A Singular Test for Automatic Perfection of Accounts and Payment Intangibles

Article 9 grants automatic perfection to assignments of accounts and payment intangibles that do not constitute a significant amount of the assignor’s outstanding accounts or payment intangibles. Although the concept of significance appears easy to implement, courts have created disparate tests to determine significance. Nevertheless, each of those tests either creates inefficiencies in application or is disjointed from the statutory text. This Article argues courts should interpret significance is a manner congruent with the first principles of Article 9 and hold that significance only exists when a transaction is either objectively or subjectively intended to further commercial financing