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2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9320 - Buyer of goods

§ 9320. Buyer of goods.
(a) Buyer in ordinary course of business.--
Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the security interest is perfected and the buyer knows of its existence.
(b) Buyer of consumer goods.--
Except as otherwise provided in subsection (e), a buyer of goods from a person who used or bought the goods for use primarily for personal, family or household purposes takes free of a security interest, even if perfected, if the buyer buys:
(1) without knowledge of the security interest;
(2) for value;
(3) primarily for the buyer's personal, family or household purposes; and
(4) before the filing of a financing statement covering the goods.
(c) Effectiveness of filing for subsection (b).--
To the extent that it affects the priority of a security interest over a buyer of goods under subsection (b), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by section 9316(a) and (b) (relating to effect of change in governing law).
(d) Buyer in ordinary course of business at wellhead or minehead.--
A buyer in ordinary course of business buying oil, gas or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.
(e) Possessory security interest not affected.--
Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under section 9313 (relating to when possession by or delivery to secured party perfects security interest without filing).
(June 27, 2013, P.L.154, No.30, eff. July 1, 2013)
2013 Amendment.
Act 30 amended subsec. (c).
Cross References.
Section 9320 is referred to in sections 7209, 7503, 9317 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9321 - Licensee of general intangible and lessee of goods in ordinary course of business

§ 9321. Licensee of general intangible and lessee of goods in
ordinary course of business.
(a) Licensee in ordinary course of business.
--As used in this section, the term "licensee in ordinary course of business" means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor's own usual or customary practices.
(b) Rights of licensee in ordinary course of business.
--A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor even if the security interest is perfected and the licensee knows of its existence.
(c) Rights of lessee in ordinary course of business.
--A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor even if the security interest is perfected and the lessee knows of its existence.
Cross References.
Section 9321 is referred to in sections 2A307, 7209, 7503, 9317 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9323 - Future advances

§ 9323. Future advances.
(a) When priority based on time of advance.
--Except as otherwise provided in subsection (c), for purposes of determining the priority of a perfected security interest under section 9322(a)(1) (relating to general priority rules), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance which:
(1) is made while the security interest is perfected only:
(i) under section 9309 (relating to security interest perfected upon attachment) when it attaches; or
(ii) temporarily under any of the following sections:
(A) 9312(e) (relating to temporary perfection: new value);
(B) 9312(f) (relating to temporary perfection: goods or documents made available to debtor); or
(C) 9312(g) (relating to temporary perfection: delivery of security certificate or instrument to debtor); and
(2) is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under section 9309 or 9312(e), (f) or (g).
(b) Lien creditor.
--Except as otherwise provided in subsection (c), a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than 45 days after the person becomes a lien creditor unless the advance is made:
(1) without knowledge of the lien; or
(2) pursuant to a commitment entered into without knowledge of the lien.
(c) Buyer of receivables.
--Subsections (a) and (b) do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor.
(d) Buyer of goods.
--Except as otherwise provided in subsection (e), a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:
(1) the time the secured party acquires knowledge of the buyer's purchase; or
(2) 45 days after the purchase.
(e) Advances made pursuant to commitment: priority of buyer of goods.
--Subsection (d) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer's purchase and before the expiration of the 45-day period.
(f) Lessee of goods.
--Except as otherwise provided in subsection (g), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:
(1) the time the secured party acquires knowledge of the lease; or
(2) 45 days after the lease contract becomes enforceable.
(g) Advances made pursuant to commitment: priority of lessee of goods.
--Subsection (f) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the 45-day period.
Cross References.
Section 9323 is referred to in sections 2A307, 9328 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9325 - Priority of security interests in transferred collateral

§ 9325. Priority of security interests in transferred
collateral.
(a) Subordination of security interest in transferred collateral.
--Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:
(1) the debtor acquired the collateral subject to the security interest created by the other person;
(2) the security interest created by the other person was perfected when the debtor acquired the collateral; and
(3) there is no period thereafter when the security interest is unperfected.
(b) Limitation of subsection (a) subordination.
--Subsection (a) subordinates a security interest only if the security interest:
(1) otherwise would have priority solely under section 9322(a) (relating to general priority rules) or 9324
(relating to priority of purchase-money security interests); or
(2) arose solely under section 2711(c) (relating to security interest of buyer in rejected goods) or 2A508(e)
(relating to security interest in goods in lessee's possession).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9326 - Priority of security interests created by new debtor

§ 9326. Priority of security interests created by new debtor.
(a) Subordination of security interest created by new debtor.--
Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement which would be ineffective to perfect the security interest but for the application of section 9316(i)(1) (relating to effect of change in governing law) or 9508 (relating to effectiveness of financing statement if new debtor becomes bound by security agreement) is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.
(b) Priority under other provisions; multiple original debtors.--
The other provisions of this chapter determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in subsection (a). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor's having become bound.
(June 27, 2013, P.L.154, No.30, eff. July 1, 2013)
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9327 - Priority of security interests in deposit account

§ 9327. Priority of security interests in deposit account.
The following rules govern priority among conflicting security interests in the same deposit account:
(1) A security interest held by a secured party having control of the deposit account under section 9104 (relating to control of deposit account) has priority over a conflicting security interest held by a secured party that does not have control.
(2) Except as otherwise provided in paragraphs (3) and
(4), security interests perfected by control under section 9314 (relating to perfection by control) rank according to priority in time of obtaining control.
(3) Except as otherwise provided in paragraph (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party.
(4) A security interest perfected by control under section 9104(a)(3) has priority over a security interest held by the bank with which the deposit account is maintained.
Cross References.
Section 9327 is referred to in sections 9322, 9324, 9330 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9328 - Priority of security interests in investment property

§ 9328. Priority of security interests in investment property.
The following rules govern priority among conflicting security interests in the same investment property:
(1) A security interest of a secured party having control of investment property under section 9106 (relating to control of investment property) has priority over a security interest of a secured party that does not have control over the investment property.
(2) Except as otherwise provided in paragraphs (3) and
(4), conflicting security interests held by secured parties each of which has control under section 9106 rank according to priority in time of:
(i) if the collateral is a security, obtaining control;
(ii) if the collateral is a security entitlement carried in a securities account and:
(A) if the secured party obtained control under section 8106(d)(1) (relating to control), the secured party's becoming the person for which the securities account is maintained;
(B) if the secured party obtained control under section 8106(d)(2), the securities intermediary's agreement to comply with the secured party's entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
(C) if the secured party obtained control through another person under section 8106(d)(3), the time on which priority would be based under this subsection if the other person were the secured party; or
(iii) if the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in section 9106(b)(2) with respect to commodity contracts carried or to be carried with the commodity intermediary.
(3) A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.
(4) A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.
(5) A security interest in a certificated security in registered form which is perfected by taking delivery under section 9313(a) (relating to perfection by possession or delivery) and not by control under section 9314 (relating to perfection by control) has priority over a conflicting security interest perfected by a method other than control.
(6) Conflicting security interests created by a broker, securities intermediary or commodity intermediary which are perfected without control under section 9106 rank equally.
(7) In all other cases, priority among conflicting security interests in investment property is governed by sections 9322 (relating to priorities among conflicting security interests in and agricultural liens on same collateral) and 9323 (relating to future advances).
Cross References.
Section 9328 is referred to in section 9322 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9329 - Priority of security interests in letter-of-credit right

§ 9329. Priority of security interests in letter-of-credit
right.
The following rules govern priority among conflicting security interests in the same letter-of-credit right:
(1) A security interest held by a secured party having control of the letter-of-credit right under section 9107
(relating to control of letter-of-credit right) has priority to the extent of its control over a conflicting security interest held by a secured party that does not have control.
(2) Security interests perfected by control under section 9314 (relating to perfection by control) rank according to priority in time of obtaining control.
Cross References.
Section 9329 is referred to in section 9322 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9330 - Priority of purchaser of chattel paper or instrument

§ 9330. Priority of purchaser of chattel paper or instrument.
(a) Purchaser's priority: security interest claimed merely as proceeds.
--A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if:
(1) in good faith and in the ordinary course of the purchaser's business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under section 9105 (relating to control of electronic chattel paper); and
(2) the chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.
(b) Purchaser's priority: other security interests.
--A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under section 9105 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.
(c) Chattel paper purchaser's priority in proceeds.
--Except as otherwise provided in section 9327 (relating to priority of security interests in deposit account), a purchaser having priority in chattel paper under subsection (a) or (b) also has priority in proceeds of the chattel paper to the extent that:
(1) section 9322 (relating to priorities among conflicting security interests in and agricultural liens on same collateral) provides for priority in the proceeds; or
(2) the proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods even if the purchaser's security interest in the proceeds is unperfected.
(d) Instrument purchaser's priority.
--Except as otherwise provided in section 9331(a) (relating to rights under Divisions 3, 7 and 8 not limited), a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.
(e) Holder of purchase-money security interest gives new value.
--For purposes of subsections (a) and (b), the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.
(f) Indication of assignment gives knowledge.
--For purposes of subsections (b) and (d), if chattel paper or an instrument indicates that it 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.
Cross References.
Section 9330 is referred to in sections 9322, 9324 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9331 - Priority of rights of purchasers of instruments, documents and securities under other divisions; priority of interests in financial assets and security entitlements under Division 8

§ 9331. Priority of rights of purchasers of instruments,
documents and securities under other divisions;
priority of interests in financial assets and
security entitlements under Division 8.
(a) Rights under Divisions 3, 7 and 8 not limited.
--This division 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 or a protected purchaser of a security. These holders or purchasers take priority over an earlier security interest, even if perfected, to the extent provided in Divisions 3 (relating to negotiable instruments), 7 (relating to warehouse receipts, bills of lading and other documents of title) and 8 (relating to investment securities).
(b) Protection under Division 8.
--This division 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 Division 8.
(c) Filing not notice.
--Filing under this division does not constitute notice of a claim or defense to the holders, purchasers or persons described in subsections (a) and (b).
Cross References.
Section 9331 is referred to in sections 9322, 9330 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9332 - Transfer of money; transfer of funds from deposit account

§ 9332. Transfer of money; transfer of funds from deposit
account.
(a) Transferee of money.
--A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party.
(b) Transferee of funds from deposit account.
--A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the transferee acts in collusion with the debtor in violating the rights of the secured party.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9333 - Priority of certain liens arising by operation of law

§ 9333. Priority of certain liens arising by operation of law.
(a) Possessory lien.
--As used in this section, the term "possessory lien" means an interest, other than a security interest or an agricultural lien:
(1) which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business;
(2) which is created by statute or rule of law in favor of the person; and
(3) whose effectiveness depends on the person's possession of the goods.
(b) Priority of possessory lien.
--A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute which expressly provides otherwise.
Cross References.
Section 9333 is referred to in section 9109 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9335 - Accessions

§ 9335. Accessions.
(a) Creation of security interest in accession.
--A security interest may be created in an accession and continues in collateral which becomes an accession.
(b) Perfection of security interest.
--If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.
(c) Priority of security interest.
--Except as otherwise provided in subsection (d), the other provisions of this chapter determine the priority of a security interest in an accession.
(d) Compliance with certificate-of-title statute.
--A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under section 9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties).
(e) Removal of accession after default.
--After default, subject to Chapter 96 (relating to default), a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.
(f) Reimbursement following removal.
--A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of, the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9336 - Commingled goods

§ 9336. Commingled goods.
(a) Commingled goods.
--As used in this section, the term "commingled goods" means goods which are physically united with other goods in such a manner that their identity is lost in a product or mass.
(b) No security interest in commingled goods as such.
--A security interest does not exist in commingled goods as such. However, a security interest may attach to a product or mass which results when goods become commingled goods.
(c) Attachment of security interest to product or mass.
--If collateral becomes commingled goods, a security interest attaches to the product or mass.
(d) Perfection of security interest.
--If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest which attaches to the product or mass under subsection (c) is perfected.
(e) Priority of security interest.
--Except as otherwise provided in subsection (f), the other provisions of this chapter determine the priority of a security interest which attaches to the product or mass under subsection (c).
(f) Conflicting security interests in product or mass.
--If more than one security interest attaches to the product or mass under subsection (c), the following rules determine priority:
(1) A security interest which is perfected under subsection (d) has priority over a security interest which is unperfected at the time the collateral becomes commingled goods.
(2) If more than one security interest is perfected under subsection (d), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods.
Cross References.
Section 9336 is referred to in section 9315 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9337 - Priority of security interests in goods covered by certificate of title

§ 9337. Priority of security interests in goods covered by
certificate of title.
If, while a security interest in goods is perfected by any method under the law of another jurisdiction, the Commonwealth issues a certificate of title which does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate:
(1) a buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and
(2) the security interest is subordinate to a conflicting security interest in the goods which attaches, and is perfected under section 9311(b) (relating to perfection of security interests in property subject to certain statutes, regulations and treaties), after issuance of the certificate and without the conflicting secured party's knowledge of the security interest.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9338 - Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect information

§ 9338. Priority of security interest or agricultural lien
perfected by filed financing statement providing
certain incorrect information.
If a security interest or agricultural lien is perfected by a filed financing statement providing information described in section 9516(b)(5) (relating to what constitutes filing; effectiveness of filing) which is incorrect at the time the financing statement is filed:
(1) the security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and
(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, in the case of tangible chattel paper, tangible documents, goods, instruments or a security certificate, receives delivery of the collateral. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days)
2008 Amendment.
Act 13 amended par. (2).
Cross References.
Section 9338 is referred to in section 9520 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9340 - Effectiveness of right of recoupment or set-off against deposit account

§ 9340. Effectiveness of right of recoupment or set-off against deposit account.
(a) Exercise of recoupment or set-off.--
Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account.
(b) Recoupment or set-off not affected by security interest.--
Except as otherwise provided in subsection (c), the application of this division to a security interest in a deposit account does not affect a right of recoupment or set-off of the secured party as to a deposit account maintained with the secured party.
(c) When set-off ineffective.--
The exercise by a bank of a set-off against a deposit account is ineffective against a secured party that holds a security interest in the deposit account which is perfected by control under section 9104(a)(3) (relating to requirements for control) if the set-off is based on a claim against the debtor.
Cross References.
Section 9340 is referred to in sections 9109, 9341 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9341 - Bank's rights and duties with respect to deposit account

§ 9341. Bank's rights and duties with respect to deposit
account.
Except as otherwise provided in section 9340(c) (relating to when set-off ineffective) and unless the bank otherwise agrees in an authenticated record, a bank's rights and duties with respect to a deposit account maintained with the bank are not terminated, suspended or modified by:
(1) the creation, attachment or perfection of a security interest in the deposit account;
(2) the bank's knowledge of the security interest; or
(3) the bank's receipt of instructions from the secured party.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 93 - Perfection and Priority › Section 9342 - Bank's right to refuse to enter into or disclose existence of control agreement

§ 9342. Bank's right to refuse to enter into or disclose
existence of control agreement.
This division does not require a bank to enter into an agreement of the kind described in section 9104(a)(2) (relating to requirements for control) even if its customer so requests or directs. A bank which has entered into such an agreement is not required to confirm the existence of the agreement to another person unless requested to do so by its customer.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Extra - Chapter Notes

Enactment.
Chapter 94 was added June 8, 2001, P.L.123, No.18, effective July 1, 2001.
Prior Provisions.
Former Chapter 94, which related to filing, was added November 1, 1979, P.L.255, No.86,
            and repealed June 8, 2001, P.L.123, No.18, effective July 1, 2001.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9401 - Alienability of debtor's rights

§ 9401. Alienability of debtor's rights.
(a) Other law governs alienability; exceptions.--
Except as otherwise provided in subsections (b) and (c), whether a debtor's rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this division.
(b) Agreement does not prevent transfer.--
An agreement between the debtor and secured party which prohibits a transfer of the debtor's rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.
(c) Exceptions.--
Subsection (a) is also subject to the following:
(1) section 9406 (relating to 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);
(2) section 9407 (relating to restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest);
(3) section 9408 (relating to restrictions on assignment of promissory notes, health-care-insurance receivables and certain general intangibles ineffective); and
(4) section 9409 (relating to restrictions on assignment of letter-of-credit rights ineffective).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9402 - Secured party not obligated on contract of debtor or in tort

§ 9402. Secured party not obligated on contract of debtor or in
tort.
The existence of a security interest, agricultural lien or authority given to a debtor to dispose of or use collateral, without more, does not subject a secured party to liability in contract or tort for the debtor's acts or omissions.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9403 - Agreement not to assert defenses against assignee

§ 9403. Agreement not to assert defenses against assignee.
(a) Value.
--As used in this section, the term "value" has the meaning provided in section 3303(a) (relating to value).
(b) Agreement not to assert claim or defense.
--Except as otherwise provided in this section, an agreement between an account debtor and an assignor not to assert against an assignee any claim or defense which the account debtor may have against the assignor is enforceable by an assignee that takes an assignment:
(1) for value;
(2) in good faith;
(3) without notice of a claim of a property or possessory right to the property assigned; and
(4) without notice of a defense or claim in recoupment of the type which may be asserted against a person entitled to enforce a negotiable instrument under section 3305(a)
(relating to defenses and claims in recoupment).
(c) When subsection (b) not applicable.
--Subsection (b) does not apply to defenses of a type which may be asserted against a holder in due course of a negotiable instrument under section 3305(b).
(d) Omission of required statement in consumer transaction.
--In a consumer transaction, if a record evidences the account debtor's obligation, law other than this division requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses which the account debtor could assert against the original obligee and the record does not include such a statement:
(1) the record has the same effect as if the record included such a statement; and
(2) the account debtor may assert against an assignee those claims and defenses which would have been available if the record included such a statement.
(e) Rule for individual under other law.
--This section is subject to law other than this division which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family or household purposes.
(f) Other law not displaced.
--Except as otherwise provided in subsection (d), this section does not displace law other than this division which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9404 - Rights acquired by assignee; claims and defenses against assignee

§ 9404. Rights acquired by assignee; claims and defenses
against assignee.
(a) Assignee's rights subject to terms, claims and defenses; exceptions.
--Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the rights of an assignee are subject to:
(1) all terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction which gave rise to the contract; and
(2) any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by the assignor or the assignee.
(b) Account debtor's claim reduces amount owed to assignee.
--Subject to subsection (c) and except as otherwise provided in subsection (d), the claim of an account debtor against an assignor may be asserted against an assignee under subsection (a) only to reduce the amount the account debtor owes.
(c) Rule for individual under other law.
--This section is subject to law other than this division which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family or household purposes.
(d) Omission of required statement in consumer transaction.
--In a consumer transaction, if a record evidences the account debtor's obligation, law other than this division requires that the record include a statement to the effect that the account debtor's recovery against an assignee with respect to claims and defenses against the assignor may not exceed amounts paid by the account debtor under the record, and the record does not include such a statement, the extent to which a claim of an account debtor against the assignor may be asserted against an assignee is determined as if the record included such a statement.
(e) Inapplicability to health-care-insurance receivable.
-- This section does not apply to an assignment of a health-care- insurance receivable.
Cross References.
Section 9404 is referred to in section 9109 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9405 - Modification of assigned contract

§ 9405. Modification of assigned contract.
(a) Effect of modification on assignee.
--A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections (b) through (d).
(b) Applicability of subsection (a).
--Subsection (a) applies to the extent that:
(1) the right to payment or a part thereof under an assigned contract has not been fully earned by performance; or
(2) the right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under section 9406(a)
(relating to discharge of account debtor; effect of notification).
(c) Rule for individual under other law.
--This section is subject to law other than this division which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family or household purposes.
(d) Inapplicability to health-care-insurance receivable.
-- This section does not apply to an assignment of a health-care- insurance receivable.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9407 - Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest

§ 9407. Restrictions on creation or enforcement of security
interest in leasehold interest or in lessor's
residual interest.
(a) Term restricting assignment generally ineffective.
-- Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:
(1) prohibits, restricts or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor's residual interest in the goods; or
(2) provides that the assignment or transfer or the creation, attachment, perfection or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the lease.
(b) Effectiveness of certain terms.
--Except as otherwise provided in section 2A303(g) (relating to requirements for prohibition of transfer in consumer lease), a term described in subsection (a)(2) is effective to the extent that there is:
(1) a transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or
(2) a delegation of a material performance of either party to the lease contract in violation of the term.
(c) Security interest not material impairment.
--The creation, attachment, perfection or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer which materially impairs the lessee's prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of section 2A303(d) (relating to certain rights and remedies) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.
Cross References.
Section 9407 is referred to in sections 2A303, 9401, 9406 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 94 - Rights of Third Parties › Section 9409 - Restrictions on assignment of letter-of-credit rights ineffective

§ 9409. Restrictions on assignment of letter-of-credit rights
ineffective.
(a) Term or law restricting assignment generally ineffective.
--A term in a letter of credit or a rule of law, statute, regulation, custom or practice applicable to the letter of credit which prohibits, restricts or requires the consent of an applicant, issuer or nominated person to a beneficiary's assignment of or creation of a security interest in a letter-of- credit right is ineffective to the extent that the term or rule of law, statute, regulation, custom or practice:
(1) would impair the creation, attachment or perfection of a security interest in the letter-of-credit right; or
(2) provides that the assignment or the creation, attachment or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the letter-of-credit right.
(b) Limitation on ineffectiveness under subsection (a).
--To the extent that a term in a letter of credit is ineffective under subsection (a) but would be effective under law other than this division or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit or to the assignment of a right to proceeds of the letter of credit, the creation, attachment or perfection of a security interest in the letter-of-credit right:
(1) is not enforceable against the applicant, issuer, nominated person or transferee beneficiary;
(2) imposes no duties or obligations on the applicant, issuer, nominated person or transferee beneficiary; and
(3) does not require the applicant, issuer, nominated person or transferee beneficiary to recognize the security interest, pay or render performance to the secured party or accept payment or other performance from the secured party.
Cross References.
Section 9409 is referred to in section 9401 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 95 - Filing › Extra - Chapter Notes

Enactment.
Chapter 95 was added June 8, 2001, P.L.123, No.18, effective July 1, 2001.
Prior Provisions.
Former Chapter 95, which related to default, was added November 1, 1979, P.L.255,
            No.86, and repealed June 8, 2001, P.L.123, No.18, effective July 1, 2001.
Cross References.
Chapter 95 is referred to in sections 9705, 9706, 9805, 9806 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 95 - Filing › Section 9501 - Filing office

§ 9501. Filing office.
(a) Filing offices.--
Except as otherwise provided in subsection (b), if the local law of this Commonwealth governs perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is one of the following:
(1) The office designated for the filing or recording of a record of a mortgage on the related real property if:
(i) the collateral is as-extracted collateral or timber to be cut; or
(ii) the financing statement is filed as a fixture filing and the collateral is goods which are or are to become fixtures.
(2) The office of the Secretary of the Commonwealth in all other cases, including a case in which the collateral is goods which are or are to become fixtures and the financing statement is not filed as a fixture filing.
(b) Filing office for transmitting utilities.--
The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the office of the Secretary of the Commonwealth. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement which is or is to become fixtures.
Cross References.
Section 9501 is referred to in sections 9102, 9109, 9502, 9512, 9516, 9519, 9520, 9523, 9525, 9706, 9707, 9806, 9807 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 13 - COMMERCIAL CODE › Chapter 95 - Filing › Section 9502 - Contents of financing statement; record of mortgage as financing statement; time of filing financing statement

§ 9502. Contents of financing statement; record of mortgage as financing statement; time of filing financing statement.
(a) Sufficiency of financing statement.--
Subject to subsection (b), a financing statement is sufficient only if it:
(1) provides the name of the debtor;
(2) provides the name of the secured party or a representative of the secured party; and
(3) indicates the collateral covered by the financing statement.
(b) Real-property-related financing statements.--
Except as otherwise provided in section 9501(b) (relating to filing office for transmitting utilities), to be sufficient, a financing statement which covers as-extracted collateral or timber to be cut or which is filed as a fixture filing and covers goods which are or are to become fixtures must satisfy subsection (a) and also:
(1) indicate that it covers this type of collateral;
(2) indicate that it is to be filed in the real property records;
(3) provide a description of the real property to which the collateral is related; and
(4) if the debtor does not have an interest of record in the real property, provide the name of a record owner.
(c) Record of mortgage as financing statement.--
A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if all of the following apply:
(1) The record indicates the goods or accounts which it covers.
(2) The goods are or are to become fixtures related to the real property described in the record, or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut.
(3) The record satisfies the requirements for a financing statement in this section subject to the following:
(i) The record need not indicate that it is to be filed in the real property records.
(ii) The record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom section 9503(a)(4) (relating to name of debtor and secured party) applies.
(4) The record is duly recorded.
(d) Filing before security agreement or attachment.--
A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.
(June 27, 2013, P.L.154, No.30, eff. July 1, 2013)
2013 Amendment. Act 30 amended subsec. (c).
Cross References.
Section 9502 is referred to in sections 2A309, 9102, 9109, 9512, 9514, 9515, 9520, 9525 of this title.