810 ILCS 5/9-324
2021 Illinois Compiled Statutes|Chapter 810 - COMMERCIAL CODE|810 ILCS 5/ - Uniform Commercial Code.|Article 9 - Secured Transactions

Sec. 9-324.     Priority of purchase-money security interests.(a) General rule:  purchase-money priority.  Except as otherwise  provided in subsection (g), a perfected purchase-money security interest in  goods  other than inventory or livestock has priority over a conflicting security  interest in  the same goods, and, except as otherwise provided in Section 9-327, a perfected  security interest in its identifiable proceeds also has priority, if the  purchase-money  security interest is perfected when the debtor receives possession of the  collateral or  within 20 days thereafter.(b) Inventory purchase-money priority.  Subject to subsection (c)  and except as otherwise provided in subsection (g), a perfected purchase-money  security interest in inventory has priority over a conflicting security  interest in the  same inventory, has priority over a conflicting security interest in chattel paper or  an instrument constituting proceeds of the inventory and in proceeds of the chattel  paper, if so provided in Section 9-330, and, except as otherwise provided in Section  9-327, also has priority in identifiable cash proceeds of the inventory to the extent  the identifiable cash proceeds are received on or before the delivery of the  inventory to a buyer, if:(1) the purchase-money security interest is perfected     when the debtor receives possession of the inventory;(2) the purchase-money secured party sends an     authenticated notification to the holder of the conflicting security interest;(3) the holder of the conflicting security interest     receives the notification within five years before the debtor receives possession of the inventory; and(4) the notification states that the person sending     the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.(c) Holders of conflicting inventory security interests to be  notified.  Subsections (b)(2) through (4) apply only if the holder of the conflicting  security interest had filed a financing statement covering the same types of  inventory:(1) if the purchase-money security interest is     perfected by filing, before the date of the filing; or(2) if the purchase-money security interest is     temporarily perfected without filing or possession under Section 9-312(f), before the beginning of the 20-day period thereunder.(d) Livestock purchase-money priority.  Subject to subsection (e)  and except as otherwise provided in subsection (g), a perfected purchase-money  security interest in livestock that are farm products has priority over a conflicting  security interest in the same livestock, and, except as otherwise provided in Section  9-327, a perfected security interest in their identifiable proceeds and identifiable  products in their unmanufactured states also has priority, if:(1) the purchase-money security interest is perfected     when the debtor receives possession of the livestock;(2) the purchase-money secured party sends an     authenticated notification to the holder of the conflicting security interest;(3) the holder of the conflicting security interest     receives the notification within six months before the debtor receives possession of the livestock; and(4) the notification states that the person sending     the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock.(e) Holders of conflicting livestock security interests to be  notified.  Subsections (d)(2) through (4) apply only if the holder of the conflicting  security interest had filed a financing statement covering the same types of  livestock:(1) if the purchase-money security interest is     perfected by filing, before the date of the filing; or(2) if the purchase-money security interest is     temporarily perfected without filing or possession under Section 9-312(f), before the beginning of the 20-day period thereunder.(f) Software purchase-money priority.  Except as otherwise  provided in subsection (g), a perfected purchase-money security interest in software  has priority over a conflicting security interest in the same collateral, and, except as  otherwise provided in Section 9-327, a perfected security interest in its identifiable  proceeds also has priority, to the extent that the purchase-money security interest in  the goods in which the software was acquired for use has priority in the goods and  proceeds of the goods under this Section.(g) Conflicting purchase-money security interests.  If more than  one security interest qualifies for priority in the same collateral under  subsection  (a), (b), (d), or (f):(1) a security interest securing an obligation     incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and(2) in all other cases, Section 9-322(a) applies to     the qualifying security interests.   (Source: P.A. 91-893, eff. 7-1-01.)