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General Services iconUniform Commercial Code

Article 9 of the Uniform Commercial Code (UCC) governs secured transactions in Kansas. Its provisions are found at K.S.A. 84-9-101 to K.S.A. 84-9-809. Its primary purpose is to provide a comprehensive set of rules and regulations that govern the creation and enforcement of security interests in personal property. A security interest is created when a debtor borrows money and grants a security interest in collateral to a secured party (typically a lender) to secure the repayment of the debt.

The core of Article 9 is its "notice filing" system, where parties to secured transactions file documents to put the pubic on notice of a secured party's interest in a debtor’s collateral. The Secretary of State serves as the single statewide repository for all public notice filings made under Article 9 of the UCC.

Key purposes and features of Article 9 include:

  1. Creation and Perfection of Security Interests: Article 9 outlines the steps required to create a security interest and how to perfect it. Perfection is the process by which a security interest is made legally effective against third parties, ensuring that the secured party has priority over other potential claimants to the same collateral.
  2. Priority Rules: Article 9 establishes rules for determining the priority of conflicting security interests. Priority determines which secured party has the first claim to the collateral in the event of default or other issues.
  3. Default and Enforcement: The article provides procedures for dealing with default situations, including the rights and remedies available to secured parties. This includes the right to repossess collateral, sell it, and apply the proceeds to the debt.
  4. Collateral Description: Article 9 provides flexibility in the description of collateral through the public notice, rather than requiring an overly specific description of collateral.
  5. Fixtures and Accessions: The article covers security interests in fixtures (goods that are attached to real property) and accessions (goods that are physically united with other goods in such a manner that the identity of the original goods is not lost).
  6. Buyers in the Ordinary Course of Business: Article 9 includes protections for buyers who acquire goods in the ordinary course of business from a seller, even if the seller is subject to a security interest in the goods.