of a securities intermediary with respect to such a 
distribution. see Section 8-505, Comment 4. 
This discussion focuses on forks and airdrops related to controllable electronic records 
in the context of blockchain technology. the prevailing relevant technology in 2022. In 
determining whether property may be proceeds of collateral in the contexts of other and 
future technologies. the principles and policies reflected in this discussion should be 
considered. 
14. 
Consignment-Related 
Definitions: 
"Consignee"; 
"Consignment"; 
"Consignor," The definition of "consignment," added by the 1998 Revisions, excludes, 
in subparagraphs (B) and (C), transactions for which filing would be inappropriate or of 
insufficient benefit to justify the costs. A consignment excluded from the application of 
this Article by one of those subparagraphs may still be a true consignment; however, it is 
governed by non-Article 9 law. The definition also excludes, in subparagraph (D), what 
have been called "consignments intended for security." These "consignments" are not 
bailments but secured transactions. Accordingly, all of Article 9 applies to them. See 
Sections 1-20l(b)(35), 9-109(a)(l). The "consignor" is the person who delivers goods to 
the "consignee" in a consignment. 
* * * 
Under clause (iii) of subparagraph (A), a transaction is not an Article 9 "consignment" 
if the consignee is "generally known by its creditors to be substantially engaged in selling 
the goods of others." Clause (iii) does not apply solely because a particular competing 
claimant knows that the goods are held on consignment. See PEB Commentary No. 20; 
dated Janaary 24, 2Q19. 
15. "Accounting," This definition describes the record and information that a debtor 
is entitled to request under Section 9-210. Consistent with the revised definition of "sign" 
in Section 1-201. the cognate term "signed" replaces the reference to "authenticated" in the 
pre-2022 text of this defmition. 
COMMITTEE AMENDMENT 
,ROS 1 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
* * * 
17. 
"Encumbrance"; "Mortgage." 
The definitions of "encumbrance" and 
"mortgage" are unchanged in substance from the corresponding definitions in ~ 
pre-
1998 Section 9-105. They are used primarily in the special real-property-related priority 
and other provisions relating to crops, fixtures, and accessions. 
18. "Fixtures." This definition is unchanged in substance from the corresponding 
defmition in~ pre-1998 Section 9-313. See Section 9-334 (priority of security 
interests in fixtures and crops). 
19. "Good Faith." This Artiole ~Epands the definitiofl of II good faith" to iflolude "the 
observance of 1·easoH:able oommeroial staH:dards of fair dealing. 
The defmitiofl m this 
seotioo applies v!heH: the term is ased ifl this f,rtiole, and the same ooH:cept applies ifl the 
ooflt~ of this ,'\rtiole for pllFposes of the obligatiofl of good faith imposed by 8eotiofl 1 
203. See sabseotiofl (c). The definition of "good faith" added by the 1998 Revisions. which 
incorporated the concept of "reasonable commercial standards of fair dealing." was deleted 
by the conforming amendments to the 2001 revision of Article 1. The defmition is 
unnecessary given the revised definition in Section 1-20l(b)(20). 
20. 
"Lien Creditor." 
This defmition is unchanged in substance from the 
corresponding definition in~ pre-1998 Section 9-301. 
21. "New Value." This f .. rtiole deletes The 1998 Revisions deleted~ pre-1998 
Section 9-108. Its broad formulation of new value, which embraced the taking of after-
acquired collateral for a pre-existing claim, was unnecessary, counterintuitive, and 
ineffective for its original purpose of sheltering after-acquired collateral from attack as a 
voidable preference in bankruptcy. The new defmition of "new value" derives from 
Bankruptcy Code Section 54 7( a). The term is used with respect to temporary perfection of 
security interests in instruments, certificated securities, or negotiable documents under 
Section 9-312( e) and with respect to chattel paper priority in Section 9-330. 
* * * 
23. "Proposal." This definition describes a record that is sufficient to propose to 
retain collateral in full or partial satisfaction of a secured obligation. See Sections 9-620, 
9-621, 9-622. Consistent with the revised defmition of "sign" in Section 1-201. the 2022 
revision of the definition adopts the cognate term "signed" to replace the term 
"authenticated" used in the pre-2022 text. 
24. "Pursuant to Commitment." This defmition is unchanged in substance from the 
corresponding definition in~ pre-1998 Section 9-105. It is used in connection with 
special priority rules applicable to future advances. See Section 9-323. 
* * * 
26. TermiHalagy: ",".tssigHmeHt" aHd "THHsftlr." IR oomeroas provisiofls, this 
Article refers to the "assigRR½eflt" or the "transfer" of property iflt01•ests. These terms and 
their derivatP;:es are Rot defined. This f .. rtiole geRerally follorns oommofl asage by asiag 
the terms "assignmeflt" and "assiga" to refer to traasfers of rights to paymeat, claims, aad 
lieas and other seoarity iaterests. It geaerally uses the term "transfer" to refer to other 
transfers of mterests in property. E1£oept vlhen used in oonneotion with a letter of oredit 
traasaotiofl (see 8eotiofl 9 107, Commeflt 4), ao sigaifioaaoe shoald be placed oa the ase 
ofoae term or the other. Depeadiag Ofl the s1:lhstaace of the traasaotioa, eaoh term as ased 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L,D, 91 
in this ,Artiele refers to the assign.meB.t or tra-esfer of an oea·ight ovl-flershi-p iB.terest or to the 
assigRffieB.t or transfer of a limi-ted iB.terest, seeh as a seeerity iB.terest, or both. 
Sec. A-84. 11 MRSA §9-1104, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
(1). A secured party has control of a deposit account if: 
(a). The secured party is the bank with which the deposit account is maintained; 
(b ). The debtor, secured party and bank have agreed in a-e autheB.tieated a signed record 
that the bank will comply with instructions originated by the secured party directing 
disposition of the funds in the deposit account without fu1ther consent by the debtor; 
er 
( c ). The secured party becomes the bank's customer with respect to the deposit 
accountT,;_Q! 
(d). Another person. other than the debtor: 
(i) Has control of the deposit account and acknowledges that it has control on 
behalf of the secured party: or 
(ii) Obtains control of the deposit account after having acknowledged that it will 
obtain control of the deposit account on behalf of the secured party. 
Official Comment 
1. Source. New; derh•ed Derived from Section 8-106, 
2. Why "Control" Matters. This section explains the concept of "control" of a 
deposit account. "Control" under this section may serve two functions. First, "control .. , 
pursuant to the debtor's agreement" may substitute for a-e autheH:tieated a signed security 
agreement as an element of attachment. See Section 9-203(b)(3)(D). Second, when a 
deposit account is taken as original collateral, the only method of perfection is obtaining 
control under this section. See Section 9-312(b )(1 ). 
3. Requirements for "Control: In General."*** 
* * * 
Under subsection (a)(2), a secured party may obtain control by obtaining the bank's 
aetheB.tieated signed agreement that it will comply with the secured party's instructions 
without further consent by the debtor. The analogous provision in Section 8-106 does not 
require that the agreement be a:utheB.tieated signed. An agreement to comply with the 
secured party's instructions suffices for "control" of a deposit account under this section 
even if the bank's agreement is subject to specified conditions, e.g., that the secured party's 
instructions are accompanied by a certification that the debtor is in default. (Of course, if 
the condition is the debtor's fu1ther consent, the statute explicitly provides that the 
agreement would not confer control.) See re•1ised Section 8-106, Comment 7, 
* * * 
4. Control on behalf of another person, Subsection (a)(4) provides for a secured 
party to obtain control of a deposit account by vittue of the acknowledgment by another 
person. other than the debtor. in control of the deposit account. It generally follows 
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COMMITTEE AMENDMENT «A "to H.P. 59, L.D. 91 
revisions to the corresponding provisions for control of electronic documents of title 
(Section 7-106(g)), control of a security entitlement (8-106(d)), control of an electronic 
copy of a record evidencing chattel paper (Section 9-1 0S(g)), control of electronic money 
(Section 9-l0SA(e)), and control ofcontrollable electronic records (Section 12-l0S(e)). For 
a brief discussion, see Section 12-105, Comments 8 and 9. 
An acknowledgment by a person in control under subsection (a)(4) would not impose 
any duties on the bank with which the deposit account is maintained. Indeed, the bank may 
have no knowledge or involvement whatsoever with a control person's acknowledgment 
under that subsection. On the other hand, subsection (a)( 4) should not be construed to 
permit the bank with which the deposit account is maintained to short-circuit subsection 
(a)(2), which provides for control through a control agreement among the debtor, the bank, 
and the control person. However, it would be possible for the bank, acting in a capacity 
other than as the depositary bank (for example, as a secured party) to acknowledge that it 
has control on behalf of another purchaser under subsection (a)( 4 ). 
Section 9-107B(a) makes clear that a person that has control under this section has no 
duty to acknowledge that it has or will obtain control on behalf of another person. 
Arrangements for a person to acknowledge that it has or will obtain control on behalf of 
another person are not standardized. Accordingly, Section 9-107B(b) leaves to the 
agreement of the parties and to any other applicable law any duties of a person that does 
acknowledge that it has or will obtain control on behalf of another person and provides that 
a person making an acknowledgment is not required to confirm the acknowledgment to 
another person. 
Sec. A-85. 11 MRSA §9-1105, as amended by PL 2013, c. 317, Pt. A, §§9 to 11, is 
repealed. 
Sec. A-86. 11 MRSA §9-1105-A is enacted to read: 
§9-1105-A. Control of electronic copy of record evidencing chattel paper 
(1). A purchaser has control of an authoritative electronic copy of a record evidencing 
chattel paper if a system employed for evidencing the assignment of interests in the chattel 
paper reliably establishes the purchaser as the person to which the authoritative electronic 
copy was assigned. 
(2). A system satisfies subsection (1) if the record or records evidencing the chattel 
paper are created, stored and assigned in a manner such that: 
(a). 
A single authoritative copy of the record or records exists that is unique, 
identifiable and, except as otherwise provided in paragraphs (d), (e) and (f), 
unalterable: 
(b). The authoritative copy identifies the purchaser as the assignee of the record or 
records: 
(c). The authoritative copy is communicated to and maintained by the purchaser or its 
designated custodian: 
(d). 
Copies or amendments that add or change an identified assignee of the 
authoritative copy can be made only with the consent of the purchaser: 
(e). 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 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
(f). Any amendment of the authoritative copy is readily identifiable as authorized or 
unauthorized. 
(3). A system satisfies subsection (1). and a purchaser has control of an authoritative 
electronic copy of a record evidencing chattel paper. if the electronic copy. a record 
attached to or logically associated with the electronic copy or a system in which the 
electronic copy is recorded: 
(a). Enables the purchaser readily to identify each electronic copy as either an 
authoritative copy or a nonauthoritative copy: 
(b). Enables the purchaser readily to identify itself in any way. including by name. 
identifying number. cryptographic key. office or account number. as the assignee of 
the authoritative electronic copy: and 
(c). Gives the purchaser exclusive power, subject to subsection (4). to: 
(i) 
Prevent others from adding or changing an identified assignee of the 
authoritative electronic copy: and 
(ii) Transfer control of the authoritative electronic copy. 
( 4). Subject to subsection (5). a power is exclusive under subsection (3 ). paragraph 
(c). subparagraphs (i) and (ii) even if: 
(a). 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 authoritative electronic copy or has a protocol that is 
programmed to cause a change. including a transfer or loss of control: or 
(b). The power is shared with another person. 
(5). A power of a purchaser is not shared with another person under subsection (4), 
paragraph (b) and the purchaser's power is not exclusive if: 
(a). The purchaser can exercise the power only if the power also is exercised by the 
other person: and 
(b). The other person: 
(i) Can exercise the power without exercise of the power by the purchaser: or 
(ii) Is the transferor to the purchaser of an interest in the chattel paper. 
(6). 
If a purchaser has the powers specified in subsection (3). paragraph (c). 
subparagraphs (i) and (ii). the powers are presumed to be exclusive. 
(7). A purchaser has control of an authoritative electronic copy of a record evidencing 
chattel paper if another person. other than the transferor to the purchaser of an interest in 
the chattel paper: 
(a). Has control of the authoritative electronic copy and acknowledges that it has 
control on behalf of the purchaser: or 
(b). Obtains control of the authoritative electronic copy after having acknowledged 
that it will obtain control of the electronic copy on behalf of the purchaser. 
Official Comment 
COMMITTEE AMENDMENT 
ROS 
tita,h.....•.-·-
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
1. Sauree. No'N. 
2. "C0B-tr0l" af Eleetranie Chattel :Papel:'. This f~rticle covOl's security interests iR 
"olectroRic ehattel paj3er," a Re>N tenn defmed in SectioR 9 102. This soctioR goverRs ho•.y 
"coH:trol" of oloetroaic ehattol paj)ot' may be obtaiaed. SubsectioR (a), •.vhieh derives from 
Soctioft 16 of tho URifom EleetroRic TraRsaetioas Act, sets forth the genOl'al test for 
coH:trol. Subseetion (b) sets forth a safe harbor test that, if satisfied, establishes contrnl 
l:lnder the genOl'al test in subsoetion (a). 
A secw-od party's coH:trol of oleetronic chattel paj3er (i) may substitate for an 
authenticated security agreement for purposes of attachm:ent uador Section 9 203, (ii) is a 
method of perfection UH:der Section 9 314, and (iii) is a condition for obtaining special, 
non temporal priority under Section 9 330. Because eleetroRie chattel paj)er cann:ot be 
transferred, assigaed, OF possessed in the same manner as tangible ehattol paper, a special 
definition of coH:trol is ROcossai:y. In. desOl'iptivo terms, this soetion provides that control of 
eleetroaie ehattel pajJor is the functional equivalent ofpossessioa of "tangible ehattol paper" 
(a term also defiaed in Section 9 102). 
3. De¥elapmeB-t af Control Systems. This f.rticle lea:vos to tho markotplaee the 
dO¥olopmeHt of s~rstoms and proeedures, through a combination of suitable technologies 
and business practices, for dealing with control of eleetroRic chattel paj)or in a commercial 
co~t. Systems that e>,<ol>1e fa£ control of eloctroRic chattel paj)0F may or may not involve 
a third party custodian of the rele:vant records. f~s UH:der UETi'\, a sy:stem must be shov,'R 
to reliably: establish that the secured party is tho assignee of the ehattel paj3or. R-eliability 
is a hlgh standard and eH:compasses the geReFal principles of uniqueness, identifiability:, 
aad uaaltorability found in subsectioR (b) •;vithout setting forth specific gl:lidelinos as to how 
those principles must be achioY1ed. Yov/e:'ler, the standards aj)plied to detennine whether a 
party is in coH:trol of eleetroaic ehattel paper should Rot be more stringent than the standards 
now applied to determiae •;vhethOl' a party is in possession of taRgible ehattol paper. For 
01£ample, just as a secured party does not lose possession of tangible chattel papOl' mOl'ezy 
by virtue of the possibility that a pOl'son actiRg on its behalf eeuldwroRgfulzy redeli:VOl' the 
chattel papoF to tho debtoF, so coH:trol of eloetroRic ehattol papOl' v,'ould Rot be defeated by 
tho possibility that the secured party's intOl'est ee'lild be sub•1erted by tho •,yrongful eonduct 
of a person (such as a custodian) acting on its behalf. 
This soetioR ana the concept of coH:trol of electronic ehattol papeF are not basea on the 
same concepts as are coH:trol of deposit accoUftts (Section 9 104), seeffl'ity oHtitlemonts, a 
type of iavestmont propOffj' (Seetion 9 106), and lettOl' of cFedit rights (Seetion 9 107). 
The rules for control of those types of collatoFal are based on 02dstiRg market practices aad 
legal and rogalatoey: regimes for institutions sueh as bcmks and seearities iRtemediarios. 
f&alogous pFactices for electronic ehattel paj3er are de>reloping nonetheless. The fl01tible 
approach adopted by this seetioa, moreo•10f, should Rot impede the dO¥elopment of these 
practices and, e¥ontually, legal and rogalatoey: regimes, vlhich may become analogous to 
those for, e.g., iR•,,estmont property. 
4. 
"A:uthal'itative Ca~" of Eleetl:'onie Chattel :P1¼f1er. 
One roquifemont for 
establishiag coH:trol uadOl' subsection (b) is that a particalar copy: be an "authoritatvle copy. 
"fJthough otheF copies may e~dst, they must be distingHished fl'om tho authoritative copy. 
This may be aehio•,rod, for 01£am:plo, throagh tho methods of authonticatioR that are used or 
by business praetiees iRvol>iing the marking of aay additioaal copies. When tangible 
ehattol paper is eonYoi1ed to olectronie ehattol paper, in order to establish that a copy of the 
COMMITTEE AMENDMENT 
ROS 
. COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
eleotronio oha-ttel pa,peF is the l¼ltth.oFitati!;:e oop;' it ffi&;' be neoessaQ' to show that the 
tangible oha-ttel pa,peF no longef e1dsts Of has been pefffianently mafked to indioate that it 
is not the a¼lthoritatiye oop;'. 
1. The Functions of Control. A secured party can perfect a security interest in chattel 
paper by filing. See Section 9-312(a). Alternatively. a secured party can perfect a security 
interest in chattel paper by taking possession of all authoritative tangible copies of the 
record evidencing the chattel paper and obtaining control of all authoritative electronic 
copies of the record evidencing chattel paper. Section 9-314A. Possession and control also 
are conditions for achieving priority under Section 9-330(a). (b). and (c). A secured party's 
possession or control of chattel paper also may substitute for a signed security agreement 
for purposes of attachment under Section 9-203. 
2. 
Conditions for Obtaining Control: In General. This section provides the 
requirements for obtaining control of chattel paper. As explained in the comment to the 
definition of "chattel paper," the definitions of "electronic chattel paper" and "tangible 
chattel paper" have been deleted as unnecessary. See Section 9-102. Comment 5.b. 
Subsections (a) and (b) are substantially unchanged under the 2022 Article 9 Revisions. 
Subsection (a). which derives from Section 16 of the Uniform Electronic Transactions Act, 
sets forth the general test for control. (The amendments to subsection (a) primarily reflect 
the changes to the definition of chattel paper in Section 9-102.) Subsections (b) and (c) set 
forth safe harbor tests that, if satisfied. establish control under the general test in subsection 
(a). It is important to note that compliance with the conditions for control in subsection (c) 
would satisfy the conditions provided in subsection (b). However. subsection (b) has been 
retained out of an abundance of caution and to provide assurances of the continuing 
viability of pre-2022 systems for control of chattel paper evidenced by electronic records. 
3. Development of Control Systems and Application of Subsection (b). This 
Article leaves to the marketplace the development of systems and procedures, through a 
combination of suitable technologies and business practices. for dealing with control of 
chattel paper in a commercial context. As under UETA and under the general standard for 
control under subsection (a), for control under subsection (b). as supplemented by 
subsection (g). a system must be shown to reliably establish that the secured party is the 
assignee of the chattel paper. Reliability is a high standard and encompasses the general 
principle of identifiability of an assignee of an authoritative copy as found in subsection 
(b), but without setting forth specific guidelines as to how compliance with this principle 
must be achieved. Under subsection (b), at any point in time, a party should be able to 
identify the single authoritative copy of the record or records evidencing the chattel paper 
which is unique and identifiable as the authoritative copy. This does not mean that once 
created the authoritative copy need be static and never moved or copied from its original 
location. To the extent that backup systems exist which result in multiple copies, the key 
to this idea is that at any point in time. the one authoritative copy needs to be unique and 
identifiable. However. the standards applied to determine whether a party is in control of 
chattel paper should not be more stringent than the pre-2022 standards applied to determine 
whether a party is in possession of tangible chattel paper. For example, just as a secured 
party does not lose possession of tangible chattel paper merely by virtue of the possibility 
that a person acting on its behalf could wrongfully redeliver the chattel paper to the debtor, 
so control of chattel paper evidenced by an electronic copy of a record or records would 
COMMITTEE AMENDMENT 
ROS 
~-... ~ .. l 
COMMITTEE AMENDMENT ,Pr to H.P. 59, L.D. 91 
not be defeated by the possibility that the secured party's control could be subverted by the 
wrongful conduct of a person (such as a custodian) acting on its behalf. 
4. Subsection (c) Safe Harbor: In General. The subsection (c) "safe harbor" 
generally follows Section 12-105 for control of controllable electronic records. See 
generally Section 12-105 and Comments. It differs from subsection (b), which (as 
explained above) is based on a "single authoritative copy" of an electronic record or 
records. Subsection (b) would be inapplicable when the relevant record is maintained on a 
blockchain or another distributed ledger. The utility of distributed ledger technology 
depends on there being multiple authoritative copies of a record. However, as with 
subsection (b), control under subsection (c) also meets the high standard ofreliability under 
subsection (a) as to the identifiability of an assignee of authoritative copies. The conditions 
for "control" in subsection (c) are meant to reflect the functions that possession serves with 
respect to writings, but in a more accurate and technologically flexible way than does the 
definition in subsection (b). 
Subsection (c), as supplemented by subsections (d) through (g), sets forth the 
requirements for a purchaser to have "control of an authoritative electronic copy of a record 
evidencing chattel paper." However, for purposes of perfection of a security interest in the 
chattel paper under Section 9-314A and qualification for non-temporal priority under 
Section 9-330, the purchaser must obtain control of each authoritative electronic copy (i.e., 
all of the copies) of a record evidencing the chattel paper and take possession of each 
tangible copy (if any) of the record evidencing the chattel paper. 
5. 
Control of Electronic Copy of Record Evidencing Chattel Paper under 
Subsection (c). Under subsection (c), to obtain control of an electronic copy of a record 
evidencing chattel paper a purchaser must be able to identify each electronic copy as 
authoritative or nonauthoritative and identify itself as the assignee of the authoritative copy. 
As to the means of identification, see Section 12-105, Comment 7. In addition, the 
purchaser must have the exclusive power to prevent others from adding or changing an 
identified ·assignee and to transfer control of the authoritative copy. However, once it is 
established that a person has received those powers, subsection (f) provides a presumption 
of exclusivity. Consequently, a person asserting control need not prove exclusivity in order 
to make out a prima facie case. Application of the presumption will be governed also by 
Section 1-206 (effects of a presumption under the UCC) and applicable non-UCC law 
(including rules of procedure and evidence). See generally Section 12-105, Comment 5. 
Subsection (d) contains two qualifications of the term "exclusive" as used in subsection 
(c)(3). A power can be "exclusive" under subsection (c)(3) even if one or both of these 
qualifications apply. 
Subsection (e) provides that in certain circumstances a power is not shared within the 
meaning of subsection (d)(2), the relaxation of the exclusivity requirement provided by 
subsection (d)(2) does not apply, and, consequently, a purchaser's power is not exclusive. 
Subsection (e) provides that a purchaser does not share an exclusive power with another 
person if the purchaser can exercise the power only with the other person's cooperation 
(subsection (e)(l)) but the other person either (i) can exercise the power without the 
purchaser's cooperation (subsection (e)(2)(A)) or (ii) is the transferor to the purchaser of an 
interest in the chattel paper (subsection (e)(2)(B)). It follows that a purchaser to which 
subsection (e) applies does not have control based on its exclusive powers (although it 
might have control through another person under subsection (g), discussed below, or if 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L,D, 91 
another person having control is acting as the person's agent). As to the rationale for 
disqualifying a purchaser (which includes a secured party in a secured transaction) from 
sharing powers with a transferor to the purchaser. as provided in subsection (e)(2)(B), and 
from the benefit of shared control under subsection (d)(2), and for examples of the 
operation of subsection (e) (in the context of the similar provision in Section 12-105), see 
Section 12-105. Comments 5 and 9. 
6. Control Through Another Person, Subsection (g) provides for a purchaser to 
obtain control of an electronic copy by virtue of the acknowledgment by another person in 
control of the electronic copy. It follows revisions to the corresponding provisions for 
control of electronic documents of title (Section 7-106(g)). control of a security entitlement 
(Section 8-106(d)(3)), control of deposit accounts (Section 9-104(a)(4)). control of 
electronic money (Section 9-105A(e)). and control of controllable electronic records 
(Section 12-105(e)), For a brief discussion. see Section 12-105. Comment 8. For an 
acknowledgment by another person to be effective to confer control on a purchaser under 
subsection (g). the other person making the acknowledgment must be one "other than the 
transferor to the purchaser of an interest in the chattel paper." The rationale for this 
limitation is discussed in Section 12-105. Comment 9. 
Section 9-107B(a) makes clear that a person that has control under this section has no 
duty to acknowledge that it has or will obtain control on behalf of another person. 
Arrangements for a person to acknowledge that it has or will obtain control on behalf of 
another person are not standardized. Accordingly. Section 9-107B(b) leaves to the 
agreement of the parties and to any other applicable law any duties of a person that does 
acknowledge that it has or will obtain control on behalf of another person and provides that 
a person making an acknowledgment is not required to confirm the acknowledgment to 
another person. For example, subsection (g) would apply to give control to a person. Alpha. 
when another person. Beta. has control of each authoritative electronic copy of a record 
evidencing chattel paper and acknowledges that it has control on behalf of Alpha. 
However, under Section 9-107B(a), Beta is not required to so acknowledge. And under 
Section 9-107B(b). even if Beta does so acknowledge. Beta owes no duty to Alpha unless 
Beta agrees or other law so provides and Beta is not required to confirm its 
acknowledgment to any other person. 
7. References to "Secured Party" Changed to "Purchaser." References to a 
"secured party" in the pre-2022 text of this section have been changed to refer to a 
"purchaser." This change aligns the text with the priority rules of Section 9-330(a). (b). and 
(21 
• 
Official Comment 
1. "Control" of Electronic Money: In General. A security interest in electronic 
money as original collateral may be perfected only by control pursuant to this section. 
Section 9-312(b)(4). These requirements for obtaining control generally track those in 
Section 12-105 for controllable electronic records, See generally Section 12-105. 
Comments. 
2. Control on Behalf of Another Person. Subsection (e) provides for a person to 
obtain control of electronic money by virtue of the acknowledgment by another person in 
control of the electronic money. It follows revisions to the corresponding provisions for 
control of electronic documents of title (Section 7-106(g)). control of a security entitlement 
COMMITTEE AMENDMENT 
Rps 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
(Section 8-106( d)(3 )), control of deposit accounts (Section 9-104(a)( 4 )), control of an 
electronic copy of a record evidencing chattel paper (Section 9-105(g)), and control of 
controllable electronic records (Section 12-105(e)). For a brief discussion, see Section 12-
105, Comment 8. 
Section 9-107B(a) makes clear that a person that has control under this section has no 
duty to acknowledge that it has or will obtain control on behalf of another person. 
Arrangements for a person to acknowledge that it has or will obtain control on behalf of 
another person are not standardized. Accordingly, Section 9-107B(b) leaves to the 
agreement of the parties and to any other applicable law any duties of a person that does 
acknowledge that it has or will obtain control on behalf of another person and provides that 
a person making an acknowledgment is not reguired to confirm the acknowledgment to 
another person. 
Sec. A-87. 11 MRSA §9-1107-A is enacted to read: 
§9-1107-A. 
Control of controllable electronic record, controllable account or 
controllable payment intangible 
(1). 
A secured party has control of a controllable electronic record as provided in 
section 12-105. 
(2). 
A secured party has control of a controllable account or controllable payment 
intangible if the secured party has control of the controllable electronic record that 
evidences the controllable account or controllable payment intangible. 
Official Comment 
1. Perfection by Control or Filing and Priority for Controllable Electronic 
Records. Perfection by filing and perfection by control are alternative methods of 
perfection for a controllable electronic record. See Sections 9-312, 9-314. Under this 
section. a secured party has control of a controllable electronic record as provided in 
Section 12-105. Under Section 9-326A. a security interest in a controllable electronic 
record that is perfected by control has priority over a security interest perfected by another 
method. 
2. Perfection by Control or Filing and Priority for Controllable Account or 
Controllable Payment Intangible. Perfection by filing and perfection by control also are 
alternative methods of perfection for a controllable account or controllable payment 
intangible. See Sections 9-312, 9-314. Under this section, a secured party would obtain 
control of a controllable account or controllable payment intangible by obtaining control 
of the controllable electronic record that evidences the controllable account or controllable 
payment intangible. Under Section 9-326A. a security interest in a controllable account or 
controllable payment intangible that is perfected by control has priority over a security 
interest perfected by another method. 
By definition, a controllable account would be an Article 9 "account." and a 
controllable payment intangible would be an Article 9 "payment intangible." Section 9-
102. The fact that an account or payment intangible is a controllable account or controllable 
payment intangible does not affect a secured party's alternative of perfection by filing. 
Moreover. that fact does not affect the applicability of other provisions of Article 9, 
including the provisions governing an account debtor's agreement not to assert defenses 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
(Section 9-403) and the statutory overrides of legal and contractual restrictions on the 
assignability of accounts and payment intangibles (Sections 9-406 and 9-408). 
Sec. A-88. 11 MRSA §9-1107-B is enacted to read: 
§9-1107-B. No requirement to acknowledge or confirm; no duties 
(1). A person that has control under section 9-1104 or 9-1105-A is not required to 
acknowledge that it has control on behalf of another person. 
(2). If a person acknowledges that it has or will obtain control on behalf of another 
person. unless the person otherwise agrees or law other than this Article 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. 
Official Comment 
1. Source. Section 9-107B derives from Sections 8-106(g) and 9-313(±) and (g). 
2. Purpose. Subsection (a) makes clear that a person that has control under the 
specified sections has no duty to acknowledge that it has or will obtain control on behalf of 
another person. Arrangements for a person to acknowledge that it has control on behalf of 
another person are not standardized. Accordingly, subsection (b) leaves to the agreement 
of the parties and to any other applicable law any duties of a person that does acknowledge 
that it has or will obtain control on behalf of any other person. 
Sec. A-89. 11 MRSA §9-1203, sub-§(2), 1(c), as amended by PL 2009, c. 324, 
Pt. B, §29 and affected by §48, is further amended to read: 
(c). One of the following conditions is met: 
(i) The debtor has amhentieated signed a security agreement that provides a 
description of the collateral and, if the security interest covers timber to be cut, a 
description of the land concerned; 
(ii) The collateral is not a certificated security and is in the possession of the 
secured party under section 9-1313 pursuant to the debtor's security agreement; 
(iii) The collateral is a certificated security in registered form and the security 
certificate has been delivered to the secured party under section 8 1302 8-1301 
pursuant to the debtor's security agreement; 0f 
(iv) 
The collateral is controllable accounts, controllable electronic records, 
controllable payment intangibles, deposit accounts, eleetfoaie ehattel ):)aper 
electronic documents, investment property; or letter-of-credit rights OF eleetfoaie 
doeuments, and the secured party has control under seetioas section 7-1106, 
9-1104, 9 1105 9-1105-A, 9-1106 eF,. 9-1107 or 9-1107-A pursuant to the debtor's 
security agreement~.:...m: 
(v) The collateral is chattel paper and the secured party has possession and 
control under section 9-1314-A pursuant to the debtor's security agreement. 
Official Comment 
* * * 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
3. Security Agreement; Signed. Under subsection (b)(3), enforceability requires the 
debtor's security agreement and compliance with an evidentiary requirement in the nature 
of a Statute of Frauds. Paragraph (3)(A) represents the most basic of the evidentiary 
alternatives, under which the debtor must autheatioate sign a security agreement that 
provides a description of the collateral. Under Section 9-102, a "security agreement" is "an 
agreement that creates or provides for a security interest." Neither that definition nor the 
requirement of paragraph (3)(A) rejects the deeply rooted doctrine that a bill of sale, 
although absolute in form, may be shown in fact to have been given as security. Under this 
Article, as under prior law, a debtor may show by parol evidence that a transfer purporting 
to be absolute was in fact for security. Similarly, a self-styled "lease" may serve as a 
security agreement if the agreement creates a security interest. 
See Section 1-203 
( distinguishing security interest from lease). Consistent with the revised definition of "sign" 
in Section 1-201, the cognate terms "signed" and "signing" replace the references to 
"authenticated" and "authentication" in the pre-2022 text of this Section. 
4. Possession, Delivery, or Control Pursuant to Security Agreement. The other 
alternatives in subsection (b )(3) dispense with the requirement of an 8.-1:1-theatioated a signed 
security agreement and provide alternative evidentiary tests. Under paragraph (3)(B), the 
secured party's possession substitutes for the debtor's au-theatioatiofl: signed security 
agreement under paragraph (3)(A) if the secured party's possession is "pursuant to the 
debtor's security agreement." That phrase refers to the debtor's agreement to the secured 
party's possession fat' the parpose of creating in connection with the creation of a security 
interest. The phrase should not be confused with the phrase "debtor has a-utheatioated 
signed a security agreement," used in paragraph (3)(A), which contemplates the debtor's 
authentioatiofl signing of a record. In the unlikely event that possession is obtained without 
the debtor's agreement, possession would not suffice as a substitute for an 8.-1:1-thefl:tioated g 
signed security agreement. However, once the security interest has become enforceable 
and has attached, it is not impaired by the fact that the secured party's possession is 
maintained without the agreement of a subsequent debtor (e.g., a transferee). Possession 
as contemplated by Section 9-313 is possession for purposes of subsection (b )(3)(B), even 
though it may not constitute possession "pursuant to the debtor's agreement" and 
consequently might not serve as a substitute for an a-utheatioated a signed security 
agreement under subsection (b)(3)(A). Subsection (b)(3)(C) provides that delivery of a 
certificated security to the secured party under Section 8-301 pursuant to the debtor's 
security agreement is sufficient as a substitute for an aatheatioated a signed security 
agreement. 
Similarly, under subsection (b)(3)(D), control of controllable accounts. 
controllable electronic records, controllable payment intangibles, deposit accounts. 
electronic documents, electronic money. investment property, a deposit aooount, eleotl:'oaio 
chattel paper, or a letter-of-credit right, or eleotroaio dooumoots rights satisfies the 
evidentiary test if control is pursuant to the debtor's security agreement, and under 
subsection (b )(3 )(E). possession and control of chattel paper under Section 9-3 l 4A satisfies 
the evidentiary test if pursuant to the debtor's security agreement. 
* * * 
8. Proceeds and Supporting Obligations. Under subsection (f), attachment of a 
security interest in original collateral also is attachment of a security interest in identifiable 
proceeds as provided in Section 9-315(a)(2). It is not necessa1y for a security agreement to 
mention "proceeds" or otherwise to describe collateral consisting of proceeds. See also 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,;A" to H.P. 59, L.D. 91 
Section 9-108. Comment 5. Also under subsection (f). a security interest in a "supporting 
obligation" (defined in Section 9-102) automatically follows from a security interest in the 
underlying, supported collateral. This result was implicit under fefmer pre-1998 Article 9. 
Implicit in subsection (f) is the principle that the secured party's interest in a supporting 
obligation extends to the supporting obligation only to the extent that it supports the 
collateral in which the secured party has a security interest. Complex issues may arise, 
however, if a supporting obligation supports many separate obligations of a particular 
account debtor and if the supported obligations are separately assigned as security to 
several secured parties. The problems may be exacerbated if a supporting obligation is 
limited to an aggregate amount that is less than the aggregate amount of the obligations it 
supports. This Article does not contain provisions dealing with competing claims to a 
limited supporting obligation. As under fefmer pre-1998 Article 9, other law, including 
the law of suretyship, and the agreements of the parties will control. 
* * * 
Sec. A-90. 11 MRSA §9-1204, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
(2). 
-A Subject to subsection (2-A). a security interest does not attach under a term 
constituting an after-acquired property clause to: 
(a). Consumer goods, other than an accession when given as additional security, unless 
the debtor acquires rights in them within 10 days after the secured party gives value; 
or 
(b ). A commercial tort claim. 
Sec. A-91. 11 MRSA §9-1204, sub-§(2-A) is enacted to read: 
(2-A). Subsection (2) does not prevent a security interest from attaching: 
(a). 
To consumer goods as proceeds under section 9-1315. subsection (1) or 
commingled goods under section 9-1336, subsection (3): 
(b). To a commercial tort claim as proceeds under section 9-1315. subsection (1): or 
(c). Under an after-acquired property clause to property that is proceeds of 
consumer goods or a commercial tort claim. 
Official Comment 
* * * 
3. After-Acquired Consumer Goods. Subsection (b)(l) makes ineffective an after-
acquired property clause covering consumer goods ( defined in Section 9--W9- 9-
102(a)(23 )). except as accessions (see Section 9-335), acquired more than 10 days after the 
secured party gives value. Subsection (b )(1) is unchanged in substance from the 
corresponding provision in :fefmer pre-1998 Section 9-204(2). However, a term granting a 
security interest in consumer goods that will be purchase-money collateral in the 
transaction is not "a term constituting an after-acquired property clause. 
Consequently. 
subsection (b)(l) does not prevent the security interest from attaching to the purchase-
money collateral even if the collateral is not an accession and the debtor acquires rights in 
the collateral more than 10 days after the secured party gives value. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
4. Commercial Tort Claims. Subsection (b )(2) provides that an after-acquired 
property clause in a security agreement does not reach future commercial tort claims. In 
order for a security interest in a tort claim as original collateral to attach, the claim must be 
in existence when the security agreement is a-u-thenticatod signed. In addition, the security 
agreement must describe the tort claim with greater specificity than simply "all tort claims." 
See Section 9-108( e ). 
4A. Proceeds and Commingled Goods, Subsection (b.1) clarifies and makes explicit 
what is implicit in the pre-2022 text of subsection (b). Subsection (b) does not prevent a 
security interest from attaching to consumer goods as proceeds or as commingled goods. 
to commercial tort claims as proceeds. or under an after-acquired property clause to 
proceeds of consumer goods or commercial tort claims. This clarification corrects and 
rejects the erroneous holdings of several cases addressing commercial tort claims that are 
proceeds. As to proceeds. this result also follows from Section 9-203(±). 
* * * 
Sec. A-92. 11 MRSA §9-1207, sub-§(3), as amended by PL 2009, c. 324, Pt. B, 
§30 and affected by §48, is fmther amended to read: 
(3). Except as otherwise provided in subsection ( 4 ), a secured party having possession 
of collateral or control of collateral under section 7-1106, 9-1104, 9 1105 9-1105-A, 
9-1106 ef,. 9-1107 or 9-1107-A: 
(a). May hold as additional security any proceeds, except money or funds, received 
from the collateral; 
(b ), Shall apply money or funds received from the collateral to reduce the secured 
obligation, unless remitted to the debtor; and 
( c ). May create a security interest in the collateral. 
Sec. A-93. 11 MRSA §9-1208, sub-§(2), as amended by PL 2009, c. 324, Pt. B, 
§31-33 and affected by §48, is further amended to read: 
(2). Within 20 days after receiving an a-u-thenticatod a signed demand by the debtor: 
(a). A secured party having control of a deposit account under section 9-1104, 
subsection (1 ), paragraph (b) shall send to the bank with which the deposit account is 
maintained an a-u-thenticated statement a signed record that releases the bank from any 
further obligation to comply with instructions originated by the secured party; 
(b ). A secured party having control of a deposit account under section 9-1104, 
subsection (1 ), paragraph ( c) shall: 
(i) Pay the debtor the balance on deposit in the deposit account; or 
(ii) Transfer the balance on deposit into a deposit account in the debtor's name; 
(c). f,. secured f)arty, other than a buyer, having control of electronic chattel f)a-por 
ooder section 9 1105 shall: 
(i) Communicate the authol'itath,e cof)y of the electronic ehattel f)a-pe1:' to the debtor 
or its desigaated custodian; 
(ii) If the debtor desigaates a custodian that is the desigaated custodian vmh vArich 
the authoritafr1e COfJY of the electronic chattel f)a-per is maintained for the secl¼red 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
party, eomHfl:lH.ica-te to the custodiaa aa authemica-ted record releasiag the 
desigaa-ted custodiaa from aR)' further obligatioa to com-ply with iastructioas 
origiaa-ted 13;, the secured party aad iastruetiag the custodiaa to comply v.iith 
mstructioas origiaa-ted by the debtor; aad 
(iii) Take appropriate action to ena-ele the debtor or its desigaated custodian to 
make copies of or re•1isioas to the authoritatr1e copj' that add or ehaage a:H: 
ideatified assigaee of the authoritatP1e copy •Nithout the coasem of the secured 
~ 
(c-1). A secured party, other than a buyer, having control under section 9-1105-A of 
an authoritative electronic copy of a record evidencing chattel paper shall transfer 
control of the electronic copy to the debtor or a person designated by the debtor; 
(d). A secured party having control of investment prope11y under section 8-1106, 
subsection ( 4 ), paragraph (b) or 9-1106, subsection (2) shall send to the securities 
inte1mediary or commodity intermediary with which the security entitlement or 
commodity contract is maintained a:H: autheaticated a signed record that releases the 
securities intermediary or commodity intermediary from any further obligation to 
comply with entitlement orders or directions originated by the secured party; 
( e ). A secured party having control of a letter-of-credit right under section 9-1107 shall 
send to each person having an unfulfilled obligation to pay or deliver proceeds of the 
letter of credit to the secured party aa autheaticated a signed release from any further 
obligation to pay or deliver proceeds of the letter of credit to the secured party; aa4 
(f). A secured party having eoatrol of aa electronie doe1:1meH:t shall: 
(1) Give eoBtrol of the eleetroaic doeUlll:eRt to the debtor or its desigaated 
oostodiaa; 
(2) If the debtor desigaates a oostodiaH: that is the desigaated custodiaa with •.vhieh 
the authoritati-v-e eopy of the eleetroaie doeHmeBt is maimained for the secured 
party, eommuaieate to the 6'1¼stodi1Hl IHl authemieated reeord releasmg the 
desigaated oostodiaa from aflj' further obligatioH: to eom-ply with mstruetioas 
origmated by the see1:1red party a:H:d iRstr1:1ctiRg the eustodiaa to eomply v1ith 
instruetioas origmated b;' the debtor; aad 
(3) Take appropriate aetioa to eaa-ele the debtor or its desigaated e1:1stodi1Hl to 
make eopies of or rwisioas to the authoFitative eopy that add or ehan:ge aa 
ideBtified assigaee of the authoritathre eopj' without the coaseBt of the seeured 
party-; 
(f-1). 
A secured party having control under section 7-1106 of an authoritative 
electronic copy of an electronic document shall transfer control of the electronic copy 
to the debtor or a person designated by the debtor: and 
(g). A secured party having control under section 12-105 of a controllable electronic 
record. other than a buyer of a controllable account or controllable payment intangible 
evidenced by the controllable electronic record, shall transfer control of the 
controllable electronic record to the debtor or a person designated by the debtor. 
Official Comment 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
* * * 
2. Scope and Purpose. This section imposes duties on a secured party who has control 
of a deposit account, fill electronic copy of a record evidencing chattel paper, investment 
property, a letter-of-credit right, el' fill electronic documents document of title. electronic 
money. or a controllable electronic record. The duty to terminate the secured party's control 
is analogous to the duty to file a termination statement, imposed by Section 9-513. Under 
subsection (a), it applies only when there is no outstanding secured obligation and the 
secured party is not committed to give value. The requirements of this section can be varied 
by agreement under Section 1-102(3). For example, a debtor could by contract agree that 
the secured party may comply with subsection (b) by releasing control more than 10 days 
after demand. Also, duties under this section should not be read to conflict with the terms 
of the collateral itself. For example, if the collateral is a time deposit account, subsection 
(b )(2) should not require a secured party with control to make an early withdrawal of the 
funds ( assuming that were possible) in order to pay them over to the debtor or put them in 
an account in the debtor's name. 
Note that subsection (b)(8) addresses secured parties that have control of a controllable 
electronic record. That control may have been obtained for the purpose of perfecting a 
security interest in a controllable account or controllable payment intangible evidenced by 
the controllable electronic record, even if the secured party did not have a security interest 
in the controllable electronic record itself. 
This section does not explicitly impose duties on a secured party whose control is based 
on the acknowledgment under Section 7-106(g). 9-104(a)(4), or 9-105A(e) or under 9-
107A and 12-105(e) by another person having control. Such a secured party would have 
control only while the other, acknowledging person retains control. This result necessarily 
follows because such a secured party's control derives solely from the other person's 
continued control. See, e.g., Section 9-314, Comment 2. Upon compliance with this section 
by an acknowledging person having control, the control of a person having control through 
such person's acknowledgment would cease. 
* * * 
5. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201, the cognate term "signed" replaces references to "authenticated" 
in the pre-2022 text of this section. 
Sec. A-94. 11 MRSA §9-1209, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
(2). Within 20 days after receiving an authenticated a signed demand by the debtor, a 
secured party shall send to an account debtor that has received notification under section 
9-1406. subsection (1) or section 12-106, subsection (2) of an assignment to the secured 
party as assignee under section 9 1406, subsection (1) an authenticated a signed record that 
releases the account debtor from any further obligation to the secured party. 
Official Comment 
* * * 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A" to H.P. 59, L.D. 91 
3. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201, the cognate term "signed" replaces references to "authenticated" 
in the pre-2022 text of this section. 
Sec. A-95. 11 MRSA §9-1210, as enacted by PL 1999, c. 699, Pt. A, §2 and affected 
by §4, is amended to read: 
§9-1210. Request for accounting; request regarding list of collateral or statement of 
account 
(1). In this section: 
(a). "Request" means a record ofa type described in paragraph (b), (c) or (d); 
(b ). "Request for an accounting" means a record authentieated signed by a debtor 
requesting that the recipient provide an accounting of the unpaid obligations secured 
by collateral and reasonably identifying the transaction or relationship that is the 
subject of the request; 
(c). "Request regarding a list of collateral" means a record authenticated signed by a 
debtor requesting that the recipient approve or correct a list of what the debtor believes 
to be the collateral securing an obligation and reasonably identifying the transaction or 
relationship that is the subject of the request; and 
(d). "Request regarding a statement of account" means a record authenticated signed 
by a debtor requesting that the recipient approve or correct a statement indicating what 
the debtor believes to be the aggregate amount of unpaid obligations secured by 
collateral as of a specified date and reasonably identifying the transaction or 
relationship that is the subject of the request. 
(2). Subject to subsections (3), ( 4), (5) and (6), a secured party, other than a buyer of 
accounts, chattel paper, payment intangibles or promissory notes or a consignor, shall 
comply with a request within 20 days after receipt: 
(a). In the case of a request for an accounting, by autheaticati.n:g signing and sending 
to the debtor an accounting; and 
(b ). In the case of a request regarding a list of collateral or a request regarding a 
statement of account, by autllentieatiag signing and sending to the debtor an approval 
or correction. 
(3). 
A secured party that claims a security interest in all of a particular type of 
collateral owned by the debtor may comply with a request regarding a list of collateral by 
sending to the debtor aa authenticated a signed record including a statement to that effect 
within 20 days after receipt. 
( 4). A person that receives a request regarding a list of collateral, claims no interest 
in the collateral when it receives the request and claimed an interest in the collateral at an 
earlier time shall comply with the request within 20 days after receipt by sending to the 
debtor aa authenticated a signed record: 
(a). Disclaiming any interest in the collateral; and 
(b). If known to the recipient, providing the name and mailing address of any assignee 
of or successor to the recipient's security interest in the collateral. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A" to H.P. 59, L.D. 91 
(5). 
A person that receives a request for an accounting or a request regarding a 
statement of account, claims no interest in the obligations when it receives the request and 
claimed an interest in the obligations at an earlier time shall comply with the request within 
days after receipt by sending to the debtor an a:uthentioated a signed record: 
(a). Disclaiming any interest in the obligations; and 
(b), If known to the recipient, providing the name and mailing address of any assignee 
of or successor to the recipient's interest in the obligations. 
(6). A debtor is entitled without charge to one response to a request under this section 
during any 6-month period. The secured party may require payment of a charge not 
exceeding $25 for each additional response. 
Official Comment 
* * * 
8. "Signed" and "Signing" Replaces "Authenticated" and "Authenticating." 
Consistent with the revised definition of "sign" in Section 1-201, the cognate terms 
"signed" and "signing" replace references to "authenticated" and "authenticating" in the 
pre-2022 text of this section. 
Sec. A-96. 11 MRSA §9-1301, first ,r, as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
Except as otherwise provided in sections 9-1303 through 9 130a to 9-1306-B, the 
following rules dete1mine the law governing perfection, the effect of perfection or 
nonperfection and the priority of a security interest in collateral. 
Sec. A-97. 11 MRSA §9-1301, sub-§(3), as amended by PL 2009, c. 324, Pt. B, 
§34 and affected by §48, is further amended to read: 
(3), Except as otherwise provided in subsection ( 4), while tangible negotiable tangible 
documents, goods, instruments, m: money or tangible ehattel paper is located in a 
jurisdiction, the local law of that jurisdiction governs: 
(a). Perfection of a security interest in the goods by filing a fixture filing; 
(b). Perfection of a security interest in timber to be cut; and 
( c ). The effect of perfection or nonperfection and the priority of a nonpossessory 
security interest in the collateral. 
Official Comment 
* * * 
2. Scope of This Subpart. * * * In transactions to which the Hague Securities 
Convention applies, the requirements for foreclosure and the like, the characterization of a 
transfer as being outright or by way of security, and certain other issues will generally be 
governed by the law specified in the account agreement. See PEB Commentary No. 19, 
dated ,'\.prH 11, 2017. And, another jurisdiction's law may govern other third-party matters 
addressed in this Article. See Section 9-401, Comment 3. 
*** 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
5. Law Governing Perfection: Exceptions, The general rule is subject to several 
exceptions. It does not apply to goods covered by a certificate of title (see Section 9-303), 
deposit accounts (see Section 9-304), investment property (see Section 9-305), 0f letter-of-
credit rights (see Section 9-306), chattel paper (see Section 9-306A), or controllable 
accounts, controllable electronic records. or controllable payment intangibles (see Section 
9-306B). Nor does it apply to possessory security interests, i.e.; security interests that the 
secured party has perfected by taking possession of the collateral (see paragraph (2)), 
security interests perfected by filing a fixture filing (see subparagraph (3)(A)), security 
interests in timber to be cut (subparagraph (3)(B)), or security interests in as-extracted 
collateral (see paragraph (4)). No exception is made for electronic money and the general 
rule applies (unless preempted by federal law). 
a. Possessory Security Interests, Paragraph (2) applies to possessory security 
interests and provides that perfection and priority is governed by the local law of the 
jurisdiction in which the collateral is located. This is the rule of fefffieF pre-1998 Section 
9-103(1)(b), except paragraph (2) eliminates the troublesome "last event" test of former 
law. 
* * * 
Sec, A-98. 11 MRSA §9-1304, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
(1), The local law of a bank's jurisdiction governs perfection, the effect of perfection 
or nonperfection and the priority of a security interest in a deposit account maintained with 
that bank even if the transaction does not bear any relation to the bank's jurisdiction. 
Official Comment 
* * * 
4. No Relation to Bank's Jurisdiction Required, As to the final clause of subsection 
(a), see Section 8-110, Comment SA. 
Sec, A-99. 11 MRSA §9-1305, sub-§(2), 1(f) is enacted to read: 
(f). Paragraphs (b), (c) and (e) apply even if the transaction does not bear any relation 
to the jurisdiction. 
Official Comment 
* * * 
3. Investment Property: Exceptions. * * * 
The Hague Securities Convention generally preserves these rules for perfection 
by filing. However, if the debtor is located in a non-U.S. jurisdiction, or if the account 
agreement designates the law of a non-U.S. jurisdiction, then filing may be appropriate 
only in a different jurisdiction or altogether unavailable. See Convention articles 12(2)(b) 
and 4(1), respectively, and PEB Commentary No. 19, Elated April 11, 2017, particularly 
footnote 25. 
* * * 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A' to H.P. 59, L.D. 91 
6. 
No Relation of Transaction to Issuer's, Securities Intermediary's, or 
Commodity Intermediary's Jurisdiction Reguired. As to subsection (a)(5), see Section 
8-110, Comment 5A. 
Sec. A-100. 11 MRSA §9-1306-A is enacted to read: 
§9-1306-A. Law governing perfection and priority of security interests in chattel 
paper 
(1). 
Except as provided in subsection (4), if chattel paper is evidenced only by an 
authoritative electronic copy of the chattel paper or is evidenced by an authoritative 
electronic copy and an authoritative tangible copy, the local law of the chattel paper's 
jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of 
a security interest in the chattel paper, even if the transaction does not bear any relation to 
the chattel paper's jurisdiction. 
(2). The following rules determine the chattel paper's jurisdiction under this section. 
(a). If the authoritative electronic copy of the record evidencing chattel paper, or a 
record attached to or logically associated with the electronic copy and readily available 
for review. expressly provides that a particular jurisdiction is the chattel paper's 
jurisdiction for purposes of this part, this Article or the Uniform Commercial Code. 
that jurisdiction is the chattel paper's jurisdiction. 
(b). If paragraph (a) does not apply and the rules of the system in which the 
authoritative electronic copy is recorded are readily available for review and expressly 
provide that a particular jurisdiction is the chattel paper's jurisdiction for purposes of 
this part, this Article or the Uniform Commercial Code, that jurisdiction is the chattel 
paper's jurisdiction. 
(c). If paragraphs (a) and (b) do not apply and the authoritative electronic copy, or a 
record attached to or logically associated with the electronic copy and readily available 
for review, expressly provides that the chattel paper is governed by the law of a 
pat1icular jurisdiction, that jurisdiction is the chattel paper's jurisdiction. 
(d). If paragraphs (a), (b) and (c) do not apply and the rules of the system in which the 
authoritative electronic copy is recorded are readily available for review and expressly 
provide that the chattel paper or the system is governed by the law of a particular 
jurisdiction, that jurisdiction is the chattel paper's jurisdiction. 
(e). If paragraphs (a) to (d) do not apply, the chattel paper's jurisdiction is the 
jurisdiction in which the debtor is located. 
(3). If an authoritative tangible copy of a record evidences chattel paper and the chattel 
paper is not evidenced by an authoritative electronic copy, while the authoritative tangible 
copy of the record evidencing chattel paper is located in a jurisdiction, the local law of that 
jurisdiction governs: 
(a). Perfection of a security interest in the chattel paper by possession under section 
9-1314-A; and 
(b ). The effect of perfection or nonperfection and the priority of a security interest in 
the chattel paper. 
COMMITTEE AMENDMENT 
ROS 
s 
COMMITTEE AMENDMENT •A" to H.P. 59, L.D. 91 
{4}. The local law of the jurisdiction in which the debtor is located governs perfection 
of a security interest in chattel paper by filing. 
Official Comment 
1. Source. Section 9-306A(a) and (b) derive from Sections 8-1 l0(e) and 9-305 on law 
governing perfection and priority of security interests in investment property (as do 
Sections 9-306B and 12-107). 
2. Applicability of this Section. This section determines the law governing perfection 
and priority of security interests in chattel paper. Subsections (a) and (b) apply to chattel 
paper that is evidenced only by an authoritative electronic copy of the chattel paper or by 
an authoritative electronic copy and an authoritative tangible copy. Subsection (c) applies 
to chattel paper that is evidenced by an authoritative tangible copy but not evidenced by an 
authoritative electronic copy. Subsection (d) applies to perfection by filing for all chattel 
~ 
3. Authoritative Electronic Copy: Chattel Paper's Jurisdiction. Subsection (a) 
specifies the law governing perfection and priority of security interests in chattel paper 
evidenced by an authoritative electronic copy of the chattel paper. even if it is also 
evidenced by an authoritative tangible copy. Subject to subsection (d) on perfection by 
filing, the law governing perfection and priority is the local law of the chattel paper's 
jurisdiction. Drawing on Sections 8-110 and 9-305, it is the authoritative electronic copy 
itself, records attached thereto or associated therewith. or the system in which the 
authoritative electronic copy is recorded that determines the chattel paper's jurisdiction and, 
therefore, the governing law. Subsection (b) provides a "waterfall" of rules based on 
provisions that identify a particular jurisdiction as the chattel paper's jurisdiction or 
alternatively that provide the governing law of the chattel paper or of the system in which 
the electronic copy is recorded. When no such identification or provision is made, it is the 
debtor's location, determined under Section 9-307, that is the chattel paper's jurisdiction. 
As to the final clause of subsection (a), see Section 8-110, Comment SA. 
4. Rationale for Subsection {a). A buyer of, or secured lender against, chattel paper 
may arrange for authoritative electronic copies of chattel paper that it wishes to have 
assigned to it to be originated in or submitted into a system for the control and assignment 
of the chattel paper. The secured parties and lessors that will be assigning the chattel paper 
may be located in many different jurisdictions. As to assignments of the chattel paper by 
these secured parties and lessors (assignor-debtors), but for this section perfection and 
priority would be governed by the law of each assignor-debtor's location under Section 9-
301(1). Under this section, however, the law of a single jurisdiction-the chattel paper's 
jurisdiction-could govern perfection and priority with respect to all of the assignments. 
By avoiding the application of the laws of multiple jurisdictions to perfection and priority, 
this rule could substantially reduce transaction costs. 
S. Authoritative tangible copy. Subsection (c) ties the choice-of-law rules to the 
location of the authoritative tangible copy when no authoritative electronic copy exists. In 
that circumstance, the local law of the jurisdiction where the authoritative tangible copy is 
physically located governs perfection of a security interest in the chattel paper by 
possession, under Section 9-314A, and priority. Like its predecessor, subsection (c) 
assumes that all the authoritative tangible copies are located in the same jurisdiction. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT 'A" to H.P. 59, L.D. 91 
However. assuming the secured party is in possession of all the tangible copies. even if the 
copies are located in more than one jurisdiction the situation is unlikely to be problematic. 
6. Perfection by filing. Subsection (d) provides that the local law of the jurisdiction 
where the debtor is located governs perfection by filing for all chattel paper. 
Sec. A-101. 11 MRSA §9-1306-B is enacted to read: 
§9-1306-B. Law governing perfection and priority of security interests in controllable 
accounts, controllable electronic records 
and 
controllable payment 
intangibles 
(1). Except as provided in subsection (2). the local law of the controllable electronic 
record's jurisdiction specified in section 12-107. subsection 3. paragraphs (c) and (d) 
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. 
(2). The local law of the jurisdiction in which the debtor is located governs: 
(a). Perfection of a security interest in a controllable account. controllable electronic 
record or controllable payment intangible by filing: and 
(b). Automatic perfection of a security interest in a controllable payment intangible 
created by a sale of the controllable payment intangible. 
Official Comment 
1. Perfection by control and priority. Subsection (a) deals with perfection of a 
security interest in a controllable account. controllable electronic record. or controllable 
payment intangible other than by filing-i.e .• perfection by control under Section 12-1 OS-
and priority. For these purposes the governing law is that of the controllable electronic 
record's jurisdiction under Section 12-107{c) and {d). 
2. Perfection by filing. Under subsection {b) the local law of the jurisdiction of the 
debtor's location governs perfection of a security interest in a controllable account. 
controllable electronic record. or controllable payment intangible by filing {but not priority. 
as to which subsection (a) would apply). Because controllable electronic records are 
general intangibles and controllable accounts and controllable payment intangibles are 
subsets of accounts and payment intangibles. this provision does not change prior law. 
Sec. A-102. 11 MRSA §9-1310, sub-§(2), 1(h), as amended by PL 2009, c. 324, 
Pt. B, §36 and affected by §48, is further amended to read: 
(h). In controllable accounts. controllable electronic records. controllable payment 
intangibles, deposit accounts, eleetmaie ehattel paper, electronic documents, 
investment property or letter-of-credit rights that is perfected by control under section 
9-1314; 
Sec. A-103. 11 MRSA §9-1310, sub-§(2), 1(h-1) is enacted to read: 
(h-1). In chattel paper that is perfected by possession and control under section 
9-1314-A; 
Official Comment 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
* * * 
3. Exemptions from Filing. Subsection (b) lists the security interests for which filing 
is not required as a condition of perfection, because they are perfected automatically upon 
attachment (subsections (b )(2) and (b )(9)) or upon the occurrence of another event 
(subsections (b)(l), (b)(5), and (b)(9)), because they are pe1fected under the law ofanother 
jurisdiction (subsection (b)(lO)), or because they are perfected by another method, such as 
by the secured party's taking possession or control (subsections (b)(3), (b)(4), (b)(5), (b)(6), 
(b )(7), aa4 (b )(8), and (b)(S.1)). 
* * * 
Sec. A-104. 11 MRSA §9-1312, as amended by PL 2009, c. 324, Pt. B, §37 and 
affected by §48, is further amended by amending the section headnote to read: 
§9-1312. Perfection of security interests in chattel paper, controllable accounts, 
controllable electronic records, controllable payment intangibles, deposit 
accounts, negotiable documents, goods covered by documents, instruments, 
investment property, letter-of-credit rights and money; perfection by 
permissive filing; temporary perfection without filing or transfer of possession 
Sec. A-105. 11 MRSA §9-1312, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(1). A security interest in chattel paper, aegotiable dooameflts controllable accounts, 
controllable electronic records, controllable payment intangibles, instruments 
ffil.,, 
investment property or negotiable documents may be perfected by filing. 
Sec. A-106. 11 MRSA §9-1312, sub-§(5), as amended by PL 2009, c. 324, Pt. B, 
§37 and affected by §48, is further amended to read: 
(5). A security interest in certificated securities, negotiable documents or instruments 
is perfected without filing or the taking of possession or control for a period of 20 days 
from the time it attaches to the extent that it arises for new value given under aa 
authefltioated a signed security agreement. 
Official Comment 
* * * 
4A. Controllable Accounts, Controllable Electronic Records, and Controllable 
Payment Intangibles. Consistent with the treatment of chattel paper, instruments. 
investment property, and negotiable documents, under subsection (a) a security interest in 
controllable accounts, controllable electronic records, and controllable payment intangibles 
may be perfected by filing, A security interest in that collateral also may be perfected by 
control. Section 9-314. 
* * * 
6A. Money. Under subsection (b)(3), a security interest in tangible money may be 
perfected only by possession under Section 9-313. Similarly, under subsection (b)(4), a 
security interest in electronic money may be perfected only by control under Section 9-
314. 
7. Goods Covered by Document of Title. * * *. 
* * * 
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COMMITTEE AMENDMENT A" to H.P. 59, L.D. 91 
Subsection ( d) takes a different approach to the problem of goods covered by a 
nonnegotiable document. Here, title to the goods is not looked on as being locked up in the 
document,. For example, a transferee that takes delive1y of a nonnegotiable document 
receives, under Section 7-504(a), "the title and rights" of the transferor, but the transferee 
would not thereby become a "person entitled under the document" with a right to receive 
delivery of the goods from the bailee. l¼fl:d the The secured party may perfect its security 
interest directly in the goods by filing as to them. The subsection provides two other 
methods of perfection: issuance of the document in the secured party's name (as consignee 
of a straight bill of lading or the person to whom delivery would be made under a non-
negotiable warehouse receipt) and receipt of notification of the secured party's interest by 
the bailee. Issuance (or reissuance) of the nonnegotiable document in the secured party's 
name would allow the secured party to become a "person entitled under the document." 
However. the bailee's receipt of notification would not confer on the secured party the status 
of a person entitled unless the notification resulted from an instruction under the document. 
See Section 7-102(a)(9) (defining "person entitled under the document") and Comment 6. 
Perfection under subsection ( d) occurs when the bailee receives notification of the secured 
party's interest in the goods, regardless of who sends the notification, Receipt of notification 
is effective to perfect, regardless of whether the bailee responds. Unlike farmer pre-1998 
Section 9-304(3), from which it derives, subsection (d) does not apply to goods in the 
possession of a bailee who has not issued a document of title. Section 9-313( c) covers that 
case and provides that perfection by possession as to goods not covered by a document 
requires the bailee's acknowledgment. 
Subsection (a) makes clear that a security interest in negotiable documents (and other 
collateral mentioned there) may be perfected by filing, but it makes no mention of 
nonnegotiable documents. However, under the general rule of Section 9-310, a security 
interest in a nonnegotiable document can be perfected by filing. A security interest in an 
electronic document, negotiable or nonnegotiable, can be perfected by control under 
Section 7-106. Section 9-314(a). But a security interest in a nonnegotiable tangible 
document cannot be perfected by possession. Section 9-313(a). Although a perfected 
security interest in a nonnegotiable document might provide useful benefits for the secured 
party, it would not perfect a security interest in the goods. And by perfecting a security 
interest in the nonnegotiable document the secured party would not thereby become a 
"person entitled under the document. 
Indeed, unless the secured party also took delivery 
of the document (i.e., possession or control under Section 1-20l(b)(15)), it would not obtain 
the rights of a transferee under Section 7-504(a). 
8. Temporary Perfection Without Having First Otherwise Perfected. Subsection 
(e) follows fermerpre-1998 Section 9-304(4) in giving perfected status to security interests 
8 
in certificated securities, instruments, and negotiable documents for a short period (reduced 
from 21 to 20 days, which is the time period generally applicable in this Article), although 
there has been no filing and the collateral is in the debtor's possession or control. The 20-
day temporary perfection runs from the date of attachment. There is no limitation on the 
purpose for which the debtor is in possession, but the secured party must have given "new 
value" ( defined in Section 9-102) under l¼fl: al¼thentioa.ted a signed security agreement. 
* * * 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
10. "Signed" Replaces "Authenticated," Consistent with the revised definition of 
"sign" in Section 1-201, the cognate term "signed" replaces the reference to "authenticated" 
in the pre-2022 text of this section. 
Sec. A-107. 11 MRSA §9-1313, sub-§(1), as amended by PL 2009, c. 324, Pt. B, 
§3 8 and affected by §48, is further amended to read: 
(1). 
Except as otherwise provided in subsection (2), a secured party may perfect a 
security interest in tangible negotiable doouraents, goods, instruments, negotiable tangible 
documents or money Of tangible ohattel f>a-pef by taking possession of the collateral. A 
secured party may perfect a security interest in certificated securities by taking delivery of 
the certificated securities under section 8-1301. 
Sec. A-108. 11 MRSA §9-1313, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). 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: 
(a). The person in possession amhentioates signs a record acknowledging that it holds 
possession of the collateral for the secured party's benefit; or 
(b ). The person takes possession of the collateral after having alfthentioated signed a 
record acknowledging that it will hold possession of the collateral for the secured 
party's benefit. 
Sec. A-109. 11 MRSA §9-1313, sub-§(4), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
( 4). If perfection of a security interest depends upon possession of the collateral by a 
secured party, perfection occurs ne not earlier than the time the secured party takes 
possession and continues only while the secured party retains possession. 
Official Comment 
2. Perfection by Possession. * * * 
This section permits a security interest to be perfected by the taking of possession only 
when the collateral is goods, instruments, tangible negotiable tangible documents, m: 
tangible money, Of tangible ohattel pa-per. Accounts, commercial tort claims, deposit 
accounts, investment property, letter-of-credit rights, letters of credit, and oil, gas, or other 
minerals before extraction are excluded. 
(But see Comment 6, below, regarding 
certificated securities.) A security interest in accounts and payment intangibles-property 
not ordinarily represented by any writing whose delivery operates to transfer the right to 
payment-may under this Article be perfected only by filing. This rule would not be 
affected by the fact that a security agreement or other record described the assignment of 
such collateral as a "pledge." Section 9-309(2) exempts from filing certain assignments of 
accounts or payment intangibles which are out of the ordinary course of financing. These 
exempted assignments are perfected when they attach. Similarly, under Section 9-309(3), 
sales of payment intangibles are automatically perfected. 
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COMMITTEE AMENDMENT 'A" to H.P. 59, L.D. 91 
Perfection by possession of chattel paper evidenced by an authoritative tangible record 
(formerly defined as "tangible chattel paper") has been removed from this section. Instead, 
perfection by possession and control of chattel paper is governed by Section 9-314A. 
* * * 
4. Goods in Possession of Third Party: Perfection.* * * 
Notification of a third person does not suffice to perfect under Section 9-313(c). 
Rather, perfection does not occur unless the third person au-thel½tica-tes ~ 
an 
acknowledgment that it holds possession of the collateral for the secured party's benefit. 
Compare Section 9-312(d), under which receipt of notification of the security party's 
interest by a bailee holding goods covered by a nonnegotiable document is sufficient to 
perfect, even if the bailee does not acknowledge receipt of the notification. A third person 
may acknowledge that it will hold for the secured party's benefit goods to be received in 
the future. Under these circumstances, perfection by possession occurs when the third 
person obtains possession of the goods. 
* * * 
5. No Relation Back; time of perfection and continuation of perfection. Former 
Section 9-305 provided that a security interest is perfected by possession from the time 
possession is taken "without a relation back." As the Comment to fermet' pre-1998 Section 
9-3 05 observed, the relation-back theo1y, under which the taking of possession was deemed 
to relate back to the date of the original security agreement, has had little vitality since the 
1938 revision of the Federal Bankruptcy Act. The theory is inconsistent with fermet' pre-
1998 Article 9 and with this Article. See Section 9-313(d). Accordingly, this Article deletes 
the quoted phrase as unnecessary. WheFe Under subsection (d), where a pledge (perfection 
by possession) transaction is contemplated, perfection dates only from the time possession 
is taken, although a security il½te:rest may attach, uaporfeoted. The only exceptions to this 
rule are the short, 20-day periods of perfection provided in Section 9-312( e ), (f), and (g), 
during which a debtor may have possession of specified collateral in which there is a 
perfected security interest. Also under subsection (d), perfection continues only while the 
secured party retains possession. However, if a secured party's possession is based on an 
acknowledgment under Section 9-313 ( c) by another person in possession, the secured party 
remains perfected by possession only while the other person retains possession. This result 
necessarily follows because such a secured party's possession derives solely from the other 
person's continued possession. 
* * * 
9. Delivery to Third Party by Secured Party. NO'tY subseotioas Subsections (h) and 
(i) address the practice of mortgage warehouse lenders. These lenders typically send 
mortgage notes to prospective purchasers under cover of letters advising the prospective 
purchasers that the lenders hold security interests in the notes. These lenders relied on 
notification to maintain perfection under ferrneF pre-1998 9-305. Requiring them to obtain 
autheR-tieated signed acknowledgments from each prospective purchaser under subsection 
( c) could be unduly burdensome and disruptive of established practices. Under subsection 
(h), when a secured party in possession itself delivers the collateral to a third party, 
instructions to the third party would be sufficient to maintain perfection by possession; an 
acknowledgment would not be necessa1y. Under subsection (i), the secured party does not 
relinquish possession by making a delivery under subsection (h), even if the delivery 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
violates the rights of the debtor. That subsection also makes clear that a person to whom 
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 Article provides otherwise. 
10. 
"Signs" and "Signed" Replaces "Authenticates" and "Authenticated." 
Consistent with the revised definition of "sign" in Section 1-201, the cognate terms "signs" 
and "signed" replace the references to "authenticates" and "authenticated" in the pre-2022 
text of this section. 
Sec. A-110. 11 MRSA §9-1314, as amended by PL 2009, c. 324, Pt. B, §§39 and 
and affected by §48, is further amended to read: 
§9-1314. Perfection by control 
(1). A security interest in H'l.Yostm:ont prnporty, deposit asso1:1nts, lotter of srodit rights, 
olostrnnis shattol paper or olostfonis doe1:1m:onts controllable accounts. controllable 
electronic records. controllable payment intangibles. deposit accounts. electronic 
documents. investment property or letter-of-credit rights may be perfected by control of the 
collateral under section 7-1106, 9-1104, 9 1105, 9-1106 ei',. 9-1107 or 9-1107-A. 
(2). A security interest in deposit assm1nts, olostronis shattol paper, lotter of SFodit 
rights or olostronis elosw.nonts controllable accounts. controllable electronic records. 
controllable payment intangibles. deposit accounts. electronic documents or letter-of-credit 
rights is perfected by control under section 7-1106, 9-1104, 9 1105 or 9-1107 wheH: or 
9-1107-A not earlier than the time the secured party obtains control and remains perfected 
by control only while the secured party retains control. 
(3). A security interest in investment property is perfected by control under section 
9-1106 ftem not earlier than the time the secured party obtains control and remains 
perfected by control until: 
(a). The secured party does not have control; and 
(b). 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; or 
(iii) If the collateral is a security entitlement, the debtor is or becomes the 
entitlement holder. 
Official Comment 
* * * 
2. Control. This section provides for perfection by control with respect to H'l.Yestm:ent 
prnporty, deposit assol:lnts, controllable accounts. controllable electronic records. 
controllable payment intangibles. deposit accounts. electronic documents. electronic 
money. investment property. and letter-of-credit rights, olostronis shattel paper, aii<l. 
olostrnnis dooomonts. For OKplanations of Concerning how a secured party takes control 
of these types ofcollateral, see Sections 7-106. 9-104. 9-105A. thro1:1gh 9-107. and 9-107A. 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
and Seotioa 7 106 Comments. Subsection (b) explains when a security interest is perfected 
by control and how long a security interest remains perfected by control. Like Section 9-
( d) and for the same reasons, subsection (b) makes no reference to the doctrine of 
"relation back." See Section 9-313, Comment 5. As to an electronic document that is 
reissued in a tangible medium, (see Section 7-105), a secured party that is perfected by 
control in the electronic document should file as to the document before relinquishing 
control in order to maintain continuous perfection in the document. See Section 9-308. If a 
secured party's control is based on an acknowledgment under Section 7-106{g), 9-
104(a)(4), or 9-105A(e) or under 9-107A and 12-l0S(e) by another person having control, 
the secured party remains perfected by control only while the other person retains control. 
This result necessarily follows because such a secured party's control derives solely from 
the other person's continued control. 
Perfection by control of chattel paper evidenced by an authoritative electronic record 
(formerly defined as "electronic chattel paper") has been removed from this section. 
Instead, perfection by possession and control of chattel paper is governed by Section 9-
314A. 
3. 
Investment Property. Subsection ( c) provides a special rule for investment 
property. Once a secured party has control, its security interest remains perfected by control 
until the secured party ceases to have control and the debtor receives possession of 
collateral that is a certificated security, becomes the registered owner of collateral that is 
an uncertificated security, or becomes the entitlement holder of collateral that is a security 
entitlement. The result is particularly important in the "repledge" context. See Section 9-
207, Comment 5. In a transaction in which a secured party who has control grants a security 
interest in investment property or sells outright the investment property, by virtue of the 
debtor's consent or applicable legal rules, a purchaser from the secured party typically will 
cut off the debtor's rights in the investment property or be immune from the debtor's claims. 
See Section 9-207, Comments 5 and 6. If the investment property is a security, the debtor 
normally would retain no interest in the security following the purchase from the secured 
party, and a claim of the debtor against the secured party for redemption (Section 9-623) 
or otherwise with respect to the security would be a purely personal claim. 
If the investment property transferred by the secured party is a financial asset in which 
the debtor had a security entitlement credited to a securities account maintained with the 
secured party as a securities intermediary, the debtor's claim against the secured party could 
arise as a part of its securities account notwithstanding its personal nature. (This claim 
would be analogous to a "credit balance" in the securities account, which is a component 
of the securities account even though it is a personal claim against the intermediary.) In the 
case in which the debtor may retain an interest in investment property notwithstanding a 
repledge or sale by the secured party, subsection (c) makes clear that the security interest 
will remain perfected.by control. Notwithstanding subsection (c), if a secured party's 
control is based on an acknowledgment under Section 8-106{d)(3) by another person 
having control, the secured party remains perfected by control only while the other person 
retains control. This result necessarily follows because such a secured party's control 
derives solely from the other person's continued control. Although Section 8-106( d)(3) was 
amended by the 2022 Article 9 Revisions, this result also applied to a secured party in 
control under pre-2022 subsection (d)(3). 
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COMMITTEE AMENDMENT" A• to H.P. 59, L.D. 91 
3A. Shared control between debtor and secured party (and other transferor and 
transferee) and control through another person. Sections 7-106 {control of electronic 
documents). 9-105 (control of authoritative electronic records evidencing chattel paper). 9-
105A (control of electronic money). and 12-105 (control of controllable electronic records. 
on which control of controllable accounts and controllable payment intangibles under 
Section 9-107 A depends) contemplate the possibility that both a debtor and a secured party 
may have control of the relevant collateral by sharing an exclusive power. Such shared 
control between a debtor and secured party does not necessarily impair perfection of a 
security interest under this section or Section 9-314A. On shared exclusive powers. see 
generally Section 12-105. Comment 5. However. if a secured party can exercise a power 
only if the power is exercised also by the debtor, the power would not be shared and. 
consequently. the secured party would not have control based on the exclusive power. This 
result follows from Section 12-105(c) and corresponding subsections in the other 
provisions on control cited above. Under Section 12-105(c), because a debtor would be a 
"transferor of an interest" in a controllable electronic record or a controllable account or 
payment intangible evidenced by the record. the debtor's "blocking power" (i.e., the secured 
party can exercise the power only if the debtor also exercises the power) with respectto the 
secured party's exercise of the power would disqualify the secured party from sharing (and. 
consequently. enjoying) the exclusive power and perfection by control based on exclusive 
powers. Similarly. a purchaser in that situation would be disqualified from having control 
and thereby from enjoying the status and benefits of a qualifying purchaser (Section 12-
l 02(a)(2)) under Section 12-104(e) and (g) if the purchaser takes from a transferor of an 
interest and the transferor has such a blocking power (whether or not the transferor is a 
debtor). 
Section 12-105(e) contains a similar limitation in connection with control through 
another person. An aclmowledging person must be one "other than the transferor of an 
interest in the electronic record." The same or a similar limitation is found in the other 
provisions relating to control through another person. See Sections 7-106{g) {control of 
electronic document of title); 8-106(d){3) (control of a security entitlement); 9-104(a){ 4) 
(control of deposit accounts); 9-105{g) {control of authoritative electronic copy of record 
evidencing chattel paper): 9-105A(e) (control of electronic money). 
For a discussion of the rationale for these limitations on sharing exclusive control and 
control through another person. see Section 12-105. Comment 9. 
* * * 
Sec. A-111. 11 MRSA §9-1314-A is enacted to read: 
§9-1314-A. Perfection by possession and control of chattel paper 
(1). 
A secured party may perfect a security interest in chattel paper by taking 
possession of each authoritative tangible copy of the record evidencing the chattel paper 
and obtaining control of each authoritative electronic copy of the electronic record 
evidencing the chattel paper. 
(2). A security interest is perfected under subsection (1) not earlier than the time the 
secured party takes possession and obtains control and remains perfected under subsection 
(1) only while the secured party retains possession and control. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT •A "to H.P. 59, L.D. 91 
(3). Section 9-1313, subsections (3) and (6) to (9) apply to perfection by possession 
of an authoritative tangible copy of a record evidencing chattel paper. 
Official Comment 
1. "Authoritative copy." To perfect a security interest in chattel paper other than by 
filing, this section provides that a secured party must obtain control of all authoritative 
electronic copies and take possession of all authoritative tangible copies. 
Like the pre-2022 text, Section 9-105(b) distinguishes between authoritative and 
nonauthoritative copies of electronic chattel paper and refers to copies that are 
"authoritative." And, like its predecessor, Section 9-105(b) does not define the term 
"authoritative." However, it also applies this concept to tangible records that evidence 
chattel paper. 
To show that it has possession of all authoritative tangible copies of a record evidencing 
chattel paper and all authoritative electronic copies of a record evidencing chattel paper, a 
purchaser can produce the tangible copies in its possession and prove control of the 
electronic copies and provide evidence that these are authoritative copies. The purchaser 
need not prove a negative-i.e., that no other tangible or electronic authoritative copies 
exist-to make a prima facie case. The purchaser's possession of the authoritative tangible 
copies and control of the authoritative electronic copies gives the purchaser the power to 
prevent others from taking possession or control of the copies and the power to transfer 
possession and control of the copies. 
Perfection of a security interest in chattel paper by taking possession of the collateral 
generally has been understood to mean taking possession of the wet-ink "original." 
Experience has shown that the concept of an original breaks down when one allows for the 
possibility of the same monetary obligation being evidenced by different media over time, 
such as where electronic records evidencing the chattel paper are "papered out" (replaced 
with tangible records evidencing the same chattel paper) or tangible records are "converted" 
to electronic records. 
Whether an electronic or tangible copy of a record evidencing chattel paper is 
authoritative depends on the facts and circumstances. The determination should tum on 
whether the copy provides reasonable notice to third parties that it is one that must be 
subject to control or possession for purposes of perfection and priority. To accommodate 
current practices and future technology, parties are allowed considerable flexibility in 
determining the method used to establish whether a particular copy is authoritative, 
provided that third patties are able to reasonably identify the authoritative copies that must 
be possessed or controlled to achieve perfection. For example, the parties could develop a 
system or protocol where each tangible or electronic copy is "watermarked" as authoritative 
or nonauthoritative or where the terms of the records themselves describe how to determine 
which copies are authoritative and which are not. 
2. Time of perfection; continuation of perfection. Subsection (b) is modeled on 
Sections 9-313(d) and 9-314(b). If a secured party's possession or control is based on the 
acknowledgment under Section 9-313(c) or 9-105(g) by another person in possession or 
control, the secured party remains perfected by possession or control only while the other 
person retains possession or control. This result necessarily follows because such a secured 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
party's possession or control derives solely from the other person's continued possession or 
control. 
3. Applicability of Section 9-313. Subsection (c) makes specified subsections of 
Section 9-313 applicable to possession of authoritative tangible copies of records 
evidencing chattel paper. 
4. Shared control. As to the sharing of powers over an authoritative electronic copy 
of a record evidencing chattel paper (see Section 9-105(c)(2)) by a debtor and a secured 
party (or by another transferor and transferee) and control through another person (see 
Section 9-105(g)). see Sections 9-314. Comment 3A: 12-105. Comment 9. 
Sec. A-112. 11 MRSA §9-1316, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(1). A security interest perfected pursuant to the law of the jurisdiction designated in 
section 9-1301, subsection (1) ffi'~ section 9-1305, subsection (3). section 9-1306-A. 
subsection ( 4) or section 9-1306-B, subsection (2) remains perfected until the earliest of: 
(a). The time perfection would have ceased under the law of that jurisdiction; 
(b ). The expiration of 4 months after a change of the debtor's location to another 
jurisdiction; 
(c). The expiration of one year after a transfer of collateral to a person that thereby 
becomes a debtor and is located in another jurisdiction; or 
(d). The expiration of one year after a new debtor located in another jurisdiction 
becomes bound under section 9-1203, subsection (4). 
Sec. A-113. 11 MRSA §9-1316, sub-§(6), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(6). A security interest in chattel paper. controllable accounts. controllable electronic 
records. controllable payment intangibles, deposit accounts, letter-of-credit rights or 
investment property that is perfected under the law of the chattel paper's jurisdiction. the 
controllable electronic record's jurisdiction. the bank's jurisdiction, the issuer's jurisdiction, 
a nominated person's jurisdiction, the securities intermediary's jurisdiction or the 
commodity intermediary's jurisdiction, as applicable, remains perfected until the earlier of: 
(a). The time the security interest would have become unperfected under the law of 
that jurisdiction; or 
(b ). The expiration of 4 months after a change of the applicable jurisdiction to another 
jurisdiction. 
Official Comment 
* * * 
4. Possessory Security Interests. Subsection ( c) deals with continued perfection of 
possessory security interests. It applies not only to security interests perfected solely by 
the secured party's having taken possession of the collateral. It also applies to security 
interests perfected by a method that includes as an element of perfection the secured party's 
having taken possession, such as perfection by taking delivery of a certificated security in 
registered fo1m, see Section 9-313(a), aa4 perfection by obtaining control over a 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
certificated security-:-Ses, see Section 9-314(a), and perfection by taking possession of and 
control over authoritative copies of records evidencing chattel paper, see Section 9-
l 4A( a). 
* * * 
6. 
Controllable Accounts, Controllable Electronic Records, Controllable 
Payment Intangibles, Chattel Paper, Deposit Accounts, Letter-of-Credit Rights, and 
Investment Property. Subsections (f) and (g) address changes in the jurisdiction of a 
bank, controllable electronic record, chattel paper, issuer of an uncertificated security, 
issuer of or nominated person under a letter of credit, securities intermediary, and 
commodity inte1mediary. The provisions are analogous to those of subsections (a) and (b ). 
* * * 
Sec. A-114. 11 MRSA §9-1317, sub-§(2), as amended by PL 2013, c. 317, Pt. A, 
§15, is further amended to read: 
(2). 
Except as otherwise provided in subsection (5), a buyer, other than a secured 
party, of taB:gi-ble ehattel paper, ta-ngi-ble doel¼ffients, goods, instruments, tangible 
documents or a certificated security takes free of a security interest or agricultural lien if 
the buyer gives value and receives delivery of the collateral without knowledge of the 
security interest or agricultural lien and before it is perfected. 
Sec. A-115. 11 MRSA §9-1317, sub-§(4), as amended by PL 2013, c. 317, Pt. A, 
§ 16, is further amended to read: 
(4). A Subject to subsections (6) to (9), a licensee of a general intangible or a buyer, 
other than a secured party, of collateral other than ta-ngi-ble ehattel paper, taB:gible 
documeB:ts, goods, instruments, tangible documents or a certificated security takes free of 
a security interest if the licensee or buyer gives value without knowledge of the security 
interest and before it is perfected. 
Sec. A-116. 11 MRSA §9-1317, sub-§(6) is enacted to read: 
(6). A buyer, other than a secured party, of chattel paper takes free of a security interest 
if, without knowledge of the security interest and before it is perfected, the buyer gives 
value and: 
(a). Receives delivery of each authoritative tangible copy of the record evidencing the 
chattel paper; and 
(b). If each authoritative electronic copy of the record evidencing the chattel paper can 
be subjected to control under section 9-1105-A, obtains control of each authoritative 
electronic copy. 
Sec. A-117. 11 MRSA §9-1317, sub-§(7) is enacted to read: 
(7). 
A buyer of an electronic document takes free of a security interest if, without 
knowledge of the security interest and before it is perfected, the buyer gives value and, if 
each authoritative electronic copy of the document can be subjected to control under section 
7-1106, obtains control of each authoritative electronic copy. 
Sec. A-118. 11 MRSA §9-1317, sub-§(8) is enacted to read: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" />r to H.P. 59, L.D. 91 
(8), 
A buyer of a controllable electronic record takes free of a security interest if, 
without knowledge of the security interest and before it is perfected, the buyer gives value 
and obtains control of the controllable electronic record. 
Sec. A-119. 11 MRSA §9-1317, sub-§(9) is enacted to read: 
(9). A buyer. other than a secured party, of a controllable account or a controllable 
payment intangible takes free of a security interest if. without knowledge of the security 
interest and before it is perfected. the buyer gives value and obtains control of the 
controllable account or controllable payment intangible. 
Official Comment 
* * * 
6. Purchasers Other Than Secured Parties. Subsections (b), (c), ae4 (d). and (f) 
through (i) afford priority over an unperfected security interest to certain purehasers buyers 
( other than secured parties) of collateral. They derive in part from farmer pre-1998 
Sections 9-30l(l)(c), 2A-307(2), and 9-301(d). Fonner Pre-1998 Section 9-301(1)(c) and 
(1 )( d) provided that unperfected security interests are "subordinate" to the rights of certain 
purchasers. 
But, as farmer pre-1998 Comment 9 suggested, the practical effect of 
subordination in this context is that the purchaser takes free of the security interest. To 
avoid any possible misinterpretation these subsections (b) aad (d) of this seetioft ™ use 
the phrase "takes free." 
Subsection (b) governs goods, as well as intangibles of the type whose transfer is 
effected by physical delivery of the representative piece of paper (taagible ehattel paper, 
tangible documents, instruments, and security certificates). To obtain priority, a buyer 
must both give value and receive delivery of the collateral without knowledge of the 
existing security interest and before perfection. Even if the buyer gave value without 
knowledge and before perfection, the buyer would take subject to the security interest if 
perfection occurred before physical delivery of the collateral to the buyer. Subsection (c) 
contains a similar rule with respect to lessees of goods. Note that a lessee of goods in 
ordinary course of business takes free of all security interests created by the lessor, even if 
perfected. See Section 9-321. 
* * * 
Subsection (b) no longer applies to chattel paper. The take-free rule in subsection (f) 
for buyers of chattel paper reflects the corresponding 2022 changes in the definition of 
chattel paper and in the methods of perfection. See Sections 9-102(a)(l 1) (defming "chattel 
paper"): 9-314A (perfection by possession and control). Note that subsection (t) applies 
only to a buyer of chattel paper "other than a secured party" and most buyers of chattel 
paper are secured parties. See Sections 9-102(a)(73) (defining "secured party" as including 
a person to which chattel paper has been sold): 9-109(a)(3) (Article 9 applies to a sale of 
chattel paper); 1-20l(b)(35) (defming "security interest" to include the interest of a buyer 
of chattel paper). However, Article 9 does not apply to "a sale of chattel paper as part of a 
sale of the business out of which [the chattel paper] arose" and, accordingly, subsection (f) 
could apply to a buyer of chattel paper in such a sale-of-business transaction. Subsection 
(t) provides that such a buyer of chattel paper takes free of a security interest if, without 
knowledge of the security interest and before it is perfected, the buyer gives value and 
receives delivery of each authoritative tangible copy of the record evidencing the chattel 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT 'A "to H.P. 59, L.D. 91 
paper and, if the chattel paper can be subjected to control. the buyer obtains control of each 
authoritative electronic copy. 
Although chattel paper has been removed from subsection (b), the phrase "other than a 
secured party" has been retained because buyers of instruments that are promissoi:y notes, 
but not buyers of other instruments, are secured parties. See Sections 9-109(a)(3) (Article 
applies to a sale of a promissoi:y note); 1-201(b)(35) (defining "security interest" to 
include the interest of a buyer of a promissoi:y note). 
The rule of subsection (b) obviously is not appropriate where the collateral consists of 
intangibles and there is no representative piece of paper whose physical delivery is the only 
or the customary method of transfer or no means of taking control of the collateral as a 
functional equivalent of a delivei:y. Therefore, with respect to such intangibles (including 
accounts other than controllable accounts, eleetFon.ic chattel paper, electronic documents 
not subject to control, general intangibles other than controllable payment intangibles, and 
investment property other than ce1tificated securities), subsection (d) gives priority to any 
buyer who gives value without knowledge, and before perfection, of the security interest. 
Buyers of electronic money also are excluded from the application of subsection (d) 
because transferees of electronic money which obtain control take free of security interests 
under Section 9-332(c), which provides a standard more generous to transferees than 
subsection (d). A licensee of a general intangible takes free of an unperfected security 
interest in the general intangible under the same circumstances (to the extent of the 
licensee's rights under the license). Note that a licensee of a general intangible in ordinary 
course of business takes rights under a nonexclusive license free of security interests 
created by the licensor, even if perfected. See Section 9-321. 
Unless Section 9-109 excludes the transaction from this Article, a buyer of accounts, 
chattel paper, payment intangibles, or promissory notes is a "secured party" (defined in 
Section 9-102), and subsection.a (b) an.d (d) do subsection (d) does not determine priority 
of the security interest created by the sale. Rather, the priority rules generally applicable 
to competing security interests apply. See~ Section 9-322. 
6A. 
[Buyers of Electronic Documents, Controllable Electronic Records, 
Controllable Accounts, and Controllable Payment Intangibles,] Subsection (g) 
provides a take-free rule for electronic documents, subsection (h) so provides for 
controllable electronic records, and subsection (i) so provides for controllable accounts and 
controllable payment intangibles. Subsection (g) conditions the take-free rule on the buyer 
obtaining control of authoritative electronic copies of the document only if the authoritative 
electronic copies can be subjected to control. Subsection (h) conditions the take-free rule 
for a buyer of a controllable electronic record on the buyer's obtaining control of the 
electronic record. Similarly, under subsection (i), the take-free rule for a buyer. other than 
a secured party, of a controllable account or controllable payment intangible is conditioned 
on the buyer's obtaining control of the account or payment intangible. Although in general 
a buyer of an account or a payment intangible is a secured party, there are limited 
exceptions. See Sections 1-20l(b)(35) ("security interest" includes interest of buyer of 
accounts or payment intangibles); 9-109(d)(4) (inapplicability of Article 9 to sale of 
accounts or payment intangibles as a part of the sale of a business). 
* * * 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
Sec. A-120. 11 MRSA §9-1323, sub-§(4), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(4). 
Except as otherwise provided in subsection (5), a buyer of goods other thaH: a 
sayer in ordinary eourse of business takes free of a security interest to the extent that it 
secures advances made after the earlier of: 
(a). The time the secured party acquires knowledge of the buyer's purchase; or 
(b). Forty-five days after the purchase. 
Sec. A-121. 11 MRSA §9-1323, sub-§(6), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(6). Except as otherwise provided in subsection (7), a lessee of goods, other than a 
lessee in m·dinary eourse of business, takes the leasehold interest free of a security interest 
to the extent that it secures advances made after the earlier of: 
(a). The time the secured party acquires knowledge of the lease; or 
(b ). Forty-five days after the lease contract becomes enforceable. 
Official Comment 
* * * 
6. Competing Buyers and Lessees. Under subsections (d) and (e), a buyer will not 
take subject to a security interest to the extent it secures advances made after the secured 
party has knowledge that the buyer has purchased the collateral or more than 45 days after 
the purchase unless the advances were made pursuant to a commitment entered into before 
the expiration of the 45-day period and without knowledge of the purchase. Subsections (:t) 
and (g) provide an analogous rule for lessees. Subsections (d) and (e) replace pre-1998 
Section 9-307(3), and subsections (f) and (g) replace pre-1998 Section 2A-307(4). No 
change in meaning is intended. 
Of course, a buyer in ordinary course who takes free of the security interest under 
Section 9-320 and a lessee in ordinary course who takes free under Section 9-321 are not 
subject to any future advances. However, the exceptions for a buyer in ordinary course of 
business and a lessee in ordinary course of business in the 1998 text of subsections (d) and 
(f) have been deleted. Even if such a buyer or lessee does not meet the requirements under 
Section 9-320 or 9-321 to take free of a security interest, it should be entitled to the benefits 
of those subsections, which apply to buyers generally. This change is consistent with the 
intended result under the 1998 text. Subseetions (d) and (e) replaee former Seetion 9 
3Q'7(3), and subsections (f) and (g) replaee former Seetion 2A 3Q'7(4). Jl,fo ehaH:ge in. 
mean.mg is intended. 
Sec. A-122. 11 MRSA §9-1324, sub-§(2), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(b ). The purchase-money secured party sends an autheatieated a signed notification to 
the holder of the conflicting security interest; 
Sec. A-123. 11 MRSA §9-1324, sub-§(4), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" A" to H.P. 59, L.D. 91 
(b ). The purchase-money secured party sends an aathentieated a signed notification to 
the holder of the conflicting security interest; 
Official Comment 
14. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201, the cognate term "signed" replaces the references to 
"authenticated" in the pre-2022 text of this section. 
Sec. A-124. 11 MRSA §9-1326-A is enacted to read: 
§9-1326-A. 
Priority of security interest in controllable account, controllable 
electronic record and controllable payment intangible 
A security interest in a controllable account, controllable electronic record or 
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. 
Official Comment 
1. {Control priority.] This section adopts an approach to priority in controllable 
accounts, controllable electronic records, and controllable payment intangibles that is 
similar to the approach of Sections 9-327 (deposit accounts) and 9-328 (investment 
property): A security interest perfected by control has priority over conflicting security 
interests that are not perfected by control. 
2. {Multiple persons having control.] This section does not apply if more than one 
secured party has control of a controllable account, controllable electronic record, or 
controllable payment intangible, which may occur through shared control or a person in 
control acknowledging that it has control on behalf of another person. See Section 12-
105(b)(2) (shared control), (e) (control through another person). In those situations, the 
residual first-to-file-or-perfect rule of Section 9-322(a)(l) would apply. However. affected 
persons may believe that the application of that first-in-time rule is not appropriate in some 
circumstances. 
Example: A person (A) has a security interest in a controllable electronic record 
perfected by control (other than through an acknowledgment by another person 
under Section 12-105(e)) and A acknowledges that it has control on behalf of 
another person (B), B has a security interest perfected by a financing statement 
filed before A obtained control. Under Section 9-322(a) (the first-to-file-or-perfect 
rule), by obtaining control through A's acknowledgment B's security interest would 
have priority over A's previously senior security interest. To avoid that result, A 
might insist on B's subordination as a condition to A's acknowledgment. See 
Section 9-339 (subordination by agreement). In cases of multiple persons having 
control, it will be important for interested persons to adjust priorities by agreement, 
when appropriate. See also Section 12-105, Comment 5. 
A secured party that relies on perfection by control resulting from the acknowledgment 
of another person under Section 12-105(e) need not prove a formal agency relationship 
with the acknowledging person. This is a principal rationale underlying the various 
provisions in Articles 7, 8, 9, and 12 which provide for a person to obtain control through 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
another person's control and acknowledgment. However, a person obtaining control 
through an acknowledgment necessarily must rely on the integrity of the acknowledging 
person. In the case of perfection by control in the Example, the acknowledging person 
presumably also has control for the benefit of the debtor. The secured party's (B 's) control, 
and perfection, depends on the acknowledging person's (A's) continued control. The 
secured party's (B's) perfection would be lost if the acknowledging person (A) were to lose 
or give up control, as by transferring control to the debtor or any other person. See, e.g., 
Section 9-314, Comment 2. 
An acknowledging person also might serially acknowledge over time that it holds for 
the benefit of multiple purchasers (secured parties or buyers). Putting aside perfection by 
filing as in the Example, secured parties so perfected would have priority based on priority 
of timing of control under Section 9-322(a). However, a transfer of control by the 
acknowledging person to a qualifying purchaser, or an acknowledgment by that the person 
that it has control on behalf of a buyer or secured party that is a qualifying purchaser, would 
allow the qualifying purchaser to take free of (or have priority over) earlier security 
interests or other interests. It follows that a first-to-control priority rule for security interests 
would not protect a secured party having control through another person's acknowledgment 
from having its interest cut off or subordinated by a later-in-time qualifying purchaser. 
Such a "first-to-control" priority rule would be illusory inasmuch as purchasers relying on 
control through another person's acknowledgment would have no reliable method of 
determining priority over subsequent transferees other than reliance on the acknowledging 
person's integrity. 
Sec. A-125. 11 MRSA §9-1330, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(1). A purchaser of chattel paper has priority over a security interest in the chattel 
paper that is claimed merely as proceeds of inventory subject to a security interest if: 
(a). In good faith and in the ordinary course of the purchaser's business, the purchaser 
gives new value ffil4,. takes possession of each authoritative tangible copy of the record 
evidencing the chattel paper 0r and obtains control ef under section 9-1105-A of each 
authoritative electronic copy of the record evidencing the chattel paper l:!Bdef seetioB 
1105; and 
(b ). The ehattel f.Hif)ef does authoritative copies of the record evidencing the chattel 
paper do not indicate that it the chattel paper has been assigned to an identified assignee 
other than the purchaser. 
Sec. A-126. 11 MRSA §9-1330, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(2). A purchaser of chattel paper has priority over a security interest in the chattel 
paper that is claimed other than merely as proceeds of inventory subject to a security 
interest if the purchaser gives new value ffil4,. takes possession of each authoritative tangible 
copy of the record evidencing the chattel paper 0r and obtains control ef under section 
9-1105-A of each authoritative electronic copy of the record evidencing the chattel paper 
l:JBder seetioB 9 1105 in good faith, in the ordinary course of the purchaser's business and 
without knowledge that the purchase violates the rights of the secured party. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
Sec. A-127. 11 MRSA §9-1330, sub-§(6), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(6). For purposes of subsections (2) and (4), if the authoritative copies of the record 
evidencing chattel paper or an instrument indicates indicate that it the chattel paper or 
instrument has been assigned to an identified secured party other than the purchaser, a 
purchaser of the chattel paper or instrument has knowledge that the purchase violates the 
rights of the secured party. 
Official Comment 
* * * 
2. Non-Temporal Priority. This Article permits a security interest to be perfected in 
chattel paper either by filing or by the secured party's possession and control under Section 
9-3 l 4A and in er instruments to be perfected either by filing or by the secured party's taking 
possession under Sections 9-312 and 9-313. This section enables secured parties and other 
purchasers of chattel paper (eoth evidenced by either or both authoritative electronic and 
tangible records) and instruments to obtain priority over earlier-perfected security interests, 
thereby promoting the negotiability of these types ofreceivables. 
3. Chattel Paper. Subsections (a) and (b) follow fOl'Hl:er pre-1998 Section 9-308 in 
distinguishing between earlier-perfected security interests in chattel paper that is claimed 
merely as proceeds of inventory subject to a security interest and chattel paper that is 
claimed other than merely as proceeds. Like :fel:'ffi0¼' pre-1998 Section 9-308, this section 
does not elaborate upon the phrase "merely as proceeds." For an elaboration, see PEB 
Commentary No. 8. 
This section makes explicit the "good faith" requirement and retains the pre-1998 
requirements of "the ordinary course of the purchaser's business" and the giving of "new 
value" as conditions for priority. Concerning the last, this Article deletes :fel:'ffi0¼' pre-1998 
Section 9-108 and adds to Section 9-102 a completely different definition of the term "new 
value." See Section 9-102, Comment 21 (discussing "new value"). Under subsection (e), 
the holder of a purchase-money security interest in inventory is deemed to give "new value" 
for chattel paper constituting the proceeds of the inventory. Accordingly, the purchase-
money secured party may qualify for priority in the chattel paper under subsection (a) or 
(b ), whichever is applicable, even if it does not make an additional advance against the 
chattel paper. 
If a possessory security interest in tangible chattel paper er-a that is perfected--by-
control security interest in electronic chattel papef by possession and control under Section 
9-3 l 4A does not qualify for priority under this section, it may be subordinate to a perfected-
by-filing security interest under Section 9-322(a)(l). 
4. Possession and Control. To qualify for priority under subsection (a) or (b), a 
purchaser must "take possession of each authoritative tangible copy of the record 
evidencing the chattel paper er and obtain[ ] control e:f under Section 9-105 of each 
authoritative electronic copy of the record evidencing the chattel paper." Vlhen chattel 
papef coffif)fises one of mofe tangible fecofds and one Of mofe electronic feeofds, a 
pUFchaser may satisfy the possession of control !!ill. requirement by taking possession of 
the tangible records under Section 9 313 and having control of the electronic fecords und0f 
Section 9 105. Note that possession and control are methods of perfection under Section 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
9-314A. In determining which of several related records constitutes chattel paper and thus 
is relevant to possession or control, the form of the records is irrelevant. Rather, the 
tol:lohstone is v,<hether possession or eontrol of the reeord ',\'Ol:lld afford the possession-and-
control requirement is based on the premise that it affords public notice oontempla-ted by 
the possessioR and eontrol requirements. For example, because possession or control of an 
amendment extending the term of a lease would not afford the contemplated public notice, 
the amendment would not constitute a record evidencing chattel paper regardless of 
whether the amendment is in tangible form and the lease is in electronic form, the 
amendment is electronic and the lease is tangible, the amendment and lease are both 
tangible, or the amendment and lease are both electronic, 
Two common practices have raised particular concerns with respect to the possession 
requirement. First, in some cases the parties create more than one copy or counterpart of 
chattel paper evidencing a single secured obligation or lease. This practice raises questions 
as to which counterpart is the "original" and whether it is necessary for a purchaser to take 
possession of all counterparts in order to "take possession" of the chattel paper. Second, 
parties sometimes enter into a single "master" agreement. 
The master agreement 
contemplates that the parties will enter into separate "schedules" from time to time, each 
evidencing chattel paper. Must a purchaser of an obligation or lease evidenced by a single 
schedule also take possession of the record evidencing the master agreement as well as the 
record evidencing the schedule in order to "take possession!.!. of each authoritative tangible 
copy of the record evidencing the chattel paper"? 
The problem raised by the first practice is easily solved. The parties may in the terms 
of their agreement and by designation on the chattel paper identify only one counterpart as 
the original, authoritative tangible copy of the chattel paper for purposes of taking the 
possession of the ehattel paper requirement. Concerns about the second practice also are 
easily solved by careful drafting. Each schedule should provide that it incorporates the 
terms of the master agreement, not the other way around. This will make it clear that each 
schedule is a "stand alone" document. 
A secured party may wish to convert tangiale chattel paper evidenced by authoritative 
tangible copies to eleetronie chattel paper evidenced by electronic copies and vice versa. 
The priority of a security interest in chattel paper under subsection (a) or (b) may be 
preserved, even if the form of the chattel paper changes. The principle implied in the 
preceding paragraph, i.e., that not every copy of chattel paper is relevant, applies to 
"control" as well as to "possession." When there are multiple copies of chattel paper, a 
secured party may take "possession" or obtain "control" of the chattel paper if it acts with 
respect to the copy or copies that are reliably identified as the authoritative copy or copies 
that are releyant for pl:lrposes of possessioR or eoRtrol. Concerning the identification of 
copies as authoritative or nonauthoritative, see Section 9-105(c) and Comment 3. +his 
prineiple applies as 'Nell to chattel paper that has heefl: eow;erted from oRe form to another, 
O','eR if the rel01",rat½t copies at'e Rot the "origiflal" ehattel paper. 
5. Chattel Paper Claimed Merely as Proceeds. Sl:lbseetion (a) revises the rule iR 
former Seetion 9 3 08(b) to eliminate feferenee to what the pl:lrehaser kno't1rs, lRstead Under 
subsection (a). a purchaser who meets the possession or eontrol possession-and-control, 
good faith, ordinary course, and new value requirements takes priority over a competing 
security interest claimed merely as proceeds of inventory unless the authoritative copies of 
the record evidencing the chattel paper itself indieates indicate that it the chattel paper has 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
been assigned to an identified assignee other than the purchaser. Thus subsection (a) 
recognizes the common practice of placing a "legend" on chattel paper to indicate that it 
has been assigned. This approach, under which the chattel paper purchaser who gives new 
value in ordinary course can rely on possession and control of unlegended, tangible chattel 
paper without any concern for other facts that it may know, comports with the expectations 
of both inventory and chattel paper financers. 
6. 
Chattel Paper Claimed Other Than Merely as Proceeds. 
Subsection (b) 
elimiaates the reqairement that the parehaser take v1ithoat knov1ledge that the "speeifie 
paper" is sabjeet to the seel:lfi-ty interest aad sl:lbstitl¼tes for it the requireIHent that the 
parehaser take Under subsection {b), a purchaser who meets the possession-and-control. 
good faith, ordina:ty course, and new value requirements takes priority over a competing 
security interest claimed other than merely as proceeds of invento:ty if it takes "without 
knowledge that the purchase violates the rights of the secured party." This standard derives 
from the definition of "buyer in ordinary course of business" in Section l-201(b)(9). The 
source of the purchaser's knowledge is irrelevant. Note, however, that "knowledge" means 
"actual knowledge." Section 1-202(6 ). 
In contrast to a junior secured party in accounts, who may be required in some special 
circumstances to undertake a search under the "good faith" requirement, see Comment 5 to 
Section 9-331, a purchaser of chattel paper under this section is not required as a matter of 
good faith to make a search in order to determine the existence of prior security interests. 
There may be circumstances where the purchaser undertakes a search nevertheless, either 
on its own volition or because other considerations make it advisable to do so, e.g., where 
the purchaser also is purchasing accounts. Without more, a purchaser of chattel paper who 
has seen a financing statement covering the chattel paper or who knows that the chattel 
paper is encumbered with a security interest, does not have knowledge that its purchase 
violates the secured party's rights. However, if a purchaser sees a statement in a financing 
statement to the effect that a purchase of chattel paper from the debtor would violate the 
rights of the filed secured party, the purchaser would have such knowledge. Likewise, 
under Rew subsection (f), if the authoritative copies of the chattel paper itself iaclieates 
indicate that it the chattel paper had been assigned to an identified secured party other than 
the purchaser, the purchaser would have wrongful knowledge for purposes of subsection 
(b ), thereby preventing the purchaser from qualifying for priority under that subsection, 
even if the purchaser did not have actual knowledge. In the case of authoritative tangible 
copies of a record evidencing chattel paper, the indication normally would consist of a 
written legend on the copies ehattel paper. In the case of authoritative electronic copies of 
the record evidencing chattel paper, this Article leaves to developing market and 
technological practices the manner in which the ehattel paper copies would indicate an 
assignment. 
Subsections {a) and {f) each refer to the possibility that authoritative copies of records 
evidencing chattel paper may indicate that the chattel paper has been assigned to an 
identified assignee. 
Those subsections should be read and interpreted in a manner 
consistent with Section 9-105 on control of authoritative electronic copies of records 
evidencing chattel paper. Accordingly, references in subsections {a) and (f) to an indication 
in a record evidencing chattel paper also embrace, for authoritative electronic copies of 
such records, records attached to or logically associated with the authoritative electronic 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
copies and systems in which the authoritative electronic copies are recorded. See Section 
9-105(c) and (d)(l), 
7. Instruments.* * * 
* * * 
The rule in subsection ( d) is similar to the rules in subsections (a) and (b ), which govern 
priority in chattel paper. The observations in Comment 6 concerning the requirement of 
good faith and the phrase "without knowledge that the purchase violates the rights of the 
secured ~ 
party," including the operation of subsection (:() if an instrument indicates 
that it has been assigned to an identified secured party, apply equally to purchasers of 
instruments. However, unlike a purchaser of chattel paper, to qualify for priority under tl:i,is 
seSffel½ subsection (d) a purchaser of an instrument need only give 
11value
as defined in 
Section ~ 
1-204; it need not give "new value." Also, the purchaser need not purchase 
the instrument in the ordinary course of its business, 
* * * 
10. Assignment of Non-Lease Chattel Paper. 
* * * 
b. Dealer's Outright Sale of Chattel Paper to SP-2. Article 9 also applies to a 
transaction whereby SP-2 buys the chattel paper in an outright sale transaction without 
recourse against Dealer. Sections 1 201(37) 1-201(b)(35), 9-109(a). Although Dealer does 
not, in such a transaction, retain any residual ownership interest in the chattel paper, the 
chattel paper constitutes proceeds of the goods to which SP-1 's security interest will attach 
and continue following the sale of the goods. Section 9-315(a). Even though Dealer has 
not retained any interest in the chattel paper, as discussed above BIOCOB subsequently 
may return the goods to Dealer under circumstances whereby Dealer reacquires an interest 
in the goods. The priority contest between SP-1 and SP-2 will be resolved as discussed 
above; Section 9-330 makes no distinction among purchasers of chattel paper on the basis 
of whether the purchaser is an outright buyer of chattel paper or one whose security interest 
secures an obligation of Dealer. 
11. Assignment of Lease Chattel Paper. As defined in Section 9-102, "chattel paper" 
includes not only Vrfkiags that e7lideace secadty imefests iR rights to payment secured by 
specific goods but also those that e7.'ideace rights to payment owed by a lessee under a true 
leases lease of goods. 
* * * 
Sec. A-128. 11 MRSA §9-1331, as amended by PL 2001, c. 471, Pt. B, §4 and 
affected by §5, is further amended to read: 
§9-1331. Priority of rights of purchasers of iastFameats controllable accounts, 
controllable electronic records, controllable payment intangibles, documentsl 
instruments and securities under other Articles; priority of interests in 
financial assets and security entitlements and protection against assertion of 
claim under AFtiele 8 Articles 8-A and 12 
(1). 
This Article does not limit the rights of a holder in due course of a negotiable 
instrument, a holder to which a negotiable document of title has been duly negotiated 0fJ. a 
protected purchaser of a security or a qualifying purchaser of a controllable account. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,A,, to H.P. 59, L.D. 91 
controllable electronic record or controllable payment intangible. 
These holders or 
purchasers take priority over an earlier security interest, even if perfected, to the extent 
provided in Articles 3-A, + 7-A. 8-A and S- 12. 
(2). 
This Atticle does not limit the rights of or impose liability on a person to the 
extent that the person is protected against the assertion of a claim under Article S- 8-A or 
12. 
(3). Filing under this Article does not constitute notice of a claim or defense to the 
holders, or purchasers, or persons described in subsections (1) and (2). 
Official Comment 
* * * 
3. * * * 
The state-law Uniform Electronic Transactions Act (UETA) and the federal Electronic 
Signature in Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq. CE-SIGN). 
provide certain rules for records referred to and defined as "transferable records." See 
UETA Section 16 and E-SIGN. 15 U.S.C. § 7021. When certain conditions have been met, 
those acts confer on a person the status of a "holder" (as defined in 1-201(b)(21). formerly 
Section 1-201(20)) of an "equivalent record" under pre-1998 Section 9-308 (now. in part. 
Section 9-330) and the rights and defenses of a "purchaser" under that section, among other 
effects. E-SIGN also refers to the rights and defenses of a purchaser under Section 9-330. 
As a matter of the application of the Uniform Commercial Code. those are not the only 
sections of the Uniform Commercial Code that would logically be affected by UETA and 
E-SIGN. For example, the rights of a holder in due course under Section 9-33 Ha) would 
also be covered by the application of those acts, when the conditions for applicability have 
been satisfied. 
* * * 
Sec. A-129. 11 MRSA §9-1332, as enacted by PL 1999, c. 699, Pt. A, §2 and 
affected by §4, is amended to read: 
§9-1332. Transfer of money; transfer of funds from deposit account 
(1). 
A transferee of money takes the money free of a security interest ualess the 
tra£sferee acts if the transferee receives possession of the money without acting in collusion 
with the debtor in violating the rights of the secured party. 
(2). A transferee of funds from a deposit account takes the funds free of a security 
interest in the deposit account unless the tra£sferee acts if the transferee receives the funds 
without acting in collusion with the debtor in violating the rights of the secured party. 
Official Comment 
* * * 
2. Scope of this Section. This section affords broad protection te for transferees whe 
take of money and of funds from a deposit account a£d to those v,z}}O take moaey. to take 
free of a security interest. 
COMMITTEE AMENDMENT 
ioos 
........ u ..... , 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
2A. Meaning of "Transfer." The term "transferee" is not defined; however, the 
debtor itself is not a transferee. Thus this section does not cover the case in which a debtor 
withdraws money (currency) from its deposit account or the case in which a bank debits an 
encumbered account and credits another account it maintains for the debtor. 
A "transfer" of property occurs when the transferee has obtained a property interest in 
the relevant property. See Section 9-102, Comment 2.b.1 ("Several provisions of this 
Article and its official comments also refer to the 'transfer' of property interests." ( emphasis 
added)). Other law determines when the transferee has acquired a property interest. See 
Section 9-408, Comment 3 ("Other law determines whether a debtor has a property interest 
('rights in the collateral') and the nature of that interest."). Although the terms "transfer" 
and "transferee" are not defined in the UCC, the term "transfer" is broader in scope than 
"purchase." which requires taking in a "voluntary transaction creating an interest in 
property." Section l-201(b)(29). For example. "transfer" includes an involuntary transfer 
such as the acquisition of a judicial lien by a lien creditor. See Section 9-102(a)(52) 
(defining "lien creditor"). However. many references to a "transfer" in the UCC and official 
comments relate to a voluntary transfer to a purchaser. as indicated by the context. 
2B. 
Transferees of Tangible Money. Subsection (a) conditions the take-free rule 
on the transferee's receipt of possession of tangible money. This reflects what had always 
been assumed under the pre-2022 text-that a transfer of an interest in tangible money 
which is not accompanied by a physical transfer of possession would not impair the rights 
of third parties. 
2C. 
Transferees of Funds from Deposit Account. Subsection (b) reflects the 
corresponding change for a transfer of funds from a deposit account. To qualify for the 
take-free protection under subsection (b). the transferee must "receive[] the funds without 
acting in collusion ... " The amendments to subsections (a) and (b) clarify what was implicit 
under the original text. Although "funds" is not defined in the UCC. if deposit accounts 
with a central bank or another bank were to become money. as defined in Section 1-
(b )(24 ). transfers from such deposit accounts would be covered by subsection (b) and 
not subsection (c) (discussed in Comment 2.D.). See Section 9-102(a)(54A) (defining 
"money." for putposes of Article 9. to exclude deposit accounts). 
* * * 
Example 2: Debtor maintains a deposit account with Bank A. The deposit account 
is subject to a perfected security interest in favor of Lender. 
At Bank B's 
suggestion, Debtor moves the funds from the account at Bank A to Debtor's deposit 
account with Bank B. Unless Bank B acted in collusion with Debtor in violating 
Lender's rights, Bank B takes the funds (the credits running in favor of Bank B) 
free from Lender's security interest. See subsection (b ). However, inasmuch as 
the deposit account maintained with Bank B constitutes the proceeds of the deposit 
account at Bank A, Lender's security interest would attach to that account as 
proceeds. See Section 9-315. 
Subsection (b) also would apply if, in the euample these examples, Bank A debited 
Debtor's deposit account in exchange for the issuance of Bank A's cashier's check. Lender's 
security interest would attach to the cashier's check as proceeds of the deposit account, and 
the rules applicable to instruments would govern any competing claims to the cashier's 
check. See, e.g., Sections 3-306, 9-322, 9-330, 9-331. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A "to H.P. 59, L.D. 91 
If Debtor withdraws moH:ey (cun·eHe)0 funds from an encumbered deposit account,. 
receives the funds in the form of tangible money, and transfers the money to a third party, 
then subsection (a), to the extent not displaced by federal law relating to money, applies to 
the transfer. It contains substantially the same rule as subsection (b ). 
Subsection (b) applies to transfers of funds from a deposit account; it does not apply to 
transfers of the deposit account itself or of an interest therein. Because a deposit account is 
a monetary obligation {debt) of the depositary bank to its depositor, a transfer of the deposit 
account itself does not transfer the funds credited to the deposit account. For example, this 
section does not apply to the creation of a security interest in a deposit account. Competing 
claims to the deposit account itself are dealt with by other Article 9 priority rules. See 
Sections 9-317(a), 9-327, 9-340, 9-341. Similarly, a corporate merger normally would not 
result in a transfer of funds from a deposit account. Rather, it might result in a transfer of 
the deposit account itself. If so, the normal rules applicable to transferred collateral would 
apply; this section would not. 
The depositor's creditors (whether secured parties or lien creditors) do not have any 
interest in any funds ( or any other assets of the depositary bank) as a result of having an 
interest in the deposit account {the right to payment of the bank's obligation). Consequently, 
a transferee of funds that takes free of a security interest under subsection {b) does so 
whether the security interest in the deposit account from which the funds were transferred 
arises as original collateral or as proceeds. 
A transferee of an interest in the deposit account, such as a garnishing lien creditor, 
does not take free of a security interest in a deposit account under subsection {b). A 
transferee takes free under subsection {b) only upon the actual receipt of funds from the 
deposit account. The proper construction of subsection {b) rejects cases that treat 
garnishment of a deposit account as an immediate transfer of funds or an interest in funds 
credited to the deposit account. 
The last event that provides a recovery for a creditor in a garnishment action virtually 
always would be a transfer of funds from a deposit account. However, this does not mean 
that a perfected security interest will always be cut off by a garnishing creditor. By 
intervening in the garnishment proceeding to assert its senior security interest before funds 
are disbursed, the secured party might assert and retain its priority. However, the relevant 
procedural law may not provide the secured party with adequate advance notice. In some 
cases, a control agreement that perfects a security interest in the deposit account may 
require the garnished bank to provide prompt notice to the secured party. But not all control 
agreements will so provide. Moreover, the secured party's priority is not absolute. See, e.g., 
Section 9-401, Comment 6 {explaining that the equitable doctrine of marshaling may be 
appropriate in the case of a lien creditor's interest in collateral when a senior secured party 
is oversecured). 
2D. Transferees of Electronic Money. Because "electronic money" is new, no pattern 
of past practices or understandings exists. However, subsection {c) provides a take-free 
rule for electronic money that complements subsection {a) by conditioning the take-free 
rule on the transferee's obtaining control. 
• 
2E. Temporal Aspect of Collusion Test. For a transferee to take free of a security 
interest under this section the transferee must receive delivery of tangible money, receive 
funds from a deposit account, or obtain control of electronic money without acting in 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,A" to H.P. 59, L.D. 91 
collusion. Whether the transferee is acting without collusion is determined as of the time 
of delivery to the transferee or receipt of funds or obtaining control by the transferee. 
* * * 
4. "Bad Actors." To deal with the question of the "bad actor," this section borrows 
"collusion" language from A1ticle 8. See, e.g., Sections 8-115, 8-503( e ). This is the most 
protective (i.e., least stringent) of the various standards now found in the UCC. Compare, 
e.g., Section 1-201(b)(9) ("without knowledge that the sale violates the rights of another 
person.,_" in the definition of "buyer in ordinary course of business"): Section 1-201(b)(20) 
(defining "good faith" as "honesty in fact and the observance of reasonable commercial 
standards of fair dealing"); Section 3-302(a)(2)(v) ("without notice of any claim"). 
* * * 
Sec. A-130. 11 MRSA §9-1334, sub-§(6), ~f(a), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(a). The encumbrancer or owner has, in an autheRtiea-ted a signed record, consented to 
the security interest or disclaimed an interest in the goods as fixtures; or 
Official Comment 
* * * 
13. 
"Signed" Replaces "Authenticated." Consistent with the revised definition 
of "sign" in Section 1-201, the cognate term "signed" replaces the reference to 
"authenticated" in the pre-2022 text of this section. 
Sec. A-131. 11 MRSA §9-1338, sub-§(2), as amended by PL 2009, c. 324, Pt. B, 
§43 and affected by §48, is repealed and the following enacted in its place: 
(2). A purchaser, other than a secured party:, of the collateral takes free of the security 
interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect 
information, the purchaser gives value and: 
(a). In the case of tangible documents, goods, instruments or a security certificate. 
receives possession or delivery of the collateral and: 
(b). In the case of chattel paper, takes possession of each authoritative tangible copy 
of the record evidencing the chattel paper and obtains control of each authoritative 
electronic copy of the electronic record evidencing the chattel paper. 
Sec. A-132. 11 MRSA §9-1341, first ,r, as enacted by PL 1999, c. 699, Pt. A, §2 
and affected by §4, is amended to read: 
Except as otherwise provided in section 9-1340, subsection (3), and unless the bank 
otherwise agrees in an a-lithentieated a signed record, a bank's rights and duties with respect 
to a deposit account maintained with the bank are not terminated, suspended or modified 
by: 
Sec. A-133. 11 MRSA §9-1403, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(1). 
In this section, "value" has the meaning provided in section ~ 
3-1303. 
subsection (1). 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,A-., to H.P. 59, L.D. 91 
Sec. A-134. 11 MRSA §9-1403, sub-§(2), 1(d), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
( d). Without notice of a defense or claim in recoupment of the type that may be asserted 
against a person entitled to enforce a negotiable instrument under section~ 3-1305, 
subsection (1). 
Sec. A-135. 11 MRSA §9-1403, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). Subsection (2) does not apply to defenses of a type that may be asserted against 
a holder in due course of a negotiable instrument under section~ 3-1305, subsection 
(2). 
Official Comment 
* * * 
6. 
"Signed" Replaces "Authenticated." Consistent with the revised definition 
of "sign" in Section 1-201. the cognate term "signed" replaces the reference to 
"authenticated" in the pre-2022 text of this section. 
Sec. A-136. 11 MRSA §9-1404, sub-§(1), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(b). Any other defense or claim of the account debtor against the assignor that accrues 
before the account debtor receives a notification of the assignment authenticated signed 
by the assignor or the assignee. 
Official Comment 
* * * 
6. 
"Signed" Replaces "Authenticated." Consistent with the revised definition 
of "sign" in Section 1-201. the cognate term "signed" replaces the reference to 
"authenticated" in the pre-2022 text of this section. 
Sec. A-137. 11 MRSA §9-1406, as amended by PL 2013, c. 317, Pt. A, §18, is 
further amended to read: 
§9-1406. Discharge of account debtor; notification of assignment; identification and 
proof of assignment; restrictions on assignment of accounts, chattel paper, 
payment intangibles, and promissory notes ineffective 
(1). Subject to subsections (2) through (9) to (10), an account debtor on an account, 
chattel paper; or a payment intangible may discharge its obligation by paying the assignor 
until, but not after, the account debtor receives a notification, authel:lticated signed by the 
assignor or the assignee, that the amount due or to become due has been assigned and that 
payment is to be made to the assignee. After receipt of the notification, the account debtor 
may discharge its obligation by paying the assignee and may not discharge the obligation 
by paying the assignor. 
(2). Subject to subsection (8) subsections (8) and (10). notification is ineffective under 
subsection (1 ): 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,A" to H.P. 59, L.D. 91 
(a). If it does not reasonably identify the rights assigned; 
(b ). To the extent that an agreement between an account debtor and a seller of a 
payment intangible limits the account debtor's duty to pay a person other than the seller 
and the limitation is effective under law other than this Article; or 
( c ). At the option of an account debtor, if the notification notifies the account debtor 
to make less than the full amount of any installment or other periodic payment to the 
assignee, even if: 
(i) Only a portion of the account, chattel paper or payment intangible has been 
assigned to that assignee; 
(ii) A portion has been assigned to another assignee; or 
(iii) The account debtor knows that the assignment to that assignee is limited. 
(3), Subject to stlhseetion subsections (8) and (10), ifrequested by the account debtor, 
an assignee shall seasonably furnish reasonable proof that the assignment has been made. 
Unless the assignee complies, the account debtor may discharge its obligation by paying 
the assignor, even if the account debtor has received a notification under subsection (1). 
(4). Except as otherwise provided in subsection (5) and sections 2-1303 and 9-1407, 
and subject to subsection (8), a term in an agreement between an account debtor and an 
assignor or in a promissory note is ineffective to the extent that it: 
(a). Prohibits, restricts or requires the consent of the account debtor or person obligated 
on the promissory note to the assignment or transfer of, or the creation, attachment, 
perfection or enforcement of a security interest in, the account, chattel paper, payment 
intangible or promissory note; or 
(b ). Provides that the assignment or transfer or the creation, attachment, perfection or 
enforcement of the security interest may give rise to a default, breach, right of 
recoupment, claim, defense, te1mination, right of termination or remedy under the 
account, chattel paper, payment intangible or promissory note. 
For the purposes of this subsection, "promissozy note" includes a negotiable instrument that 
evidences chattel paper. 
(5). Subsection ( 4) does not apply to the sale of a payment intangible or promissory 
note other than a sale pursuant to a disposition under section 9-1610 or an acceptance of 
collateral under section 9-1620. 
(6). 
Except as otherwise provided in sections 2-1303 and 9-1407 and subject to 
subsections (8) and (9), a rule of law, statute, or regulation that prohibits, restricts or 
requires the consent of a government, governmental body or official, or account debtor to 
the assignment or transfer of, or creation of a security interest in, an account or chattel 
paper is ineffective to the extent that the rule of law, statute or regulation: 
(a). Prohibits, restricts or requires the consent of the government, governmental body 
or official, or account debtor to the assignment or transfer of, or the creation, 
attachment, perfection or enforcement of a security interest in the account or chattel 
paper; or 
(b ), Provides that the assignment or transfer or the creation, attachment, perfection or 
enforcement of the security interest may give rise to a default, breach, right of 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
recoupment, claim, defense, termination, right of termination or remedy under the 
account or chattel paper. 
(7). 
Subject to subsection (8) subsections (8) and (10), an account debtor may not 
waive or vary its option under subsection (2), paragraph (c). 
(8). This section is subject to law other than this Article that establishes a different 
rule for an account debtor who is an individual and who incurred the obligation primarily 
for personal, family or household purposes. 
(9). 
This section does not apply to an assignment of a health-care-insurance 
receivable. 
(10). 
Subsections (1), (2), (3) and (7) do not apply to a controllable account or 
controllable payment intangible. 
Official Comment 
* * * 
2. Account Debtor's Right to Pay Assignor Until Notification. Subsection (a) 
provides the general rule concerning an account debtor's right to pay the assignor until the 
account debtor receives appropriate notification. The revision makes clear that once the 
account debtor receives the notification, the account debtor cannot discharge its obligation 
by paying the assignor. It also makes explicit that payment to the assignor before 
notification, or payment to the assignee after notification, discharges the obligation. No 
change in meaning from :fem½er pre-1998 Section 9-318 is intended. Nothing in this section 
conditions the effectiveness of a notification on the identity of the person who gives it. An 
account debtor that doubts whether the right to payment has been assigned may avail itself 
of the procedures in subsection ( c ), See Comment 4. As to the rights and powers of an 
assignee generally, see Section 9-102(a)(7A) (defining "assignee"), (7B) (defining 
"assignor"), and Comment2.b.1. 
An effective notification under subsection (a) must be authenticated signed. This 
requirement normally could be satisfied by sending notification on the notifying person's 
letterhead or on a form on which the notifying person's name appears. In each case the 
printed name would be a symbol adopted by the notifying person for the purpose of 
identifying the person and adopting the notification. See Section ~ 
1-20l(b)(37) 
(defining "authenticate" "sign"). 
* * * 
5. Contractual Restrictions on Assignment. Former Pre-1998 Section 9-318(4) 
rendered ineffective an agreement between an account debtor and an assignor which 
prohibited assignment of an account (whether outright or to secure an obligation) or 
prohibited a security assignment of a general intangible for the payment of money due or 
to become due. Subsection (d) essentially follows :fem½er pre-1998 Section 9-318(4), but 
expands the rule of free assignability to chattel paper (subject to Sections 2A-303 and 9-
407) and promissory notes and explicitly overrides both restrictions and prohibitions of 
assignment. The policies underlying the ineffectiveness of contractual restrictions under 
this section build on common-law developments that essentially have eliminated legal 
restrictions on assignments of rights to payment as security and other assignments of rights 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT •A• to H,P, 59, L.D, 91 
to payment such as accounts and chattel paper. Any that might linger for accounts and 
chattel paper are addressed by Bew subsection (f). See Comment 6. 
The first sentence of subsection (d) ensures that the subsection applies to a negotiable 
instrument that would be a promissory note but for (i) the exclusion of writings that 
evidence chattel paper from the definition of "instrument" (Section 9-102(a)( 4 7). as revised 
in 2022) and (ii) the definition of "promissory note" (Section 9-102(a)(65)) as a subset of 
"instrument." That sentence also ensures that subsection (d) applies to an obligor on such 
a negotiable instrument, even though the obligor is not an "account debtor" (Section 9-
102(a)(3)). The sentence restores the scope of subsection (d) to apply to all obligations and 
obligors on chattel paper. as was the case prior to the revision of the definition of 
"instrument". 
* * * 
10. Inapplicability to Certain Ownership Interests. This seetioH does Subsection 
(k) provides that subsections (d). (f). and (j) do not apply to a security interest in an 
ownership interest in a limited liability company, limited partnership, or general 
partnership, regardless of the name of the interest and whether the interest: (i) pertains to 
economic rights, governance rights, or both; (ii) arises under: (a) an operating agreement, 
the applicable limited liability company act, or both; or (b) a partnership agreement, the 
applicable partnership act, or both; or (iii) is owned by: (a) a member of a company or 
transferee or assignee of a member; or (b) a partner or a transferee or assignee of a partner; 
or (iv) comprises contractual, property, other rights, or some combination thereof. 
Ownership interests referred to in subsection (k) include interests in a series of a limited 
liability company. limited partnership. or general partnership. if the series is a "person" 
(Section 1-20l(b)(27)). 
11. Controllable Accounts and Controllable payment intangibles. For controllable 
accounts and controllable payment intangibles. subsection (1) recognizes that subsections 
fa). (b), (c) and (g) are replaced by analogous provisions in Section 12-106. 
12. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201. the cognate term "signed" replaces the reference to "authenticated" 
in the pre-2022 text of this section. 
Sec. A-138. 11 MRSA §9-1408, sub-§(5) is enacted to read: 
{5). 
For the purposes of this section. "promissory note" includes a negotiable 
instrument that evidences chattel paper. 
Official Comment 
* * * 
11. 
Subsection (g) ensures that this section applies to a negotiable instrument that 
would be a promissory note but for (i) the exclusion of writings that evidence chattel paper 
from the definition of "instrument" (Section 9-102(a)( 47). as revised in 2022) and (ii) the 
definition of "promissory note" (Section 9-102{a)(65)) as a subset of "instrument." See 
Section 9-406. Comment 5. 
Sec. A-139. 11 MRSA §9-1509, sub-§(1), 1(a), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
COMMITTEE AMENDMENT 
ROS 
COMMITIEEAMENDMENT'A"toH.P. 59, L.D. 91 
(a). The debtor authorizes the filing in afl authenticated a signed record or pursuant to 
subsection (2) or (3); or 
Sec. A-140. 11 MRSA §9-1509, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(2). By authenticating signing or becoming bound as debtor by a security agreement, 
a debtor or new debtor authorizes the filing of an initial financing statement, and an 
amendment, covering: 
(a). The collateral described in the security agreement; and 
(b ). Property that becomes collateral under section 9-1315, subsection (1 ), paragraph 
(b ), whether or not the security agreement expressly covers proceeds. 
Official Comment 
* * * 
3. Unauthorized Filings. Records filed in the filing office do not require signatures 
for their effectiveness. 
Subsection (a)(l) substitutes for the debtor's signature on a 
financing statement the requirement that the debtor authorize in aR authenticated a signed 
record the filing of an initial financing statement or an amendment that adds collateral. 
Also, under subsection ( a)( 1 ), if an amendment adds a debtor, the debtor who is added must 
authorize the amendment. A person who files an unauthorized record in violation of 
subsection (a)(l) is liable under Section 9-625(b) and (e) for actual and statutory damages. 
Of course, a filed financing statement is ineffective to perfect a security interest if the filing 
is not authorized. See Section 9-510(a). Law other than this A1ticle, including the law 
with respect to ratification of past acts, generally determines whether a person has the 
requisite authority to file a record under this section. See Sections 1-103, 9-502, Comment 
3. This Article applies to other issues, such as the priority of a security interest perfected 
by the filing of a financing statement. See Section 9-322, Comment 4. Amendment 
approved by the Permanent Editorial Board for Uniform Commercial Code December 31, 
2001. 
4. Ipso Facto Authorization. Under subsection (b ), the authentication signing of a 
security agreement ipso facto constitutes the debtor's authorization of the filing of a 
financing statement covering the collateral described in the security agreement. The 
secured party need not obtain a separate authorization. Similarly, a new debtor's becoming 
bound by a security agreement ipso facto constitutes the new debtor's authorization of the 
filing of a financing statement covering the collateral described in the security agreement 
by which the new debtor has become bound. And, under subsection ( c ), the acquisition of 
collateral in which a security interest continues after disposition under Section 9-315(a)(l) 
ipso facto constitutes an authorization to file an initial financing statement against the 
person who acquired the collateral. The authorization to file an initial financing statement 
also constitutes an authorization to file a record covering actual proceeds of the original 
collateral, even if the security agreement is silent as to proceeds. 
Example 1: Debtor authenticates signs a security agreement creating a security 
interest in Debtor's inventory in favor of Secured Party. Secured Party files a 
financing statement covering inventory and accounts. The financing statement is 
authorized insofar as it covers inventory and unauthorized insofar as it covers 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D, 91 
accounts. (Note, however, that.the financing statement will be effective to perfect 
a security interest in accounts constituting proceeds of the inventory to the same 
extent as a financing statement covering only inventory.) 
Example 2: Debtor authea-tieates signs a security agreement creating a security 
interest in Debtor's inventory in favor of Secured Party. Secured Party files a 
financing statement covering inventory. Debtor sells some inventory, deposits the 
buyer's payment into a deposit account, and withdraws the funds to purchase 
equipment. As long as the equipment can be traced to the inventory, the security 
interest continues in the equipment. See Section 9-315(a)(2). However, because 
the equipment was acquired with cash proceeds, the financing statement becomes 
ineffective to perfect the security interest in the equipment on the 21st day after the 
security interest attaches to the equipment unless Secured Party continues 
perfection beyond the 20-day period by filing a financing statement against the· 
equipment or amending the filed financing statement to cover equipment. See 
Section 9-315( d). 
Debtor's authea-tieatioa signing of the security agreement 
authorizes the filing of an initial financing statement or amendment covering the 
equipment, which is "property that becomes collateral under Section 9-315( a)(2)." 
See Section 9-509(b)(2). 
* * * 
6. 
Amendments; Termination Statements Authorized by Debtor, 
Most 
amendments may not be filed unless the secured party of record, as determined under 
Section 9-511, authorizes the filing. See subsection (d)(l). However, under subsection 
(d)(2), the authorization of the secured party of record is not required for the filing of a 
termination statement if the secured party of record failed to send or file a termination 
statement as required by Section 9-513, the debtor authorizes it to be filed, and the 
termination statement so indicates. An authorization to file a record under subsection ( d) is 
effective even if the authorization is not in aa authefltieated a signed record. Compare 
subsection (a)(l). However, both the person filing the record and the person giving the 
authorization may wish to obtain and retain a record indicating that the filing was 
authorized. 
* * * 
9. 
"Signed" and "Signing" Replace "Authenticated" and "Authenticating," 
Consistent with the revised definition of "sign" in Section 1-201. the cognate terms 
"signed" and "signing" replace the references to "authenticated" and "authenticating" in the 
pre-2022 text of this section. 
Sec. A-141. 11 MRSA §9-1513, sub-§(2), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(b ). If earlier, within 20 days after the secured party receives an a-atheB-tieated a signed 
demand from a debtor. 
Sec. A-142. 11 MRSA §9-1513, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). 
In cases not governed by subsection (1), within 20 days after a secured party 
receives aa authen-tieated a signed demand from a debtor, the secured party shall cause the 
secured party of record for a financing statement to send to the debtor a termination 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
statement for the financing statement or file the termination statement in the filing office 
if: 
(a). Except in the case of a financing statement covering accounts or chattel paper that 
has been sold or goods that are the subject of a consignment, there is no obligation 
secured by the collateral covered by the financing statement and no commitment to 
make an advance, incur an obligation or otherwise give value; 
(b ). The financing statement covers accounts or chattel paper that has been sold but as 
to which the account debtor or other person obligated has discharged its obligation; 
(c). The financing statement covers goods that were the subject of a consignment to 
the debtor but are not in the debtor's possession; or 
(d). The debtor did not authorize the filing of the initial financing statement. 
Official Comment 
* * * 
2. Duty to File or Send. * * * 
* * * 
References to a "termination statement" in this section and in Part 5 generally should 
be interpreted functionally, based on the purposes of the termination. A termination 
statement includes any amendment that meets the definition of that term by containing an 
indication that the amendment "is a termination statement" or that the identified financing 
statement "is no longer effective." Section 9-102(a)(80). The amendment may terminate 
the effectiveness of a financing statement in whole or in part. For example, if a person did 
not authorize the filing of a financing statement against it as debtor. under subsection (a)(2) 
and Cc)( 4) the person may demand that the financing statement be terminated as to that 
person, even if the financing statement remains of record and effective as to one or more 
other persons named as debtors in the financing statement. Such a termination statement 
may take the form of an amendment that deletes the person as a debtor. Similarly. if a 
person authorized the filing of a financing statement as to some collateral but not as to other 
property identified as collateral on the financing statement, the person may demand that 
the financing statement be terminated as to the unauthorized identified collateral. even if 
the financing statement remains of record and effective as to other identified collateral. 
Such a termination statement may take the form of an amendment that deletes the 
unauthorized identified collateral from coverage of the financing statement. Even if such 
amendments do not indicate explicitly that they are termination statements, they would 
nonetheless indicate that the financing statement "is no longer effective" to the extent 
specified and fall within the definition of "termination statement." 
3. "Bogus" Filings. A secured party's duty to send a termination statement arises 
when the secured party "receives" a-a a-utheR-tieatod a signed demand from the debtor. In 
the case of an unauthorized financing statement, the person named as debtor in the 
financing statement may have no relationship with the named secured party and no reason 
to know the secured party's address. Inasmuch as the address in the financing statement is 
"held out by [the person named as secured party in the financing statement] as the place for 
receipt of such communications [i.e., communications relating to security interests]," the 
putative secured party is deemed to have "received" a notification delivered to that address. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT ,A,, to H.P. 59, L.D. 91 
See Section 1-202( e ), If a termination statement is not forthcoming, the person named as 
debtor itself may authorize the filing of a termination statement, which will be effective if 
it indicates that the person authorized it to be filed, See Sections 9-509(d)(2), 9 Sl0(e) 9-
510(a). 
* * * 
6. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201. the cognate term "signed" replaces the references to 
"authenticated" in the pre-2022 text of this section, 
Sec. A-143. 11 MRSA §9-1601, sub-§(2), as amended by PL 2009, c. 324, Pt B, 
§44 and affected by §48, is further amended to read: 
(2). A secured party in possession of collateral or control of collateral under section 
7-1106, 9-1104, ~ 
9-1105-A, 9-1106 er.,, 9-1107 or 9-1107-A has the rights and duties 
provided in section 9-1207, 
Sec. A-144. 11 MRSA §9-1605, as enacted by PL 1999, c. 699, Pt A, §2 and 
affected by §4, is amended to read: 
§9-1605. Unknown debtor or secondary obligor 
A Except as provided in this section, a secured party does not owe a duty based on its 
status as secured party: 
(1). To a person that is a debtor or obligor unless the secured party knows: 
( a), That the person is a debtor or obligor; 
(b), The identity of the person; and 
( c ), How to communicate with the person; or 
(2). 
To a secured party or lienholder that has filed a financing statement against a 
person unless the secured party knows: 
(a), That the person is a debtor; and 
(b). The identity of the person. 
A secured party owes a duty based on its status as a secured party to a person if, at the 
time the secured party obtains control of collateral that is a controllable account, 
controllable electronic record or controllable payment intangible or at the time the security 
interest attaches to the collateral, whichever is later, the person is a debtor or obligor and 
the secured party knows that the information in subsection {1), paragraph (a), (b) or (c) 
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. 
Official Comment 
* * * 
2. 
Duties to Unknown Persons and Limitation of Liability. This section 
relieves a secured party from duties owed to a debtor or obliger if the secured party does 
not know about the debtor or obligor. Similarly, it relieves a secured party from duties 
owed to a secured party or lienholder who has filed a financing statement against the debtor 
if the secured party does not know about the debtor. Section 9-628(a) and (b) provide 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
analogous limitations of liability. For example, a secured party may be unaware that the 
original debtor has sold the collateral subject to the security interest and that the new owner 
has become the debtor. If so, the secured party owes no duty to the new owner (debtor) or 
to a secured party who has filed a financing statement against the new owner. This seetion 
shoald be read in oonjanotion with the 07£calpatory provisions in Seotion 9 628. Note that 
this section relieves a secured party not only from duties arising under this Article but also 
from duties arising under other law by virtue of the secured party's status as such under this 
Article, unless the other law otherwise provides. 
This section should be read in conjunction with the limitations on liability contained in 
the exculpatory provisions in subsections (a), (b). and (c) of Section 9-628. Without this 
group of provisions. a secured party could incur liability to unknown persons and under 
circumstances that would not allow the secured party to protect itself. The broadened 
definition of the term "debtor" underscores the need for these provisions. For example, as 
noted above, a debtor may dispose of collateral subject to a security interest, resulting in 
the transferee becoming a debtor, but the secured party may have no knowledge of the 
disposition or that the transferee has become a debtor. In that situation the secured party 
will have no means of giving notice to or accounting to the transferee debtor. Sections 9-
and 9-628 contemplate such situations by relieving the secured party of its duties to 
the debtor and limiting the secured party's liability to the debtor. 
3. Exceptions to Relief from Duties and Limitation of Liability. In some cases, 
lenders may extend secured credit without knowing, or having the ability to discover, the 
identity of their borrowers. Pre-2022 Sections 9-605(a) and 9-628(a) and (b) would excuse 
these secured parties from having duties to their debtors and obligors, including, for 
example, the duty to notify the debtor or secondary obligor before disposing of the 
collateral and the duty to account to the debtor for any surplus arising from a disposition, 
and would limit the secured parties' liability to their debtors and obligors. In many cases 
these debtors and obligors may be aware that their identities are unknown to their secured 
parties. By failing to make their identities and contact information known. these debtors 
and obligors may be impairing the ability of their secured parties to comply with their duties 
under Article 9. However, such debtor complicity notwithstanding, if secured parties were 
relieved of their duties in these circumstances, it would conflict with the policy of Section 
9-602, which prohibits a waiver or variance of many rights of debtors and obligors and 
duties of secured parties. 
Sections 9-605(b) and 9-628(:f) reflect the policy that a secured party should not be free 
to avoid statutory duties or absolve itself from liability to a debtor or obligor when the 
secured party knows that the collateral, records attached to or logically associated with the 
collateral, and the system in which the collateral is recorded do not provide the secured 
party with the information necessary to fulfill its statutory duties. As discussed in the 
following paragraph, the secured party's knowledge that it may not be able to comply with 
its duties enables the secured party to protect itself from being in breach of these duties. (A 
person has knowledge of or knows a fact if it has "actual knowledge." Section 1-202(b).) 
The exceptions from the exculpatory protections otherwise afforded to secured parties are 
determined by the secured party's knowledge at the later of the time the secured party 
obtains control of a controllable account, controllable electronic record. or controllable 
payment intangible or the time that the security interest attaches to the collateral. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
Obtaining control or attachment of the security interest serves as a rough proxy for the 
context in which a secured party may know that it may be unable to comply with its duties. 
usually because the transferor is pseudonymous. The carve-out from the exculpatory 
protection is limited to duties owed to and liability to a debtor-the transferor of a 
controllable account, controllable electronic record, or controllable payment intangible 
over which the secured party obtains control-or obligor. The secured party in such 
situations could protect itself by choosing not to enter into a transaction in which it might 
be unable to comply with its statutory duties or by conditioning its participation on 
disclosure of the debtor's or obligor's identity and contact information. Ideally. systems 
providing for the transfer of controllable electronic records would provide mechanisms that 
would permit compliance with such duties (such as methods of communication and making 
payments that would preserve a debtor's or obligor's pseudonymity, where that is desired). 
The amendments to Sections 9-605 and 9-628 provide incentives for system design that 
would allow for compliance with Article 9 duties. 
Secured parties that enter into transactions with knowledge that they may not be able 
to comply with their Article 9 duties do so at their own peril. Of course, if a secured party 
possesses, or can obtain, the information necessary to comply with its duties, there is no 
need for the exculpation from those duties. Note, however, that the limitation on a secured 
party's relief from duties and liability relates only to secured transactions involving 
controllable accounts, controllable electronic records, or controllable payment intangibles. 
Designing systems for these assets that would afford secured parties with opportunities to 
comply with their Article 9 duties, as suggested above, could eliminate the risks to secured 
parties and also provide for the protection of debtors' and obligors' rights. 
Sec. A-145. 11 MRSA §9-1608, sub-§(1), 1(a), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended by amending subparagraph (iii) to read: 
(iii) The satisfaction of obligations secured by any subordinate security interest in 
or other lien on the collateral subject to the security interest or agricultural lien 
under which the collection or enforcement is made if the secured party receives aa-
l¼l¼thefttieated a signed demand for proceeds before distribution of the proceeds is 
completed. 
Official Comment 
* * * 
6. 
"Signed" Replaces "Authenticated." Consistent with the revised definition 
of "sign" in Section 1-201, the cognate term "signed" replaces the reference to 
"authenticated" in the pre-2022 text of this section. 
Sec. A-146. 11 MRSA §9-1611, sub-§(1), 1(a), as enacted by PL 1999, c, 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(a). A secured party sends to the debtor and any secondary obligor an ffii-thentieated .!! 
signed notification of disposition; or 
Sec. A-147. 11 MRSA §9-1611, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "It' to H.P. 59, L.D. 91 
(2). Except as otherwise provided in subsection ( 4 ), a secured party that disposes of 
collateral under section 9-1610 shall send to the persons specified in subsection (3) a 
reasonable a:u-thentiea-ted signed notification of disposition. 
Sec. A-148. 11 MRSA §9-1611, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). To comply with subsection (2), the secured party shall send a-a a-uthen.-tiea-ted !! 
signed notification of disposition to: 
(a). The debtor; 
(b ). Any secondary obligor; and 
( c ). If the collateral is other than consumer goods: 
(i) Any other person from which the secured party has received, before the 
notification date, a-a a:u-then.-tiea-ted a signed notification of a claim of an interest in 
the collateral; 
(ii) Any other secured party or lienholder that, 10 days before the notification date, 
held a security interest in or other lien on the collateral perfected by the filing of a 
financing statement that: 
(A) Identified the collateral; 
(B) Was indexed under the debtor's name as of that date; and 
(C) Was filed in the appropriate office in which to file a financing statement 
against the debtor covering the collateral as of that date; and 
(iii) Any other secured party that, 10 days before the notification date, held a 
security interest in the collateral perfected by compliance with a statute, regulation 
or treaty described in section 9-1311, subsection (1). 
Sec. A-149. 11 MRSA §9-1611, sub-§(5), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended by amending subparagraph (ii) to read: 
(ii) Received a response to the request for information and sent a-a al.¼then.tiea-ted !! 
signed notification of disposition to each secured party or other lienholder named 
in that response whose fmancing statement covered the collateral. 
Official Comment 
* * * 
2. Reasonable Notification. This section requires a secured party who wishes to 
dispose of collateral under Section 9-610 to send "a reasonable al.¼thentiea-ted signed 
notification of disposition" to specified interested persons, subject to certain exceptions. 
The notification must be reasonable as to the manner in which it is sent, its timeliness (i.e., 
a reasonable time before the disposition is to take place), and its content. See Sections 9-
(timeliness of notification), 9-613 (contents of notification generally), 9-614 (contents 
of notification in consumer-goods transactions). 
* * * 
5. 
A.utheR-tien-tieB Signature Requirement. 
Subsections (b).,_ aH:El (c). and (e) 
explicitly provide that a aotifieation of disposition notifications must be "authentiea-ted." 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
"signed." Some cases read :fefffief pre-1998 Section 9-504(3) as validating oral notification. 
Consistent with the revised definition of "sign" in Section 1-201. the cognate term "signed" 
replaces the references to "authenticated" in the pre-2022 text of this section. 
*** 
7. Recognized Market; Perishable Collateral. Ne•N sabseetioe Subsection ( d) makes 
it clear that there is no obligation to give notification of a disposition in the case of 
perishable collateral or collateral customarily sold on a recognized market ( e.g., marketable 
securities). Fonner Seetioa 9 5Q4 (3) might be read (ieeorreetly) to relie1;:e the seeared party 
from its daty to eotify a debtor bat eot from its daty to eotify other seeared parties ifl: 
eoftfl:eetioa vt'ith disf)ositioes of sash eollateral. As to what constitutes a recognized market. 
see Section 9-610, Comment 9. 
* * * 
9. Waiver. A debtor or secondary obligor may waive the right to notification under 
this section only by a post-default a1:1thefl:tieated signed agreement. See Section 9-624(a). 
* * * 
Sec. A-150. 11 MRSA §9-1613, sub-§(5), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(5). 
The following form of notification or the form appearing in section 9-1614, 
subsection (3), when completed; in accordance with the instructions in subsection (6) and 
section 9-1614, subsection (3-A). each provides sufficient information: 
NOTIFlC,A_..TION OF DISPOSITION OF COLLATERAL 
+e+ 
0,fome of debtor, obliger or other persofl: to 
Vlhieh the aotifieatioa is sefl:t] 
0,fo,m,e, address, aed telephoae earaber of 
seeu.red part)~ 
Name ofDebtor(s): 
[Eaelade ofl:l;' if debtor(s) eot 
addressee] 
[For a pablie dispositioa:] 
We •Nill sell [or lease or lieease, as applieable] the [deseribe eollateral] [to the highest 
qualified bidder] in pu-blie as follows: 
Day aed Date: 
Time: 
Plaee: 
[}<or a prh•ate dispositioe:] 
We will sell [or lease or lieease, as llflplieable] the [deser4be eoUateral] prP;:ately 
sometime after [day Mel elate]. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
You are ®titled to a-n aeemmtiag of the un:paid mdebtedaess seeured by the property 
that we i-nl:ead to sell [or lease or lieense, as applieable] [for a eharge of$ ......... ]. You 
may request a-n aooountiRg by oalliag us at [telephoae number]. 
[Bnd of Form] 
NOTIFICATION OF DISPOSITION OF COLLATERAL 
To: (Name of debtor, obligor or other person to which the notification is sent) 
From: (Name. address and telephone number of secured party) 
{ 1} Name of any debtor that is not an addressee: (Name of each debtor) 
{2} We will sell (describe collateral) (to the highest qualified bidder) at public sale. A 
sale could include a lease or license. The sale will be held as follows: 
(Date) 
(Time) 
(Place) 
{3} We will sell (describe collateral) at private sale sometime after (date). A sale could 
include a lease or license. 
{ 4} You are entitled to an accounting of the unpaid indebtedness secured by the 
property that we intend to sell or, as applicable, lease or license. 
{5} If you request an accounting you must pay a charge of$ (amount). 
{ 6} You may request an accounting by calling us at (telephone number). 
[End of Form] 
Sec. A-151. 11 MRSA §9-1613, sub-§(6) is enacted to read: 
(6). The following instructions apply to the form of notification in subsection (5). 
(a). The instructions in this subsection refer to the numbers in braces before items in 
the form of notification in subsection (5). Do not include the numbers or braces in the 
notification. The numbers and braces are used only for the purpose of these 
instructions. 
(b). Include and complete item { 1} only ifthere is a debtor that is not an addressee of 
the notification and list the name or names. 
(c). Include and complete either item {2}, if the notification relates to a public 
disposition of the collateral, or item {3}, if the notification relates to a private 
disposition of the collateral. If item {2} is included. include the words "to the highest 
qualified bidder" only if applicable. 
(d). Include and complete items { 4} and { 6}. 
(e). Include and complete item {5} only if the sender will charge the recipient for an 
accounting. 
COMMITTEE AMENDMENT 
ROS 
COMMJTTEE AMENDMENT •A" to H.P. 59, L,D, 91 
Official Comment 
* * * 
2. Contents of Notification. To comply with the "reasonable a-a-thentioated signed 
notification" requirement of Section 9-611 (b ), the contents of a notification must be 
reasonable. * * * 
* * * 
3. [Style Changes in Safe-Harbor Form and Medium Neutrality] No change in 
substance is intended by the changes in style to the form provided in paragraph (5) of the 
pre-2022 text of this section. However. the presentation and explanation of how to use the 
form has been simplified and clarified. 
Sec. A-152. 11 MRSA §9-1614, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). 
The following form of notification, when completed in accordance with the 
instructions in subsection (3-A), provides sufficient information. 
O,tame and OF addFesses of intended Fecipient] 
~ 
NOTICE OF OUR PLAN TO SELL PROPERTY 
[Name and addFess of any oblige£ who is also a debtor] 
Subject: [Iden-tification of Transaction] 
We ha1,•e your [desCfihe collateral] hecause you hrok:e promises HJ: our agreement 
[For a public disposition:] 
We vlill sell [describe collateFal] at public sale. l\ sale could incmde a lease or license. 
The sale •.vill he held as follovi's. 
Date: 
Time: 
Plaee: 
You may att:eael the sale aRel hrHJ:g hielelers if you waat. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT A--» to H.P. 59, L.D. 91 
[For a private disposition:] 
We vrill sell [deseribe sollateral] at prp,zate sale sometime after [date]. fL sale sould insklde 
a lease or lisease. 
The moBej' that we get from the sale (after payiag our eosts) v,rill redl:lee the amoufl.t you 
owe. If we get less moaey thaB you o•Ne, you [a.vill or will not, as applieable] still ov,ze us 
the differenee. If vie get more money thaB you owe, you v.4ll get the e*tra money ualess 
we must pay it to someone else. 
Yea eaB get the property back at af1.Y time before we sell it bj• payiag us the full amoafl.t 
yea owe (Bot jast the past dae paymeats), ffieladiag our e*penses. To leam the 8*aet 
amouat you must pay, eall us at [telephoae aumber]. 
If you v,•aat us to 6*plain to yea ffi •.vritiag hov,r we have figured the amoufl.t that you owe 
as, yea may eall us at [telephone aumbef] [of wfite us at [seeured party's addfess]] aBd 
request a writtea 6*plaBatioa. 
If you aeed mofe :informatioa about the sale, sail us at [telephone aumbef] [or write us at 
[sesured party's addfess]]. 
'Ne afe sending this aotise to the follo1,vffig othef people who have aB iaterest in [dessribe 
sollateral] or who owe moaey UBder yoaf agreement. 
[}I-tames of all othef debtors aBd obligors, if a-a.y] 
[Ead of Form] 
(Name and address of secured party) 
(Date) 
NOTICE OF OUR PLAN TO SELL PROPERTY 
(Name and address of any obligor who is also a debtor) 
Subject: (Identify transaction) 
We have your (describe collateral), because you broke promises in our agreement. 
{l} We will sell (describe collateral) at public sale. A sale could include a lease or 
license. The sale will be held as follows: 
(Date) 
COMMITTEE AMENDMENT 
HOS 
COMMITTEE AMENDMENT ,A,, to H.P. 59, L.D. 91 
(Time) 
(Place) 
You may attend the sale and bring bidders if you want. 
{2} We will sell (describe collateral) at private sale sometime after (date). A sale could 
include a lease or license. 
{3} The money that we get from the sale. after paying our costs. will reduce the amount 
you owe. Ifwe get less money than you owe, you (will or will not. as applicable) still owe 
us the difference. If we get more money than you owe. you will get the extra money. unless 
we must pay it to someone else. 
{ 4} You can get the property back at any time before we sell it by paying us the full 
amount you owe, not just the past due payments, including our expenses. To learn the exact 
amount you must pay. call us at (telephone number). 
{5} If you want us to explain to you in (writing) (writing or in (description of electronic 
record)) (description of electronic record) how we have figured the amount that you owe 
us. {6} call us at (telephone number) (or) (write us at (secured party1s address)) (or contact 
us by (description of electronic communication method)) {7} and request (a written 
explanation) (a written explanation or an explanation in (description of electronic record)) 
(an explanation in (description of electronic record)). 
{8} We will charge you$ (amount) for the explanation ifwe sent you another written 
explanation of the amount you owe us within the last six months. 
{9} If you need more information about the sale (call us at (telephone number)) (or) 
(write us at (secured party's address)) (or contact us by (description of electronic 
communication method)). 
{10} We are sending this notice to the following other people who have an interest in 
(describe collateral) or who owe money under your agreement: 
(Names of all other debtors and obligors. if any) 
[End of Form) 
Sec. A-153. 11 MRSA §9-1614, sub-§(3-A) is enacted to read: 
(3-A). The following instructions apply to the form of notification in subsection (3). 
(a). The instructions in this subsection refer to the numbers in braces before items in 
the form of notification in subsection (3). Do not include the numbers or braces in the 
notification. The numbers and braces are used only for the purpose of these 
instructions. 
(b). Include and complete either item {l}. if the notification relates to a public 
disposition of the collateral. or item {2}. if the notification relates to a private 
disposition of the collateral. 
(c). Include and complete items {3}, {4}. {5}. {6} and {7}. 
(d). In item {5}. include and complete any one of the 3 alternative methods for the 
explanation: writing. writing or electronic record or electronic record. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT •A "to H.P. 59, L.D. 91 
(e). In item {6}, include the telephone number. In addition, the sender may include 
and complete either or both of the 2 additional alternative methods of communication, 
writing or electronic communication, for the recipient of the notification to 
communicate with the sender.Neither of the two additional methods of communication 
is required to be included. 
(f). In item {7}. include and complete the method or methods for the explanation. 
writing, writing or electronic record or electronic record, included in item {5}. 
(g). Include and complete item {8} only if a written explanation is included in item 
{5} as a method for communicating the explanation and the sender will charge the 
recipient for another written explanation. 
(h). In item {9}. include either the telephone number or the address or both the 
telephone number and the address. In addition. the sender may include and complete 
the additional method of communication. electronic communication. for the recipient 
of the notification to communicate with the sender. The additional method of electronic 
communication is not required to be included. 
(i). If item { 10} does not apply. insert "None" after "agreement:". 
Official Comment 
* * * 
4. [Style Changes in Safe-Harbor Form and Medium Neutrality] No change in 
substance is intended by the changes in style to the form provided in paragraph (3) of the 
pre-2022 text of this section, except that in furtherance of medium neutrality references to 
"electronic record" and "electronic communication method" have been added to the form. 
However. the presentation and explanation of how to use the form has been simplified and 
clarified. 
Sec. A-154. 11 MRSA §9-1615, sub-§(1), 1(c), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended by amending subparagraph (i) to read: 
(i) The secured party receives from the holder of the subordinate security interest 
or other lien aR aa-thentiea-ted a signed demand for proceeds before distribution of 
the proceeds is completed; and 
Sec. A-155. 11 MRSA §9-1615, sub-§(1), 1(d), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(d). A secured party that is a consignor of the collateral if the secured party receives 
from the consignor aR aa-thentieated a signed demand for proceeds before distribution 
of the proceeds is completed. 
Official Comment 
* * * 
8. 
"Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201, the cognate term "signed" replaces the reference to "authenticated" 
in the pre-2022 text of this section. 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" A» to H,P, 59, L.D, 91 
Sec. A-156. 11 MRSA §9-1616, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(1). In this section: 
(a). "Explanation" means a 'i¥.t4tiag record that: 
(i) States the amount of the surplus or deficiency; 
(ii) Provides an explanation in accordance with subsection (3) of how the secured 
party calculated the surplus or deficiency; 
(iii) States, if applicable, that future debits, credits, charges including additional 
credit service charges or interest, rebates and expenses may affect the amount of 
the surplus or deficiency; and 
(iv) Provides a telephone number or mailing address from which additional 
information concerning the transaction is available; and 
(b ). "Request" means a record: 
(i) Aethentioated Signed by a debtor or consumer obligor; 
(ii) Requesting that the recipient provide an explanation; and 
(iii) Sent after disposition of the collateral under section 9-1610. 
Sec. A-157. 11 MRSA §9-1616, sub-§(2), ,(a), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended by amending subparagraph (i) to read: 
(i) Before or when the secured party accounts to the debtor and pays any surplus 
or first makes 1.vrittea demand in a record on the consumer obligor after the 
disposition for payment of the deficiency; and 
Sec. A-158. 11 MRSA §9-1616, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). 
To comply with subsection (1), paragraph (a), subparagraph (ii), a writiag an 
explanation must provide the following information in the following order: 
(a). The aggregate amount of obligations secured by the security interest under which 
the disposition was made and, if the amount reflects a rebate of unearned interest or 
credit service charge, an indication of that fact, calculated as of a specified date: 
(i) If the secured party takes or receives possession of the collateral after default, 
not more than 3 5 days before the secured party takes or receives possession; or 
(ii) If the secured party takes or receives possession of the collateral before default 
or does not take possession of the collateral, not more than 35 days before the 
disposition; 
(b). The amount of proceeds of the disposition; 
( c ). The aggregate amount of the obligations after deducting the amount of proceeds; 
( d). The amount, in the aggregate or by type, and types of expenses, including expenses 
of retaking, holding, preparing for disposition, processing and disposing of the 
collateral, and attorney's fees secured by the collateral that are known to the secured 
party and relate to the current disposition; 
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COMMITTEE AMENDMENT "Ir" to H.P. 59, L.D. 91 
( e ). The amount, in the aggregate or by type, and types of credits, including rebates of 
interest or credit service charges, to which the obligor is known to be entitled and that 
are not reflected in the amount in paragraph (a); and 
(f). The amount of the surplus or deficiency. 
Official Comment 
* * * 
2. Duty to Send Information Concerning Surplus or Deficiency. This section 
reflects the view that, in every consumer-goods transaction, the debtor or obligor is entitled 
to know the amount of a surplus or deficiency and the basis upon which the surplus or 
deficiency was calculated. Under subsection (b )( 1 ), a secured party is obligated to provide 
this information (an "explanation," defined in subsection (a)(l)) no later than the time that 
it accounts for and pays a surplus or the time of its first v,rritten attempt demand in a record 
in an attempt to collect the deficiency. The obligor need not make a request for an 
accounting in order to receive an explanation. A secured party who does not attempt to 
collect a deficiency in w,ritin:g a demand in a record or account for and pay a surplus has no 
obligation to send an explanation under subsection (b)(l) and, consequently, cannot be 
liable for noncompliance. 
A debtor or secondary obligor need not wait until the secured party commences VlFi-tten 
collection efforts in a demand in a record in order to receive an explanation of how a 
deficiency or surplus was calculated. Subsection (b )(1 )(B) obliges the secured party to send 
an explanation within 14 days after it receives a "request" (defined in subsection (a)(2)). 
* * * 
5. "Signed" Replaces "Authenticated"; Medium Neutrality. Consistent with the 
revised definition of "sign" in Section 1-201, the cognate term "signed" replaces the 
reference to "authenticated" in the pre-2022 text of this section. In furtherance of medium 
neutrality, the reference in the pre-2022 text of this section to a "written demand" has been 
replaced by a reference to a "demand in a record" and the reference to a "writing" has been 
replaced by a reference to a "record." 
Sec. A-159. 11 MRSA §9-1619, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(1). 
In this section, "transfer statement" means a record aathenticated signed by a 
secured party stating: 
(a). That the debtor has defaulted in connection with an obligation secured by specified 
collateral; 
(b ). That the secured party has exercised its post-default remedies with respect to the 
collateral; 
( c ). That, by reason of the exercise, a transferee has acquired the rights of the debtor 
in the collateral; and 
(d). The name and mailing address of the secured party, debtor and transferee. 
Official Comment 
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COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
* * * 
4. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201. the cognate term 
11signed
replaces the reference to "authenticated" 
in the pre-2022 text of this section. 
Sec. A-160. 11 MRSA §9-1620, sub-§(1), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(b). The secured party does not receive, within the time set forth in subsection (4), a 
notification of objection to the proposal autheB-tioated signed by: 
(i) A person to which the secured party was required to send a proposal under 
section 9-1621; or 
(ii) Any other person, other than the debtor, holding an interest in the collateral 
subordinate to the security interest that is the subject of the proposal; 
Sec, A-161. 11 MRSA §9-1620, sub-§(2), 1(a), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(a). The secured party consents to the acceptance in aR autheB-tioated a signed record 
or sends a proposal to the debtor; and 
Sec. A-162. 11 MRSA §9-1620, sub-§(3), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(3). For purposes of this section: 
(a). A debtor consents to an acceptance of collateral in partial satisfaction of the 
obligation it secures only if the debtor agrees to the terms of the acceptance in a record 
al¼theB-tioated signed after default; and 
(b ). 
A debtor consents to an acceptance of collateral in full satisfaction of the 
obligation it secures only if the debtor agrees to the terms of the acceptance in a record 
authenticated signed after default or the secured party: 
(i) Sends to the debtor after default a proposal that is unconditional or subject only 
to a condition that collateral not in the possession of the secured party be preserved 
or maintained; 
(ii) In the proposal, proposes to accept collateral in full satisfaction of the 
obligation it secures; and 
(iii) Does not receive a notification of objection a-utheB-tioated signed by the debtor 
within 20 days after the proposal is sent. 
Sec. A-163. 11 MRSA §9-1620, sub-§(6), 1(b), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(b ). Within any longer period to which the debtor and all secondary obligors have 
agreed in an agreement to that effect entered into and a-utheatioated signed after default. 
Official Comment 
* * * 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
3. Conditions to Effective Acceptance. Subsection (a) contains the conditions 
necessary to the effectiveness of an acceptance of collateral. Subsection ( a )(1) requires the 
debtor's consent. Under subsections (c)(l) and (c)(2), the debtor may consent by agreeing 
to the acceptance in writing after default. Subsection ( c )(2) contains an alternative method 
by which to satisfy the debtor's-consent condition in subsection (a)(l). It follows the 
proposal-and-objection model found in fefmeF pre-1998 Section 9-505: 
The debtor 
consents if the secured party sends a proposal to the debtor and does not receive an 
objection within 20 days. Under subsection (c)(l), however, that silence is not deemed to 
be consent with respect to acceptances in partial satisfaction. Thus, a secured party who 
wishes to conduct a "partial strict foreclosure" must obtain the debtor's agreement in a 
record authenticated a signed after default. In all other respects, the conditions necessary 
to an effective partial strict foreclosure are the same as those governing acceptance of 
collateral in full satisfaction. (But see subsection (g), prohibiting partial strict foreclosure 
of a security interest in consumer transactions.) 
* * * 
4. Proposals. Section 9-102 defines the term "proposal." It is necessary to send a 
"proposal" to the debtor only if the debtor does not agree to an acceptance in aft 
authenticated a signed record as described in subsection (c)(l) or (c)(2). Section 9-62l(a) 
determines whether it is necessary to send a proposal to third parties. A proposal need not 
take any particular form as long as it sets forth the terms under which the secured party is 
willing to accept collateral in satisfaction. A proposal to accept collateral should specify 
the amount ( or a means of calculating the amount, such as by including a per diem accrual 
figure) of the secured obligations to be satisfied, state the conditions (if any) under which 
the proposal may be revoked, and describe any other applicable conditions. Note, however, 
that a conditional proposal generally requires the debtor's agreement in order to take effect. 
See subsection ( c ). 
5. 
Secured Party's Agreement; No "Constructive" Strict Foreclosure. 
The 
conditions of subsection (a) relate to actual or implied consent by the debtor and any 
secondary obligor or holder of a junior security interest or lien. To ensure that the debtor 
cannot unilaterally cause an acceptance of collateral, subsection (b) provides that 
compliance with these conditions is necessary but not sufficient to cause an acceptance of 
collateral. Rather, under subsection (b ), acceptance does not occur unless, in addition, the 
secured party consents to the acceptance in afJ. authenticated a signed record or sends to the 
debtor a proposal. For this reason, a mere delay in collection or disposition of collateral 
does not constitute a "constructive" strict foreclosure. Instead, delay is a factor relating to 
whether the secured party acted in a commercially reasonable manner for purposes of 
Section 9-607 or 9-610. A debtor's voluntary surrender of collateral to a secured party and 
the secured party's acceptance of possession of the collateral does not, of itself, necessarily 
raise an implication that the secured party intends or is proposing to accept the collateral in 
satisfaction of the secured obligation under this section. 
* * * 
10. Accounts, Chattel Paper, Payment Intangibles, and Promissory Notes. If the 
collateral is accounts, chattel paper, payment intangibles, or promissory notes, then a 
secured party's acceptance of the collateral in satisfaction of secured obligations would 
constitute a sale to the secured party. That sale normally would give rise to a new security 
interest (the ownership interest) under Sections 1 201(37) 1-201(b)(35) and 9-109. In the 
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COMMITTEE AMENDMENT A 
"to H.P. 59, L.D. 91 
case of accounts and chattel paper, the new security interest would remain perfected by a 
filing that was effective to perfect the secured party's original security interest. In the case 
of payment intangibles or promissory notes, the security interest would be perfected when 
it attaches. See Section 9-3 09. However, the procedures for acceptance of collateral under 
this section satisfy all necessary formalities and a new security agreement authefttieated 
signed by the debtor would not be necessary. 
* * * 
13. "Signed" Replaces "Authenticated." Consistent with the revised definition of 
"sign" in Section 1-201, the cognate term "signed" replaces the references to 
"authenticated" in the pre-2022 text of this section. 
Sec, A-164. 11 MRSA §9-1621, sub-§(1), 1(a), as enacted by PL 1999, c. 699, 
Pt. A, §2 and affected by §4, is amended to read: 
(a). Any person from which the secured party has received, before the debtor consented 
to the acceptance, an a-\:l-th:efttieated a signed notification of a claim of an interest in the 
collateral; 
Official Comment 
* * * 
3, "Signed" Replaces "Authenticated," Consistent with the revised definition of 
"sign" in Section 1-201. the cognate term "signed" replaces the reference to "authenticated" 
in the pre-2022 text of this section. 
Sec. A-165. 11 MRSA §9-1624, as enacted by PL 1999, c. 699, Pt. A, §2 and 
affected by §4, is amended to read: 
§9-1624. Waiver 
(1). A debtor or secondary obligor may waive the right to notification of disposition 
of collateral under section 9-1611 only by an agreement to that effect entered into and 
a-\:l-th:efttieated signed after default. 
(2). A debtor may waive the right to require disposition of collateral under section 
9-1620, subsection (5) only by an agreement to that effect entered into and authen-tieated 
signed after default. 
(3). Except in a consumer-goods transaction, a debtor or secondary obligor may waive 
the right to redeem collateral under section 9-1623 only by an agreement to that effect 
entered into and amh:ea-tieated signed after default. 
Official Comment 
* * * 
3. "Signed" Replaces "Authenticated." Consistent with the revised defmition of 
"sign" in Section 1-201, the cognate term "signed" replaces the references to 
"authenticated" in the pre-2022 text of this section. 
Sec. A-166. 11 MRSA §9-1628, sub-§(1), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
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COMMITTEE AMENDMENT" A, to H.P. 59, L.D. 91 
(1). tffiles& Subject to subsection (6), 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: 
(a). 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 Article; 
and 
(b ). The secured party's failure to comply with this Article does not affect the liability 
of the person for a deficiency. 
Sec. A-167. 11 MRSA §9-1628, sub-§(2), as enacted by PL 1999, c. 699, Pt. A, 
§2 and affected by §4, is amended to read: 
(2). A Subject to subsection (6), a secured party is not liable because of its status as 
secured party: 
(a). To 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; or 
(b ). To 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. 
Sec. A-168. 11 MRSA §9-1628, sub-§(6) is enacted to read: 
(6), Subsections (1) and (2) 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: 
(a). The person is a debtor or obligor: and 
(b). The secured party knows that the information in subsection (2), paragraph (a), 
subparagraph (i), (ii) or (iii) 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. 
Official Comment 
* * * 
2. 
Exculpatory Provisions. 
8ubseetiofls (a), (b), aftd (e) eol.½ta-ffi: ~..e:elpatory 
provisiofls that should be read ifl eonjufletiofl with 8eetiofl 9 605 aad Gommel.½ts. Without 
this group of provisioas, a seeured party eould ifl0'\¼l' liability to uak.B:o:v.'fl persons and under 
oireumstffi½oes that would aot allow the secured party to proteet itself. The broadOH:ed 
defmition of the term "debtor" underseores the fleed for these pro:visio:es. With respect to 
subsection (f), see Section 9-605, Comments 2 and 3. 
* * * 
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COMMITTEE AMENDMENT ,A" to H.P. 59, L.D. 91 
PARTB 
PREFATORY NOTE to Article 12 
1. Introduction to Controllable Electronic Records. Article 12, which deals with 
controllable electronic records, and the conforming amendments to Articles 1 and 9, in 
particular. are a major part of the effort to adapt the UCC to emerging technologies as they 
might affect electronic commerce. 
Article 12 creates a legal regime that is meant to apply more broadly than to electronic 
(intangible) assets that are created using existing technologies such as distributed ledger 
technology (DLT), including blockchain technology, which records transactions in bitcoin 
and other digital assets. It also aspires to apply to electronic assets that may be created using 
technologies that have yet to be developed, or even imagined. 
The adoption of DLT has underscored two important trends in electronic commerce. 
First, people have begun to assign economic value to some electronic records that bear no 
relationship to extrinsic rights and interests. For example, without any law or legally 
enforceable agreement, people around the world have agreed to treat virtual currencies such 
as bitcoin (or, more precisely "transaction outputs" generated by the Bitcoin protocol) as a 
medium of exchange and store of value. Second, people are using the creation or transfer 
of electronic records to transfer rights to receive payment, rights to receive performance of 
other obligations (e.g .. services or delivery of goods). and other rights and interests in 
personal and real property. 
These trends will inevitably result in disputes among claimants to electronic records 
and their related rights and other benefits. Uncertainty as to the criteria for resolving these 
claims creates commercial risk. The magnitude of these risks will grow as these trends 
continue. 
As explained in more detail below, Article 12 is designed to reduce these risks by 
providing legal rules governing the transfer--both outright and for security-of interests 
in some, but not all, electronic records (controllable electronic records). These rules specify 
certain rights in a controllable electronic record that a purchaser would acquire. Many 
systems for transferring controllable electronic records are pseudonymous, so that the 
transferee of a controllable electronic record may be unable to verify the identity of the 
transferor or the source of the transferor's title. Accordingly, the Article 12 rules would 
make controllable electronic records negotiable, in the sense that a qualifying good faith 
purchaser for value could take a controllable electronic record free of third-party claims of 
a property interest in the controllable electronic record. 
Experience with DLT and other records-management systems has established some 
general functions required for electronic records to serve as an effective and reliable means 
of transferring economic value. 
The electronic record must have some "use" or benefit that one person can enjoy and 
can exclude all others from enjoying. e.g., the power to "spend" a bitcoin (or, more 
precisely, the power to include an unspent transaction output (a UTXO) in a message 
that the Bitcoin protocol will record to its blockchain). 
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COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
A person must be able to transfer to another person this exclusive power to use and the 
exclusive power to transfer the electronic record. To remain exclusive. the transfer 
must divest the transferor of the power to use the electronic record. 
A person must be able to demonstrate to others that the person has the power to use 
and transfer control of the electronic record. 
As discussed in the Comments to Section 12-105, these functions form the basis of the 
Article 12 concept of control. To receive the benefits of negotiability and take free ofthird-
party claims of a property interest in a controllable electronic record, a person must have 
control of the controllable electronic record. In addition. control serves as a method of 
perfection of a security interest in a controllable electronic record and as a condition for 
achieving a non-temporal priority of a security interest. In this context. it may be useful to 
think of control as the functional analogue of possession of tangible personal property such 
as goods. Note that the concept of control allows for certain exceptions to the exclusivity 
of powers. 
Article 12 governs certain rights (primarily property rights) of transacting parties and 
other persons that might be affected by the transactions. Article 12 does not govem assets 
other than controllable electronic records except. in coordination with Article 9. 
controllable accounts and controllable payment intangibles evidenced by controllable 
electronic records (discussed below). Like the UCC in general. Article 12 is not a regulatory 
statute. The fact that an asset is or is not a controllable electronic record under the UCC 
would not necessarily affect the application of laws regulating. for example. banking. 
securities. commodities. money transmission. and taxation. 
2. Scope of Article 12. 
Article 12 applies to controllable electronic records. Controllable electronic records are 
a subset of what often are referred to as digital assets. Article 12 is designed to work for 
both technologies that are known and those that may be developed in the future. Whether 
an asset is a controllable electronic record (and therefore within the scope of Article 12) 
depends on whether the characteristics of the asset and the protocols of any system on 
which the asset is recorded make it suitable for the application of Article 12's substantive 
rules. The nature of electronic commerce is constantly changing. For this reason, the 
technology on which an asset depends. the type of asset. and the prevailing use of the asset 
should all be irrelevant to whether the asset is a controllable electronic record. 
To determine whether Article 12 applies to a particular asset. for example, bitcoin, one 
must determine whether the asset falls within the definition of controllable electronic 
record. A controllable electronic record is a record. as the UCC defines the term. A record 
is information that is retrievable in perceivable f01m. Section 1-201(b)(31) (defining 
"record"). A controllable electronic record is a record that is stored in an electronic medium 
and that can be subjected to control. as defined in Section 12-105. Sections 1-201(b)(16A) 
(defining "electronic"): 12-102(a)(l) (defining "controllable electronic record"). An 
electronic record that cannot be subjected to control under Section 12-105 is outside the 
scope of Article 12. As already mentioned. Article 12 addresses primarily certain property 
rights in controllable electronic records. Of course. that an electronic record is not subject 
to control does not imply that it does not have commercial utility. Businesses generate and 
sell or license large quantities of electronic records that do not require the attributes of 
negotiability that Article 12 affords to controllable electronic records. 
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COMMITTEE AMENDMENT •A" to H.P. 59, L,D, 91 
The meaning of control in the DCC depends on the type of property involved. See 
Sections 7-106 (electronic documents of title): 8-106 (four different types of investment 
property, each with a different definition of "control"): 9-104 (deposit accounts): 9-105 
(chattel paper); 9-105A (electronic money). The Comments to Section 12-105 explain the 
requirements for obtaining control of a controllable electronic record. For present purposes 
of exposition, it is sufficient to think of bitcoin and other virtual currencies as prototypical 
controllable electronic records. The provisions under other law that govern control and 
other matters for other types of electronic records (some of which are modified by these 
amendments) are not addressed by Article 12. 
3. Substantive Provisions of Article 12. 
The principal function of Article 12 is to specify certain rights of a purchaser of a 
controllable electronic record. A purchaser is a person that acquires an interest in property 
by a voluntary transaction, such as a sale. Section l-201(b)(29) (defining "purchase"), (30) 
(defining "purchaser"). Purchasers include both buyers and secured parties. Law other than 
Article 12 would determine whether a person acquires any rights in a controllable electronic 
record and so would be eligible to be a purchaser. Section 12-104(c). 
Section 12-104 adopts the "shelter" principle, under which a purchaser of a controllable 
electronic record acquires whatever rights the transferor had or had power to transfer. 
Section 12-104(d). A similar rule appears in Articles 2, 3, 7, and 8. See Sections 2-403(1) 
(goods): 3-203(b) (negotiable instruments): 7-504(a) (documents of title): 8-302(a) 
(certificated and uncertificated securities). 
The ability to take a controllable electronic record free of third-party property claims 
appears to be necessary for a controllable electronic record to have commercial utility. As 
is the case with Articles 2, 3, 7, and 9, Article 12 would facilitate commerce by affording 
to certain good-faith purchasers for value (buyers as well as secured parties) greater rights 
than their transferors had or had power to transfer. (Article 8 also provides for certain 
purchasers for value to take greater rights than their transferors had, but does not contain 
an explicit good-faith requirement. See Section 8-303.) Article 12 refers to these purchasers 
as qualifying purchasers. Qualifying purchasers are purchasers that obtain control of a 
controllable electronic record for value, in good faith, and without notice of any claim of a 
property interest in the controllable electronic record. Section 12-102(a)(2). Like a holder 
in due course of a negotiable instrument, a qualifying purchaser of a controllable electronic 
record takes the controllable electronic record free of property claims. Section 12-104(e). 
Consider an example in which B contracts to buy bitcoin from S. 
Law other than Article 12 generally would determine whether S is the owner of the 
bitcoin. 
Law other than Article 12 would resolve issues concerning the formation of the contract 
of sale between B and S and the obligations of the parties under the contract. 
Except to the extent provided by Article 12, law other than Article 12 would determine 
what steps are necessary for B to acquire rights in the bitcoin. 
By acquiring rights in the bitcoin by sale, B would become a purchaser of the bitcoin 
within the meaning of UCC Article 1. 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
Article 12 provides that ifB becomes a purchaser. B will acquire whatever rights Shad 
or had power to transfer. As a general matter, law other than Article 12 would define these 
rights. B would acquire these rights regardless of whether B obtained control of the bitcoin. 
In this example. law other than Article 12 includes UCC Article 9, which determines 
the steps necessary for a security interest to attach to a controllable electronic record. More 
generally, Article 9 governs any conflict between Article 9 and Article 12. Section 12-
103(a). 
Now assume that O is the owner of the bitcoin and that S is a hacker, who acquired 
control of the bitcoin illegally from 0. 
Just as a buyer of goods can obtain possession from a seller that has no rights in the 
goods, B can obtain control of the bitcoin, even if S "stole" it from 0. 
If B obtains control of the bitcoin for value, in good faith, and without notice of any 
claim of a property interest. B would be a qualifying purchaser. 
Even ifB would not have acquired any rights in the bitcoin under non-Article 12 law 
{for example. because S, a "thief," had no rights to give), as an Article 12 qualifying 
purchaser, B would acquire the bitcoin free of all claims of a property interest in the bitcoin. 
S's control of the bitcoin gave S the power to transfer rights to a qualifying purchaser. such 
as B. Even if O could locate B. B would defeat O's claim of ownership and own the bitcoin 
:free and clear. (The same result would obtain if B bought a negotiable instrument from a 
thief under circumstances where B became a holder in due course. This distinguishes 
"negotiable" property from property such as goods, as to which a buyer from a thief 
normally obtains no rights.) 
4. Rights or Property Linked to a Controllable Electronic Record. 
a. General Rules, 
Recall that a controllable electronic record is a record. i.e., information. Some records 
have what one might call "inherent value" solely because the market treats them as having 
value. Bitcoin would be an example of such a record. Bitcoin can be exchanged (sold) for 
cash or other valuable assets. Or. the owner ofbitcoin can hold the bitcoin as an investment. 
The value of many records, however. is as evidence of the rights of the parties to a 
transaction or of the rights of a party in other property. In these situations. it is essential to 
differentiate between the record and the rights that are evidenced by the record. 
Suppose, for example, that S and B enter into a written contract for the sale of 100 air 
purifiers. The contract provides that at a specified time in the future, S is to deliver the 
goods and B is to pay for them. B may sell {assign) to P the right to receive delivery of the 
goods from S. P has acquired a valuable asset, i.e., the right to receive delivery. 
In contrast, if B sells to P only the paper {record) on which the contract is written. P 
might or might not acquire the right to delivery of the goods. depending on whether 
applicable law treats the sale of the paper as an assignment of the right to delivery (as can 
be the case with a negotiable document of title under UCC Article 7). P would become the 
owner of the paper in any event. but the paper itself may be of little value. 
If the contract for the sale of air purifiers were electronic rather than written. the same 
analysis would apply. The right evidenced by the electronic record (i.e .. B's right to receive 
delivery from S) would be the valuable asset. not the record itself. 
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COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
Suppose that the contract of sale between B and S is evidenced by a controllable 
electronic record that B sells to P. Under Section 12-104(d), P would acquire all rights in 
the controllable electronic record that the transferor (B) had or had power to transfer. If P 
obtains control of the controllable electronic record for value. in good faith, and without 
notice of any claim of a property right in the controllable electronic record. P will become 
a qualifying purchaser and, as such, would acquire its rights in the controllable electronic 
record free of any claim of a property right under Section 12-104. 
But the controllable electronic record itself may or may not be a valuable asset. In this 
example. unlike bitcoin, the record would have value to P only if by virtue of acquiring 
rights in the controllable electronic record. P would also acquire the right to receive 
delivery of the goods from S. 
Except to the extent provided by Article 12. that Article leaves to other law the question 
whether P's acquisition of rights in the controllable electronic record gives P the right to 
receive delivery of the goods. Section 12-104(f). We would typically expect that under 
other law P would not acquire the right to receive the goods merely by acquiring rights in 
the controllable electronic record. any more than P would have acquired the right to receive 
the goods if the record were in paper form. the paper were physically delivered to P. and P 
acquired rights in the paper. 
Suppose. however. that other law does provide that, by acquiring the controllable 
electronic record. P would acquire the right to receive delivery of the goods from S. 
Suppose also that P becomes a qualifying purchaser of the controllable electronic record. 
As we have seen. as a qualifying purchaser. P would take its rights in the controllable 
electronic record free of property claims. But even though under non-Article 12 law P 
would (as posited) acquire the right to receive delivery of the goods. P would not acquire 
that right free of property claims unless non-Article 12 law also were to provide otherwise. 
Section 12-104(t). 
b. Exceptions: Controllable Accounts and Controllable Payment Intangibles. 
As a general rule. Article 12 applies to records and not to rights evidenced by records 
(or to rights that records are purported to evidence). And. in general, law other than Article 
would govern what steps must be taken or conditions must be satisfied for a person to 
acquire an interest in a controllable electronic record and the rights. if any. that the person 
acquires in other property (including a right to payment or performance of an obligation) 
as a result of acquiring an interest in the record. This "other" law includes UCC Article 9. 
Article 12 provides an important exception to this general rule. The exception concerns 
rights to payment (specifically, accounts and payment intangibles) that are evidenced by a 
controllable electronic record and as to which the obliger (account debtor) undertakes to 
pay the person that has control of the controllable electronic record. These rights to 
payment are referred to as "controllable accounts" and "controllable payment intangibles." 
See Section 9-102(a)(27A) (defining "controllable account") and (27B) (defining 
"controllable payment intangible"). A qualifying pW'chaser of a controllable account or 
controllable payment intangible takes free of property claims and is protected from certain 
actions. See Section 12-104(a) through (e), (g), and (h). and Comments 6 through 10. As 
to the feasibility and rationale for this exception for controllable accounts and controllable 
payment intangibles. see Section 12-104. Comments 9 and 10. 
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The 2022 Article 9 Revisions amend several sections of Article 9 to deal with various 
aspects of security interests in controllable accounts, controllable electronic records, and 
controllable payment intangibles. See Sections 9-101, Comment 4.a.: 9-102, Comment 
5.d.1. 
5. Governing Law for Article 12. 
Section 12-107 provides rules on governing law. The general rule under subsection (a) 
is that the local law of a "controllable electronic record's jurisdiction" governs matters 
covered by Article 12. The controllable electronic record's jurisdiction is determined by an 
express provision in the record or in the system in which the record is recorded. If not so 
designated, it is determined based on the designation of the law governing the record or the 
system generally. Absent any such designations. at the bottom of this "waterfall" of 
alternatives, the governing law will be that of the District of Columbia. Subsection (b) 
provides an exception for the rights and duties of account debtors under Section 12-106 if 
an agreement between the account debtor and an assignor of the record provides for the 
law of another jurisdiction to govern those rights and duties. 
The law of the controllable electronic record's jurisdiction also governs perfection and 
priority of security interests in controllable electronic records, controllable accounts. and 
controllable payment intangibles. Perfection by filing, however. is governed by the law of 
the location of the debtor. See Section 9-306B. 
Maine Comment: 
The UCC amendments as adopted by Maine do not include provisions related to 
electronic money. All references to electronic money in the official comments therefore 
may be disregarded. 
Sec. B-1. 11 MRSA Art. 12 is enacted to read: 
ARTICLE 12 
CONTROLLABLE ELECTRONIC RECORDS 
§12-101. Short title 
This Article may be cited as "the Uniform Commercial Code - Controllable Electronic 
Records." 
Official Comment 
Subsection headings. Subsection headings are not a part of the official text itself and 
have not been approved by the sponsors. See Section 1-107. Comment 1. 
§12-102. Definitions 
(1}. In this Article. unless the context otherwise indicates, the following terms have 
the following meanings. 
(a). "Controllable electronic record" means a record stored in an electronic medium 
that can be subjected to control under section 12-105. "Controllable electronic record" 
does not include a controllable account, a controllable payment intangible, a deposit 
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account, an electronic copy of a record evidencing chattel paper, an electronic 
document of title, investment property, a transferable record or an electronic record 
that is a medium of exchange currently authorized or adopted by a domestic or foreign 
government and is not a medium of exchange that was recorded or transferable in a 
system that existed and operated for a medium of exchange before the medium of 
exchange was authorized or adopted by the government. 
(b). "Qualifying purchaser" means a purchaser of a controllable electronic record or 
an interest in a controllable electronic record that obtains control of the controllable 
electronic record for value. in good faith, and without notice of a claim of a property 
right in the controllable electronic record. 
(c). "Transferable record" has the same meaning as in: 
(i) 15 United States Code, Section 7021(a)(l); or 
(ii) Title 10, section 9416. subsection 1. 
(d). "Value" has the same meaning provided in section 3-1303, subsection (1), as if 
references in that subsection to an "instrument" were references to a controllable 
account, controllable electronic record or controllable payment intangible. 
(2). 
The definitions in Article 9-A of "account debtor," "controllable account," 
"controllable payment intangible," "chattel paper," "deposit account" and "investment 
property" apply to this Article. 
(3). 
Article 1-A contains general definitions and principles of construction and 
interpretation applicable throughout this Article. 
Official Comment 
1. Source, Subsection (a)(2), defining "qualifying purchaser," derives from Section 3-
302(a)(2), which defines "holder in due course" of a negotiable instrument. 
2. "Controllable electronic record." To be a "controllable electronic record" (CER) 
within the scope of Article 12, an electronic record must be susceptible of control under 
Section 12-105. Unlike "transferable records" under the Electronic Signatures in Global 
and National Commerce Act (E-SIGN) or a "transferable record" under the Uniform 
Electronic Transactions Act (UETA), a record can be a CER under Article 12 in the absence 
of an agreement to that effect. 
This definition uses the term "record," defined in Section 1-201 to include "information 
that is stored in an electronic or other medium and is retrievable in perceivable form." The 
term "electronic" also is defined in Section 1-201. These broad definitions of "record" and 
"electronic" necessarily produce an expansive meaning of "electronic record." An 
electronic record would include, for example, music stored on compact disks, email 
messages, digital photos, personal and other information stored on a social media platform, 
and all types of databases stored on in an electronic medium. But most of these electronic 
records typically would not fall within the definition of a CER in subsection (a)(l), which 
includes only those electronic records "that can be subjected to control under Section 12-
OS." See generally Prefatory Note 2. 
Consider, for example, a so-called "page" on a social media platform. Generalizations 
about social media/social networking platforms are difficult and these systems no doubt 
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will continue to evolve. But these platforms typically involve licensing arrangements with 
users that do not permit the users ( or anyone) to acquire the exclusive powers contemplated 
by the definition of "control" in Section 12-105. Consequently. these electronic records are 
not controllable electronic records as defined. 
The provisions of Article 12 also do not apply to certain specified types of electronic 
records. and the definition has been limited accordingly. For example. the definition does 
not include a "transferable record" under E-SIGN or UETA. It also does not include 
"investment property." as defined in Section 9-102(a)( 49). For this reason. the rights of an 
entitlement holder in a controllable electronic record that is a financial asset with respect 
to which the entitlement holder has a security entitlement are excluded from the definition 
(although the entitlement holder's securities intermediary may hold directly an interest in a 
controllable electronic record that it has credited to a securities account). See Sections 8-
102(a)(9) (defming "financial asset"), (a)(l 4) (defming "securities intermediary"). (a)(l 7) 
(defming "security entitlement"), and Comment 9; 9-102(a)(49) (defining "investment 
property"). See also Section 8-103(h). clarifying that a controllable electronic record is not 
a "fmancial asset" except pursuant to Section 8-102(a)(9){iii). 
A controllable electronic record is not itself a "security," defmed in part in Section 8-
102(a)(15) as "an obligation of an issuer or a share. participation. or other interest in an 
issuer or in property or an enterprise of an issuer." It also is not "a share or similar equity 
interest," an "investment company security." or "an interest in a partnership or limited 
liability company." See Section 8-103(a). (b), and (c). For a discussion of the roles that 
controllable electronic records may play in transactions involving uncertificated securities. 
see Section 8-102. Comment 18. 
3. "Qualifying purchaser." The conditions for becoming a qualifying purchaser were 
drawn from Article 3. More specifically, the conditions for becoming a qualifying 
purchaser were drawn from Section 3-302(a)(2). which defines "holder in due course" of a 
negotiable instrument. Among these conditions is that a person take the instrument "for 
value." See subsection (a)(4) (defining "value") and Comment 5. To meet the requirements 
for a qualifying purchaser under subsection (a)(2) there must be a time at which all of the 
requirements are satisfied. For example, if a purchaser obtains notice of a claim of a 
property right before giving value or satisfying the requirements for control. the purchaser 
cannot be a qualifying purchaser. 
Under Section 12-104(a), not only a purchaser of a controllable electronic record but 
also a purchaser of a controllable account or controllable payment intangible may be a 
qualifying purchaser. Moreover. a purchaser of a controllable account or a controllable 
payment intangible may be a qualifying purchaser even if the purchaser does not also 
purchase the controllable electronic record that evidences the account or payment 
intangible. For example, a secured party having a security interest in all of a debtor's 
accounts and payment intangibles would be a purchaser of those rights to payment. which 
would include the debtor's controllable accounts and payment intangibles. If the secured 
party were to obtain control of the debtor's controllable account or payment intangible. it 
would become a qualifying purchaser if it also met the other conditions for that status. 
However, to obtain control of the controllable account or controllable payment intangible. 
a requirement for qualifying purchaser status. the purchaser must obtain control of the 
controllable electronic record evidencing the controllable account or controllable payment 
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intangible. Section 12-104(b): see also Section 9-107A. A person need not be a purchaser, 
however, to obtain control of a controllable electronic record. 
4. "Transferable record." This definition facilitates the exclusion of transferable 
records from the definition of controllable electronic record. 
5. "Value." This definition adopts the concept of value in Section 3-303, which is 
narrower than the generally applicable concept in Section 1-204. Comment 10 to Section 
12-104 explains the difference between the two concepts. 
§12-103. Relation to Article 9-A and consumer laws 
(1), If there is conflict between this Article and Article 9-A. Article 9-A governs. 
(2). A transaction subject to this Article is subject to any applicable rule of law that 
establishes a different rule for consumers, including Title 9-A. Title 30-A. chapter 183, 
subchapter 6 and Title 32. chapter 109-A. 
Official Comment 
Source. Subsection (a) follows Section 3-102(b). Notwithstanding subsection (a). as is 
the case with respect to Article 3. Article 9 explicitly defers to Article 12 in some instances. 
See. e.g .. Section 9-331. Subsection (b) is copied from Section 9-20l(b). To the extent that 
Article 9 contains provisions described in subsection (b). subsections (a) and (b) are not 
mutually exclusive. 
§12-104. 
Rights in controllable account, controllable electronic record and 
controllable payment intangible 
(1), 
This section applies to the acquisition and purchase of rights in a controllable 
account or controllable payment intangible, including the rights and benefits under 
subsections (3), (4). (5), (6) and (7) of a purchaser and qualifying purchaser, in the same 
manner as this section applies to a controllable electronic record. 
(2). 
To determine whether a purchaser of a controllable account or a controllable 
payment intangible is a qualifying purchaser, the purchaser obtains control of the account 
or payment intangible if it obtains control of the controllable electronic record that 
evidences the account or payment intangible. 
(3). Except as provided in this section. law other than this Article determines whether 
a person acquires a right in a controllable electronic record and the right the person acquires. 
( 4). 
A purchaser of a controllable electronic record acquires all rights in the 
controllable electronic record that the transferor had or had power to transfer. except that a 
purchaser of a limited interest in a controllable electronic record acquires rights only to the 
extent of the interest purchased. 
(5), A qualifying purchaser acquires its rights in a controllable electronic record free 
of a claim of a property right in the controllable electronic record. 
(6). Except as provided in subsections (l) and (5) for a controllable account and a 
controllable payment intangible or law other than this Article, a qualifying purchaser takes 
a right to payment. right to performance or other interest in property evidenced by the 
controllable electronic record subject to a claim of a property right in the right to payment. 
right to performance or other interest in property. 
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(7). 
An action may not be asserted against a qualifying purchaser based on both a 
purchase by the qualifying purchaser of a controllable electronic record and a claim of a 
property right in another controllable electronic record. whether the action is framed in 
conversion, replevin, constructive trust. equitable lien or other theory. 
(8), 
Filing of a financing statement under Article 9-A is not notice of a claim of a 
property right in a controllable electronic record. 
Official Comment 
1. Source. Subsection (d) derives from Section 2-403(1) (concerning the rights of a 
purchaser). 
Subsection (e) derives from Sections 3-306 (concerning the rights of a holder in due 
course of an instrument) and 8-303 (concerning rights of a protected purchaser of a 
security). 
Subsection (g) derives from Section 8-502 (protecting entitlement holders). 
Subsection (h) derives from Section 9-33 l(c) (filing under Article 9 does not provide 
notice for purposes of protections of purchasers under other articles). 
2. Applicability of section to controllable accounts and controllable payment 
intangibles. Under subsection (a). the provisions of this section apply to controllable 
accounts and controllable payment intangibles in the same manner that they apply to 
controllable electronic records. For example, a qualifying purchaser of a controllable 
account that obtains control of the controllable electronic record that evidences the account 
(and who thereby obtains control of the account under subsection (b) and Section 9-107A) 
would take the account free of conflicting claims of a property right in the account under 
subsection (e). Under subsection (b), for purposes of determining whether a purchaser of a 
controllable account or controllable payment intangible obtains control, the purchaser 
obtains control by obtaining control of the controllable electronic record that evidences the 
account or payment intangible. Unless otherwise specified or the context otherwise 
requires, references to a controllable electronic record in the official comments in this 
Article also refer to a controllable account or controllable payment intangible. 
3. Applicability of other law. As a general matter, subsection (c) leaves to other law 
the resolution of questions concerning the transfer of rights in a controllable electronic 
record, such as the acts that must be taken to effectuate a transfer of rights and the scope of 
the rights that a transferee acquires. Subsections (d) through (h) contain important 
exceptions to subsection (c). 
Example 1: A creates a controllable electronic record. Although the system in 
which the electronic record is recorded may determine how the electronic record 
can be used and control may be transferred, other law would determine what rights 
A has in the controllable electronic record. If, for example. A created the electronic 
record in the scope of its employment, A's rights would be subject to the terms of 
A's employment contract. 
A and B agree to the sale of the controllable electronic record to B. Other law would 
determine what steps need to be taken for B to acquire rights in the controllable 
electronic record. Once B acquires those rights under other law. B would be a 
purchaser (as defined in Section 1-201), whose rights also would be determined by 
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subsection (d) (i.e .• the shelter principle, discussed below in Comment 4). 
However, even if B did not acquire rights under other law. if B met the 
requirements for a qualifying purchaser. its rights would be determined by 
subsections (e) and (g). See Comments 7 and 8, below. 
The "law other than this article" that may apply to the transfer ofrights in a controllable 
electronic record under subsection (c) includes UCC Article 9. Section 9-203 would apply. 
for example. to determine whether a purported secured party acquired an enforceable 
security interest in a controllable electronic record. 
4. Purchaser and transferor under subsection (d): shelter principle and resulting 
controllable electronic records. Subsection (d) sets forth the familiar "shelter" principle, 
under which a purchaser of a controllable electronic record acquires whatever rights the 
transferor had or had power to transfer. However. in some cases the controllable electronic 
record that is acquired by the purchaser will not be the "same" controllable electronic record 
that was transferred by the transferor. Such a transfer might involve the elimination of a 
"transferred" controllable electronic record and the resulting and corresponding derivative 
creation and acquisition of a new controllable electronic record. An example of such a 
resulting controllable electronic record is the unspent transaction output (UTXO) generated 
by a transaction in bitcoin. The Bitcoin protocol operates by allowing users to "spend" their 
UTXOs to create one or more new UTXOs for the same amount of bitcoin, so each transfer 
produces new UTXOs controlled by the transferees (one of which may be the transferor-
spender--of the bitcoin). Subsection (d) should be construed broadly to encompass such 
transfers and resulting derivative controllable electronic records acquired by a purchaser. 
Because subsection (d) addresses the rights of a purchaser in the "purchased" asset and not 
the "transferred" asset, this construction is wholly consistent with the statutory text. 
Notwithstanding the broad subsection (d) shelter principle. which provides that a 
purchaser acquires "all rights" of the transferor. those rights are subject to the reach of 
Section 1-304. Under that section a contract or duty under the UCC imposes an overarching 
"obligation of good faith in its performance and enforcement." Section 1-304. In this 
context. "performance and enforcement" include the exercise of rights under the UCC. such 
as the rights conferred on a purchaser by the subsection (d) shelter principle. See Section 
1-304. Comment 2. For example. consider a qualifying purchaser of a controllable 
electronic record. controllable account. or controllable payment intangible who then sells 
that asset to a person who is not a qualifying purchaser. If the second purchaser had 
previously engaged in fraudulent or illegal activity in connection with the purchased asset 
or an asset to which the purchased asset is attributable, the purchaser's exercise of rights 
under subsection (d) as to the purchased asset may be in breach of its obligation of good 
faith. Section 3-203(b) states thls result directly with respect to a transferee of a negotiable 
instrument if the transferee previously engaged in fraud or illegality with respect to the 
same instrument. Section 3-203(b). The same result would apply under subsection (d). 
Subsection (d) relies on the application of the general obligation of good faith under Section 
1-304 to reach the appropriate result. However. unlike negotiable instruments. many 
controllable electronic records are fungible. For this reason, in some cases it might not be 
possible to establish that an acquired controllable electronic record has a sufficient nexus 
with a transferee's earlier fraud or illegality. 
5. Nonpurchaser having control. Under Section 12-105, a person may have control 
of a controllable electronic record even if the person has no property interest in the 
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controllable electronic record. A person that has control of, but no properly interest in, a 
controllable electronic record would not be a purchaser of the controllable electronic record 
and so would not be eligible to be a qualifying purchaser under this section. 
Example 2: Debtor granted to Secured Party a security interest in all Debtor's 
existing and after-acquired accounts, chattel paper, and payment intangibles. 
Secured Par1y perfected its security interest in a specific controllable account by 
obtaining control of the controllable electronic record that evidences the 
controllable account. See Section 9-107 A. 
Because Debtor's security agreement does not cover controllable electronic 
records, Secured Party would have no interest in the controllable electronic record. 
Accordingly, Secured Party would not be a purchaser of the controllable electronic 
record. However, as a purchaser of the controllable accounts and controllable 
payment intangibles, Secured Party could benefit from the take-free rule in 
subsection (e) (discussed in Comment 7). 
6. Distinction between controllable electronic record and controllable account or 
controllable payment intangible evidenced by the controllable electronic record. Even 
though a controllable electronic record evidences a controllable account or controllable 
payment intangible. the controllable electronic record is distinct from the account or 
payment intangible that it evidences. The account or payment intangible is connected with 
(or "tethered" to) the electronic record by virtue of the relevant account debtor's obligation 
to pay the person in control of the controllable electronic record. Moreover. control of the 
controllable account or payment intangible is achieved only by obtaining control of the 
controllable electronic record that evidences the account or payment intangible. Example 
explains that a purchaser may obtain a property interest in the controllable account or 
controllable payment intangible even if it does not acquire any interest in the controllable 
electronic record that evidences the account or payment intangible. (On the other hand, 
merely obtaining control of a controllable electronic record does not result in the 
acquisition of an interest in the record.) This approach is intended to avoid a trap for the 
unwary purchaser that obtains an interest in the account or payment intangible (which is 
the asset that has stand-alone value) but might fail to acquire an interest in the related 
controllable electronic record. However, good practice may encourage a purchaser to 
acquire an interest in the controllable electronic record as well. which would eliminate any 
potential confusion. 
7. The take-free rule, Subsection (e) makes controllable electronic records and, under 
subsection (a), controllable accounts and controllable payment intangibles, highly 
negotiable. Subsection (e) derives from Section 3-306, under which a holder in due course 
takes a negotiable instrument free of a claim of a property right in the instrument. A 
qualifying purchaser of a controllable electronic record, controllable account, or 
controllable payment intangible takes free of all claims of a property right in the purchased 
controllable electronic record, account, or payment intangible. 
Example 3: 
Hacker, a thief, "steals" and obtains control of a controllable 
electronic record. Hacker then sells the controllable electronic record to Buyer, 
who obtains control and otherwise meets the requirements for a qualifying 
purchaser (by obtaining control and purchasing for value, in good faith, and 
without notice of a claim of a property right). 
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As a general matter, law other than Article 12 would determine whether any 
particular transaction creates a property interest in a controllable electronic record. 
Section 12-104(c). However, even if under other applicable law Hacker has no 
rights in. and no right to transfer, the "stolen" controllable electronic record, 
subsection (e) enables Buyer, a qualifying purchaser, to take the controllable 
electronic record ( or any purchased controllable account or controllable payment 
intangible evidenced by the controllable electronic record) free of claims of a 
property right-including that of the rightful owner. 
As Example 3 illustrates, a person in control of a controllable electronic record, such 
as Hacker, has the power. even if not the right. to transfer rights in the record to a qualifying 
purchaser. Of course, if the qualifying purchaser is a secured party whose security interest 
secures an obligation, the purchaser would take free of the conflicting property right only 
to the extent of the obligation secured. See Section 12-104(d) (purchaser of a limited 
interest); ct Section 3-302(e). Moreover, even if a secured party were not a qualifying 
purchaser of a controllable electronic record, controllable account. or controllable payment 
intangible, its security interest in the collateral over which it obtained control would, 
however, have priority over a conflicting security interest that was perfected by a method 
other than control. Section 9-326A. 
8.Subsection (g)-the "no-action" rule. Subsection (g) applies in the situation 
(explained in Comment 4) in which the "resulting" controllable electronic record (or 
controllable account or controllable payment intangible) purchased by a qualifying 
purchaser is not the "same" record, account, or payment intangible that was transferred. In 
such a situation, a person claiming a property right in the transferred asset may assert a 
claim against a purchaser of the "resulting" asset even though the claimant is not asserting 
a claim of a property right in the purchased asset. If the claim is based on both the 
purchaser's purchase of the acquired asset and the claimant's claim of a property right in 
the transferred asset. subsection (g) protects the qualifying purchaser from liability to the 
claimant based on any theory. The qualifying purchaser's protection from the assertion of 
such a claim does not depend on any proof that the purchased asset is somehow "traceable" 
to the transferred asset. 
If instead, such a claimant were to assert a claim based on a property right in the 
purchased asset, then the qualifying purchaser would take free of that claim under 
subsection (e). Subsection (e) applies whether or not the acquired asset is the same asset 
that was transferred. 
9. "Tethered" assets. Certain controllable electronic records may carry with them 
rights to other assets. for example. goods or rights to payment. By its terms, the take-free 
rule in subsection (e) applies to controllable electronic records (and, under subsection (a), 
controllable accounts and controllable payment intangibles evidenced by a controllable 
electronic record). One might argue that the inclusion of controllable accounts and 
controllable payment intangibles in the scope of subsection (e) is unnecessary. By taking a 
controllable electronic record free of property claims. the argument would be that a person 
takes not only the controllable electronic record itself but also all rights that are "carried" 
in the controllable electronic record free and clear. 
Subsection (j) defeats that argument. It limits the application of the take-free rule in 
subsection (e) to controllable electronic records and, through the application of subsection 
(a), controllable accounts and controllable payment intangibles evidenced by a controllable 
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electronic record. Under subsection (:f), except as provided in subsections (a) and (e), a 
qualifying purchaser takes rights to payment (other than controllable accounts and 
controllable payment intangibles), rights to performance, and interests in property that are 
evidenced by a controllable electronic record subject to third-party property claims, unless 
law other than Article 12 provides to the contrary. The reference in subsection (f) to "law 
other than this article" contemplates that another article of the UCC might provide a 
contrary rule for some types of property that might be tethered to a controllable electronic 
record. 
The treatment of controllable accounts and controllable payment intangibles in Articles 
and 12 is feasible because Article 9 already provides the legal framework for assignments 
of accounts and payment intangibles. In addition, because accounts and payment 
intangibles are rights to payment of monetary obligations, tethering of an account or 
payment intangible to a controllable electronic record is straightforward. The account 
debtor is obligated to pay the person that has control of the relevant controllable electronic 
record (subject to the qualifications imposed by Section 12-106). 
10. Creating the functional equivalent of a negotiable instrument. Two defining 
characteristics of an Article 3 negotiable instrument are that a holder in due course (i) takes 
free of claims of a property or possessory right to the instrument (Section 3-306) and (ii) 
takes free of most defenses and claims in recoupment (Section 3-305). Article 3 applies 
only to written instruments. Article 12 and the revisions to Article 9 provide a method for 
reaching a similar result with respect to controllable accounts and controllable payment 
intangibles. 
As regards the first characteristic, a qualifying purchaser could acquire the controllable 
account or controllable payment intangible free of any claim of a property interest. As 
regards the second characteristic, the definition of "qualifying purchaser" omits some of 
the conditions for becoming a holder in due course. For example, to qualify as a holder in 
due course, a holder must take "without notice that any party has a defense or claim in 
recoupment .... " Section 3-302(a)(2)(vi). A controllable electronic record is information; 
there are no parties to a controllable electronic record. However, there are parties to a 
controllable account or controllable payment intangible. Accordingly. Sections 9-404 and 
9-403 would determine whether a purchaser of the controllable account or controllable 
payment intangible takes free of a defense. Section 9-403 ordinarily would give effect to 
the account debtor's agreement not to assert claims or defenses. 
Section 9-403 adopts the meaning of value in Section 3-303, as does Article 12. The 
concept of value in Section 3-303 is narrower than the concept in Section 1-204. which 
applies generally to UCC transactions. Under Section 1-204. a person gives value for rights 
if the person acquires them in return for a promise. However, under Section 3-303, if a 
negotiable instrument is issued or transferred for a promise of performance, the instrument 
is transferred for value only to the extent that the promise has been perf01med. 
§12-105. Control of controllable electronic record 
(1). A person has control of a controllable electronic record if the electronic record. a 
record attached to or logically associated with the electronic record or a system in which 
the electronic record is recorded: 
(a). Gives the person: 
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(i) Power to avail itself of substantially all the benefit from the electronic record: 
and 
(ii) Exclusive power. subject to subsection (2). to: 
(A) Prevent others from availing themselves of substantially all the benefit 
from the electronic record: and 
(B) Transfer control of the electronic record to another person or cause another 
person to obtain control of another controllable electronic record as a result of 
the transfer of the electronic record: and 
(b). Enables the person readily to identify itself in any way, including by name. 
identifying number. cryptographic key. office or account number, as having the powers 
specified in paragraph (a). 
(2). Subject to subsection (3). a power is exclusive under subsection (1), paragraph 
(a). subparagraph (ii), divisions (A) and (B) even if: 
(a). The controllable electronic record. a record attached to or logically associated with 
the electronic record or a system in which the electronic record is recorded limits the 
use of the electronic record or has a protocol that is programmed to cause a change, 
including a transfer or loss of control or a modification of benefits afforded by the 
electronic record: or 
(b). The power is shared with another person. 
(3). 
A power of a person is not shared with another person under subsection (2), 
paragraph (b) and the person's power is not exclusive if: 
(a). The person can exercise the power only if the power also is exercised by the other 
person: and 
(b). 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 controllable electronic record 
or a controllable account or controllable payment intangible evidenced by the 
controllable electronic record. 
( 4). If a person has the powers specified in subsection ( 1 ), paragraph (a), subparagraph 
(ii), divisions (A) and (B), the powers are presumed to be exclusive. 
(5). A person has control of a controllable electronic record if another person, other 
than the transferor to the person of an interest in the controllable electronic record or a 
controllable account or controllable payment intangible evidenced by the controllable 
electronic record: 
(a). Has control of the electronic record and acknowledges that it has control on behalf 
of the person; or 
(b). Obtains control of the electronic record after having acknowledged that it will 
obtain control of the electronic record on behalf of the person. 
(6). A person that has control under this section is not required to acknowledge that it 
has control on behalf of another person. 
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(7), If a person acknowledges that it has or will obtain control on behalf of another 
person. unless the person otherwise agrees or law other than this Article or Article 9-A 
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. 
Official Comment 
1. Why "control" matters, Control serves two major functions in Article 12. An 
electronic record is a "controllable electronic record" and is subject to the provisions of this 
Article only if it can be subjected to control under this section. See Section 12-102(a)(l) 
(defining "controllable electronic record"). And only a person having control of a 
controllable electronic record is eligible to become a qualifying purchaser and so to take 
free of claims of a property interest in the controllable electronic record, or any controllable 
account or controllable payment intangible evidenced by the controllable electronic record. 
and to be protected by the "no-action" rule. See Section 12-104(e) and (g). 
Article 9 provides that obtaining control of a controllable electronic record is one 
method by which to perfect a security interest in the controllable electronic record or in any 
controllable account or controllable payment intangible evidenced by the controllable 
electronic record. See Sections 9-107A; 9-314. Moreover. a security interest perfected by 
control has priority over a conflicting security interest that was perfected by a method other 
than control and "control ... pursuant to the debtor's agreement" may substitute for an 
authenticated a signed security agreement as an element of attachment. See Sections 9-
326A: 9-203(b)(3)(D). 
2. Powers and sources of powers; inability to exercise a power. This section 
conditions control on a person's having the three powers specified in subsection (a)(l). A 
person would have the powers described in that subsection if the controllable electronic 
record, a record attached to or logically associated with the controllable electronic record, 
or any system in which it is recorded gives the person those powers. This description of the 
source of the relevant powers should be construed broadly and functionally. For example, 
a person would have a power even if the characteristics of the particular purchaser disable 
the person from exercising the power. This would be the case, for example, when the 
purchaser holds the private key required to access the benefit of the controllable electronic 
record but lacks the hardware required to use it. In addition, a system in which the person 
in control is identified is a permissible source of a power even if it is related to but not 
precisely the "same" system in which the controllable electronic record is recorded. 
Moreover. this broad and functional construction is particularly important for references to 
"a record attached to or logically associated with the electronic record, or a system in which 
the electronic record is recorded," as used in Section 12-105(a) and (b) (and elsewhere). 
For example. overly literal or technical interpretations of the terminology "attached to" or 
"logically associated" are inappropriate. The statutory language must be adapted and 
applied in a functional manner to technology. systems, and infrastructure that may be 
developed and employed in the future. The goal is to embrace records and systems that are 
connected to a particular electronic record in such a manner that the information contained 
in or the functions performed by those "attached" or "associated" records are appropriately 
and reasonably attributable to and identifiable as connected with the electronic record itself. 
See also, e.g .. Sections 7-106, 9-105. 9-105A. 9-306A. 9-605, 9-628. and 12-107. 
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3. "Benefit." Subsection (a)(l)(A) and (a)(l )(B)(i) condition control of a controllable 
electronic record on a person's relationship to the benefit of the controllable electronic 
record. 
As used in this section, the "benefit" of a controllable electronic record refers to the 
rights that are afforded by the controllable electronic record and the uses to which the 
controllable electronic record can be put. These, in tum, depend on the characteristics of 
the controllable electronic record in question. For example, the benefit afforded by control 
of a bitcoin is that it can be held or disposed of (sold or spent). And control of a controllable 
electronic record evidencing a controllable account or controllable payment intangible 
affords the benefit of the right to collect from the account debtor (obligor). 
The system in which a controllable electronic record is recorded may limit the benefit 
from the controllable electronic record that is available to those who interact with the 
system. In determining whether a person has the power to avail itself of substantially all 
the benefit from a controllable electronic record under subsection (a)(l)(A), or to prevent 
others from availing themselves of substantially all the benefit from a controllable 
electronic record under subsection (a)O)(B)(i), only the benefit that the system makes 
available (subject to the system's inherent limitations) should be considered. 
4. Power to retrieve information. By definition, the information constituting an 
electronic record must be "retrievable in perceivable form." Section 1-201 (b)(31) (defining 
"record"). The power to retrieve the record in perceivable form is included in the benefit of 
a controllable electronic record. "Perceivable form" means that the contents of the record 
are intelligible; the ability to perceive the indecipherable jumble of an encrypted record 
does not give a person the power to retrieve the record in perceivable form. 
To have control of a controllable electronic record under subsection (a)(1)(A). a person 
must have at least the nonexclusive power to avail itself of this benefit. If a person also has 
the exclusive power to dec1ypt the encrypted record. the person will have the exclusive 
power to prevent others from availing themselves of substantially all the benefit from the 
controllable electronic record and thereby will satisfy the condition in subsection 
(a)(l)(B)(i). 
5. 
Exclusive powers. Unlike the power in subsection (a)(l)(A), the powers in 
subsection (a)(l)(B)(i) and (a)(l)(B)(ii) must be held exclusively by the person claiming 
control in order to establish control. However, once it is established that a person has 
received those powers, subsection (d) provides a presumption of exclusivity. Consequently, 
a person asserting control need not prove exclusivity in order to make out a prima facie 
case, Application of the presumption will be governed also by Section 1-206 (effects of a 
presumption under the UCC) and applicable non-UCC law (including rules of procedure 
and evidence). In addition, subsection (b) contains two qualifications of the term 
"exclusive" as used in subsection (a)(l)(B). A power can be "exclusive" under subsection 
(a)(l )(B) even if one or both of these qualifications apply. 
Subsection (b)(l) takes account of the fact that the powers of a purchaser of a 
controllable electronic record necessarily are subject to the attributes of the controllable 
electronic record, records associated with the controllable electronic record, and the 
protocols of any system in which the controllable electronic record is recorded. For 
example, a transfer of control resulting from a program that is a part of a system's protocol 
is inherent in the controllable electronic record and does not impair the exclusivity of the 
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COMMIITEEAMENDMENTA "to H.P. 59,L.D. 91 
power of the person in control of the record. Subsection (b)(l) also contemplates that the 
potential for the system to otherwise modify (or even destroy) controllable electronic 
records would not impair the exclusivity. 
Example 1: Pursuant to the governance apparatus of a system (Propofolium) for a 
cryptocurrency (propofol), an upgrade to the system was made that modified the 
consensus mechanism for determining the effectiveness of transfers of propofols 
within the system. Although this change did not divest any holder of propofols of 
its control, it prospectively modified the system for all propofols. The adoption of 
this change and the potential for such a change (or any other change) are functions 
of the attributes of the system and. consequently. of all propofols. Neither this 
change nor such potential impaired the exclusivity. for purposes of subsection 
(a)O)(B), of the powers of a person in control ofpropofols. 
Subsection (b)(2) allows for a power to be shared with another person without 
impairing the exclusivity of the power. One effect of subsection (b )(2) is that. under a multi-
signature (multi-sig) agreement. any person that is readily identifiable under subsection 
(a)(2) and shares the relevant power would be eligible to have control. even if the action of 
another person is a condition for the exercise of the power. For example, a person in control 
may agree that another person's action on the relevant system would be required to effect a 
transfer of control without impairing the requisite exclusivity. 
Example 2: Pursuant to a multi-sig arrangement. control of propofols (in the 
system described in Example 1) is shared by Campbell, Elizabeth, Mia, and 
Natasha. Under the multi-sig arrangement. the exercise of powers over the 
propofols requires action by three of the four persons having control. None of the 
participants acting alone has the power to exercise the relevant powers. Subsection 
(b)(2) makes clear that all four participants have control over the propofols and 
exclusivity is not impaired by the shared control under the multi-sig arrangement. 
Although all four persons in Example 2 have control. that may leave many questions 
as to the rights of the four as among themselves. For example, if more than one of the four 
were secured parties, it would be important for them to settle by agreement issues such as 
relative priorities and enforcement rights, Similar situations can arise in other contexts and 
with respect to other types of collateral. 
A multi-sig arrangement for a controllable electronic record, such as that described in 
Example 2, may provide enhanced security. For example, if the power of one participant is 
compromised by a "hacker, 
the required actions by the other participants would prevent 
the hacker from exercising unauthorized power over the record. Although the hacker might 
possess the power along with the remaining multi-sig participants, those participants would 
continue to have control. A multi-sig structure also may protect against the misuse of a 
record by ensuring that actions by multiple persons are required for exercising power over 
the record. 
Subsection (c) provides that in certain circumstances a power is not shared within the 
meaning of subsection (b)(2), the relaxation of the exclusivity requirement provided by 
subsection (b)(2) does not apply, and, consequently, a person's power is not exclusive. 
Subsection ( c) provides that a person does not share an exclusive power with another person 
if the person can exercise the power only with the other person's cooperation (subsection 
(c)(l)) but the other person either (i) can exercise the power without the person's 
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cooperation (subsection (c)(2)(A)) or (ii) is the transferor to the person (transferee) of an 
interest in the controllable electronic record or a controllable account or controllable 
payment intangible evidenced by the controllable electronic record (subsection {c){2)(B)). 
It follows that a person to which subsection (c) applies does not have control based on its 
exclusive powers (although it might have control through another person under subsection 
(e), discussed below, or if another person having control is acting as the person's agent). 
Comment 9 addresses the rationale for disqualifying the transferee from a transferor 
under subsection (c)(2)(B) from the benefit of sharing a power under subsection (b)(2). 
The following examples illustrate the application of subsection (c): 
Example 3: Under a multi-sig arrangement, exercise by any two of Campbell, 
Elizabeth, and Mia is required to exercise a power with respect to a controllable 
electronic record (CER). None of the three can exercise a power without the 
cooperation of another, so all three have control because they share the power. 
Even if Campbell were the transferor of the CER to Elizabeth, Elizabeth's power 
is shared, and therefore treated as exclusive, because Campbell cannot block 
Elizabeth's exercise of the power if Mia acts with Elizabeth. It follows that 
subsection (c)(l) does not apply, subsection (b)(2) does apply, and Elizabeth shares 
the power with Campbell. (The same result would apply with respect to Mia's 
power if Campbell were the transferor of the CER to Mia.) 
Example 4: 
Under a multi-sig arrangement, exercise by both Campbell and 
Elizabeth are required to exercise a power, so subsection ( c)( 1) applies with respect 
to each person. However, neither Campbell nor Elizabeth can exercise the power 
without cooperation of the other and neither is the transferor to the other, so 
subsection (c)(2)(A) and (2)(B) does not apply with respect to either person. It 
follows that Campbell and Elizabeth each share the power. 
Example 5: The facts are the same as in Example 4, but Campbell is the transferor 
of an interest in the CER to Elizabeth. Elizabeth does not share the power with 
Campbell and Elizabeth's power is not exclusive because subsection (c)(l) and 
(2)(B) applies. 
Example 6: Under a multi-sig arrangement, Mia or Natasha can exercise a power 
only with the exercise by Campbell, but Campbell can exercise the power 
unilaterally without the exercise by either Mia or Natasha. Neither Mia nor 
Natasha shares the power with Campbell because subsection (c)(l) and (2)(A) 
apply, so neither Mia's nor Natasha's power is treated as exclusive. Campbell's 
power is exclusive in fact and Campbell need not rely on subsection (b)(2) for 
shared power. 
Example 7: Under a multi-sig arrangement, Mia can exercise a power only with 
exercise by Elizabeth or Natasha, but Elizabeth and Natasha each can exercise the 
power unilaterally without the exercise by the other or by Mia. Elizabeth and 
Natasha share the power, but Mia does not share the power with Elizabeth or 
Natasha. Mia's power is not exclusive because subsection (c)(l) and (2)(A) 
applies. 
Although the presumption in subsection (d) is not expressly made subject to subsection 
(c), it is functionally so. Under Section 1-206, once evidence is introduced that subsection 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
(c} applies and that, accordingly, a person relying on the presumption cannot rely on the 
relaxation of the exclusivity requirement provided by subsection (b)(2). the presumption 
would no longer apply. 
6. Transfer of control. The power to transfer control of a controllable electronic 
record under subsection (a)(l)(B)(ii) includes the power to cause another person to obtain 
control of another derivative and resulting controllable electronic record that results from 
the transfer of the controllable electronic record. See Section 12-104, Comment 4. 
7. Readily identify itself. Subsection (a)(2) provides that a person does not have 
control of a controllable electronic record unless the controllable electronic record, a record 
attached to or logically associated with the controllable electronic record. or any system in 
which the controllable electronic record is recorded enables the person readily to identify 
itself as the person having the requisite powers. The identification need not be by a "name." 
but also may be by "identifying number. cryptographic key. office, or account number"-
language derived from Section 3-1 lO(c). The reference to "office" means a public office. 
See Section 3-11 0. Comment 3. This subsection does not obligate a person to identify itself 
as having control. However, to prove that it has control. a person would need to prove that 
the relevant records or any system in which the controllable electronic record is recorded 
readily identifies the person as such. Consistent with the subsection (d) presumption of 
exclusivity. proof that a person has the powers specified in section (a)(l) does not require 
proof of exclusivity-Le .• proof of a negative (that no one else has such powers). The 
means of identification mentioned in subsection (a)(2) derive from Section 3-ll0(c). 
Subsection (a)(2) adds "cryptographic key" as an example of a way in which a person may 
be identified. 
8. Control throu,:h another person. Neither Article 12 nor any other provision of the 
UCC would restrict or render ineffective any agreement of a person in control of a 
controllable electronic record to hold control on behalf of another person. This result is 
implicit from subsection (b)(2) dealing with sharing of control. It also would follow under 
principles of agency. But such an arrangement should be effective regardless of any agency 
or fiduciary relationship. 
This concept is expressly addressed in Section 8-106(d)(3), on control of a security 
entitlement. which achieves perfection of a security interest under Sections 9-106(a) and 
9-314(a). It also applies to perfection by possession under Section 9-313(c) ifa person other 
than the debtor or the secured party (or the secured party's agent} is in possession of 
collateral. Under those provisions, however, effectiveness is conditioned in some 
circumstances on an "aclmowledgment" by the person in control or possession. Under 
Section 9-313(c} the acknowledgment must be in a signed record. These provisions appear 
to derive from practices involving bailees of tangible property. such as goods. chattel paper. 
and certificated securities. See Section 9-313, Comment 4. 
Subsection (e) likewise provides for control by a person through another person's 
acknowledgment that it has control on behalf of the person. Subsection (e) is patterned on 
Section 9-313(c). but like Section 8-106(d}(3}, subsection (e) omits the requirement in 
Section 9-313(c) that an acknowledgment be made in a signed record. Although best 
practices might suggest the wisdom of relying on a signed record to evidence such an 
acknowledgment. subsection (e) would permit proof by other means. Under subsection (e) 
for an acknowledgment by another person to be effective to confer control on a person, the 
other person making the acknowledgment must be one "other than the transferor of an 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
interest in the electronic record" to the person. The rationale for this limitation is discussed 
in Comment 9. Control based on an acknowledgment under subsection (e) by another 
person having control continues only while the other person retains control. This result 
necessarily follows because such control derives solely from the other person's continued 
control. 
The combined operation of subsections (b)(2) and (e) ensure that the continuance of 
various existing practices would not prevent or cause the loss of control. For example, a 
person in control may wish to grant another person the power to approve or disapprove a 
transfer of control on the system. Alternatively. a person in control may wish to permit a 
system administrator. the system itself, or a prearranged operation to transfer control to 
another person under specified conditions without participation by the person in control. 
And, of course. a person in control may wish to delegate the power to transfer control to an 
agent or fiduciary. 
Provisions substantially similar to subsection (e) are included in Section 7-106 (control 
of electronic documents of title), Section 8-106(d)(3) {control of security entitlement), 9-
(control of deposit accounts), 9-105 (control of authoritative electronic copies of 
records evidencing chattel paper), and 9-105A (control of electronic money). 
9. Shared powers under subsection (b)(2) and control through another person 
under subsection {e): Limitations related to transferors and transferees of interests in 
controllable electronic records. Subsection (c)(2)(B) disqualifies a transferee (which 
includes a secured party in a secured transaction) of an interest in a controllable electronic 
record (or controllable account or controllable payment intangible) from the benefit of a 
shared power under subsection (b)(2) when the transferor retains a blocking power (i.e., 
when the transferee cannot exercise the power unless the transferor also exercises the 
power). In similar fashion, under subsection (e), an acknowledgment by a transferor of an 
interest in a controllable electronic record ( or controllable account or controllable payment 
intangible) that the transferor has control for the benefit of a person is ineffective to confer 
control on the person. Each of these limitations is premised on the view that the transferor 
has not been divested sufficiently of its powers over the relevant controllable electronic 
record so as to warrant treating the transferee as a secured party having a security interest 
perfected by control or as having the requisite control to be a qualifying purchaser. 
Subsection (c)(l) and (c)(2)(B) contemplates that the transferor has retained a blocking 
power over the transferee's exercise of a power. Subsection (e) contemplates that the 
transferor remains in control and has merely acknowledged that its control is for the 
transferee's benefit and that the acknowledgment is ineffective to confer control on the 
transferee. Although the concept of shared control is newly introduced in the UCC, holding 
possession or control for another is not. Section 9-313(c) expressly provides in this context 
that an acknowledging person having possession of goods must be a person "other than the 
debtor" for a secured party to take possession through the acknowledging person. The 
official comments to Section 8-106 are to the same effect in the context of control of a 
security entitlement. See Section 8-106(d)(3). Comment 4A and pre-2022 Comment 4. The 
same policy that underpins the inapplicability of this method of control to an 
acknowledgment by a debtor applies as well to a transferor that is not an Article 9 debtor. 
Control is intended to be a proxy for and a functional equivalent of the transfer of physical 
possession of goods. In general, a person can obtain control through control by an agent, 
but under subsection (e) an acknowledgment by a debtor or transferor (even "as agent") 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
that acknowledges control on behalf of a secured parly or other transferee would be 
ineffective. This corresponds to the policy underlying Section 9-313 that "the debtor cannot 
qualify as an agent for the secured parly for purposes of the secured parly's taking 
possession." Section 9-313, Comment 3. 
Notwithstanding these limitations, they would not impair the continued perfection by 
control upon a secured parly's assignment of a perfected-by-control security interest in a 
controllable electronic record to a successor secured party. The following example 
illustrates. 
Example 8: Debtor (D) buys a CER and obtains control. D then grants a security 
interest in the CER to Secured Parly A (SPA) to secure D's obligation to SPA and 
transfers to SPA control of the CER (not pursuant to shared control with D or 
pursuantto subsection (e)). SPA then assigns to Secured Parly B (SPB) the secured 
obligation owed by D to SP A. 
As to perfection of the security interest granted by D. perfection by control is not 
affected even if SPA retains powers over the CER (as between SPA and SPB) following 
the assignment to SPB. The security interest remains perfected. This is consistent with the 
policy underlying 9-3 lO(c}=an assignment of a security interest should not require the 
assignee to refile or take an assignment of record of a filed financing statement in favor of 
the assignor for protection against a debtor's creditors and transferees. 
The economic interest being assigned by SP A to SPB in Example 8 is primarily the 
right to payment or performance of the obligation ofD that is secured by the CER. If the 
transfer of the secured obligation by SPA to SPB itself creates a security interest securing 
an obligation (e.g .. owed by SPA to SPB). then SPB should perfect the security interest 
granted by SP A ( which is distinct from the security interest in the CER granted by D and 
assigned by SP A to SPB). The method of perfection will depend on the nature of the 
secured obligation-the type of collateral-being assigned. Is the right to payment an 
instrument. an account. or a payment intangible? Or is performance of the secured 
obligation pursuant to another type of general intangible? SPB should file a financing 
statement against SPA, as debtor, or take possession of the instrument, if applicable. 
However, as to the underlying collateral securing the assigned obligation-the CER-
attachment and perfection of SPB's security interest in the obligation of D owed to SPA 
would also constitute attachment and perfection as to the security interest in the CER 
securing that obligation. Sections 9-203(g); 9-308(e); see also 1 Restatement (Second) of 
Contracts § 340. Comment b ("b. Security follows the debt. Where a secured claim is 
assigned, the collateral is ordinarily assigned as well."). 
If the transfer by SP A to SPB is an outright transfer (a sale) of an account. a payment 
intangible. or a promissory note, the transfer creates a security interest and the analysis in 
the preceding paragraph applies (except that the security interest arising from the sale of a 
payment intangible or promissory note is automatically perfected under Section 9-
309(a)(3) and (4)). If the transfer is a sale of another type of general intangible or 
instrument that is secured by the CER, then non-Article 9 law applies to the transfer. 
However, the same result may occur under the common-law rule that the collateral (the 
CER) follows a secured obligation that is transferred. See Sections 9-203, Comment 9; 9-
308, Comment 6. 
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to H.P. 59, L.D. 91 
For obvious business reasons, SPB may not wish to allow SPA to remain in control of 
the CER and may require SP A to transfer control to it as a condition to the transaction. 
Alternatively, SPB may obtain control through sharing powers with SPA or through SP A's 
acknowledgment pursuant to subsection (e). It is true that SPA's assignment to SPB of D's 
secured obligation carried with it the collateral-the CER-securing the obligation. But 
such a derivative acquisition (through the operation of Sections 9-203(g) and 9-308(e)) by 
SPB would not be a transfer by SPA of "an interest in" the CER within the meaning of the 
limitations imposed in subsections (c)(2)(B) or (e). The operation of these rules, providing 
that collateral follows the transfer of a secured obligation, are based on the premise that 
any necessary public notice provided in connection with the assignment of the obligation 
provides, in tum, sufficient public notice with respect to the underlying collateral. It follows 
that the policy to be implemented by subsections (c)(2)(B) and (e) is not implicated by such 
an assignment. 
10. No requirement to acknowledge, no duties, and no requirement to confirm 
acknowledgment. Subsections (f) and (g) derive from Section 9-313(±) and (g). Subsection 
(0 makes clear that a person that has control under this section has no duty to acknowledge 
that it has or will obtain control on behalf of another person. Arrangements for a person to 
acknowledge that it has or will obtain control on behalf of another person are not 
standardized. Accordingly, subsection (g) leaves to the agreement of the parties and to any 
other applicable law (other than this Article or Article 9) any duties of a person that does 
acknowledge that it has or will obtain control on behalf of another person and provides that 
a person making an acknowledgment is not required to confirm the acknowledgment to 
another person. 
For example, subsection (e) would apply to give control to a person, Alpha, when 
another person, Beta, has control of a controllable electronic record and 
acknowledges that it has control on behalf of Alpha. However, under subsection 
(f), Beta is not reguired to so acknowledge. And under subsection (g), even if Beta 
does so acknowledge, Beta owes no duty to Alpha unless Beta agrees or other law 
so provides. and Beta is not required to confirm its aclmowledgment to any other 
person. 
§12-106. 
Discharge of account debtor on controllable account or controllable 
payment intangible 
(1). An account debtor on a controllable account or controllable payment intangible 
may discharge its obligation by paying: 
(a). The person having control of the controllable electronic record that evidences the 
controllable account or controllable payment intangible: or 
(b). Except as provided in subsection (2). a person that formerly had control of the 
controllable electronic record. 
(2). Subject to subsection ( 4). the account debtor may not discharge its obligation by 
paying a person that formerly had control of the controllable electronic record if the account 
debtor receives a notification that: 
(a). Is signed by a person that formerly had control or the person to which control was 
transferred: 
(b). Reasonably identifies the controllable account or controllable payment intangible: 
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COMMITTEE AMENDMENT ,A "to H.P. 59, L.D. 91 
(c). Notifies the account debtor that control of the controllable electronic record that 
evidences the controllable account or controllable payment intangible was transferred: 
(d). Identifies the transferee. in any reasonable way, including by name. identifying 
number, cryptographic key. office or account number; and 
(e). Provides a commercially reasonable method by which the account debtor is to pay 
the transferee. 
(3). After receipt of a notification that complies with subsection (2). the account debtor 
may discharge its obligation by paying in accordance with the notification and may not 
discharge the obligation by paying a person that formerly had control. 
(4). Subject to subsection (8). notification is ineffective under subsection (2): 
(a). Unless. before the notification is sent, the account debtor and the person that. at 
that time. had control of the controllable electronic record that evidences the 
controllable account or controllable payment intangible agree in a signed record to a 
commercially reasonable method by which a person may furnish reasonable proof that 
control has been transferred: 
(b). To the extent an agreement between the account debtor and seller of a payment 
intangible limits the account debtor's duty to pay a person other than the seller and the 
limitation is effective under law other than this Article: or 
(c). At the option of the account debtor, if the notification notifies the account debtor 
to: 
(i) Divide a payment; 
(ii) Make less than the full amount of an installment or other periodic payment: or 
(iii) Pay any part of a payment by more than one method or to more than one 
person. 
(5). Subject to subsection (8), if requested by the account debtor, the person giving 
the notification under subsection (2) seasonably shall furnish reasonable proof, using the 
method in the agreement referred to in subsection (4). paragraph (a), that control of the 
controllable electronic record has been transferred. Unless the person complies with the 
request, the account debtor may discharge its obligation by paying a person that formerly 
had control, even if the account debtor has received a notification under subsection (2). 
(6). A person furnishes reasonable proof under subsection (5) that control has been 
transferred if the person demonstrates, using the method in the agreement referred to in 
subsection (4). paragraph (a). that the transferee has the power to: 
(a). Avail itself of substantially all the benefit from the controllable electronic record; 
(b). Prevent others from availing themselves of substantially all the benefit from the 
controllable electronic record: and 
(c). Transfer the powers specified in paragraphs (a) and (b) to another person. 
(7). Subject to subsection (8). an account debtor may not waive or vary its rights under 
subsection (4), paragraph (a) and subsection (5) or its option under subsection (4). 
paragraph (c). 
COMMITTEE AMENDMENT 
COMMITTEE ANIBNDMENTA "to H.P. 59, L.D. 91 
(8). This section is subject to law other than this Article that establishes a different 
mle for an account debtor who is an individual and who incurred the obligation primarily 
for personal. family or household purposes. 
Official Comment 
1. Source. These provisions derive from Section 3-602. which governs the discharge 
of a person obligated on a negotiable instrument. and Section 9-406(a). (b) and (c). which 
governs the discharge of an account debtor, including a person obligated on an account or 
payment intangible. 
2. The basic rules, This section applies only to an account debtor that has undertaken 
to pay the person that has control of the controllable electronic record that evidences the 
obligation to pay. See Section 9-102 (defining "controllable account" and "controllable 
payment intangible"). Section 9-406 would continue to apply in other respects and to all 
other account debtors. As to the relationship between this section and Section 9-406. see 
Comment 5. 
Under subsection (a)(l). an account debtor may discharge its obligation on the 
controllable account or controllable payment intangible by paying the person that has 
control of the related controllable electronic record at the time of payment. Subsections 
(a)(2) and (b) would remove from an account debtor the burden of determining who has 
control of the related controllable electronic record at any given time-a burden that. with 
respect to some controllable electronic records, an account debtor may be unable to satisfy. 
Under subsection (a)(2). subject to subsection (b). an account debtor may discharge its 
obligation by paying a person that formerly had control of the related controllable 
electronic record, which presumably would include the initial obligee. 
Subsection (b) reflects the fact that a person to which control has been transferred may 
not wish to take the risk that the account debtor will discharge its obligation by paying the 
transferor. Subsection (b) protects the transferee by providing that. if the account debtor 
receives an effective notification that control has been transferred. the account debtor may 
discharge its obligation by paying in accordance with the notification and may not 
discharge its obligation by paying a person that formerly had control. The notification must 
be signed by a person formerly having control or by the transferee. 
To be effective under subsection (b), a notification must reasonably identify the 
controllable account or controllable payment intangible, notify the account debtor that 
control of the controllable electronic record that evidences the controllable account or 
controllable payment intangible was transferred. identify the transferee in any reasonable 
way. and provide a commercially reasonable method by which the account debtor is to 
make payments to the transferee. A change in the identity of the person to which the 
account debtor must make payment should not. and typically will not. impose a significant 
burden on the account debtor. However. one can imagine a method of making payment that 
would be burdensome, for example. making a payment through a trading platform or 
payment service with which the account debtor does not have an account. For this reason. 
the designated method of making payment must be "commercially reasonable." 
3. "Reasonable proof." As noted above. this section derives in large part from Section 
9-406. which provides for notification that an account or payment intangible has been 
assigned. Experience suggests that account debtors that have received notification of an 
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assignment under Section 9-406 typically make payments in accordance with the notice. 
Recognizing that an account debtor may be uncertain whether a notification is legitimate. 
Section 9-406 affords to an account debtor the right to request proof that the account or 
payment intangible was assigned. See generally. Section 9-406, Comment 4. 
Subsection (e) contains a similar provision. On the account debtor's request. the person 
giving the notification must seasonably furnish reasonable proof that control of the 
controllable electronic record has been transferred. If the person does not comply with the 
request. the account debtor may ignore the notification and discharge its obligation by 
paying a person formerly in control. 
"Reasonable proof' requires evidence that would be understood by a typical account 
debtor to whom it is proffered as demonstrating to a reasonably high probability that control 
of the controllable electronic record has been transferred to the transferee. Subsection (;f) 
provides a safe harbor for providing reasonable proof. It enables a person to satisfy the 
account debtor's request by demonstrating that the transferee has the power to avail itself 
of substantially all the benefit from the controllable electronic record. to prevent others 
from availing themselves of substantially all the benefit from the controllable electronic 
record. and to transfer these powers to another person. This demonstration would not 
necessarily prove that a person actually has control of a controllable electronic record 
because it need not show that the transferee held the last two powers exclusively. 
Nevertheless. such a demonstration would constitute "reasonable proof' under subsection 
(;f). A person that has control should have little difficulty providing this proof, as a person 
cannot have control unless it can readily identify itself as having the requisite powers. See 
Section 12-105(a)(2). Reasonable proof that is seasonably furnished by a person other than 
the person that gave the notification would constitute compliance with the account debtor's 
request. 
Subsection (e) requires that reasonable proof be provided "using the agreed method." 
Subsection (f) requires that a person use "the agreed method" to demonstrate that the 
transferee has the specified powers. "Agreed method" refers to the commercially 
reasonable method to which the parties agreed, in a signed record. before the notification 
was sent. If parties did not so agree. the notification is ineffective under subsection (d)(l). 
An account debtor may agree to participate in a system providing for the control of 
controllable accounts or controllable payment intangibles. If the system is programmed to 
provide for notification to the account debtor upon the transfer of control. the account 
debtor's agreement and the operation of the system may satisfy the requirements of 
subsections (d)(l), (e). and (;f). 
4. Additional considerations for account debtors. The requirement in subsection (e) 
that reasonable proof be furnished using the "agreed method" provides considerable 
protection for account debtors upon receipt of a notification of assignment and making a 
request for proof. There are. however. other considerations that are of importance to 
account debtors but are beyond the scope of the frameworks provided by Articles 9 and 12. 
One such consideration is the potential involvement of pseudonymous payees. which may 
raise issues such as compliance with anti-money laundering regulations and sanctions 
compliance. These are examples of issues that a well-structured program for controllable 
accounts and controllable payment intangibles might address. 
COMMITTEE AMENDMENT 
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5. 
Relationship to Section 9-406. Section 9-406 governs the discharge of the 
obligation of an account debtor. Section 9-406 carves out of its scope transactions to the 
extent covered by this section. See Section 9-4060). 
§12-107. Governing law 
(1). Except as provided in subsection (2), the local law of a controllable electronic 
record's jurisdiction governs a matter covered by this Article. 
(2). 
For a controllable electronic record that evidences a controllable account or 
controllable payment intangible, the local law of the controllable electronic record's 
jurisdiction governs a matter covered by section 12-106 unless an effective agreement 
determines that the local law of another jurisdiction governs. 
(3). The following rules determine a controllable electronic record's jurisdiction under 
this section. 
(a). If the controllable electronic record, or a record attached to or logically associated 
with the controllable electronic record and readily available for review, expressly 
provides that a particular jurisdiction is the controllable electronic record's jurisdiction 
for purposes of this Article or the Uniform Commercial Code, that jurisdiction is the 
controllable electronic record's jurisdiction. 
(b). If paragraph (a) does not apply and the rules of the system in which the controllable 
electronic record is recorded are readily available for review and expressly provide that 
a particular jurisdiction is the controllable electronic record's jurisdiction for purposes 
of this Article or the Uniform Commercial Code, that jurisdiction is the controllable 
electronic record's jurisdiction. 
(c). If paragraphs (a) and (b) do not apply and the controllable electronic record. or a 
record attached to or logically associated with the controllable electronic record and 
readily available for review, expressly provides that the controllable electronic record 
is governed by the law of a particular jurisdiction, that jurisdiction is the controllable 
electronic record's jurisdiction. 
(d). If paragraphs (a), (b) and (c) do not apply and the rules of the system in which the 
controllable electronic record is recorded are readily available for review and expressly 
provide that the controllable electronic record or the system is governed by the law of 
a particular jurisdiction, that jurisdiction is the controllable electronic record's 
jurisdiction. 
(e). 
If paragraphs {a) to (d) do not apply, the controllable electronic record's 
jurisdiction is the District of Columbia. 
(4). If subsection {3), paragraph (e) applies and Article 12 is not in effect in the District 
of Columbia without material modification, the governing law for a matter covered by this 
Article is the law of the District of Columbia as though Article 12 were in effect in the 
District of Columbia without material modification. For the purposes of this subsection, 
"Article 12" means Article 12 of Uniform Commercial Code Amendments {2022). 
(5), To the extent subsections (1) and (2) provide that the local law of the controllable 
electronic record's jurisdiction governs a matter covered by this Article, that law governs 
even if the matter or a transaction to which the matter relates does not bear any relation to 
the controllable electronic record's jurisdiction. 
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(6). The rights acquired under section 12-104 by a purchaser or qualifying purchaser 
are governed by the law applicable under this section at the time of purchase. 
Official Comment 
1. Source. The provisions of Section 12-107 (as well as Sections 9-306A and 9-306B) 
derive from Sections 8-110 and 9-3 05 on law governing perfection and priority of security · 
interests in investment property and the relevance of a securities intermediary's jurisdiction 
and a commodity intermediary's jurisdiction. 
2. The basic rule: Law governing matters covered by Article 12. Subsection (a) 
states the basic rule that the local law of the controllable electronic record's jurisdiction 
governs the matters covered by this Article. The "matters covered by" this Article are 
relatively narrow and discrete. albeit enormously important. If the choice-of-law rule 
provided by this section points to a jurisdiction that has adopted Article 12. those matters 
would include the interpretation and application of Article 12, including its definitions. In 
general. issues that would be determined by the provisions of this Article are to be 
determined under the law that is applicable as determined by this section. These include 
the rights of purchasers and property claimants more generally with respect to controllable 
electronic records. controllable accounts, and controllable payment intangibles to the extent 
dealt with by this A1ticle-issues addressed by section 12-104. The rights and obligations 
of account debtors, to the extent dealt with by section 12-106, are also matters covered. 
Matters not covered by th1s Article. including matters as to which this Article expressly 
provides are covered by other law, are not within the scope of this section. 
3. 
Practical considerations on determination of governing law. This section 
relating to the law governing the matters covered by this A1ticle must confront substantial 
practical considerations. These considerations arise primarily from two factors. First. as 
described below, this section relies primarily on a "waterfall" of alternatives for 
determining a controllable electronic record's jurisdiction. The first four elements of the 
waterfall require for their applicability express provisions of a controllable electronic 
record, an attached or logically associated record, or the system in which a controllable 
electronic record is recorded. However. many controllable electronic records and systems 
existing at the time of the 2022 Amendments do not contain these provisions. As explained 
in Comment 6, the expectation is that over time electronic records and related systems will 
adopt these provisions in reliance on this section. thereby satisfying at least one of the first 
four elements of the waterfall. Second. in the absence of these provisions, at the bottom of 
the waterfall the controllable electronic record's jurisdiction is the District of Columbia. 
See Comment 6. 
4. Governing law for Section 12-106. Subsection (b) provides an exception to the 
general rule of subsection (a) that "the local law of a controllable electronic record's 
jurisdiction governs the matters covered by this Article." The exception recognizes that an 
account debtor's rights and duties generally are governed by the law applicable to the 
underlying obligation of the account debtor, and not by the law applicable to the agreement 
between the assignor (debtor) and the assignee (secured partY:l::=a security agreement. See 
Section 9-401. Comment 3. Subsection (b) recognizes that an effective agreement (i.e .. one 
effective under Section 1-301(a)) between the account debtor and assignor may choose a 
different law to cover the matters covered by Section 12-106 (i.e., the account debtor's 
rights and duties addressed in that section). Such an agreement may, of course, address 
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COMMITTEE AMENDMENT "A" to H.P. 59, L.D. 91 
matters other than those covered by Section 12-106 (for example, an agreement that all 
obligations of the account debtor are governed by the laws of State X). 
5. Determination of controllable electronic record's jurisdiction. The basic rule 
that the law of a controllable electronic record's jurisdiction governs the matters covered 
by Article 12 may be viewed as a rough proxy for the traditional role of the location of 
tangible asset (e.g .. goods) in determining the applicable law (lex rei sitae). Drawing on 
the analogous provisions in Sections 8-110 and 9-305 in the context of a security 
entitlement or securities account or a commodity contract or commodity account. under 
subsection (c) it is the controllable electronic record itself, records attached thereto or 
associated therewith, or the system in which the controllable electronic record is recorded 
that determines the controllable electronic record's jurisdiction and, thereby, the governing 
law. Subsection (c) provides a "waterfall" of rules based on provisions that identify a 
particular jurisdiction as the controllable electronic record's jurisdiction or alternatively that 
provide the governing law for a controllable electronic record or the system in which the 
record is recorded, As to subsection (e), see Section 8-110. Comment SA. 
Paragraphs (1) through ( 4) of the subsection (c) waterfall each relies on information 
available from a controllable electronic record. an attached or logically associated record, 
or rules of a system in which the record is recorded. A controllable electronic record's 
jurisdiction is determined by one of these sources that "expressly provide[s]" that a 
jurisdiction is the controllable electronic record's jurisdiction or that a particular 
jurisdiction's law is the governing law. These paragraphs refer to attached or logically 
associated records or system rules that are "readily available." They also assume that the 
controllable electronic record is itself readily available to anyone choosing to deal with the 
record. These provisions are based on the assumption that the relevant express provision 
will be available to an interested person without the imposition of unreasonable burdens. 
6. Bottom of the waterfall: District of Columbia. Many controllable electronic 
records. attached or logically associated records, and systems in which controllable 
electronic records are recorded that exist at the time of the 2022 Amendments do not 
identify the "controllable electronic record's jurisdiction" or the governing law (some 
permissioned systems being exceptions). (It is anticipated that, upon widespread adoption 
of Article 12 and accompanying amendments. systems will adapt and the first four elements 
of the waterfall will become more generally applicable for identifying a controllable 
electronic record's jurisdiction.) Consequently. subsection (c)(5) addresses an issue that 
does not normally exist in the context of Sections 8-110 and 9-305. It might be thought that 
the logical choice for the residual rule for designating the controllable electronic record's 
jurisdiction at bottom of the waterfall would be. the location of the debtor. That approach 
would follow the role of the location of a debtor under Sections 9-301 and 9-307. However, 
that location may not readily be determined by parties to a transaction, primarily because 
in many cases involving controllable electronic records the transferor is not known to or 
easily discoverable by a purchaser. See Prefatory Note 1 to Article 12. Consequently. 
Subsection (c)(S) resolves this issue by providing that the controllable electronic record's 
jurisdiction is the District of Columbia. 
7. 
District of Columbia as controllable electronic record's jurisdiction. The 
designation of the District of Columbia as the controllable electronic record's jurisdiction 
follows Section 9-307(c). which designates the District of Columbia as the location of a 
debtor that otherwise would be located in a jurisdiction whose law does not provide for a 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT •A" to H.P. 59, L.D. 91 
generally applicable system of public notice (such a filing or registration) for 
nonpossessory security interests. This designation also assumes that the District of 
Columbia will have adopted Article 12 and the conforming amendments to Articles 1 and 
in substantially the uniform version-i.e., without material modification of the official 
text. This is a plausible assumption based on the history of adoptions in that jurisdiction. 
Because the controllable electronic record's jurisdiction does not govern perfection of a 
security interest by filing, the designation of the District of Columbia at the bottom of the 
waterfall will not confer on that jurisdiction any economic benefits of fees for filing of 
financing statements. See Section 9-306B(b). Subsection (d) addresses the unlikely 
situation that the District of Columbia does not adopt Article 12 without material 
modification of the official text or later adopts materially non-uniform amendments. 
Subsection (d) is patterned loosely (but as closely as feasible) on the TRADES Regulations, 
CFR § 357.1 l(e), for U.S. Treasury securities. 
The term "Article 12" is defined in subsection (d) as the officially promulgated 2022 
version of Article 12 and conforming amendments. In determining whether the District of 
Columbia has enacted Article 12 without material modification, a court or other tribunal 
should consider the materiality of any provision in the context of the issue or issues before 
it. A modification of a provision that would be material in another context should be 
disregarded if it has no bearing on the issue or issues before the tribunal. In connection with 
any future revision of the Article 12 official text. it will be important for transitional 
provisions to address the situations in which the District of Columbia may or may not have 
adopted the revised official text. 
8. Relevant time for determination of governing law. Subsection (f) provides that 
the rights of purchasers are governed by the applicable law as of the time of purchase. Note 
that Sections 8-110 and 9-305 do not contain an analogous rule with respect to a securities 
intermediary's jurisdiction. However, Section 8-ll0(c) does provide a similar rule for the 
delivery of a security certificate and adverse claims. As to the timing of the determination 
of the governing law for other issues under Article 12. such as the rights and duties of 
account debtors under Section 12-106. the section does not specify a time. As with most 
statutory provisions relating to governing law, courts are free to determine the appropriate 
relevant time taking into account the relevant facts and the nature of the issues involved. 
PARTC 
PREFATORY NOTE to Article 15-Transitional Provisions 
The Uniform Commercial Code Amendments (2022) (2022 Amendments) pose special 
challenges. The amendments add a new Article 12, covering new classes of property, and 
provide extensive revisions to Article 9. They also include amendments to every other UCC 
article (save Article 6). Earlier transitional provisions do not provide an adequate template 
for addressing such a broad set of amendments. However, this article draws substantially 
on Article 9, Part 7, the transitional provisions applicable to the 1998 Article 9 Revisions. 
In particular, the substantial amendments to Article 9 and the new Article 12 contained in 
the 2022 Amendments require that special attention be given to post-effective date 
perfection and priority issues. 
A uniform law as complex as the 2022 Amendments necessarily gives rise to difficult 
problems and uncertainties during the transition to the new law. As is customary for 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT •A" to H.P. 59, L.D. 91 
uniform laws, these amendments are based on the general assumption that all States will 
have enacted substantially identical versions. While always important, uniformity is 
particularly important to the success of these amendments, especially those to Article 9 and 
the new Article 12 and conforming amendments to other articles relating to each. 
Article 9, Part 7, provided that several material changes in the law would be given 
effect one year after a "uniform" effective date. (As it tumed out, all but a few states enacted 
the 1998 Article 9 Revisions with the uniform effective date.). However, for practical 
reasons many states may wish to provide an effective date for this act that is consistent with 
their usual timing for effectiveness of legislation. Consequently, this article does not 
provide for a uniform effective date but does provide for a uniform adjustment date 
(Adjustment Date), which is July 1, 2025, on which several material provisions (in 
particular, new priority rules that would override pre-effective-date established priorities) 
would apply. However, if the uniform Adjustment Date would be less than one year after 
the effective date for a state's adoption of these amendments, then the state should adopt an 
Adjustment Date that is one year after the state's effective date. The minimum of a one-
year period between the effective date and the Adjustment Date is important. It is intended 
primarily to provide sufficient time for a person to achieve perfection or priority of a 
security interest under the 2022 Amendments following the effective date, or for a person 
with an established priority in property to protect its priority before the priority might 
otherwise be lost on the Adjustment Date. 
The law, other than the Uniform Commercial Code, of a state adopting the 2022 
Amendments determines the time of day on the state's effective date on which the 
amendments take effect. 
Sec. C-1. 11 MRSA Art. 15 is enacted to read: 
ARTICLE 15 
TRANSITIONAL PROVISIONS 
PART 1 
GENERAL PROVISIONS AND DEFINITIONS 
§15-101. Short title 
This Article may be cited as "the Transitional Provisions for Uniform Commercial 
Code Amendments (2022)." 
§15-102. Definitions 
(1). 
For the purposes of this Article. unless the context otherwise indicates, the 
following terms have the following meanings. 
(a). "Adjustment date" means July 1. 2026. 
(b). "Article 12" means A1ticle 12 of the Uniform Commercial Code. 
(c). "Article 12 property" means a controllable account. controllable electronic record 
or controllable payment intangible. 
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COMMITTEE AMENDMENT ".A" to H.P. 59, L.D. 91 
(2). 
The following definitions in other Articles of the Uniform Commercial Code 
apply to this Article: 
(a). "Controllable account." section 9-1102; 
(b). "Controllable electronic record," section 12-102: 
(c). "Controllable payment intangible," section 9-1102: and 
(d). "Financing statement." section 9-1102. 
(3). 
Article 1-A contains general definitions and principles of construction and 
interpretation applicable throughout this Article. 
Official Comment 
Subsection headings. Subsection headings are not a part of the official text itself and 
have not been approved by the sponsors. 
PART2 
GENERAL TRANSITIONAL PROVISION 
§15-201. Savings clause 
Except as provided in part 3. a transaction validly entered into before July 1. 2025 and 
the rights, duties and interests flowing from the transaction remain valid thereafter and may 
be terminated. completed. consummated or enforced as required or permitted by law other 
than the Uniform Commercial Code or. if applicable, the Uniform Commercial Code in 
effect prior to July 1, 2025. 
Comment 
1. Source. This Section is drawn from pre-2022 Section 10-102(2) (now withdrawn). 
2. In general: Prospective application. This section is a savings clause that provides 
in general for the prospective application of the 2022 Amendments and the preservation of 
the validity of pre-effective-date transactions and the rights. duties, and interests flowing 
from those transactions. Part 3 provides important exceptions to this prospective 
application for Articles 9 and new Article 12. 
3. Prospective application: Examples. 
11Conspicuous." 2022 section 1-20l(b)(10) provides a revised definition of "conspicuous" 
and revised Comment 10 provides extensive new commentary. The revised definition 
applies to a record that becomes a part of the relevant transaction after the effective date. 
''Hybrid transaction" and "hybrid lease." The 2022 revisions of Sections 2-102 and 2A-
address a sale of goods that is a patt of a "hybrid transaction" and a lease of goods that 
is part of a "hybrid lease." See Sections 2-106(5) (defming "hybrid transaction") and 2A-
103(1)(h.1) (defining "hybrid lease"). These revisions apply to transactions entered into 
after the effective date. 
4. 
Revisions reflecting continuation of pre-effective-date precedents. Several 
revisions are intended to clarify and reaffirm understandings of pre-effective-date 
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COMMITTEE AMENDMENT ,A" to H.P. 59, L.D. 91 
interpretations of the Uniform Commercial Code and are intended to modify some pre-
effective-date judicial interpretations. Examples include (i) the amendment to Section 3-
104. which clarifies that neither a choice-of-law nor a choice-of-forum clause prevents a 
promise from being a negotiable instrument, (ii) the amendments to Section 4A-201, which 
indicate that a security procedure may impose an obligation on both the receiving bank and 
the customer and may involve the use of symbols, sounds, or biometrics. (iii) the clarifying 
revision of Section 5-116. (iv) the new definitions of "assignee" and "assignor" in Section 
9-102(a)(7A) and (7B). and (v) clarification in Section 9-204(b.1) as to the attachment of 
a security interest in consumer goods as proceeds or commingled goods and in a 
commercial tort claim as proceeds. However, this transitional rule will be important in 
situations in which the controlling pre-effective-date case law is not consistent with the 
amended provisions. 
PART3 
TRANSITIONAL PROVISIONS FOR ARTICLES 9-A AND 12 
§15-301. Savings clause 
(1). Except as provided in this part. Article 9-A as in effect on July 1, 2025 and Article 
apply to a transaction, lien or other interest in property, even if the transaction, lien or 
interest was entered into, created or acquired before July 1. 2025. 
(2). Except as provided in subsection (3) and sections 15-302 to 15-306: 
(a). A transaction. lien or interest in property that was validly entered into, created or 
transferred before July 1, 2025 and was not governed by the Uniform Commercial 
Code, but would be subject to Article 9-A as in effect on July 1. 2025 or Article 12 if 
it had been entered into, created or transferred on or after July 1. 2025. including the 
rights. duties and interests flowing from the transaction, lien or interest, remains valid 
on and after July 1. 2025; and 
(b). The transaction, lien or interest may be terminated. completed, consummated and 
enforced as required or permitted by this Title as in effect on July 1. 2025 or by the law 
that would apply prior to July 1, 2025. 
(3). The provisions of this Title that take effect July 1, 2025 do not affect an action, 
case or proceeding commenced before July 1, 2025. 
Comment 
1. Source. This section derives from Section 9-702. 
2. Pre-effective-date transactions, liens, and interests. Subsection (a) contains the 
general rule that Article 9 as amended by this act (2022 Article 9) and Article 12 generally 
apply to transactions, liens (including security interests), and interests in property, even if 
entered into, created, or acquired before the effective date. Thus, for example, secured 
transactions entered into under Article 9 before amendment by this act (as used in these 
official comments to Article A. "pre-2022 Article 9
11) must be terminated. completed, 
consummated, and enforced under this act. However, other provisions in this part provide 
exceptions to this general rule. 
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COMMITTEE AMENDMENT 'A" to H.P. 59, L.D. 91 
3. Pre-effective-date transactions not governed by pre-effective-date Uniform 
Commercial Code. Subsection (b) is an exception to the general rule. It applies to valid, 
pre-effective-date transactions, liens, and other interests in property that were not governed 
by the pre-2022 Uniform Commercial Code but would be governed by this act if they had 
been entered into or created after this act takes effect. Under subsection (b), these valid 
transactions, such as the sale of a controllable electronic record, retain their validity under 
this act and may be terminated, completed, consummated, and enforced as required or 
permitted by the law that would apply had this act not taken effect or, to the extent not 
inconsistent with that law, this act. 
4. Judicial proceedings commenced before effective date. As is usual in transitional 
provisions, subsection (c) provides that this act does not affect litigation pending on the 
effective date. 
§15-302. Security interest perfected before effective date 
(1). A security interest that is enforceable and perfected immediately before July 1, 
2025 is a perfected security interest under this Title if, on July 1, 2025, the requirements 
for enforceability and perfection under this Title as in effect on July 1, 2025 are satisfied 
without further action. 
(2), If a security interest is enforceable and perfected immediately before July 1, 2025, 
but the requirements for enforceability or perfection under this Title as in effect on July 1, 
2025 are not satisfied on July 1, 2025, the security interest: 
(a). Is a perfected security interest until the earlier of the time perfection would have 
ceased under the law in effect immediately before July 1, 2025 and the adjustment date; 
(b). 
Remains enforceable thereafter only if the security interest satisfies the 
requirements for enforceability under section 9-1203, as in effect on July 1, 2025, 
before the adjustment date; and 
(c). Remains perfected thereafter only if the requirements for perfection under this 
Title as in effect on July 1, 2025 are satisfied before the time specified in paragraph 
(ru.. 
Official Comment 
1. Source. This section derives from Section 9-703. 
2. Perfected security interests under pre-2022 Article 9 and 2022 Article 9. This 
section deals with security interests that are perfected under pre-2022 Article 9 immediately 
before this act takes effect. Subsection (a) provides, not surprisingly, that if the security 
interest would be a perfected security interest under 2022 Article 9 (i.e., if the transaction 
satisfies 2022 Article 9's requirements for enforceability (attachment) and perfection), no 
further action need be taken for the security interest to be a perfected security interest. 
Example 1: A pre-effective-date security agreement and financing statement 
covered "all accounts and general intangibles now owned or hereafter acquired." 
After the effective date the debtor acquired controllable accounts, controllable 
electronic records, and controllable payment intangibles. The security interest in 
the after-acquired collateral is enforceable and perfected under both pre-2022 and 
2022 Article 9. The controllable accounts are accounts, the controllable electronic 
records and controllable payment intangibles are general intangibles, and filing is 
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an appropriate method of perfection for that collateral under both versions of 
Article 9. 
Other examples of methods of perfection under pre-2022 Article 9 that also would achieve 
perfection under 2022 Article 9 include filing a financing statement and perfection by 
control in electronic documents under pre-2022 and amended Section 7-106, in chattel 
paper under pre-2022 Section 9-105, and in chattel paper evidenced by authoritative 
electronic records under 2022 Section 9-105. 
3. Security interests enforceable and perfected under pre-2022 Article 9 but 
unenforceable or unperfected under 2022 Article 9. Subsection (b) deals with security 
interests that are enforceable and perfected under pre-2022 A1ticle 9 immediately before 
this act takes effect but do not satisfy the requirements for enforceability (attachment) or 
perfection under 2022 Article 9. These security interests are perfected security interests 
until the earlier of the time perfection would have ceased under the law in effect 
immediately before this act takes effect and the adjustment date. If the security interest 
satisfies the requirements for attachment and perfection within that period. the security 
interest remains continuously perfected thereafter. If the security interest satisfies only the 
requirements for attachment within that period, the security interest becomes unperfected 
on the adjustment date. 
Example 2: A pre-effective-date security agreement signed by Debtor in favor of 
Secured Party covers, among other things, "all money ... and general intangibles 
now owned or hereafter acquired. 
Secured Party filed a proper financing statement 
in the appropriate filing office covering "All personal property." Debtor owns 
electronic money, spitcoin, issued by the government of El Cuspidouro. Under pre-
2022 Article 9 the electronic money might be characterized as a general intangible 
if "money" were to be construed (at least for purposes of Article 9) to include only 
tangible money as to which perfection is possible only by possession. See pre-2022 
Section 9-312(b)(3). Alternatively, even if the spitcoin is money, perfection might 
be possible by filing under the baseline rule of Section 9-310, inasmuch as the 
spitcoin (an intangible) cannot be possessed. Assume, therefore, that under pre-
2022 Article 9 Secured Party's security interest in the spitcoin is perfected by filing. 
Assume also that spitcoin can be subjected to control under Section 9-105A. As to 
the spitcoin owned by the debtor before the effective date, under subsection (b) the 
security interest would remain perfected until the adjustment date but would 
become unperfected under 2022 Article 9 on the adjustment date unless earlier 
perfected by control. This is so because a security interest in electronic money that 
can be subject to control under Section 9-105A, such as spitcoin, may be perfected 
only by control under 2022 Article 9. Sections 9-312(b)(4): 9-314(a). The security 
interest in any spitcoin acquired by the debtor after the effective date would be 
unperfected until the secured party obtains control. 
Example 3: Secured Party has a pre-effective-date security interest in a security 
entitlement perfected by control pursuant to Sections 9-106 and 8-106( d)(3 ), based 
on control held by Kontroal Phreeque LLC (KP) on behalf of Secured Party. Even 
in the highly unlikely event that following the effective date the secured party could 
not prove that KP acknowledged its control on behalf of the secured party in 
conformity with 2022 Section 8-106( d)(3 ), its security interest would nevertheless 
remain perfected beyond the adjustment date. Perfection by control for a security 
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entitlement under Section 9-106 depends on control under 8-106 and. under 
Section A-30l(a), Part 3 of this a1ticle, including subsection (b), does not apply to 
transactions under Article 8 because Section A-30l(a) applies only to Articles 9 
and 12. The rules under pre-effective date Article 8 continue to apply to the pre-
effective date transaction. As to financial assets acquired and becoming a part of 
the security entitlement after the effective date, however, 2022 Articles 8 and 9 
would apply. Secured Party could perfect its security interest in those financial 
assets through a complying acknowledgment by KP or by filing. This means for a 
securities account involving active trading, for example. the secured party should 
ensure compliance with the 2022 A1ticle 8 control requirements at or before the 
effective date so as to ensure perfection in post-effective date-acquired financial 
assets. 
4. Interpretation of pre-effective-date security agreements. Section 9-102 defines 
"security agreement" as "an agreement that creates or provides for a security interest." 
Under Section 1-201(b)(3), an "agreement" is a "bargain of the parties in fact." If parties to 
a pre-effective-date security agreement describe the collateral by using a term defined in 
pre-2022 Article 9 in one way and defined in 2022 Article 9 in another way, in most cases 
it should be presumed that the bargain of the parties contemplated the meaning of the term 
under pre-2022 Article 9. Definitions of terms relating to collateral which have been 
amended in 2022 Article 9 are "account." "chattel paper." "instrument." "money," and 
"general intangible." A different result might be appropriate, for example, if a security 
agreement explicitly contemplated future changes in the Article 9 definitions of types of 
collateral-for example, "'Accounts' means 'accounts' as defined in the Uniform 
Commercial Code Article 9 of [State X]. as that definition may be amended from time to 
time. 
Whether a different interpretive approach is appropriate in any given case depends 
on the bargain of the parties. as determined by applying ordinary principles of contract law. 
§15-303. Security interest unperfected before effective date 
A security interest that is enforceable immediately before July 1. 2025 but is 
unperfected at that time: 
(1). Remains an enforceable security interest until the adjustment date; 
(2), Remains enforceable thereafter if the security interest becomes enforceable under 
section 9-1203. as in effect on July 1. 2025, on July 1. 2025 or before the adjustment date: 
and 
(3). Becomes perfected: 
(a). Without further action. on July 1. 2025 if the requirements for perfection under 
this Title as in effect on July 1. 2025 are satisfied before or at that time; or 
(b). 
When the requirements for perfection under this Title are satisfied if the 
requirements are satisfied after that time. 
Official Comment 
1. Source. This Section derives from Section 9-704. 
2. Pre-effective-date enforceable but unperfected security interests. This section 
deals with security interests that are enforceable but unperfected {i.e., subordinate to the 
rights of a person who becomes a lien creditor) under pre-2022 Article 9 or other applicable 
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law immediately before this act takes effect. These security interests remain enforceable 
until the adjustment date, and thereafter if the appropriate steps for attachment under 2022 
Article 9 are taken before the adjustment date. See Section A-304(c) (This section's 
treatment of enforceability is the same as that of Section A-302.) The security interest 
becomes a perfected security interest on the effective date if, at that time, the security 
interest satisfies the requirements for perfection (which include the requirements for 
attachment) under 2022 Article 9. If the security interest does not satisfy the requirements 
for perfection until sometime thereafter, it becomes a perfected security interest at that later 
time. 
Example 1: Prior to the effective date Debtor obtained a loan from Secured Party 
and signed a security agreement covering "all cryptocurrencies now owned or 
hereafter acquired." The security interest attached to various cryptocurrencies 
owned by Debtor, including 1.000 happicoins held by debtor on the happicoins 
blockchain platform. Debtor then transferred the 1,000 happicoins to Secured Party 
on the blockchain. Although the happicoins are general intangibles, Secured Party 
failed to file a financing statement necessary to perfect its security interest under 
pre-2022 Article 9. 
Under 2022 Article 9, the happicoins would be controllable electronic records and 
the transfer of the happicoins to Secured Party would give Secured Party "control" 
of the happicoins as provided in Section 12-105, Before 2022 Article 9 (i.e., 
including 2022 Sections 9-107A and 9-314) and Article 12 became effective. 
Secured Party's security interest was unperfected as noted above. Upon the 
effective date, however, the security interest became perfected by control as a result 
of the pre-effective-date transfer ofcontrol to Secured Party. 
Example 2. Prior to the effective date Debtor obtained a loan from Secured Party 
and signed a security agreement covering certain specified deposit accounts and 
"all documents and chattel paper now owned or hereafter acquired by Debtor." The 
security interest attached to the deposit accounts and to various documents and 
chattel paper owned by Debtor. Persons in control of certain electronic chattel 
paper, electronic documents, and deposit accounts included in the collateral 
acknowledged that they had control of that collateral on behalf of Secured Party. 
Assuming that an agency relationship cannot be established between these 
acknowledging persons and Secured Party, it is perhaps arguable that Secured 
Party's security interest in the relevant collateral was unperfected because Secured 
Party did not have control under pre-2022 Sections 7-106, 9-104, and 9-105. 
However, because the pre-effective-date acknowledgments would give Secured 
Party control under the relevant 2022 sections. its security interest. even if not 
perfected pre-effective date. became perfected by control on the effective date. 
§15-304. Effectiveness of actions taken before July 1, 2025 
(1), If action. other than the filing of a financing statement, is taken before July 1. 
2025 and the action would have resulted in perfection of the security interest had the 
security interest become enforceable before July 1. 2025. the action is effective to perfect 
a security interest that attaches under this Title as in effect on July 1. 2025 before the 
adjustment date. An attached security interest becomes unperfected on the adjustment date 
unless the security interest becomes a perfected security interest under this Title as in effect 
on July 1, 2025 before the adjustment date. 
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(2). The filing of a fmancing statement before July 1, 2025 is effective to perfect a 
security interest on July 1, 2025 to the extent the filing would satisfy the requirements for 
perfection on July 1, 2025. 
(3). The taking of an action before July 1, 2025 is sufficient for the enforceability of 
a security interest on July 1, 2025 if the action would satisfy the requirements for 
enforceability on July 1, 2025. 
Official Comment 
1. 
Source. Subsections (a) and (b) of this Section derive from Section 9-705. 
Subsection (c) is new. 
2. General. This section addresses primarily the situation in which the perfection step 
or requirement for enforceability is taken under pre-2022 Article 9 or other applicable law 
before the effective date of this act. but the security interest does not attach until after that 
date. 
3. Perfection other than by filing. Subsection (a) applies when the perfection step is 
a step other than the filing of a financing statement. If the step that would be a valid 
perfection step under pre-2022 Article 9 or other law is taken before this act takes effect, 
and if a security interest attaches before the adjustment date, then the security interest 
becomes a perfected security interest upon attachment. However, the security interest 
becomes unperfected on the adjustment date unless the requirements for attachment and 
perfection under 2022 Article 9 are satisfied within that period. 
4. Perfection by filing: ineffective filings made effective, Subsection (b) deals with 
financing statements that were filed under pre-2022 Article 9 and which would not have 
perfected a security interest under the pre-2022 Article, but which would perfect a security 
interest under 2022 Article 9. Under subsection (b ). such a fmancing statement is effective 
to perfect a security interest to the extent it complies with 2022 Article 9. Subsection (b) 
applies regardless of the reason for the filing. When this act takes effect, the filing becomes 
effective to perfect a security interest assuming the filing satisfies the perfection 
requirements under 2022 Article 9. 
Example 1, Prior to the effective date Debtor obtained a loan from Secured Party 
and signed a security agreement covering. among other collateral. "money," 
"accounts," "chattel paper," and "general intangibles." Secured Party filed a 
financing statement covering "all assets." If, under the applicable pre-2022 Article 
as interpreted by the courts, electronic currency was "money" as defmed in pre-
2022 Section 1-201 even though as an intangible it could not be possessed, then 
under the applicable pre-2022 Section 9-312(b)(3), filing a financing statement was 
not an effective method of perfection. Assume. however, that under 2022 Articles 
and 9, the electronic currency is not "money," and is instead a general intangible. 
Under 2022 Article 9, filing is an effective method of perfection. Upon the 
effective date of 2022 Article 9, the security interest became perfected by the pre-
effective-date filed fmancing statement. 
Example 2. Prior to the effective date Debtor obtained a loan from Secured Party 
and signed a security agreement covering, among other collateral. "accounts," 
"chattel paper. 
and "general intangibles." Secured Party filed a financing 
statement covering "accounts." Under the applicable pre-2022 Article 9, a certain 
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right to payment was chattel paper because it was a lease of specific goods, even 
though the transaction also covered, and the lessee's monetary obligation also 
related to, various other assets and various services. Because the filed financing 
statement covered only accounts, the security interest in the chattel paper was 
unperfected. Under 2022 Article 9, however, the right to payment was an 
"account," and not chattel paper, assuming that the lessee's right to possession and 
use of the goods was not "the predominant purpose of the transaction." Section 9-
102(a)O l){B)(ii). On that assumption. upon the effective date the security interest 
became perfected by the pre-effective-date filed financing statement covering 
accounts. 
5. 
Enforceability of security interest: unenforceable security interest made 
enforceable, 
Example 3, Under the facts of Example 1. Section A-303, Comment 2, instead of 
signing a security agreement Debtor agreed orally to grant to Secured Party a 
security interest in the happicoins. It follows that under pre-2022 Article 9 Secured 
Party's security interest was unenforceable and did not attach to the happicoins for 
want of a signed security agreement. Pre-2022 Section 9-203(b)(3)(A). However. 
upon the effective date of 2022 Article 9. Secured Party had control of the 
happicoins under 2022 Article 9. Sections 12-105. At that time the security interest 
became enforceable and attached under Sections 9-107A and 9-203(b)(3)(D) and 
also was perfected by control. 
§15-305. Priority 
(1). Subject to subsections (2) and (3), this Title as in effect on July 1, 2025 determines 
the priority of conflicting claims to collateral. 
(2). Subject to subsection (3), if the priorities of claims to collateral were established 
before July 1. 2025, Article 9-A as in effect before July 1. 2025 determines priority. 
(3), On the adjustment date, to the extent the priorities determined by Article 9-A as 
in effect after July 1. 2025 modify the priorities established before July 1. 2025, the 
priorities of claims to Article 12 property established before July 1, 2025 cease to apply. 
Official Comment 
1. Source. This section derives from Section 9-709. 
2. Law governing priority and established priorities. Ordinarily, 2022 Article 9 
determines the priority of conflicting claims to collateral under subsection (a). However, 
when the relative priorities of the claims were established before the effective date. pre-
2022 Article 9 governs under subsection (b). Subsection (c) provides an exception to 
subsection (b ). 
Example 1. In 2021, prior to the effective date, Debtor obtained a loan from 
Secured Party and signed a security agreement covering "all cryptocurrency and 
money now owned or hereafter acguired." The security interest attached to various 
cryptocurrencies owned by Debtor, including 1,000 happicoins held by Debtor on 
the happicoins blockchain platform. Secured Party promptly filed a financing 
statement covering "all general intangibles, including cryptocu1Tencies.
In 2022. 
also prior to the effective date. Debtor obtained a loan from Lender and signed a 
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security agreement covering "all cryptocurrency.
Although the happicoins are 
general intangibles, Lender failed to file a financing statement. Because the 
priorities of the claims were established before the effective date, pre-2022 Article 
governs. Secured Party's perfected security interest has priority over Lender's 
unperfected security interest under pre-2022 Section 9-322(a)(2). 
Example 2. The facts are the same as in Example 1, except that Debtor transferred 
control of the 1,000 happicoins to Lender on the blockchain in 2022 before the 
effective date. Because Lender failed to file a fmancing statement and control was 
not a method of perfection under pre-2022 Article 9, Lender's security interest was 
unperfected immediately prior to the effective date. However, because under 2022 
Article 9 the happicoins are controllable electronic records and Lender has 
"control" of the happicoins under Section 12-105, Lender's security interest 
became perfected on the effective date. Nevertheless, because the priorities of 
Secured Party's and Lender's security interests were established before the effective 
date, Secured Party's security interest continues to have priority after the effective 
date. (However, see Example 4 for the shift of priority on the adjustment date.) 
Example 3. The facts are the same as in Example 1, except that in 2023, after the 
effective date, Debtor transferred control of the 1,000 happicoins to Lender on the 
blockchain. Under 2022 Article 9, the happicoins were controllable electronic 
records and the transfer of control of the happicoins gave Lender "control" of the 
happicoins as provided in Section 12-105. The affirmative step of transferring 
control established anew the relative priority of the conflicting claims after the 
effective date. 2022 Atticle 9 determines priority and Lender's security interest has 
priority under Section 9-326A (without any deferral until the adjustment date). 
Moreover, Lender also may have priority over other property claims as a qualifying 
purchaser under Section 12-104(e). 
One consequence of the rule on established priorities in subsection (b) is that the mere 
taking effect of this act does not of itself adversely affect the priority of conflicting claims 
to collateral, as Example 2 illustrates. However, as Example 3 illustrates, relative priorities 
that are "established" before the effective date do not necessarily remain unchanged 
following the effective date. Of course, unlike priority contests among security interests, 
some priorities are established permanently. for example, the rights of a buyer of property 
who took free of a security interest under pre-2022 Article 9. 
3. Modification of established priorities on adjustment date. 
Subsection (c) provides an exception to the respect that subsection (b) affords to pre-
effective-date established priorities, but only for security interests in Article 12 property-
controllable accounts. controllable electronic records. and controllable payment 
intangibles-and electronic money. 
Example 4. The facts are the same as in Example 2. Lender's security interest 
became perfected by control on the effective date. Secured Party's established 
priority continued to apply under subsection (b). Under subsection (c), however. 
on the adjustment date the priorities shifted. Secured Patty's established priority 
ceased to apply and Lender's perfection by control gave Lender priority under 2022 
Section 9-326A. 
4. Transfers of collateral after the effective date. 
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Example 5. The facts are the same as in Example 2. In 2023, after the effective 
date, Debtor acquired an additional 500 happicoins. The security interests of both 
Secured Party and Lender attached to the happicoins pursuant to the after-acquired 
property clauses in their respective security agreements. Secured Party's security 
interest was perfected by its earlier financing statement filing. Lender then 
perfected its security interest by Debtor's transfer of control of the happicoins to 
Lender. Lender's security interest in the additional happicoins perfected by control 
gave Lender priority as to those happicoins under Section 9-326A. Unlike the 
situation in Example 2, however, as to the newly acquired happicoins the priorities 
were not established prior to the effective date. Before the effective date neither 
creditor could have had a "perfected" security interest in happicoins in which 
Debtor had not yet acquired rights. 
Example 6. The facts are the same as in Example 1. In 2023, after the effective 
date, Debtor transferred 750 spitcoins, an electronic money, to Beier. Beier then 
obtained control of the spitcoins under Section 9-105A. Secured Party's security 
interest in the spitcoins, which were either money not capable of being possessed 
or general intangibles under pre-2022 Article 9, are assumed to be perfected by 
filing. See Section A-302, Comment 3, Example 2. Because there was no wrongful 
collusion with Debtor (indeed, Beier had no knowledge or notice of Secured Party's 
security interest), Beier took the spitcoin free of Secured Party's security interest 
under Section 9-332(c). 
§15-306. Priority of claims when priority rules of Article 9-A do not apply 
(1). Subject to subsections (2) and (3), Article 12 determines the priority of conflicting 
claims to Article 12 property when the priority rules of Article 9-A as in effect on July 1, 
2025 do not apply. 
(2). Subject to subsection (3), when the priority rules of Article 9-A as in effect on 
July 1, 2025 do not apply and the priorities of claims to Article 12 property were established 
before July L 2025, law other than Article 12 determines priority. 
(3). When the priority rules of Article 9-A as in effect on July L 2025 do not apply, 
to the extent the priorities determined by this Title as in effect on July 1, 2025 modify the 
ptiorities established before July L 2025, the priorities of claims to Article 12 property 
established before July 1, 2025 cease to apply on the adjustment date. 
Official Comment 
1. Source. This section derives from Section 9-709 and, in part, from Section 8-510. 
2. Applicability of this section to Article 12 property. Although this section applies 
to Article 12 property (controllable accounts, controllable electronic records, and 
controllable payment intangibles) when the priority rules of Article 9 do not apply, it 
applies primarily to controllable electronic records. Its application to controllable accounts 
and controllable payment intangibles is quite limited because Article 9 applies to most sales 
of accounts and payment intangibles (as well as to the use of that property to secure an 
obligation). Section 9-109(a)(3). There is a very limited exclusion from the scope of Article 
for a sale of accounts and payment intangibles in connection with a sale of the business 
out of which they arose. Section 9-109(d)(4). 
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3. Law governing priority and established priorities. Ordinarily. when the priority 
rules of Article 9 do not apply, Article 12 determines the priority of conflicting claims to 
Article 12 property under subsection (a). However, when the relative priorities of the claims 
were established before the effective date, under subsection (b) law other than Article 12 
governs. Subsection (c) provides an exception to subsection (b). 
4. Law governing priority and established priorities, 
Example 1. In 2021, prior to the effective date, Aiko owned 500 happicoins (a 
cryptocurrency consisting of controllable electronic records) over which Aiko had 
control (within the meaning of Section 12-105, which was not yet effective) on the 
happicoin blockchain. In December 2021 Aiko sold the 500 happicoins to Barbara 
for $10,000 cash. Aiko provided Barbara with a signed memorandum 
acknowledging the sale and Aiko's receipt of the purchase price and agreeing to 
hold the happicoins for Barbara pending Barbara's further instructions. 
In January 2022 (also prior to the effective date), Aiko sold the same 500 
happicoins to Molly for $12,000 cash. Aiko provided Molly with a signed 
memorandum similar to the one Aiko had provided to Barbara. Assume that, under 
the non-Uniform Commercial Code applicable law, Barbara remained the owner 
of the happicoins and under that law Molly obtained no interest in the happicoins 
pursuant to the purported sale because Aiko had retained no interest and had 
nothing to transfer to Molly. Because the priorities of the claims of Aiko, Barbara, 
and Molly were established before the effective date, under subsection (a) those 
priorities remained in effect after the effective date and Barbara remains the owner 
of the happicoins. 
Example 2. The facts are the same as in Example 1, except that before the effective 
date, Aiko transferred control of the happicoins to Molly on the happicoins 
blockchain. Again, assume that under the non-Uniform Commercial Code 
applicable law that transfer of control had no legal effect. After the effective date 
the relative priorities are unchanged from those described in Example 1 because 
the relative priorities were established before the effective date and subsection (b) 
applies. 
Example 3. The facts are the same as in Example 1, except that after the effective 
date, Aiko transferred control of the happicoins to Molly on the happicoins 
blockchain. Under Article 12, the happicoins were controllable electronic records 
and the transfer of control of the happicoins gave Molly "control" of the happicoins 
as provided in Section 12-105. Because (it is assumed) Molly met the requirements 
for a "qualifying purchaser" under Section 12-104(e), Molly acquired the 
happicoins free of Barbara's property claim. The affirmative step of transferring 
control after the effective date established anew the relative priority of the 
conflicting claims after the effective date. Under Section A-301(a), Article 12 
applies to the pre-effective-date transactions and property interests and subsection 
(a) of this section applies. 
5. 
Modification of established priorities on adjustment date. Subsection (c) 
provides an exception to the respect that subsection (b) affords to pre-effective-date 
established priorities. 
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Example 4. The facts are the same as in Example 2. However, on the adjustment 
date the established priorities change. Because (it is assumed) Molly met the 
requirements for a "qualifying purchaser" under Section 12-104(e), on the 
adjustment date Molly acquired the happicoins free of Barbara's property claim. 
Under Section A-30l(a). Article 12 applies to the pre-effective-date transactions 
and property interests and subsection (a) of this section applies. 
6. Transfers after the effective date. 
Example 5. The facts are the same as in Example 1, except that after the effective 
date Aiko sold the happicoins to Jacob. for value. and also transferred control of 
the happicoins to Jacob on the happicoins blockchain. Because (it is assumed) 
Jacob met the requirements for a "qualifying purchaser" under Section 12-104(e). 
Jacob acquired the happicoins free of both Barbara's and Molly's property claims. 
Note that Jacob took the happicoins free of conflicting claims in the post-effective 
date acquisition immediately upon acquisition as a qualifying purchaser. Jacob's 
priority was established after the effective date and was not deferred until the 
adjustment date, as was the case for Molly's rights in Example 4. 
PARTD 
Sec. D-1. Legislative intent. Part B is the Maine enactment of the Uniform 
Commercial Code, Article 12 as revised by the National Conference of Commissioners on 
Uniform State Laws. The text of the uniform act has been changed to conform to the Maine 
statutory conventions, and the Article is enacted as Article 12. Unless otherwise noted in a 
Maine comment, the changes are technical in nature and it is the intent of the Legislature 
that Part B be interpreted as substantively the same as the revised Article 12 of the uniform 
act. 
Sec. D-2. Comments. The Legislature accepts the Uniform Comments composed 
by the National Conference of Commissioners on Uniform State Laws as part of the 2022 
amendments to the Uniform Commercial Code, Article 12. 
Sec. D-3. Construction. This Act may not be construed to support, endorse, create 
or implement a central bank digital currency. 
PARTE 
Sec. E-1. Effective date. This Act takes effect July 1, 2025.' 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or section 
number to read consecutively. 
SUMMARY 
This amendment replaces the bill, which is a concept draft. The amendment updates 
the Uniform Commercial Code with the 2022 version of the Code as approved by the 
National Conference of Commissioners on Uniform State Laws. It also enacts a new 
Article 12 governing controllable electronic records. It removes the provisions related to 
electronic money from the amendment. Explanatory notes and Uniform Comments as 
prepared by the uniform law commissioners are included except that explanatory notes and 
Uniform Comments for sections of the Uniform Commercial Code that have not been 
amended are not included. 
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