Sales of Personal Property as Secured Transactions Under Article 9 of the Uniform Commercial Code

The principal focus of Article 9 of the Uniform Commercial Code (UCC) has always dealt with transactions intended by the parties to create security interests in personal property. In 1998, the sponsors of the UCC approved a sweeping revision of Article 9; however, the main focus of the Article was not changed. § 9-109(a)(1) of revised Article 9 provides: [e]xcept as otherwise provided in subsection (c) and (d), this Article applies to (1) a transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract, and § 1-201(37) of the Code, although modified to conform to some changes made in Article 9, retained the general definition of security interest quoted above without change. Nevertheless, Article 9 continues to apply to some transactions that are not intended to create security interests. Revised § 9-109 (a)(3) provides that, subject to exceptions in subsections (c) and (d), the Article applies to a sale of accounts, chattel paper, payment intangibles, or promissory notes. This Article has two objectives: (1) to explore the reasons for including some outright sales of personal property within the scope of Article 9 and the effect of such inclusions on the status of buyers and sellers of such property, and (2) to identify the difference between the two versions of the Article in their treatment of sales of personal property as secured transactions