2023 New York Laws › UCC - Uniform Commercial Code › Article 9 - Secured Transactions › Part 1 - General Provisions › Sub Part 1 - Short Title, Definitions, and General Concepts › 9-103 - Purchase-Money Security Interest; Application of Payments; Burden of Establishing

Section 9--103. Purchase-money   Security   Interest;   Application   of
Payments; Burden of Establishing.
(a) Definitions. In this section:
(1) "purchase-money collateral"  means  goods  or  software  that
secures  a purchase-money obligation incurred with respect to
that collateral; and
(2) "purchase-money obligation" means an obligation of an obligor
incurred as all or part of the price of the collateral or for
value given to enable the debtor to acquire rights in or  the
use of the collateral if the value is in fact so used.
(b) Purchase-money  security interest in goods. A security interest in
goods is a purchase-money security interest:
(1) to the extent that the goods  are  purchase-money  collateral
with respect to that security interest;
(2) if  the  security  interest  is  in  inventory that is or was
purchase-money  collateral,  also  to  the  extent  that  the
security   interest   secures   a  purchase-money  obligation
incurred with respect to other inventory in which the secured
party holds or held a purchase-money security interest; and
(3) also to the extent  that  the  security  interest  secures  a
purchase-money  obligation  incurred with respect to software
in which the secured party holds  or  held  a  purchase-money
security interest.
(c) Purchase-money  security interest in software. A security interest
in software is a purchase-money security interest to the extent that the
security interest also secures a purchase-money obligation incurred with
respect  to  goods  in  which  the  secured  party  holds  or   held   a
purchase-money security interest if:
(1) the  debtor  acquired  its  interest  in  the  software in an
integrated transaction in which it acquired  an  interest  in
the goods; and
(2) the  debtor  acquired  its  interest  in the software for the
principal purpose of using the software in the goods.
(d) Consignor's  inventory  purchase-money  security   interest.   The
security  interest  of  a  consignor  in goods that are the subject of a
consignment is a purchase-money security interest in inventory.
(e) Application of payment in  non-consumer-goods  transaction.  In  a
transaction  other  than  a consumer-goods transaction, if the extent to
which a security interest is a purchase-money security interest  depends
on  the application of a payment to a particular obligation, the payment
must be applied:
(1) in accordance with any reasonable method  of  application  to
which the parties agree;
(2) in  the  absence  of  the  parties' agreement to a reasonable
method, in accordance  with  any  intention  of  the  obligor
manifested at or before the time of payment; or
(3) in  the  absence of an agreement to a reasonable method and a
timely manifestation  of  the  obligor's  intention,  in  the
following order:
(A) to obligations that are not secured; and
(B) if  more  than  one obligation is secured, to obligations
secured by purchase-money security interests in the order
in which those obligations were incurred.
(f) No  loss  of  status  of  purchase-money  security   interest   in
non-consumer-goods   transaction.   In   a   transaction  other  than  a
consumer-goods transaction, a purchase-money security interest does  not
lose its status as such, even if:
(1) the purchase-money collateral also secures an obligation that
is not a purchase-money obligation;
(2) collateral that is not purchase-money collateral also secures
the purchase-money obligation; or
(3) the  purchase-money  obligation has been renewed, refinanced,
consolidated, or restructured.
(g) Burden  of  proof  in   non-consumer-goods   transaction.   In   a
transaction  other  than  a  consumer-goods transaction, a secured party
claiming  a  purchase-money  security  interest  has   the   burden   of
establishing   the   extent   to   which  the  security  interest  is  a
purchase-money security interest.
(h) Non-consumer-goods transactions; no inference. The  limitation  of
the  rules  in  subsections (e), (f), and (g) to transactions other than
consumer-goods transactions is  intended  to  leave  to  the  court  the
determination  of  the  proper rules in consumer-goods transactions. The
court may not infer from that limitation the nature of the  proper  rule
in  consumer-goods  transactions  and  may continue to apply established
approaches.