Uniform Commercial Code; revise.

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To: Judiciary, Division A
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Wiggins

SENATE BILL NO. 2119

AN ACT TO ENACT THE 2018 AND 2022 AMENDMENTS TO THE UNIFORM 1
COMMERCIAL CODE AS RECOMMENDED BY THE UNIFORM LAW COMMISSION AND 2
THE AMERICAN LAW INSTITUTE; TO AMEND SECTION 75-1-201, MISSISSIPPI 3
CODE OF 1972, TO AMEND THE TERMS "CONSPICUOUS," "DELIVERY," 4
"HOLDER," "MONEY," "PERSON" AND "SEND"; TO DEFINE THE TERM 5
"ELECTRONIC"; TO DELETE THE TERM "SIGNED"; TO AMEND SECTION 6
75-1-204, MISSISSIPPI CODE OF 1972, TO SPECIFY THAT EXCEPT AS 7
OTHERWISE PROVIDED IN ARTICLE 12 OF THE UNIFORM COMMERCIAL CODE A 8
PERSON GIVES VALUE FOR RIGHTS IF THE PERSON ACQUIRES THEM; TO 9
AMEND SECTION 75-2-102, MISSISSIPPI CODE OF 1972, TO CLARIFY THE 10
SCOPE OF THIS CHAPTER; TO PROVIDE WHEN A HYBRID TRANSACTION IS 11
SUBJECT TO ARTICLE 2; TO AMEND SECTION 75-2-106, MISSISSIPPI CODE 12
OF 1972, TO DEFINE THE TERM HYBRID TRANSACTION; TO AMEND SECTION 13
75-2A-102, MISSISSIPPI CODE OF 1972, TO MODIFY THE SCOPE OF THIS 14
CHAPTER AS IT CONCERNS A HYBRID LEASE; TO AMEND SECTION 75-2A-103, 15
MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "HYBRID LEASE"; TO 16
AMEND SECTION 75-3-104, MISSISSIPPI CODE OF 1972, TO REVISE THE 17
DEFINITION OF THE TERM "NEGOTIABLE INSTRUMENT"; TO AMEND SECTION 18
75-3-105, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF 19
THE TERM "ISSUE"; TO AMEND SECTION 75-3-604, MISSISSIPPI CODE OF 20
1972, TO SPECIFY THAT THE OBLIGATION OF A PARTY TO PAY A CHECK IS 21
NOT DISCHARGED SOLELY BY DESTRUCTION OF THE CHECK IN CONNECTION 22
WITH A SPECIFIED PROCESS; TO AMEND SECTION 75-4A-201, MISSISSIPPI 23
CODE OF 1972, TO REVISE THE DEFINITION OF THE TERM "SECURITY 24
PROCEDURE" TO PROVIDE THAT A SECURITY PROCEDURE AGREED TO BY A 25
CUSTOMER AND A RECEIVING BANK MAY IMPOSE AN OBLIGATION THEREIN; TO 26
PROVIDE THAT A SECURITY PROCEDURE MAY REQUIRE THE USE OF SYMBOLS, 27
SOUNDS, AND BIOMETRICS; TO PROVIDE THAT REQUIRING A PAYMENT ORDER 28
BE SENT FROM A KNOWN EMAIL ADDRESS, IP ADDRESS, OR TELEPHONE 29
NUMBER IS NOT BY ITSELF A SECURITY PROCEDURE; TO AMEND SECTION 30
75-4A-202, MISSISSIPPI CODE OF 1972, TO REVISE THE CIRCUMSTANCES 31
UNDER WHICH PAYMENT ORDERS RECEIVED BY BANKS ARE EFFECTIVE AS THE 32
ORDER OF A CUSTOMER; AND FOR RELATED PURPOSES; TO AMEND SECTION 33
75-5-116, MISSISSIPPI CODE OF 1972, TO SPECIFY THAT FOR PURPOSES 34
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OF CHOICE OF LAW AND FORUM REGARDING LETTERS OF CREDIT A BRANCH OF 35
A BANK IS CONSIDERED TO BE LOCATED AT THE ADDRESS INDICATED IN A 36
BRANCH'S UNDERTAKING OR IF MORE THAN ONE ADDRESS IS INDICATED THEN 37
THE BRANCH IS CONSIDERED TO BE LOCATED AT THE ADDRESS FROM WHICH 38
THE UNDERTAKING WAS ISSUED; TO AMEND SECTION 75-7-106, MISSISSIPPI 39
CODE OF 1972, TO SPECIFY WHEN A SYSTEM SATISFIES CERTAIN 40
REQUIREMENTS AND A PERSON HAS CONTROL OF AN ELECTRONIC DOCUMENT OF 41
TITLE; TO SPECIFY WHEN CERTAIN POWERS ARE OR ARE NOT EXCLUSIVE; TO 42
PROVIDE THAT A PERSON THAT HAS CONTROL OF AN ELECTRONIC DOCUMENT 43
OF TITLE DOES NOT NEED TO ACKNOWLEDGE THAT IT HAS CONTROL ON 44
BEHALF OF ANOTHER PERSON; TO SPECIFY THAT A PERSON DOES NOT OWE 45
ANY DUTY TO ANOTHER PERSON UNDER CERTAIN CIRCUMSTANCES; TO REVISE 46
THE APPLICABILITY OF DEFINITIONS; TO AMEND SECTION 75-8-103, 47
MISSISSIPPI CODE OF 1972, TO SPECIFY THAT A CONTROLLABLE ACCOUNT, 48
CONTROLLABLE ELECTRONIC RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE 49
IS NOT A FINANCIAL ASSET UNLESS CERTAIN CIRCUMSTANCES APPLY; TO 50
AMEND SECTION 75-8-106, MISSISSIPPI CODE OF 1972, TO REVISE THE 51
CIRCUMSTANCES UNDER WHICH PURCHASERS HAVE CONTROL OF SECURITY 52
ENTITLEMENTS; TO SPECIFY THAT A PERSON THAT HAS SUCH CONTROL IS 53
NOT REQUIRED TO ACKNOWLEDGE SUCH CONTROL ON BEHALF OF A PURCHASER; 54
TO SPECIFY THAT CERTAIN PERSONS DO NOT OWE ANY DUTY TO PURCHASERS 55
AND ARE NOT REQUIRED TO CONFIRM CERTAIN ACKNOWLEDGMENT UNDER 56
CERTAIN CIRCUMSTANCES; TO AMEND SECTION 75-8-110, MISSISSIPPI CODE 57
OF 1972, TO DECLARE THE LOCAL LAW OF THE ISSUER'S JURISDICTION OR 58
SECURITIES INTERMEDIARY'S JURISDICTION GOVERNS A TRANSACTION OR 59
MATTER EVEN IF IT BEARS NO RELATION TO THAT JURISDICTION; TO AMEND 60
SECTION 75-8-303, MISSISSIPPI CODE OF 1972, TO MAKE A MINOR, 61
NONSUBSTANTIVE CHANGE; TO AMEND SECTION 75-9-102, MISSISSIPPI CODE 62
OF 1972, TO AMEND THE DEFINITIONS OF THE TERMS "ACCOUNT," "ACCOUNT 63
DEBTOR," "ACCOUNTING," "CHATTEL PAPER," "GENERAL INTANGIBLE," 64
"INSTRUMENT," "PAYMENT INTANGIBLE" AND "PROPOSAL"; TO DEFINE THE 65
TERMS "ASSIGNEE," "ASSIGNOR," "CHATTEL PAPER," "CONTROLLABLE 66
ACCOUNT," "CONTROLLABLE PAYMENT INTANGIBLE," "ELECTRONIC MONEY" 67
AND "TANGIBLE MONEY"; TO DELETE THE TERMS "AUTHENTICATE," 68
"ELECTRONIC CHATTEL PAPER," "SEND" AND "TANGIBLE CHATTEL PAPER"; 69
TO PROVIDE THAT THE DEFINITIONS OF CERTAIN TERMS WITHIN OTHER 70
ARTICLES OF THE UNIFORM COMMERCIAL CODE APPLY TO THIS ARTICLE; TO 71
AMEND SECTION 75-9-104, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A 72
SECURED PARTY TO OBTAIN CONTROL OF A DEPOSIT ACCOUNT BY 73
ACKNOWLEDGMENT OF ANOTHER PERSON IN CONTROL OF THE DEPOSIT 74
ACCOUNT; TO AMEND SECTION 75-9-105, MISSISSIPPI CODE OF 1972, TO 75
PROVIDE THE GENERAL RULE FOR WHEN A PURCHASER HAS CONTROL OF AN 76
AUTHORITATIVE ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL 77
PAPER; TO PROVIDE WHEN POWER IS EXCLUSIVE IN REFERENCE TO POWER OF 78
A PURCHASER TO CONTROL AUTHORITATIVE COPY OF CHATTEL PAPER; TO 79
CLARIFY WHEN POWER OF A PURCHASER IS NOT SHARED WITH ANOTHER 80
PERSON AND NOT EXCLUSIVE; TO PROVIDE A PURCHASER MAY CONTROL AN 81
ELECTRONIC COPY OF CHATTEL PAPER THROUGH ANOTHER BY VIRTUE OF 82
ACKNOWLEDGMENT; TO CREATE NEW SECTION 75-9-105A, MISSISSIPPI CODE 83
OF 1972, TO SPECIFY WHEN A PERSON HAS CONTROL OF ELECTRONIC MONEY; 84
TO SPECIFY WHEN POWER OF SUCH CONTROL IS OR IS NOT EXCLUSIVE; TO 85
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CREATE NEW SECTION 75-9-107A, MISSISSIPPI CODE OF 1972, TO PROVIDE 86
THAT A SECURED PARTY HAS CONTROL OF A CONTROLLABLE ELECTRONIC 87
RECORD AS PROVIDED UNDER SECTION 75-12-105; TO PROVIDE THAT A 88
SECURED PARTY CONTROLS A CONTROLLABLE ACCOUNT OR CONTROLLABLE 89
PAYMENT INTANGIBLE IF THE SECURED PARTY HAS CONTROL OF THE 90
CONTROLLABLE ELECTRONIC RECORD EVIDENCING THE CONTROLLABLE ACCOUNT 91
OR CONTROLLABLE PAYMENT INTANGIBLE; TO CREATE NEW SECTION 92
75-9-107B, MISSISSIPPI CODE OF 1972, TO CLARIFY THAT A PERSON IS 93
NOT REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL OF A DEPOSIT 94
ACCOUNT, ELECTRONIC COPY OF RECORD EVIDENCING CHATTEL PAPER, OR 95
ELECTRONIC MONEY; TO CLARIFY THAT A PERSON DOES NOT OWE ANY DUTY 96
AND IS NOT REQUIRED TO CONFIRM ACKNOWLEDGMENT OF CONTROL TO ANY 97
OTHER PERSON UNLESS AGREED TO OR LAW OTHER THAN THIS CHAPTER 98
APPLIES; TO AMEND SECTION 75-9-203, MISSISSIPPI CODE OF 1972, TO 99
REVISE THE CIRCUMSTANCES UNDER WHICH A SECURITY INTEREST IS 100
ENFORCEABLE AGAINST A DEBTOR AND THIRD PARTIES; TO AMEND SECTION 101
75-9-204, MISSISSIPPI CODE OF 1972, TO REVISE THE CIRCUMSTANCES 102
UNDER WHICH A SECURITY INTEREST DOES NOT ATTACH UNDER A TERM 103
CONSTITUTING AN AFTER-ACQUIRED PROPERTY CLAUSE; TO AMEND SECTION 104
75-9-208, MISSISSIPPI CODE OF 1972, TO REVISE DUTIES RELATING TO 105
SECURED PARTIES HAVING CONTROL OF COLLATERAL; TO AMEND SECTION 106
75-9-304, MISSISSIPPI CODE OF 1972, TO SPECIFY THAT THE LOCAL LAW 107
RELATED TO JURISDICTION OF A BANK GOVERNS EVEN IF A TRANSACTION 108
DOES NOT BEAR ANY RELATION TO THE JURISDICTION OF THE BANK; TO 109
AMEND SECTION 75-9-305, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT 110
THE LOCAL LAW OF THE JURISDICTION SHALL APPLY TO SECURITY 111
INTERESTS IN INVESTMENT PROPERTY EVEN IF THE TRANSACTION DOES NOT 112
BEAR ANY RELATION TO THE JURISDICTION; TO CREATE NEW SECTION 113
75-9-306A, MISSISSIPPI CODE OF 1972, TO SPECIFY WHICH LAWS GOVERN 114
THE PERFECTION AND PRIORITY OF SECURITY INTERESTS IN CHATTEL 115
PAPER; TO CREATE NEW SECTION 75-9-306B, MISSISSIPPI CODE OF 1972, 116
TO SPECIFY WHICH LAWS GOVERN THE PERFECTION AND PRIORITY OF 117
SECURITY INTERESTS IN CONTROLLABLE ACCOUNTS, CONTROLLABLE 118
ELECTRONIC RECORDS, AND CONTROLLABLE PAYMENT INTANGIBLES; TO AMEND 119
SECTION 75-9-312, MISSISSIPPI CODE OF 1972, TO PROVIDE 120
REQUIREMENTS FOR PERFECTING A SECURITY INTEREST IN CONTROLLABLE 121
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS, AND CONTROLLABLE 122
PAYMENT INTANGIBLES; TO CREATE NEW SECTION 75-9-314A, MISSISSIPPI 123
CODE OF 1972, TO PROVIDE REQUIREMENTS FOR PERFECTING A SECURITY 124
INTEREST IN CHATTEL PAPER BY POSSESSION AND CONTROL; TO AMEND 125
SECTION 75-9-317, MISSISSIPPI CODE OF 1972, TO REVISE THE 126
CIRCUMSTANCES UNDER WHICH PERSONS TAKE FREE OF A SECURITY INTEREST 127
OR AGRICULTURAL LIEN; TO AMEND SECTION 75-9-323, MISSISSIPPI CODE 128
OF 1972, TO REVISE WHICH BUYERS OR LESSEES OF GOODS TAKE FREE OF A 129
SECURITY INTEREST OR LEASEHOLD UNDER CERTAIN CIRCUMSTANCES; TO 130
CREATE NEW SECTION 75-9-326A, MISSISSIPPI CODE OF 1972, TO SPECIFY 131
THAT CERTAIN SECURITY INTERESTS IN CONTROLLABLE ACCOUNTS, 132
CONTROLLABLE ELECTRONIC RECORDS, OR CONTROLLABLE PAYMENT 133
INTANGIBLES HAVE PRIORITY OVER CONFLICTING SECURITY INTERESTS; TO 134
AMEND SECTION 75-9-330, MISSISSIPPI CODE OF 1972, TO REVISE THE 135
CIRCUMSTANCES UNDER WHICH PURCHASERS OF CHATTEL PAPER HAVE 136
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PRIORITY OVER CERTAIN SECURITY INTERESTS IN THE CHATTEL PAPER; TO 137
REVISE APPLICABILITY; TO AMEND SECTION 75-9-332, MISSISSIPPI CODE 138
OF 1972, TO REVISE THE CIRCUMSTANCES UNDER WHICH A TRANSFEREE 139
TAKES MONEY OR FUNDS FREE OF A SECURITY INTEREST; TO AMEND SECTION 140
75-9-406, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "PROMISSORY 141
NOTE"; TO PROVIDE THAT CERTAIN PROVISIONS DO NOT APPLY TO A 142
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE; TO MODIFY 143
THE ANTI-ASSIGNMENT OVERRIDE PROVISIONS, EXCLUDING SECURITY 144
INTERESTS IN OWNERSHIP INTERESTS OF GENERAL PARTNERSHIPS, LIMITED 145
PARTNERSHIPS, OR LIMITED LIABILITY COMPANIES FROM THE OVERRIDE 146
PROVISIONS; TO AMEND SECTION 75-9-408, MISSISSIPPI CODE OF 1972, 147
TO DEFINE THE TERM "PROMISSORY NOTE"; TO PROVIDE THAT THIS SECTION 148
DOES NOT APPLY TO SECURITY INTERESTS IN OWNERSHIP INTERESTS OF 149
GENERAL PARTNERSHIPS, LIMITED PARTNERSHIPS, OR LIMITED LIABILITY 150
COMPANIES; TO AMEND SECTION 75-9-605, MISSISSIPPI CODE OF 1972, TO 151
SPECIFY WHEN A SECURED PARTY OWES A DUTY TO A PERSON BASED ON THE 152
STATUS OF THE PARTY AS A SECURED PARTY; TO AMEND SECTION 75-9-613, 153
MISSISSIPPI CODE OF 1972, TO REVISE THE FORM FOR NOTIFICATION OF 154
THE DISPOSITION OF COLLATERAL; TO PROVIDE REQUIREMENTS RELATING TO 155
THE FORM; TO AMEND SECTION 75-9-614, MISSISSIPPI CODE OF 1972, TO 156
REVISE FORM REQUIREMENTS FOR NOTICE OF A PLAN TO SELL PROPERTY; TO 157
PROVIDE REQUIREMENTS RELATING TO THE FORM; TO AMEND SECTION 158
75-9-628, MISSISSIPPI CODE OF 1972, TO PROVIDE AN EXCEPTION TO THE 159
LIMITATION OF LIABILITY OF A SECURED PARTY WHO OBTAINS CONTROL OF 160
COLLATERAL THAT IS A CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC 161
RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE; TO CREATE A NEW 162
ARTICLE 12 WITHIN CHAPTER 12 OF TITLE 75; TO CREATE NEW SECTION 163
75-12-101, MISSISSIPPI CODE OF 1972, TO PROVIDE A SHORT TITLE FOR 164
A NEW ARTICLE OF THE UNIFORM COMMERCIAL CODE; TO CREATE NEW 165
SECTION 75-12-102, MISSISSIPPI CODE OF 1972, TO DEFINE TERMS; TO 166
CREATE NEW SECTION 75-12-103, MISSISSIPPI CODE OF 1972, TO PROVIDE 167
THAT IF THERE IS A CONFLICT BETWEEN ARTICLE 9 AND ARTICLE 12 THEN 168
ARTICLE 9 SHALL GOVERN; TO PROVIDE THAT A TRANSACTION SUBJECT TO 169
ARTICLE 12 IS SUBJECT TO ANY APPLICABLE LAW THAT ESTABLISHES A 170
DIFFERENT RULE FOR CONSUMERS AS WELL AS ANY OTHER STATUTE OR 171
REGULATION THAT REGULATES THE RATES, CHARGES, AGREEMENTS, AND 172
PRACTICES FOR LOANS, CREDIT SALES, OR OTHER EXTENSIONS OF CREDIT 173
AND ANY CONSUMER-PROTECTION STATUTE OR REGULATION; TO CREATE NEW 174
SECTION 75-12-104, MISSISSIPPI CODE OF 1972, TO PROVIDE 175
APPLICABILITY; TO SPECIFY WHEN A PURCHASER OF A CONTROLLABLE 176
ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE IS A QUALIFYING 177
PURCHASER; TO SPECIFY RIGHTS ACQUIRED RELATING TO CONTROLLABLE 178
ELECTRONIC RECORDS; TO PROHIBIT ACTIONS FROM BEING ASSERTED 179
AGAINST QUALIFYING PURCHASERS UNDER CERTAIN CIRCUMSTANCES; TO 180
SPECIFY THAT FILING A CERTAIN FINANCING STATEMENT IS NOT NOTICE OF 181
A CLAIM OF A PROPERTY RIGHT IN A CONTROLLABLE ELECTRONIC RECORD; 182
TO CREATE NEW SECTION 75-12-105, MISSISSIPPI CODE OF 1972, TO 183
SPECIFY WHEN A PERSON HAS CONTROL OF A CONTROLLABLE ELECTRONIC 184
RECORD; TO PROVIDE WHEN A POWER OF A PERSON RELATING TO 185
CONTROLLABLE ELECTRONIC RECORDS IS OR IS NOT EXCLUSIVE; TO PROVIDE 186
THAT A PERSON WHO HAS CONTROL OF A CONTROLLABLE ELECTRONIC RECORD 187
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IS NOT REQUIRED TO ACKNOWLEDGE SUCH CONTROL; TO SPECIFY THAT A 188
PERSON THAT ACKNOWLEDGES CONTROL OF A CONTROLLABLE ELECTRONIC 189
RECORD DOES NOT OWE ANY DUTY TO THE OTHER PERSON AND IS NOT 190
REQUIRED TO CONFIRM THE ACKNOWLEDGMENT TO ANY OTHER PERSON; TO 191
CREATE NEW SECTION 75-12-106, MISSISSIPPI CODE OF 1972, TO 192
AUTHORIZE ACCOUNT DEBTORS ON A CONTROLLABLE ACCOUNT OR 193
CONTROLLABLE PAYMENT INTANGIBLE TO DISCHARGE OBLIGATIONS UNDER 194
CERTAIN CIRCUMSTANCES; TO PROVIDE REQUIREMENTS FOR SUCH DISCHARGE; 195
TO PROHIBIT ACCOUNT DEBTORS FROM WAIVING OR VARYING CERTAIN RIGHTS 196
AND OPTIONS; TO PROVIDE THAT THIS SECTION IS SUBJECT TO LAW OTHER 197
THAN THIS ARTICLE UNDER CERTAIN CIRCUMSTANCES; TO CREATE NEW 198
SECTION 75-12-107, MISSISSIPPI CODE OF 1972, TO SPECIFY THE 199
GOVERNING LAWS AND JURISDICTIONS RELATING TO CONTROLLABLE 200
ELECTRONIC RECORDS; TO CREATE A NEW ARTICLE 12A WITHIN CHAPTER 12 201
OF TITLE 75; TO CREATE NEW SECTIONS 75-12A-101, 75-12A-102, 202
75-12A-201, 75-12A-301, 75-12A-302, 75-12A-303, 75-12A-304, 203
75-12A-305 AND 75-12A-306, MISSISSIPPI CODE OF 1972, TO PROVIDE 204
TRANSITIONAL PROVISIONS FOR THE 2022 AMENDMENTS TO THE UNIFORM 205
COMMERCIAL CODE, INCLUDING SAVING CLAUSES AND PROVISIONS ON THE 206
PERFECTION OF SECURITY INTERESTS, ACTIONS TAKEN BEFORE THE 207
EFFECTIVE DATE OF THIS ACT AND PRIORITY OF INTERESTS; TO AMEND 208
SECTIONS 75-1-101, 75-1-306, 75-2-201, 75-2-202, 75-2-203, 209
75-2-205, 75-2-209, 75-2A-107, 75-2A-201, 75-2A-202, 75-2A-203, 210
75-2A-205, 75-2A-208, 75-3-401, 75-4A-103, 75-4A-203, 75-4A-207, 211
75-4A-208, 75-4A-210, 75-4A-211, 75-4A-305, 75-5-104, 75-7-102, 212
75-8-102, 75-9-207, 75-9-209, 75-9-210, 75-9-301, 75-9-310, 213
75-9-313, 75-9-314, 75-9-316, 75-9-324, 75-9-331, 75-9-334, 214
75-9-341, 75-9-404, 75-9-509, 75-9-513, 75-9-601, 75-9-608, 215
75-9-611, 75-9-615, 75-9-616, 75-9-619, 75-9-620, 75-9-621 AND 216
75-9-624, MISSISSIPPI CODE OF 1972, TO CONFORM; TO REPEAL SECTIONS 217
79-13-505 AND 79-29-711, MISSISSIPPI CODE OF 1972, WHICH ARE THE 218
PROVISIONS OF LAW THAT AFFECT THE ENFORCEABILITY OF LIMITATIONS ON 219
ASSIGNMENTS OF PARTNERSHIP INTERESTS AND FINANCIAL INTERESTS IN 220
DOMESTIC LIMITED LIABILITY COMPANIES; AND FOR RELATED PURPOSES. 221
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 222
SECTION 1. Section 75-1-201, Mississippi Code of 1972, is 223
amended as follows: 224
75-1-201. (a) Unless the context otherwise requires, words 225
or phrases defined in this section, or in the additional 226
definitions contained in other articles of the Uniform Commercial 227
Code contained in other chapters of this title that apply to 228
particular chapters or parts thereof, have the meanings stated. 229
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(b) Subject to definitions contained in other articles of 230
the Uniform Commercial Code that apply to particular articles or 231
parts thereof: 232
(1) "Action," in the sense of a judicial proceeding, 233
includes recoupment, counterclaim, setoff, suit in equity, and any 234
other proceeding in which rights are determined. 235
(2) "Aggrieved party" means a party entitled to pursue 236
a remedy. 237
(3) "Agreement," as distinguished from "contract," 238
means the bargain of the parties in fact, as found in their 239
language or inferred from other circumstances, including course of 240
performance, course of dealing, or usage of trade as provided in 241
Section 75 1 303. 242
(4) "Bank" means a person engaged in the business of 243
banking and includes a savings bank, savings and loan association, 244
credit union, and trust company. 245
(5) "Bearer" means a person in possession of a 246
negotiable instrument, document of title, or certificated security 247
that is payable to bearer or indorsed in blank. 248
(6) "Bill of lading" means a document evidencing the 249
receipt of goods for shipment issued by a person engaged in the 250
business of transporting or forwarding goods. 251
(7) "Branch" includes a separately incorporated foreign 252
branch of a bank. 253
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(8) "Burden of establishing a fact" means the burden of 254
persuading the trier of fact that the existence of the fact is 255
more probable than its nonexistence. 256
(9) "Buyer in ordinary course of business" means a 257
person that buys goods in good faith, without knowledge that the 258
sale violates the rights of another person in the goods, and in 259
the ordinary course from a person, other than a pawnbroker, in the 260
business of selling goods of that kind. A person buys goods in 261
the ordinary course if the sale to the person comports with the 262
usual or customary practices in the kind of business in which the 263
seller is engaged or with the seller's own usual or customary 264
practices. A person that sells oil, gas, or other minerals at the 265
wellhead or minehead is a person in the business of selling goods 266
of that kind. A buyer in ordinary course of business may buy for 267
cash, by exchange of other property, or on secured or unsecured 268
credit, and may acquire goods or documents of title under a 269
preexisting contract for sale. Only a buyer that takes possession 270
of the goods or has a right to recover the goods from the seller 271
under Article 2 may be a buyer in ordinary course of business. 272
'Buyer in ordinary course of business' does not include a person 273
that acquires goods in a transfer in bulk or as security for or in 274
total or partial satisfaction of a money debt. 275
(10) "Conspicuous," with reference to a term, means so 276
written, displayed, or presented that, based on the totality of 277
the circumstances, a reasonable person against which it is to 278
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operate ought to have noticed it. Whether a term is "conspicuous" 279
or not is a decision for the court. * * * 280
(11) "Consumer" means an individual who enters into a 281
transaction primarily for personal, family, or household purposes. 282
(12) "Contract," as distinguished from "agreement," 283
means the total legal obligation that results from the parties' 284
agreement as determined by the Uniform Commercial Code as 285
supplemented by any other applicable laws. 286
(13) "Creditor" includes a general creditor, a secured 287
creditor, a lien creditor, and any representative of creditors, 288
including an assignee for the benefit of creditors, a trustee in 289
bankruptcy, a receiver in equity, and an executor or administrator 290
of an insolvent debtor's or assignor's estate. 291
(14) "Defendant" includes a person in the position of 292
defendant in a counterclaim, cross claim, or third party claim. 293
(15) "Delivery," with respect to an electronic document 294
of title, means voluntary transfer of control and, with respect to 295
an instrument, a tangible document of title, or an authoritative 296
tangible copy of a record evidencing chattel paper, means 297
voluntary transfer of possession. 298
(16) "Document of title" includes bill of lading, dock 299
warrant, dock receipt, warehouse receipt or order for the delivery 300
of goods, and also any other document which in the regular course 301
of business or financing is treated as adequately evidencing that 302
the person in possession of it is entitled to receive, hold, and 303
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dispose of the document and the goods it covers. To be a document 304
of title, a document must purport to be issued by or addressed to 305
a bailee and purport to cover goods in the bailee's possession 306
which are either identified or are fungible portions of an 307
identified mass. 308
(16A) "Electronic" means relating to technology having 309
electrical, digital, magnetic, wireless, optical, electromagnetic, 310
or similar capabilities. 311
(17) "Fault" means a default, breach, or wrongful act 312
or omission. 313
(18) "Fungible goods" means: 314
(A) Goods of which any unit, by nature or usage of 315
trade, is the equivalent of any other like unit; or 316
(B) Goods that by agreement are treated as 317
equivalent. 318
(19) "Genuine" means free of forgery or counterfeiting. 319
(20) "Good faith," except as otherwise provided in 320
Article 5, means honesty in fact and the observance of reasonable 321
commercial standards of fair dealing. 322
(21) "Holder" means: 323
(A) The person in possession of a negotiable 324
instrument that is payable either to bearer or to an identified 325
person that is the person in possession; * * * 326
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(B) The person in possession of a document of 327
title if the goods are deliverable either to bearer or to the 328
order of the person in possession * * *; or 329
(C) The person in control, other than pursuant to 330
Section 75-7-106(g), of a negotiable electronic document of title. 331
(22) "Insolvency proceeding" includes an assignment for 332
the benefit of creditors or other proceeding intended to liquidate 333
or rehabilitate the estate of the person involved. 334
(23) "Insolvent" means: 335
(A) Having generally ceased to pay debts in the 336
ordinary course of business other than as a result of bona fide 337
dispute; 338
(B) Being unable to pay debts as they become due; 339
or 340
(C) Being insolvent within the meaning of federal 341
bankruptcy law. 342
(24) "Money" means a medium of exchange that is 343
currently authorized or adopted by a domestic or foreign 344
government. The term includes a monetary unit of account 345
established by an intergovernmental organization, or * * * 346
pursuant to an agreement between two (2) or more countries. The 347
term does not include an electronic record that is a medium of 348
exchange recorded and transferable in a system that existed and 349
operated for the medium of exchange before the medium of exchange 350
was authorized or adopted by the government. 351
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(25) "Organization" means a person other than an 352
individual. 353
(26) "Party," as distinguished from "third party," 354
means a person that has engaged in a transaction or made an 355
agreement subject to the Uniform Commercial Code. 356
(27) "Person" means an individual, corporation, 357
business trust, estate, trust, partnership, limited liability 358
company, association, joint venture, government, governmental 359
subdivision, agency, or instrumentality, * * * or any other legal 360
or commercial entity. The term includes a protected series, 361
however denominated, of an entity if the protected series is 362
established under law other than the Uniform Commercial Code that 363
limits, or limits if conditions specified under the law are 364
satisfied, the ability of a creditor of the entity or of any other 365
protected series of the entity to satisfy a claim from assets of 366
the protected series. 367
(28) "Present value" means the amount as of a date 368
certain of one or more sums payable in the future, discounted to 369
the date certain by use of either an interest rate specified by 370
the parties if that rate is not manifestly unreasonable at the 371
time the transaction is entered into or, if an interest rate is 372
not so specified, a commercially reasonable rate that takes into 373
account the facts and circumstances at the time the transaction is 374
entered into. 375
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(29) "Purchase" means taking by sale, lease, discount, 376
negotiation, mortgage, pledge, lien, security interest, issue or 377
reissue, gift, or any other voluntary transaction creating an 378
interest in property. 379
(30) "Purchaser" means a person that takes by purchase. 380
(31) "Record" means information that is inscribed on a 381
tangible medium or that is stored in an electronic or other medium 382
and is retrievable in perceivable form. 383
(32) "Remedy" means any remedial right to which an 384
aggrieved party is entitled with or without resort to a tribunal. 385
(33) "Representative" means a person empowered to act 386
for another, including an agent, an officer of a corporation or 387
association, and a trustee, executor, or administrator of an 388
estate. 389
(34) "Right" includes remedy. 390
(35) "Security interest" means an interest in personal 391
property or fixtures which secures payment or performance of an 392
obligation. "Security interest" includes any interest of a 393
consignor and a buyer of accounts, chattel paper, a payment 394
intangible, or a promissory note in a transaction that is subject 395
to Article 9. "Security interest" does not include the special 396
property interest of a buyer of goods on identification of those 397
goods to a contract for sale under Section 75-2-401, but a buyer 398
may also acquire a "security interest" by complying with Article 399
9. Except as otherwise provided in Section 75-2-505, the right of 400
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a seller or lessor of goods under Article 2 or 2A to retain or 401
acquire possession of the goods is not a "security interest," but 402
a seller or lessor may also acquire a "security interest" by 403
complying with Article 9. The retention or reservation of title 404
by a seller of goods notwithstanding shipment or delivery to the 405
buyer under Section 75-2-401 is limited in effect to a reservation 406
of a "security interest." Whether a transaction in the form of a 407
lease creates a "security interest" is determined pursuant to 408
Section 75-1-203. 409
(36) "Send," in connection with a * * * record * * * 410
or * * * notification, means: 411
(A) To deposit in the mail * * *, deliver for 412
transmission, or transmit by any other usual means of 413
communication, with postage or cost of transmission provided 414
for * * *, addressed to any address reasonable under the 415
circumstances; or 416
(B) * * * To cause the record or notification to 417
be received within the time it would have been received if 418
properly sent under subparagraph (A). 419
(37) * * * "Sign" means, with present intent to 420
authenticate or adopt a record: 421
(A) Execute or adopt a tangible symbol; or 422
(B) Attach to or logically associate with the 423
record an electronic symbol, sound, or process. 424
"Signed," "signing," and "signature" have corresponding meanings. 425
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(38) "State" means a state of the United States, the 426
District of Columbia, Puerto Rico, the United States Virgin 427
Islands, or any territory or insular possession subject to the 428
jurisdiction of the United States. 429
(39) "Surety" includes a guarantor or other secondary 430
obligor. 431
(40) "Term" means a portion of an agreement that 432
relates to a particular matter. 433
(41) "Unauthorized signature" means a signature made 434
without actual, implied, or apparent authority. The term includes 435
a forgery. 436
(42) "Warehouse receipt" means a receipt issued by a 437
person engaged in the business of storing goods for hire. 438
(43) "Writing" includes printing, typewriting, or any 439
other intentional reduction to tangible form. "Written" has a 440
corresponding meaning. 441
SECTION 2. Section 75-1-204, Mississippi Code of 1972, is 442
amended as follows: 443
75-1-204. Except as otherwise provided in Articles 3, 444
4, * * * 5, and 12, a person gives value for rights if the person 445
acquires them: 446
(1) In return for a binding commitment to extend credit 447
or for the extension of immediately available credit, whether or 448
not drawn upon and whether or not a charge back is provided for in 449
the event of difficulties in collection; 450
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(2) As security for, or in total or partial 451
satisfaction of, a preexisting claim; 452
(3) By accepting delivery under a preexisting contract 453
for purchase; or 454
(4) In return for any consideration sufficient to 455
support a simple contract. 456
SECTION 3. Section 75-2-102, Mississippi Code of 1972, is 457
amended as follows: 458
75-2-102. * * * (1) Unless the context otherwise requires, 459
and except as provided in subsection (3) of this section, this 460
chapter applies to transactions in goods and, in the case of a 461
hybrid transaction, it applies to the extent provided in 462
subsection (2) of this section. 463
(2) In a hybrid transaction: 464
(a) If the sale-of-goods aspects do not predominate, 465
only the provisions of this chapter which relate primarily to the 466
sale-of-goods aspects of the transaction apply, and the provisions 467
that relate primarily to the transaction as a whole do not apply. 468
(b) If the sale-of-goods aspects predominate, this 469
chapter applies to the transaction but does not preclude 470
application in appropriate circumstances of other law to aspects 471
of the transaction which do not relate to the sale of goods. 472
(3) This chapter does not: 473
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(a) Apply to a transaction that, even though in the 474
form of an unconditional contract to sell or present sale, 475
operates only to create a security interest; or 476
(b) Impair or repeal a statute regulating sales to 477
consumers, farmers, or other specified classes of buyers. 478
SECTION 4. Section 75-2-106, Mississippi Code of 1972, is 479
amended as follows: 480
75-2-106. Definitions: "contract"; "agreement"; "contract 481
for sale"; "sale"; "present sale"; "conforming to contract"; 482
"termination"; "cancellation"; "hybrid transaction." (1) In this 483
chapter unless the context otherwise requires "contract" and 484
"agreement" are limited to those relating to the present or future 485
sale of goods. "Contract for sale" includes both a present sale 486
of goods and a contract to sell goods at a future time. A "sale" 487
consists in the passing of title from the seller to the buyer for 488
a price (Section 2 401) [Section 75 2 401]. A "present sale" 489
means a sale which is accomplished by the making of the contract. 490
(2) Goods or conduct including any part of a performance are 491
"conforming" or conform to the contract when they are in 492
accordance with the obligations under the contract. 493
(3) "Termination" occurs when either party pursuant to a 494
power created by agreement or law puts an end to the contract 495
otherwise than for its breach. On "termination" all obligations 496
which are still executory on both sides are discharged but any 497
right based on prior breach or performance survives. 498
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(4) "Cancellation" occurs when either party puts an end to 499
the contract for breach by the other and its effect is the same as 500
that of "termination" except that the cancelling party also 501
retains any remedy for breach of the whole contract or any 502
unperformed balance. 503
(5) "Hybrid transaction" means a single transaction 504
involving a sale of goods and: 505
(a) The provision of services; 506
(b) A lease of other goods; or 507
(c) A sale, lease, or license of property other than 508
goods. 509
SECTION 5. Section 75-2A-102, Mississippi Code of 1972, is 510
amended as follows: 511
75-2A-102. (1) This chapter applies to any transaction, 512
regardless of form, that creates a lease and, in the case of a 513
hybrid lease, it applies to the extent provided in subsection (2) 514
of this section. 515
(2) In a hybrid lease: 516
(a) If the lease-of-goods aspects do not predominate: 517
(i) Only the provisions of this article which 518
relate primarily to the lease-of-goods aspects of the transaction 519
apply, and the provisions that relate primarily to the transaction 520
as a whole do not apply; 521
(ii) Section 75-2A-209 applies if the lease is a 522
finance lease; and 523
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(iii) Section 75-2A-407 applies to the promises of 524
the lessee in a finance lease to the extent the promises are 525
consideration for the right to possession and use of the leased 526
goods; and 527
(b) If the lease-of-goods aspects predominate, this 528
chapter applies to the transaction, but does not preclude 529
application in appropriate circumstances of other law to aspects 530
of the lease which do not relate to the lease of goods. 531
SECTION 6. Section 75-2A-103, Mississippi Code of 1972, is 532
amended as follows: 533
75-2A-103. (1) In this chapter unless the context otherwise 534
requires: 535
(a) "Buyer in ordinary course of business" means a 536
person who in good faith and without knowledge that the sale to 537
him is in violation of the ownership rights or security interest 538
or leasehold interest of a third party in the goods, buys in 539
ordinary course from a person in the business of selling goods of 540
that kind but does not include a pawnbroker. "Buying" may be for 541
cash or by exchange of other property or on secured or unsecured 542
credit and includes acquiring goods or documents of title under a 543
preexisting contract for sale but does not include a transfer in 544
bulk or as security for or in total or partial satisfaction of a 545
money debt. 546
(b) "Cancellation" occurs when either party puts an end 547
to the lease contract for default by the other party. 548
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(c) "Commercial unit" means such a unit of goods as by 549
commercial usage is a single whole for purposes of lease and 550
division of which materially impairs its character or value on the 551
market or in use. A commercial unit may be a single article, as a 552
machine, or a set of articles, as a suite of furniture or a line 553
of machinery, or a quantity, as a gross or carload, or any other 554
unit treated in use or in the relevant market as a single whole. 555
(d) "Conforming" goods or performance under a lease 556
contract means goods or performance that are in accordance with 557
the obligations under the lease contract. 558
(e) "Consumer lease" means a lease that a lessor 559
regularly engaged in the business of leasing or selling makes to a 560
lessee who is an individual and who takes under the lease 561
primarily for a personal, family or household purpose, if the 562
total payments to be made under the lease contract, excluding 563
payments for options to renew or buy, do not exceed Twenty-five 564
Thousand Dollars ($25,000.00). 565
(f) "Fault" means wrongful act, omission, breach or 566
default. 567
(g) "Finance lease" means a lease with respect to 568
which: 569
(i) The lessor does not select, manufacture, or 570
supply the goods; 571
(ii) The lessor acquires the goods or the right to 572
possession and use of the goods in connection with the lease; and 573
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(iii) One (1) of the following occurs: 574
(A) The lessee receives a copy of the 575
contract by which the lessor acquired the goods or the right to 576
possession and use of the goods before signing the lease contract; 577
(B) The lessee's approval of the contract by 578
which the lessor acquired the goods or the right to possession and 579
use of the goods is a condition to effectiveness of the lease 580
contract; 581
(C) The lessee, before signing the lease 582
contract, receives an accurate and complete statement designating 583
the promises and warranties, and any disclaimers of warranties, 584
limitations or modifications of remedies, or liquidated damages, 585
including those of a third party, such as the manufacturer of the 586
goods, provided to the lessor by the person supplying the goods in 587
connection with or as part of the contract by which the lessor 588
acquired the goods or the right to possession and use of the 589
goods; or 590
(D) If the lease is not a consumer lease, the 591
lessor, before the lessee signs the lease contract, informs the 592
lessee in writing (a) of the identity of the person supplying the 593
goods to the lessor, unless the lessee has selected that person 594
and directed the lessor to acquire the goods or the right to 595
possession and use of the goods from that person, (b) that the 596
lessee is entitled under this chapter to the promises and 597
warranties, including those of any third party, provided to the 598
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lessor by the person supplying the goods in connection with or as 599
part of the contract by which the lessor acquired the goods or the 600
right to possession and use of the goods, and (c) that the lessee 601
may communicate with the person supplying the goods to the lessor 602
and receive an accurate and complete statement of those promises 603
and warranties, including any disclaimers and limitations of them 604
or of remedies. 605
(h) "Goods" means all things that are movable at the 606
time of identification to the lease contract, or are fixtures 607
(Section 75-2A-309), but the term does not include money, 608
documents, instruments, accounts, chattel paper, general 609
intangibles or minerals or the like, including oil and gas, before 610
extraction. The term also includes the unborn young of animals. 611
(h.1) "Hybrid lease" means a single transaction 612
involving a lease of goods and: 613
(i) The provision of services; 614
(ii) A sale of other goods; or 615
(iii) A sale, lease, or license of property other 616
than goods. 617
(i) "Installment lease contract" means a lease contract 618
that authorizes or requires the delivery of goods in separate lots 619
to be separately accepted, even though the lease contract contains 620
a clause "each delivery is a separate lease" or its equivalent. 621
(j) "Lease" means a transfer of the right to possession 622
and use of goods for a term in return for consideration, but a 623
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sale, including a sale on approval or a sale or return, or 624
retention or creation of a security interest is not a lease. 625
Unless the context clearly indicates otherwise, the term includes 626
a sublease. 627
(k) "Lease agreement" means the bargain, with respect 628
to the lease, of the lessor and the lessee in fact as found in 629
their language or by implication from other circumstances 630
including course of dealing or usage of trade or course of 631
performance as provided in this chapter. Unless the context 632
clearly indicates otherwise, the term includes a sublease 633
agreement. 634
(l) "Lease contract" means the total legal obligation 635
that results from the lease agreement as affected by this chapter 636
and any other applicable rules of law. Unless the context clearly 637
indicates otherwise, the term includes a sublease contract. 638
(m) "Leasehold interest" means the interest of the 639
lessor or the lessee under a lease contract. 640
(n) "Lessee" means a person who acquires the right to 641
possession and use of goods under a lease. Unless the context 642
clearly indicates otherwise, the term includes a sublease. 643
(o) "Lessee in ordinary course of business" means a 644
person who in good faith and without knowledge that the lease to 645
him is in violation of the ownership rights or security interest 646
or leasehold interest of a third party in the goods leases in 647
ordinary course from a person in the business of selling or 648
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leasing goods of that kind but does not include a pawnbroker. 649
"Leasing" may be for cash or by exchange of other property or on 650
secured or unsecured credit and includes acquiring goods or 651
documents of title under a preexisting lease contract but does not 652
include a transfer in bulk or as security for or in total or 653
partial satisfaction of a money debt. 654
(p) "Lessor" means a person who transfers the right to 655
possession and use of goods under a lease. Unless the context 656
clearly indicates otherwise, the term includes a sublessor. 657
(q) "Lessor's residual interest" means the lessor's 658
interest in the goods after expiration, termination or 659
cancellation of the lease contract. 660
(r) "Lien" means a charge against or interest in goods 661
to secure payment of a debt or performance of an obligation, but 662
the term does not include a security interest. 663
(s) "Lot" means a parcel or a single article that is 664
the subject matter of a separate lease or delivery, whether or not 665
it is sufficient to perform the lease contract. 666
(t) "Merchant lessee" means a lessee that is a merchant 667
with respect to goods of the kind subject to the lease. 668
(u) "Present value" means the amount as of a date 669
certain of one or more sums payable in the future, discounted to 670
the date certain. The discount is determined by the interest rate 671
specified by the parties if the rate was not manifestly 672
unreasonable at the time the transaction was entered into; 673
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otherwise, the discount is determined by a commercially reasonable 674
rate that takes into account the facts and circumstances of each 675
case at the time the transaction was entered into. 676
(v) "Purchase" includes taking by sale, lease, 677
mortgage, security interest, pledge, gift or any other voluntary 678
transaction creating an interest in goods. 679
(w) "Sublease" means a lease of goods the right to 680
possession and use of which was acquired by the lessor as a lessee 681
under an existing lease. 682
(x) "Supplier" means a person from whom a lessor buys 683
or leases goods to be leased under a finance lease. 684
(y) "Supply contract" means a contract under which a 685
lessor buys or leases goods to be leased. 686
(z) "Termination" occurs when either party pursuant to 687
a power created by agreement or law puts an end to the lease 688
contract otherwise than for default. 689
(2) Other definitions applying to this chapter and the 690
sections in which they appear are: 691
"Accessions" Section 75-2A-310(1) 692
"Construction mortgage" Section 75-2A-309(1)(d) 693
"Encumbrance" Section 75-2A-309(1)(e) 694
"Fixtures" Section 75-2A-309(1)(a) 695
"Fixture filing" Section 75-2A-309(1)(b) 696
"Purchase money lease" Section 75-2A-309(1)(c) 697
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(3) The following definitions in other chapters apply to 698
this chapter: 699
"Account" Section 75-9-102(a)(2) 700
"Between merchants" Section 75-2-104(3) 701
"Buyer" Section 75-2-103(1)(a) 702
"Chattel paper" Section 75-9-102(a)(11) 703
"Consumer goods" Section 75-9-102(a)(23) 704
"Document" Section 75-9-102(a)(30) 705
"Entrusting" Section 75-2-403(3) 706
"General intangible" Section 75-9-102(a)(42) 707
"Instrument" Section 75-9-102(a)(47) 708
"Merchant" Section 75-2-104(1) 709
"Mortgage" Section 75-9-102(a)(55) 710
"Pursuant to commitment" Section 75-9-102(a)(69) 711
"Receipt" Section 75-2-103(1)(c) 712
"Sale" Section 75-2-106(1) 713
"Sale on approval" Section 75-2-326 714
"Sale or return" Section 75-2-326 715
"Seller" Section 75-2-103(1)(d) 716
(4) In addition, Chapter 1 contains general definitions and 717
principles of construction and interpretation applicable 718
throughout this chapter. 719
SECTION 7. Section 75-3-104, Mississippi Code of 1972, is 720
amended as follows: 721
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75-3-104. (a) Except as provided in subsections (c) and 722
(d), "negotiable instrument" means an unconditional promise or 723
order to pay a fixed amount of money, with or without interest or 724
other charges described in the promise or order, if it: 725
(1) Is payable to bearer or to order at the time it is 726
issued or first comes into possession of a holder; 727
(2) Is payable on demand or at a definite time; and 728
(3) Does not state any other undertaking or instruction 729
by the person promising or ordering payment to do any act in 730
addition to the payment of money, but the promise or order may 731
contain (i) an undertaking or power to give, maintain, or protect 732
collateral to secure payment, (ii) an authorization or power to 733
the holder to confess judgment or realize on or dispose of 734
collateral, * * * (iii) a waiver of the benefit of any law 735
intended for the advantage or protection of an obligor, (iv) a 736
term that specifies the law that governs the promise or order, or 737
(v) an undertaking to resolve in a specified forum a dispute 738
concerning the promise or order. 739
(b) "Instrument" means a negotiable instrument. 740
(c) An order that meets all of the requirements of 741
subsection (a), except paragraph (1), and otherwise falls within 742
the definition of "check" in subsection (f) is a negotiable 743
instrument and a check. 744
(d) A promise or order other than a check is not an 745
instrument if, at the time it is issued or first comes into 746
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possession of a holder, it contains a conspicuous statement, 747
however expressed, to the effect that the promise or order is not 748
negotiable or is not an instrument governed by this chapter. 749
(e) An instrument is a "note" if it is a promise and is a 750
"draft" if it is an order. If an instrument falls within the 751
definition of both "note" and "draft," a person entitled to 752
enforce the instrument may treat it as either. 753
(f) "Check" means (i) a draft, other than a documentary 754
draft, payable on demand and drawn on a bank or (ii) a cashier's 755
check or teller's check. An instrument may be a check even though 756
it is described on its face by another term, such as "money 757
order." 758
(g) "Cashier's check" means a draft with respect to which 759
the drawer and drawee are the same bank or branches of the same 760
bank. 761
(h) "Teller's check" means a draft drawn by a bank (i) on 762
another bank, or (ii) payable at or through a bank. 763
(i) "Traveler's check" means an instrument that (i) is 764
payable on demand, (ii) is drawn on or payable at or through a 765
bank, (iii) is designated by the term "traveler's check" or by a 766
substantially similar term, and (iv) requires, as a condition to 767
payment, a countersignature by a person whose specimen signature 768
appears on the instrument. 769
(j) "Certificate of deposit" means an instrument containing 770
an acknowledgment by a bank that a sum of money has been received 771
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by the bank and a promise by the bank to repay the sum of money. A 772
certificate of deposit is a note of the bank. 773
SECTION 8. Section 75-3-105, Mississippi Code of 1972, is 774
amended as follows: 775
75-3-105. (a) "Issue" means: 776
(1) The first delivery of an instrument by the maker or 777
drawer, whether to a holder or nonholder, for the purpose of 778
giving rights on the instrument to any person * * *; or 779
(2) If agreed by the payee, the first transmission by 780
the drawer to the payee of an image of an item and information 781
derived from the item that enables the depositary bank to collect 782
the item by transferring or presenting under federal law an 783
electronic check. 784
(b) An unissued instrument, or an unissued incomplete 785
instrument that is completed, is binding on the maker or drawer, 786
but nonissuance is a defense. An instrument that is conditionally 787
issued or is issued for a special purpose is binding on the maker 788
or drawer, but failure of the condition or special purpose to be 789
fulfilled is a defense. 790
(c) "Issuer" applies to issued and unissued instruments and 791
means a maker or drawer of an instrument. 792
SECTION 9. Section 75-3-604, Mississippi Code of 1972, is 793
amended as follows: 794
75-3-604. (a) A person entitled to enforce an instrument, 795
with or without consideration, may discharge the obligation of a 796
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party to pay the instrument (i) by an intentional voluntary act, 797
such as surrender of the instrument to the party, destruction, 798
mutilation, or cancellation of the instrument, cancellation or 799
striking out of the party's signature, or the addition of words to 800
the instrument indicating discharge, or (ii) by agreeing not to 801
sue or otherwise renouncing rights against the party by a signed 802
record. The obligation of a party to pay a check is not 803
discharged solely by destruction of the check in connection with a 804
process in which information is extracted from the check and an 805
image of the check is made and, subsequently, the information and 806
image are transmitted for payment. 807
(b) Cancellation or striking out of an indorsement pursuant 808
to subsection (a) does not affect the status and rights of a party 809
derived from the indorsement. 810
* * * 811
SECTION 10. Section 75-4A-201, Mississippi Code of 1972, is 812
amended as follows: 813
75-4A-201. "Security procedure" means a procedure 814
established by agreement of a customer and a receiving bank for 815
the purpose of (i) verifying that a payment order or communication 816
amending or cancelling a payment order is that of the customer, or 817
(ii) detecting error in the transmission or the content of the 818
payment order or communication. A security procedure may impose 819
an obligation on the receiving bank or the customer and may 820
require the use of algorithms or other codes, identifying 821
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words * * *, numbers, symbols, sounds, biometrics, encryption, 822
callback procedures, or similar security devices. Comparison of a 823
signature on a payment order or communication with an authorized 824
specimen signature of the customer or requiring a payment order to 825
be sent from a known email address, IP address, or telephone 826
number is not by itself a security procedure. 827
SECTION 11. Section 75-4A-202, Mississippi Code of 1972, is 828
amended as follows: 829
75-4A-202. (a) A payment order received by the receiving 830
bank is the authorized order of the person identified as sender if 831
that person authorized the order or is otherwise bound by it under 832
the law of agency. 833
(b) If a bank and its customer have agreed that the 834
authenticity of payment orders issued to the bank in the name of 835
the customer as sender will be verified pursuant to a security 836
procedure, a payment order received by the receiving bank is 837
effective as the order of the customer, whether or not authorized, 838
if (i) the security procedure is a commercially reasonable method 839
of providing security against unauthorized payment orders, and 840
(ii) the bank proves that it accepted the payment order in good 841
faith and in compliance with the bank's obligations under the 842
security procedure and any * * * agreement or instruction of the 843
customer, evidenced by a record, restricting acceptance of payment 844
orders issued in the name of the customer. The bank is not 845
required to follow an instruction that violates * * * an agreement 846
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with the customer, evidenced by a record, or notice of which is 847
not received at a time and in a manner affording the bank a 848
reasonable opportunity to act on it before the payment order is 849
accepted. 850
(c) Commercial reasonableness of a security procedure is a 851
question of law to be determined by considering the wishes of the 852
customer expressed to the bank, the circumstances of the customer 853
known to the bank, including the size, type, and frequency of 854
payment orders normally issued by the customer to the bank, 855
alternative security procedures offered to the customer, and 856
security procedures in general use by customers and receiving 857
banks similarly situated. A security procedure is deemed to be 858
commercially reasonable if (i) the security procedure was chosen 859
by the customer after the bank offered, and the customer refused, 860
a security procedure that was commercially reasonable for that 861
customer, and (ii) the customer expressly agreed in * * * a record 862
to be bound by any payment order, whether or not authorized, 863
issued in its name and accepted by the bank in compliance with the 864
bank's obligations under the security procedure chosen by the 865
customer. 866
(d) The term "sender" in this chapter includes the customer 867
in whose name a payment order is issued if the order is the 868
authorized order of the customer under subsection (a), or it is 869
effective as the order of the customer under subsection (b). 870
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(e) This section applies to amendments and cancellations of 871
payment orders to the same extent it applies to payment orders. 872
(f) Except as provided in this section and in Section 873
75-4A-203(a)(1), rights and obligations arising under this section 874
or Section 75-4A-203 may not be varied by agreement. 875
SECTION 12. Section 75-5-116, Mississippi Code of 1972, is 876
amended as follows: 877
75-5-116. (a) The liability of an issuer, nominated person 878
or adviser for action or omission is governed by the law of the 879
jurisdiction chosen by an agreement in the form of a record 880
signed * * * by the affected parties * * * or by a provision in 881
the person's letter of credit, confirmation or other undertaking. 882
The jurisdiction whose law is chosen need not bear any relation to 883
the transaction. 884
(b) Unless subsection (a) applies, the liability of an 885
issuer, nominated person or adviser for action or omission is 886
governed by the law of the jurisdiction in which the person is 887
located. The person is considered to be located at the address 888
indicated in the person's undertaking. If more than one address 889
is indicated, the person is considered to be located at the 890
address from which the person's undertaking was issued. 891
(c) For the purpose of jurisdiction, choice of law and 892
recognition of interbranch letters of credit, but not enforcement 893
of a judgment, all branches of a bank are considered separate 894
juridical entities and a bank is considered to be located at the 895
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place where its relevant branch is considered to be located 896
under * * * subsection (d). 897
(d) A branch of a bank is considered to be located at the 898
address indicated in the branch's undertaking. If more than one 899
(1) address is indicated, the branch is considered to be located 900
at the address from which the undertaking was issued. 901
( * * *e) Except as otherwise provided in this subsection, 902
the liability of an issuer, nominated person or adviser is 903
governed by any rules of custom or practice, such as the Uniform 904
Customs and Practice for Documentary Credits, to which the letter 905
of credit, confirmation or other undertaking is expressly made 906
subject. If (i) this chapter would govern the liability of an 907
issuer, nominated person or adviser under subsection (a) or (b), 908
(ii) the relevant undertaking incorporates rules of custom or 909
practice, and (iii) there is conflict between this chapter and 910
those rules as applied to that undertaking, those rules govern 911
except to the extent of any conflict with the nonvariable 912
provisions specified in Section 75-5-103(c). 913
( * * *f) If there is conflict between this chapter 914
and * * * Chapter 3, 4, 4A or 9, this chapter governs. 915
( * * *g) The forum for settling disputes arising out of an 916
undertaking within this chapter may be chosen in the manner and 917
with the binding effect that governing law may be chosen in 918
accordance with subsection (a). 919
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SECTION 13. Section 75-7-106, Mississippi Code of 1972, is 920
amended as follows: 921
75-7-106. (a) A person has control of an electronic 922
document of title if a system employed for evidencing the transfer 923
of interests in the electronic document reliably establishes that 924
person as the person to which the electronic document was issued 925
or transferred. 926
(b) A system satisfies subsection (a), and a person * * * 927
has control of an electronic document of title, if the document is 928
created, stored, and * * * transferred in * * * a manner that: 929
(1) A single authoritative copy of the document exists 930
which is unique, identifiable, and, except as otherwise provided 931
in paragraphs (4), (5), and (6), unalterable; 932
(2) The authoritative copy identifies the person 933
asserting control as: 934
(A) The person to which the document was issued; 935
or 936
(B) If the authoritative copy indicates that the 937
document has been transferred, the person to which the document 938
was most recently transferred; 939
(3) The authoritative copy is communicated to and 940
maintained by the person asserting control or is designated 941
custodian; 942
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(4) Copies or amendments that add or change an 943
identified * * * transferee of the authoritative copy can be made 944
only with the consent of the person asserting control; 945
(5) Each copy of the authoritative copy and any copy of 946
a copy is readily identifiable as a copy that is not the 947
authoritative copy; and 948
(6) Any amendment of the authoritative copy is readily 949
identifiable as authorized or unauthorized. 950
(c) A system satisfies subsection (a), and a person has 951
control of an electronic document of title, if an authoritative 952
electronic copy of the document, a record attached to or logically 953
associated with the electronic copy, or a system in which the 954
electronic copy is recorded: 955
(1) Enables the person readily to identify each 956
electronic copy as either an authoritative copy or a 957
nonauthoritative copy; 958
(2) Enables the person readily to identify itself in 959
any way, including by name, identifying number, cryptographic key, 960
office, or account number, as the person to which each 961
authoritative electronic copy was issued or transferred; and 962
(3) Gives the person exclusive power, subject to 963
subsection (d), to: 964
(A) Prevent others from adding or changing the 965
person to which each authoritative electronic copy has been issued 966
or transferred; and 967
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(B) Transfer control of each authoritative 968
electronic copy. 969
(d) Subject to subsection (e), a power is exclusive under 970
subsection (c)(3)(A) and (B) even if: 971
(1) The authoritative electronic copy, a record 972
attached to or logically associated with the authoritative 973
electronic copy, or a system in which the authoritative electronic 974
copy is recorded limits the use of the document of title or has a 975
protocol that is programmed to cause a change, including a 976
transfer or loss of control; or 977
(2) The power is shared with another person. 978
(e) A power of a person is not shared with another person 979
under subsection (d)(2) and the person's power is not exclusive 980
if: 981
(1) The person can exercise the power only if the power 982
also is exercised by the other person; and 983
(2) The other person: 984
(A) Can exercise the power without exercise of the 985
power by the person; or 986
(B) Is the transferor to the person of an interest 987
in the document of title. 988
(f) If a person has the powers specified in subsection 989
(c)(3)(A) and (B), the powers are presumed to be exclusive. 990
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(g) A person has control of an electronic document of title 991
if another person, other than the transferor to the person of an 992
interest in the document: 993
(1) Has control of the document and acknowledges that 994
it has control on behalf of the person; or 995
(2) Obtains control of the document after having 996
acknowledged that it will obtain control of the document on behalf 997
of the person. 998
(h) A person that has control under this section is not 999
required to acknowledge that it has control on behalf of another 1000
person. 1001
(i) If a person acknowledges that it has or will obtain 1002
control on behalf of another person, unless the person otherwise 1003
agrees or law other than this chapter or Chapter 9 otherwise 1004
provides, the person does not owe any duty to the other person and 1005
is not required to confirm the acknowledgment to any other person. 1006
SECTION 14. Section 75-8-103, Mississippi Code of 1972, is 1007
amended as follows: 1008
75-8-103. (a) A share or similar equity interest issued by 1009
a corporation, business trust, joint stock company, or similar 1010
entity is a security. 1011
(b) An "investment company security" is a security. 1012
"Investment company security" means a share or similar equity 1013
interest issued by an entity that is registered as an investment 1014
company under the federal investment company laws, an interest in 1015
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a unit investment trust that is so registered, or a face-amount 1016
certificate issued by a face-amount certificate company that is so 1017
registered. Investment company security does not include an 1018
insurance policy or endowment policy or annuity contract issued by 1019
an insurance company. 1020
(c) An interest in a partnership or limited liability 1021
company is not a security unless it is dealt in or traded on 1022
securities exchanges or in securities markets, its terms expressly 1023
provide that it is a security governed by this chapter, or it is 1024
an investment company security. However, an interest in a 1025
partnership or limited liability company is a financial asset if 1026
it is held in a securities account. 1027
(d) A writing that is a security certificate is governed by 1028
this chapter and not by Chapter 3, even though it also meets the 1029
requirements of that chapter. However, a negotiable instrument 1030
governed by Chapter 3 is a financial asset if it is held in a 1031
securities account. 1032
(e) An option or similar obligation issued by a clearing 1033
corporation to its participants is not a security, but is a 1034
financial asset. 1035
(f) A commodity contract, as defined in Section 1036
75-9-102(a)(15), is not a security or a financial asset. 1037
(g) A document of title is not a financial asset unless 1038
Section 75-8-102(a)(9)(iii) applies. 1039
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(h) A controllable account, controllable electronic record, 1040
or controllable payment intangible is not a financial asset unless 1041
Section 75-8-102(a)(9)(iii) applies. 1042
SECTION 15. Section 75-8-106, Mississippi Code of 1972, is 1043
amended as follows: 1044
75-8-106. (a) A purchaser has "control" of a certificated 1045
security in bearer form if the certificated security is delivered 1046
to the purchaser. 1047
(b) A purchaser has "control" of a certificated security in 1048
registered form if the certificated security is delivered to the 1049
purchaser, and: 1050
(1) The certificate is endorsed to the purchaser or in 1051
blank by an effective endorsement; or 1052
(2) The certificate is registered in the name of the 1053
purchaser, upon original issue or registration of transfer by the 1054
issuer. 1055
(c) A purchaser has "control" of an uncertificated security 1056
if: 1057
(1) The uncertificated security is delivered to the 1058
purchaser; or 1059
(2) The issuer has agreed that it will comply with 1060
instructions originated by the purchaser without further consent 1061
by the registered owner. 1062
(d) A purchaser has "control" of a security entitlement if: 1063
(1) The purchaser becomes the entitlement holder; 1064
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(2) The securities intermediary has agreed that it will 1065
comply with entitlement orders originated by the purchaser without 1066
further consent by the entitlement holder; or 1067
(3) Another person * * *, other than the transferor to 1068
the purchaser of an interest in the security entitlement: 1069
(A) Has control of the security entitlement and 1070
acknowledges that it has control on behalf of the purchaser; or 1071
(B) Obtains control of the security entitlement 1072
after having acknowledged that it will obtain control of the 1073
security entitlement on behalf of the purchaser. 1074
(e) If an interest in a security entitlement is granted by 1075
the entitlement holder to the entitlement holder's own securities 1076
intermediary, the securities intermediary has control. 1077
(f) A purchaser who has satisfied the requirements of 1078
subsection (c) or (d) has control, even if the registered owner in 1079
the case of subsection (c) or the entitlement holder in the case 1080
of subsection (d) retains the right to make substitutions for the 1081
uncertificated security or security entitlement, to originate 1082
instructions or entitlement orders to the issuer or securities 1083
intermediary, or otherwise to deal with the uncertificated 1084
security or security entitlement. 1085
(g) An issuer or a securities intermediary may not enter 1086
into an agreement of the kind described in subsection (c)(2) or 1087
(d)(2) without the consent of the registered owner or entitlement 1088
holder, but an issuer or a securities intermediary is not required 1089
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to enter into such an agreement even though the registered owner 1090
or entitlement holder so directs. An issuer or securities 1091
intermediary that has entered into such an agreement is not 1092
required to confirm the existence of the agreement to another 1093
party unless requested to do so by the registered owner or 1094
entitlement holder. 1095
(h) A person that has control under this section is not 1096
required to acknowledge that it has control on behalf of a 1097
purchaser. 1098
(i) If a person acknowledges that it has or will obtain 1099
control on behalf of a purchaser, unless the person otherwise 1100
agrees or law other than this chapter or Chapter 9 otherwise 1101
provides, the person does not owe any duty to the purchaser and is 1102
not required to confirm the acknowledgment to any other person. 1103
SECTION 16. Section 75-8-110, Mississippi Code of 1972, is 1104
amended as follows: 1105
75-8-110. (a) The local law of the issuer's jurisdiction, 1106
as specified in subsection (d), governs: 1107
(1) The validity of a security; 1108
(2) The rights and duties of the issuer with respect to 1109
registration of transfer; 1110
(3) The effectiveness of registration of transfer by 1111
the issuer; 1112
(4) Whether the issuer owes any duties to an adverse 1113
claimant to a security; and 1114
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(5) Whether an adverse claim can be asserted against a 1115
person to whom transfer of a certificated or uncertificated 1116
security is registered or a person who obtains control of an 1117
uncertificated security. 1118
(b) The local law of the securities intermediary's 1119
jurisdiction, as specified in subsection (e), governs: 1120
(1) Acquisition of a security entitlement from the 1121
securities intermediary; 1122
(2) The rights and duties of the securities 1123
intermediary and entitlement holder arising out of a security 1124
entitlement; 1125
(3) Whether the securities intermediary owes any duties 1126
to an adverse claimant to a security entitlement; and 1127
(4) Whether an adverse claim can be asserted against a 1128
person who acquires a security entitlement from the securities 1129
intermediary or a person who purchases a security entitlement or 1130
interest therein from an entitlement holder. 1131
(c) The local law of the jurisdiction in which a security 1132
certificate is located at the time of delivery governs whether an 1133
adverse claim can be asserted against a person to whom the 1134
security certificate is delivered. 1135
(d) "Issuer's jurisdiction" means the jurisdiction under 1136
which the issuer of the security is organized or, if permitted by 1137
the law of that jurisdiction, the law of another jurisdiction 1138
specified by the issuer. An issuer organized under the law of 1139
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this state may specify the law of another jurisdiction as the law 1140
governing the matters specified in subsection (a)(2) through (5). 1141
(e) The following rules determine a "securities 1142
intermediary's jurisdiction" for purposes of this section: 1143
(1) If an agreement between the securities intermediary 1144
and its entitlement holder governing the securities account 1145
expressly provides that a particular jurisdiction is the 1146
securities intermediary's jurisdiction for the purposes of this 1147
part, this article or the Uniform Commercial Code, that 1148
jurisdiction is the securities intermediary's jurisdiction. 1149
(2) If paragraph (1) does not apply and an agreement 1150
between the securities intermediary and its entitlement holder 1151
governing the securities account expressly provides that the 1152
agreement is governed by the law of a particular jurisdiction, 1153
that jurisdiction is the securities intermediary's jurisdiction. 1154
(3) If neither paragraph (1) nor paragraph (2) applies 1155
and an agreement between the securities intermediary and its 1156
entitlement holder expressly provides that the securities account 1157
is maintained at an office in a particular jurisdiction, that 1158
jurisdiction is the securities intermediary's jurisdiction. 1159
(4) If none of the preceding paragraphs of this 1160
subsection apply, the securities intermediary's jurisdiction is 1161
the jurisdiction in which the office identified in an account 1162
statement as the office serving the entitlement holder's account 1163
is located. 1164
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(5) If none of the preceding paragraphs of this 1165
subsection apply, the securities intermediary's jurisdiction is 1166
the jurisdiction in which the chief executive office of the 1167
securities intermediary is located. 1168
(f) A securities intermediary's jurisdiction is not 1169
determined by the physical location of certificates representing 1170
financial assets, or by the jurisdiction in which is organized the 1171
issuer of the financial asset with respect to which an entitlement 1172
holder has a security entitlement, or by the location of 1173
facilities for data processing or other record keeping concerning 1174
the account. 1175
(g) The local law of the issuer's jurisdiction or the 1176
securities intermediary's jurisdiction governs a matter or 1177
transaction specified in subsection (a) or (b) even if the matter 1178
or transaction does not bear any relation to the jurisdiction. 1179
SECTION 17. Section 75-8-303, Mississippi Code of 1972, is 1180
amended as follows: 1181
75-8-303. (a) "Protected purchaser" means a purchaser of a 1182
certificated or uncertificated security, or of an interest 1183
therein, who: 1184
(1) Gives value; 1185
(2) Does not have notice of any adverse claim to the 1186
security; and 1187
(3) Obtains control of the certificated or 1188
uncertificated security. 1189
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(b) * * * A protected purchaser * * * acquires its interest 1190
in the security free of any adverse claim. 1191
SECTION 18. Section 75-9-102, Mississippi Code of 1972, is 1192
amended as follows: 1193
75-9-102. (a) In this article: 1194
(1) "Accession" means goods that are physically united 1195
with other goods in such a manner that the identity of the 1196
original goods is not lost. 1197
(2) "Account," except as used in "account for," 1198
"account statement," "account to," "commodity account" in 1199
paragraph (14), "customer's account," "deposit account" in 1200
paragraph (29), "on account of," and "statement of account," means 1201
a right to payment of a monetary obligation, whether or not earned 1202
by performance, (i) for property that has been or is to be sold, 1203
leased, licensed, assigned, or otherwise disposed of, (ii) for 1204
services rendered or to be rendered, (iii) for a policy of 1205
insurance issued or to be issued, (iv) for a secondary obligation 1206
incurred or to be incurred, (v) for energy provided or to be 1207
provided, (vi) for the use or hire of a vessel under a charter or 1208
other contract, (vii) arising out of the use of a credit or charge 1209
card or information contained on or for use with the card, or 1210
(viii) as winnings in a lottery or other game of chance operated 1211
or sponsored by a state, governmental unit of a state, or person 1212
licensed or authorized to operate the game by a state or 1213
governmental unit of a state. The term includes controllable 1214
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accounts and health-care-insurance receivables. The term does not 1215
include (i) * * * chattel paper, (ii) commercial tort claims, 1216
(iii) deposit accounts, (iv) investment property, (v) 1217
letter-of-credit rights or letters of credit, * * * (vi) rights to 1218
payment for money or funds advanced or sold, other than rights 1219
arising out of the use of a credit or charge card or information 1220
contained on or for use with the card, or (vii) rights to payment 1221
evidenced by an instrument. 1222
(3) "Account debtor" means a person obligated on an 1223
account, chattel paper, or general intangible. The term does not 1224
include persons obligated to pay a negotiable instrument, even if 1225
the negotiable instrument * * * evidences chattel paper. 1226
(4) "Accounting," except as used in "accounting for," 1227
means a record: 1228
(A) * * * Signed by a secured party; 1229
(B) Indicating the aggregate unpaid secured 1230
obligations as of a date not more than thirty-five (35) days 1231
earlier or thirty-five (35) days later than the date of the 1232
record; and 1233
(C) Identifying the components of the obligations 1234
in reasonable detail. 1235
(5) "Agricultural lien" means an interest in farm 1236
products: 1237
(A) Which secures payment or performance of an 1238
obligation for: 1239
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(i) Goods or services furnished in connection 1240
with a debtor's farming operation; or 1241
(ii) Rent on real property leased by a debtor 1242
in connection with its farming operation; 1243
(B) Which is created by statute in favor of a 1244
person that: 1245
(i) In the ordinary course of its business 1246
furnished goods or services to a debtor in connection with a 1247
debtor's farming operation; or 1248
(ii) Leased real property to a debtor in 1249
connection with the debtor's farming operation; and 1250
(C) Whose effectiveness does not depend on the 1251
person's possession of the personal property. 1252
(6) "As-extracted collateral" means: 1253
(A) Oil, gas, or other minerals that are subject 1254
to a security interest that: 1255
(i) Is created by a debtor having an interest 1256
in the minerals before extraction; and 1257
(ii) Attaches to the minerals as extracted; 1258
or 1259
(B) Accounts arising out of the sale at the 1260
wellhead or minehead of oil, gas, or other minerals in which the 1261
debtor had an interest before extraction. 1262
(7) * * * [Reserved.] 1263
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(7A) "Assignee," except as used in "assignee for 1264
benefit of creditors," means a person (i) in whose favor a 1265
security interest that secures an obligation is created or 1266
provided for under a security agreement, whether or not the 1267
obligation is outstanding or (ii) to which an account, chattel 1268
paper, payment intangible, or promissory note has been sold. The 1269
term includes a person to which a security interest has been 1270
transferred by a secured party. 1271
(7B) "Assignor" means a person that (i) under a 1272
security agreement creates or provides for a security interest 1273
that secures an obligation or (ii) sells an account, chattel 1274
paper, payment intangible, or promissory note. The term includes 1275
a secured party that has transferred a security interest to 1276
another person. 1277
(8) "Bank" means an organization that is engaged in the 1278
business of banking. The term includes savings banks, savings and 1279
loan associations, credit unions, and trust companies. 1280
(9) "Cash proceeds" means proceeds that are money, 1281
checks, deposit accounts, or the like. 1282
(10) "Certificate of title" means a certificate of 1283
title with respect to which a statute provides for the security 1284
interest in question to be indicated on the certificate as a 1285
condition or result of the security interest's obtaining priority 1286
over the rights of a lien creditor with respect to the collateral. 1287
The term includes another record maintained as an alternative to a 1288
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certificate of title by the governmental unit that issues 1289
certificates of title if a statute permits the security interest 1290
in question to be indicated on the record as a condition or result 1291
of the security interest's obtaining priority over the rights of a 1292
lien creditor with respect to the collateral. 1293
(11) "Chattel paper" means * * *: 1294
(A) A right to payment of a monetary obligation 1295
secured by specific goods, if the right to payment and security 1296
agreement are evidenced by a record; or 1297
(B) A right to payment of a monetary obligation 1298
owed by a lessee under a lease agreement with respect to specific 1299
goods and a monetary obligation owed by the lessee in connection 1300
with the transaction giving rise to the lease, if: 1301
(i) the right to payment and lease agreement 1302
are evidenced by a record; and 1303
(ii) The predominant purpose of the 1304
transaction giving rise to the lease was to give the lessee the 1305
right to possession and use of the goods. 1306
The term does not include a right to payment arising out of a 1307
charter or other contract involving the use or hire of a vessel or 1308
a right to payment arising out of the use of a credit or charge 1309
card or information contained on or for use with the card. 1310
(12) "Collateral" means the property subject to a 1311
security interest or agricultural lien. The term includes: 1312
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(A) Proceeds to which a security interest 1313
attaches; 1314
(B) Accounts, chattel paper, payment intangibles, 1315
and promissory notes that have been sold; and 1316
(C) Goods that are the subject of a consignment. 1317
(13) "Commercial tort claim" means a claim arising in 1318
tort with respect to which: 1319
(A) The claimant is an organization; or 1320
(B) The claimant is an individual and the claim: 1321
(i) Arose in the course of the claimant's 1322
business or profession; and 1323
(ii) Does not include damages arising out of 1324
personal injury to or the death of an individual. 1325
(14) "Commodity account" means an account maintained by 1326
a commodity intermediary in which a commodity contract is carried 1327
for a commodity customer. 1328
(15) "Commodity contract" means a commodity futures 1329
contract, an option on a commodity futures contract, a commodity 1330
option, or another contract if the contract or option is: 1331
(A) Traded on or subject to the rules of a board 1332
of trade that has been designated as a contract market for such a 1333
contract pursuant to federal commodities laws; or 1334
(B) Traded on a foreign commodity board of trade, 1335
exchange, or market, and is carried on the books of a commodity 1336
intermediary for a commodity customer. 1337
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(16) "Commodity customer" means a person for which a 1338
commodity intermediary carries a commodity contract on its books. 1339
(17) "Commodity intermediary" means a person that: 1340
(A) Is registered as a futures commission merchant 1341
under federal commodities law; or 1342
(B) In the ordinary course of its business 1343
provides clearance or settlement services for a board of trade 1344
that has been designated as a contract market pursuant to federal 1345
commodities law. 1346
(18) "Communicate" means: 1347
(A) To send a written or other tangible record; 1348
(B) To transmit a record by any means agreed upon 1349
by the persons sending and receiving the record; or 1350
(C) In the case of transmission of a record to or 1351
by a filing office, to transmit a record by any means prescribed 1352
by filing-office rule. 1353
(19) "Consignee" means a merchant to which goods are 1354
delivered in a consignment. 1355
(20) "Consignment" means a transaction, regardless of 1356
its form, in which a person delivers goods to a merchant for the 1357
purpose of sale and: 1358
(A) The merchant: 1359
(i) Deals in goods of that kind under a name 1360
other than the name of the person making delivery; 1361
(ii) Is not an auctioneer; and 1362
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(iii) Is not generally known by its creditors 1363
to be substantially engaged in selling the goods of others; 1364
(B) With respect to each delivery, the aggregate 1365
value of the goods is One Thousand Dollars ($1,000.00) or more at 1366
the time of delivery; 1367
(C) The goods are not consumer goods immediately 1368
before delivery; and 1369
(D) The transaction does not create a security 1370
interest that secures an obligation. 1371
(21) "Consignor" means a person that delivers goods to 1372
a consignee in a consignment. 1373
(22) "Consumer debtor" means a debtor in a consumer 1374
transaction. 1375
(23) "Consumer goods" means goods that are used or 1376
bought for use primarily for personal, family, or household 1377
purposes. 1378
(24) "Consumer-goods transaction" means a consumer 1379
transaction in which: 1380
(A) An individual incurs an obligation primarily 1381
for personal, family, or household purposes; and 1382
(B) A security interest in consumer goods secures 1383
the obligation. 1384
(25) "Consumer obligor" means an obligor who is an 1385
individual and who incurred the obligation as part of a 1386
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transaction entered into primarily for personal, family, or 1387
household purposes. 1388
(26) "Consumer transaction" means a transaction in 1389
which (i) an individual incurs an obligation primarily for 1390
personal, family, or household purposes, (ii) a security interest 1391
secures the obligation, and (iii) the collateral is held or 1392
acquired primarily for personal, family, or household purposes. 1393
The term includes consumer-goods transactions. 1394
(27) "Continuation statement" means an amendment of a 1395
financing statement which: 1396
(A) Identifies, by its file number, the initial 1397
financing statement to which it relates; and 1398
(B) Indicates that it is a continuation statement 1399
for, or that it is filed to continue the effectiveness of, the 1400
identified financing statement. 1401
(27A) "Controllable account" means an account evidenced 1402
by a controllable electronic record that provides that the account 1403
debtor undertakes to pay the person that has control under Section 1404
75-12-105 of the controllable electronic record. 1405
(27B) "Controllable payment intangible" means a payment 1406
intangible evidenced by a controllable electronic record that 1407
provides that the account debtor undertakes to pay the person that 1408
has control under Section 75-12-105 of the controllable electronic 1409
record. 1410
(28) "Debtor" means: 1411
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(A) A person having an interest, other than a 1412
security interest or other lien, in the collateral, whether or not 1413
the person is an obligor; 1414
(B) A seller of accounts, chattel paper, payment 1415
intangibles, or promissory notes; or 1416
(C) A consignee. 1417
(29) "Deposit account" means a demand, time, savings, 1418
passbook, or similar account maintained with a bank. The term 1419
does not include investment property or accounts evidenced by an 1420
instrument. 1421
(30) "Document" means a document of title or a receipt 1422
of the type described in Section 75-7-201(b). 1423
(31) * * * [Reserved.] 1424
(31A) "Electronic money" means money in an electronic 1425
form. 1426
(32) "Encumbrance" means a right, other than an 1427
ownership interest, in real property. The term includes mortgages 1428
and other liens on real property. 1429
(33) "Equipment" means goods other than inventory, farm 1430
products, or consumer goods. 1431
(34) "Farm products" means goods, other than standing 1432
timber, with respect to which the debtor is engaged in a farming 1433
operation and which are: 1434
(A) Crops grown, growing, or to be grown, 1435
including: 1436
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(i) Crops produced on trees, vines, and 1437
bushes; and 1438
(ii) Aquatic goods produced in aquacultural 1439
operations; 1440
(B) Livestock, born or unborn, including aquatic 1441
goods produced in aquacultural operations; 1442
(C) Supplies used or produced in a farming 1443
operation; or 1444
(D) Products of crops or livestock in their 1445
unmanufactured states. 1446
(35) "Farming operation" means raising, cultivating, 1447
propagating, fattening, grazing, or any other farming, livestock 1448
or aquacultural operation. 1449
(36) "File number" means the number assigned to an 1450
initial financing statement pursuant to Section 75-9-519(a). 1451
(37) "Filing office" means an office designated in 1452
Section 75-9-501 as the place to file a financing statement. 1453
(38) "Filing-office rule" means a rule adopted pursuant 1454
to Section 75-9-526. 1455
(39) "Financing statement" means a record or records 1456
composed of an initial financing statement and any filed record 1457
relating to the initial financing statement. 1458
(40) "Fixture filing" means the filing of a financing 1459
statement covering goods that are or are to become fixtures and 1460
satisfying Section 75-9-502(a) and (b). The term includes the 1461
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filing of a financing statement covering goods of a transmitting 1462
utility which are or are to become fixtures. 1463
(41) "Fixtures" means goods that have become so related 1464
to particular real property that an interest in them arises under 1465
real property law. 1466
(42) "General intangible" means any personal property, 1467
including things in action, other than accounts, chattel paper, 1468
commercial tort claims, deposit accounts, documents, goods, 1469
instruments, investment property, letter-of-credit rights, letters 1470
of credit, money, and oil, gas, or other minerals before 1471
extraction. The term includes controllable electronic records, 1472
payment intangibles, and software. 1473
(43) [Reserved.] 1474
(44) "Goods" means all things that are movable when a 1475
security interest attaches. The term includes (i) fixtures, (ii) 1476
standing timber that is to be cut and removed under a conveyance 1477
or contract for sale, (iii) the unborn young of animals, (iv) 1478
crops grown, growing, or to be grown, even if the crops are 1479
produced on trees, vines, or bushes, (v) farm-raised fish produced 1480
in fresh water according to the usual and customary techniques of 1481
commercial agriculture, (vi) manufactured homes and (vii) marine 1482
vessels (herein defined as every type of watercraft used, or 1483
capable of being used, as a means of transportation on water) 1484
including both marine vessels under construction, including 1485
engines and all items of equipment installed or to be installed 1486
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therein, whether such vessels are being constructed by the 1487
shipbuilder for his own use or for sale (said vessels under 1488
construction being classified as inventory within the meaning of 1489
Section 75-9-102(48)), and marine vessels after completion of 1490
construction so long as such vessels have not become "vessels of 1491
the United States" within the meaning of the Ship Mortgage Act of 1492
1920, 46 USCS, Section 911(4), as same is now written or may 1493
hereafter be amended (said completed vessels being classified as 1494
equipment within the meaning of Section 75-9-102(33)). The term 1495
also includes a computer program embedded in goods and any 1496
supporting information provided in connection with a transaction 1497
relating to the program if (i) the program is associated with the 1498
goods in such a manner that it customarily is considered part of 1499
the goods, or (ii) by becoming the owner of the goods, a person 1500
acquires a right to use the program in connection with the goods. 1501
The term does not include a computer program embedded in goods 1502
that consist solely of the medium in which the program is 1503
embedded. The term also does not include accounts, chattel paper, 1504
commercial tort claims, deposit accounts, documents, general 1505
intangibles, instruments, investment property, letter-of-credit 1506
rights, letters of credit, money, or oil, gas, or other minerals 1507
before extraction. 1508
(45) "Governmental unit" means a subdivision, agency, 1509
department, county, parish, municipality or other unit of the 1510
government of the United States, a state, or a foreign country. 1511
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The term includes an organization having a separate corporate 1512
existence if the organization is eligible to issue debt on which 1513
interest is exempt from income taxation under the laws of the 1514
United States. 1515
(46) "Health-care-insurance receivable" means an 1516
interest in or claim under a policy of insurance which is a right 1517
to payment of a monetary obligation for health-care goods or 1518
services provided or to be provided. 1519
(47) "Instrument" means a negotiable instrument or any 1520
other writing that evidences a right to the payment of a monetary 1521
obligation, is not itself a security agreement or lease, and is of 1522
a type that in ordinary course of business is transferred by 1523
delivery with any necessary endorsement or assignment. The term 1524
does not include (i) investment property, (ii) letters of 1525
credit, * * * (iii) writings that evidence a right to payment 1526
arising out of the use of a credit or charge card or information 1527
contained on or for use with the card, or (iv) writings that 1528
evidence chattel paper. 1529
(48) "Inventory" means goods, other than farm products, 1530
which: 1531
(A) Are leased by a person as lessor; 1532
(B) Are held by a person for sale or lease or to 1533
be furnished under a contract of service; 1534
(C) Are furnished by a person under a contract of 1535
service; or 1536
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(D) Consist of raw materials, work in process or 1537
materials used or consumed in a business. 1538
(49) "Investment property" means a security, whether 1539
certificated or uncertificated, security entitlement, securities 1540
account, commodity contract, or commodity account. 1541
(50) "Jurisdiction of organization," with respect to a 1542
registered organization, means the jurisdiction under whose law 1543
the organization is formed or organized. 1544
(51) "Letter-of-credit right" means a right to payment 1545
or performance under a letter of credit, whether or not the 1546
beneficiary has demanded or is at the time entitled to demand 1547
payment or performance. The term does not include the right of a 1548
beneficiary to demand payment or performance under a letter of 1549
credit. 1550
(52) "Lien creditor" means: 1551
(A) A creditor that has acquired a lien on the 1552
property involved by attachment, levy, or the like; 1553
(B) An assignee for benefit of creditors from the 1554
time of assignment; 1555
(C) A trustee in bankruptcy from the date of the 1556
filing of the petition; or 1557
(D) A receiver in equity from the time of 1558
appointment. 1559
(53) "Manufactured home" means a structure, 1560
transportable in one or more sections, which, in the traveling 1561
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mode, is eight (8) body feet or more in width or forty (40) body 1562
feet or more in length, or, when erected on site, is three hundred 1563
twenty (320) or more square feet, and which is built on a 1564
permanent chassis and designed to be used as a dwelling with or 1565
without a permanent foundation when connected to the required 1566
utilities, and includes the plumbing, heating, air-conditioning, 1567
and electrical systems contained therein. The term includes any 1568
structure that meets all of the requirements of this paragraph 1569
except the size requirements and with respect to which the 1570
manufacturer voluntarily files a certification required by the 1571
United States Secretary of Housing and Urban Development and 1572
complies with the standards established under Title 42 of the 1573
United States Code. 1574
(54) "Manufactured-home transaction" means a secured 1575
transaction: 1576
(A) That creates a purchase-money security 1577
interest in a manufactured home, other than a manufactured home 1578
held as inventory; or 1579
(B) In which a manufactured home, other than a 1580
manufactured home held as inventory, is the primary collateral. 1581
(54A) "Money" has the meaning in Section 1582
75-1-201(b)(24), but does not include (i) a deposit account or 1583
(ii) money in an electronic form that cannot be subjected to 1584
control under Section 75-9-105(A). 1585
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(55) "Mortgage" means a consensual interest in real 1586
property, including fixtures, which secures payment or performance 1587
of an obligation. "Mortgage" shall mean and include a deed of 1588
trust. 1589
(56) "New debtor" means a person that becomes bound as 1590
debtor under Section 75-9-203(d) by a security agreement 1591
previously entered into by another person. 1592
(57) "New value" means (i) money, (ii) money's worth in 1593
property, services, or new credit, or (iii) release by a 1594
transferee of an interest in property previously transferred to 1595
the transferee. The term does not include an obligation 1596
substituted for another obligation. 1597
(58) "Noncash proceeds" means proceeds other than cash 1598
proceeds. 1599
(59) "Obligor" means a person that, with respect to an 1600
obligation secured by a security interest in or an agricultural 1601
lien on the collateral, (i) owes payment or other performance of 1602
the obligation, (ii) has provided property other than the 1603
collateral to secure payment or other performance of the 1604
obligation, or (iii) is otherwise accountable in whole or in part 1605
for payment or other performance of the obligation. The term does 1606
not include issuers or nominated persons under a letter of credit. 1607
(60) "Original debtor," except as used in Section 1608
75-9-310(c), means a person that, as debtor, entered into a 1609
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security agreement to which a new debtor has become bound under 1610
Section 75-9-203(d). 1611
(61) "Payment intangible" means a general intangible 1612
under which the account debtor's principal obligation is a 1613
monetary obligation. The term includes a controllable payment 1614
intangible. 1615
(62) "Person related to," with respect to an 1616
individual, means: 1617
(A) The spouse of the individual; 1618
(B) A brother, brother-in-law, sister, or 1619
sister-in-law of the individual; 1620
(C) An ancestor or lineal descendant of the 1621
individual or the individual's spouse; or 1622
(D) Any other relative, by blood or marriage, of 1623
the individual or the individual's spouse who shares the same home 1624
with the individual. 1625
(63) "Person related to," with respect to an 1626
organization, means: 1627
(A) A person directly or indirectly controlling, 1628
controlled by, or under common control with the organization; 1629
(B) An officer or director of, or a person 1630
performing similar functions with respect to, the organization; 1631
(C) An officer or director of, or a person 1632
performing similar functions with respect to, a person described 1633
in subparagraph (A); 1634
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(D) The spouse of an individual described in 1635
subparagraph (A), (B), or (C); or 1636
(E) An individual who is related by blood or 1637
marriage to an individual described in subparagraph (A), (B), (C), 1638
or (D) and shares the same home with the individual. 1639
(64) "Proceeds," except as used in Section 75-9-609(b), 1640
means the following property: 1641
(A) Whatever is acquired upon the sale, lease, 1642
license, exchange or other disposition of collateral; 1643
(B) Whatever is collected on, or distributed on 1644
account of, collateral; 1645
(C) Rights arising out of collateral; 1646
(D) To the extent of the value of collateral, 1647
claims arising out of the loss, nonconformity, or interference 1648
with the use of, defects or infringement of rights in, or damage 1649
to, the collateral; or 1650
(E) To the extent of the value of collateral and 1651
to the extent payable to the debtor or the secured party, 1652
insurance payable by reason of the loss or nonconformity of, 1653
defects or infringement of rights in, or damage to, the 1654
collateral. 1655
(64A) "Production-money crops" means crops that secure 1656
a production-money obligation incurred with respect to the 1657
production of those crops. 1658
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(64B) "Production-money obligation" means an obligation 1659
of an obligor incurred for new value given to enable the debtor to 1660
produce crops if the value is in fact used for the production of 1661
the crops. 1662
(64C) "Production of crops" includes tilling and 1663
otherwise preparing land for growing, planting, cultivating, 1664
fertilizing, irrigating, harvesting and gathering crops, and 1665
protecting them from damage or disease. 1666
(65) "Promissory note" means an instrument that 1667
evidences a promise to pay a monetary obligation, does not 1668
evidence an order to pay, and does not contain an acknowledgment 1669
by a bank that the bank has received for deposit a sum of money or 1670
funds. 1671
(66) "Proposal" means a record * * * signed by a 1672
secured party which includes the terms on which the secured party 1673
is willing to accept collateral in full or partial satisfaction of 1674
the obligation it secures pursuant to Sections 75-9-620, 75-9-621, 1675
and 75-9-622. 1676
(67) "Public-finance transaction" means a secured 1677
transaction in connection with which: 1678
(A) Debt securities are issued; 1679
(B) All or a portion of the securities issued have 1680
an initial stated maturity of at least twenty (20) years; and 1681
(C) The debtor, obligor, secured party, account 1682
debtor or other person obligated on collateral, assignor or 1683
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assignee of a secured obligation, or assignor or assignee of a 1684
security interest is a state or a governmental unit of a state. 1685
(68) "Public organic record" means a record that is 1686
available to the public for inspection and is: 1687
(A) A record consisting of the record initially 1688
filed with or issued by a state or the United States to form or 1689
organize an organization and any record filed with or issued by 1690
the state or the United States which amends or restates the 1691
initial record; 1692
(B) An organic record of a business trust 1693
consisting of the record initially filed with a state and any 1694
record filed with the state which amends or restates the initial 1695
record, if a statute of the state governing business trusts 1696
requires that the record be filed with the state; or 1697
(C) A record consisting of legislation enacted by 1698
the Legislature of a state or the Congress of the United States 1699
which forms or organizes an organization, any record amending the 1700
legislation, and any record filed with or issued by the state or 1701
United States which amends or restates the name of the 1702
organization. 1703
(69) "Pursuant to commitment," with respect to an 1704
advance made or other value given by a secured party, means 1705
pursuant to the secured party's obligation, whether or not a 1706
subsequent event of default or other event not within the secured 1707
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party's control has relieved or may relieve the secured party from 1708
its obligation. 1709
(70) "Record," except as used in "for record," "of 1710
record," "record or legal title," and "record owner," means 1711
information that is inscribed on a tangible medium or which is 1712
stored in an electronic or other medium and is retrievable in 1713
perceivable form. 1714
(71) "Registered organization" means an organization 1715
formed or organized solely under the law of a single state or the 1716
United States by the filing of a public organic record with, the 1717
issuance of a public organic record by, or the enactment of 1718
legislation by the state or the United States. The term includes 1719
a business trust that is formed or organized under the law of a 1720
single state if a statute of the state governing business trusts 1721
requires that the business trust's organic record be filed with 1722
the state. 1723
(72) "Secondary obligor" means an obligor to the extent 1724
that: 1725
(A) The obligor's obligation is secondary; or 1726
(B) The obligor has a right of recourse with 1727
respect to an obligation secured by collateral against the debtor, 1728
another obligor, or property of either. 1729
(73) "Secured party" means: 1730
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(A) A person in whose favor a security interest is 1731
created or provided for under a security agreement, whether or not 1732
any obligation to be secured is outstanding; 1733
(B) A person that holds an agricultural lien; 1734
(C) A consignor; 1735
(D) A person to which accounts, chattel paper, 1736
payment intangibles, or promissory notes have been sold; 1737
(E) A trustee, indenture trustee, agent, 1738
collateral agent, or other representative in whose favor a 1739
security interest or agricultural lien is created or provided for; 1740
or 1741
(F) A person that holds a security interest 1742
arising under Section 75-2-401, 75-2-505, 75-2-711(3), 1743
75-2A-508(5), 75-4-210, or 75-5-118. 1744
(74) "Security agreement" means an agreement that 1745
creates or provides for a security interest. 1746
(75) * * * [Reserved.] 1747
(76) "Software" means a computer program and any 1748
supporting information provided in connection with a transaction 1749
relating to the program. The term does not include a computer 1750
program that is included in the definition of goods. 1751
(77) "State" means a state of the United States, the 1752
District of Columbia, Puerto Rico, the United States Virgin 1753
Islands, or any territory or insular possession subject to the 1754
jurisdiction of the United States. 1755
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(78) "Supporting obligation" means a letter-of-credit 1756
right or secondary obligation that supports the payment or 1757
performance of an account, chattel paper, a document, a general 1758
intangible, an instrument, or investment property. 1759
(79) * * * [Reserved.] 1760
(79A) "Tangible money" means money in a tangible form. 1761
(80) "Termination statement" means an amendment of a 1762
financing statement which: 1763
(A) Identifies, by its file number, the initial 1764
financing statement to which it relates; and 1765
(B) Indicates either that it is a termination 1766
statement or that the identified financing statement is no longer 1767
effective. 1768
(81) "Transmitting utility" means a person primarily 1769
engaged in the business of: 1770
(A) Operating a railroad, subway, street railway, 1771
or trolley bus; 1772
(B) Transmitting communications electrically, 1773
electromagnetically, or by light; 1774
(C) Transmitting goods by pipeline or sewer; or 1775
(D) Transmitting or producing and transmitting 1776
electricity, steam, gas, or water. 1777
(b) The following definitions in other articles apply to 1778
this article: 1779
"Applicant" Section 75-5-102 1780
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"Beneficiary" Section 75-5-102 1781
"Broker" Section 75-8-102 1782
"Certificated security" Section 75-8-102 1783
"Check" Section 75-3-104 1784
"Clearing corporation" Section 75-8-102 1785
"Contract for sale" Section 75-2-106 1786
"Control" Section 75-7-106 1787
"Controllable electronic record" Section 75-12-102 1788
"Customer" Section 75-4-104 1789
"Entitlement holder" Section 75-8-102 1790
"Financial asset" Section 75-8-102 1791
"Holder in due course" Section 75-3-302 1792
"Issuer" (with respect to 1793
a letter of credit or 1794
letter-of-credit right) Section 75-5-102 1795
"Issuer" (with respect to a 1796
security) Section 75-8-201 1797
"Issuer" (with respect to 1798
documents of title) Section 75-7-102 1799
"Lease" Section 75-2A-103 1800
"Lease agreement" Section 75-2A-103 1801
"Lease contract" Section 75-2A-103 1802
"Leasehold interest" Section 75-2A-103 1803
"Lessee" Section 75-2A-103 1804
"Lessee in ordinary course 1805
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of business" Section 75-2A-103 1806
"Lessor" Section 75-2A-103 1807
"Lessor's residual interest" Section 75-2A-103 1808
"Letter of credit" Section 75-5-102 1809
"Merchant" Section 75-2-104 1810
"Negotiable instrument" Section 75-3-104 1811
"Nominated person" Section 75-5-102 1812
"Note" Section 75-3-104 1813
"Proceeds of a letter of 1814
credit" Section 75-5-114 1815
"Protected purchaser" Section 75-8-303 1816
"Prove" Section 75-3-103 1817
"Qualifying purchaser" Section 75-12-102 1818
"Sale" Section 75-2-106 1819
"Securities account" Section 75-8-501 1820
"Securities intermediary" Section 75-8-102 1821
"Security" Section 75-8-102 1822
"Security certificate" Section 75-8-102 1823
"Security entitlement" Section 75-8-102 1824
"Uncertificated security" Section 75-8-102 1825
(c) Article 1 contains general definitions and principles of 1826
construction and interpretation applicable throughout this 1827
article. 1828
SECTION 19. Section 75-9-104, Mississippi Code of 1972, is 1829
amended as follows: 1830
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75-9-104. (a) A secured party has control of a deposit 1831
account if: 1832
(1) The secured party is the bank with which the 1833
deposit account is maintained; 1834
(2) The debtor, secured party, and bank have agreed 1835
in * * * a signed record that the bank will comply with 1836
instructions originated by the secured party directing disposition 1837
of the funds in the deposit account without further consent by the 1838
debtor; * * * 1839
(3) The secured party becomes the bank's customer with 1840
respect to the deposit account * * *; or 1841
(4) Another person, other than the debtor: 1842
(A) Has control of the deposit account and 1843
acknowledges that it has control on behalf of the secured party; 1844
or 1845
(B) Obtains control of the deposit account after 1846
having acknowledged that it will obtain control of the deposit 1847
account on behalf of the secured party. 1848
(b) A secured party that has satisfied subsection (a) has 1849
control, even if the debtor retains the right to direct the 1850
disposition of funds from the deposit account. 1851
SECTION 20. Section 75-9-105, Mississippi Code of 1972, is 1852
amended as follows: 1853
75-9-105. Control of Electronic Copy of Record Evidencing 1854
Chattel Paper. (a) * * * A purchaser has control of an 1855
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authoritative electronic copy of a record evidencing chattel paper 1856
if a system employed for evidencing the assignment of interests in 1857
the chattel paper reliably establishes the purchaser as the person 1858
to which the authoritative electronic copy was assigned. 1859
(b) A system satisfies subsection (a) if the record or 1860
records evidencing the chattel paper are created, stored, and 1861
assigned in a manner that: 1862
(1) A single authoritative copy of the record or 1863
records exists which is unique, identifiable, and, except as 1864
otherwise provided in paragraphs (4), (5), and (6), unalterable; 1865
(2) The authoritative copy identifies the purchaser as 1866
the assignee of the record or records; 1867
(3) The authoritative copy is communicated to and 1868
maintained by the purchaser or its designated custodian; 1869
(4) Copies or amendments that add or change an 1870
identified assignee of the authoritative copy can be made only 1871
with the consent of the purchaser; 1872
(5) Each copy of the authoritative copy and any copy of 1873
a copy is readily identifiable as a copy that is not the 1874
authoritative copy; and 1875
(6) Any amendment of the authoritative copy is readily 1876
identifiable as authorized or unauthorized. 1877
(c) A system satisfies subsection (a), and a purchaser has 1878
control of an authoritative electronic copy of a record evidencing 1879
chattel paper, if the electronic copy, a record attached to or 1880
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logically associated with the electronic copy, or a system in 1881
which the electronic copy is recorded: 1882
(1) Enables the purchaser readily to identify each 1883
electronic copy as either an authoritative copy or 1884
nonauthoritative copy; 1885
(2) Enables the purchaser readily to identify itself in 1886
any way, including by name, identifying number, cryptographic key, 1887
office, or account number, as the assignee of the authoritative 1888
electronic copy; and 1889
(3) Gives the purchaser exclusive power, subject to 1890
subsection (d), to: 1891
(A) Prevent others from adding or changing an 1892
identified assignee of the authoritative electronic copy; and 1893
(B) Transfer control of the authoritative 1894
electronic copy. 1895
(d) Subject to subsection (e), a power is exclusive under 1896
subsection (c)(3)(A) and (B) even if: 1897
(1) The authoritative electronic copy, a record 1898
attached to or logically associated with the authoritative 1899
electronic copy, or a system in which the authoritative electronic 1900
copy is recorded limits the use of the authoritative electronic 1901
copy or has a protocol programmed to cause a change, including a 1902
transfer or loss of control; or 1903
(2) The power is shared with another person. 1904
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(e) A power of a purchaser is not shared with another person 1905
under subsection (d)(2) and the purchaser's power is not exclusive 1906
if: 1907
(1) The purchaser can exercise the power only if the 1908
power also is exercised by the other person; and 1909
(2) The other person: 1910
(A) Can exercise the power without exercise of the 1911
power by purchaser; or 1912
(B) Is the transferor to the purchaser of an 1913
interest in the chattel paper. 1914
(f) If a purchaser has the powers specified in subsection 1915
(c)(3)(A) and (B), the powers are presumed to be exclusive. 1916
(g) A purchaser has control of an authoritative electronic 1917
copy of a record evidencing chattel paper if another person, other 1918
than the transferor to the purchaser of an interest in the chattel 1919
paper: 1920
(1) Has control of the authoritative electronic copy 1921
and acknowledges that it has control on behalf of the purchaser; 1922
or 1923
(2) Obtains control of the authoritative electronic 1924
copy after having acknowledged that it will obtain control of the 1925
electronic copy on behalf of the purchaser. 1926
SECTION 21. The following shall be codified as Section 1927
75-9-105A, Mississippi Code of 1972: 1928
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75-9-105A. Control of Electronic Money. (a) A person has 1929
control of electronic money if: 1930
(1) The electronic money, a record attached to or 1931
logically associated with the electronic money, or a system in 1932
which the electronic money is recorded gives the person: 1933
(A) Power to avail itself of substantially all the 1934
benefit from the electronic money; and 1935
(B) Exclusive power, subject to subsection (b), 1936
to: 1937
(i) Prevent others from availing themselves 1938
of substantially all the benefit from the electronic money; and 1939
(ii) Transfer control of the electronic money 1940
to another person or cause another person to obtain control of 1941
other electronic money as a result of the transfer of the 1942
electronic money; and 1943
(2) The electronic money, a record attached to or 1944
logically associated with the electronic money, or a system in 1945
which the electronic money is recorded enables the person readily 1946
to identify itself in any way, including by name, identifying 1947
number, cryptographic key, office, or account number, as having 1948
the powers under paragraph (1). 1949
(b) Subject to subsection (c), a power is exclusive under 1950
subsection (a)(1)(B)(i) and (ii) even if: 1951
(1) The electronic money, a record attached to or 1952
logically associated with the electronic money, or a system in 1953
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which the electronic money is recorded limits the use of the 1954
electronic money or has a protocol programmed to cause a change, 1955
including a transfer or loss of control; or 1956
(2) The power is shared with another person. 1957
(c) A power of a person is not shared with another person 1958
under subsection (b)(2) and the person's power is not exclusive 1959
if: 1960
(1) The person can exercise the power only if the power 1961
also is exercised by the other person; and 1962
(2) The other person: 1963
(A) Can exercise the power without exercise of the 1964
power by the person; or 1965
(B) Is the transferor to the person of an interest 1966
in the electronic money. 1967
(d) If a person has the powers specified in subsection 1968
(a)(1)(B)(i) and (ii), the powers are presumed to be exclusive. 1969
(e) A person has control of electronic money if another 1970
person, other than the transferor to the person of an interest in 1971
the electronic money: 1972
(1) Has control of the electronic money and 1973
acknowledges that it has control on behalf of the person; or 1974
(2) Obtains control of the electronic money after 1975
having acknowledged that it will obtain control of the electronic 1976
money on behalf of the person. 1977
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SECTION 22. The following shall be codified as Section 1978
75-9-107A, Mississippi Code of 1972: 1979
75-9-107A. Control of Controllable Electronic Record, 1980
Controllable Account, or Controllable Payment Intangible. (a) A 1981
secured party has control of a controllable electronic record as 1982
provided in Section 75-12-105. 1983
(b) A secured party has control of a controllable account or 1984
controllable payment intangible if the secured party has control 1985
of the controllable electronic record that evidences the 1986
controllable account or controllable payment intangible. 1987
SECTION 23. The following shall be codified as Section 1988
75-9-107B, Mississippi Code of 1972: 1989
75-9-107B. No Requirement to Acknowledge or Confirm; No 1990
Duties. (a) A person that has control under Section 75-9-104, 1991
75-9-105, or 75-9-105A is not required to acknowledge that it has 1992
control on behalf of another person. 1993
(b) If a person acknowledges that it has or will obtain 1994
control on behalf of another person, unless the person otherwise 1995
agrees or law other than this chapter otherwise provides, the 1996
person does not owe any duty to the other person and is not 1997
required to confirm the acknowledgment to any other person. 1998
SECTION 24. Section 75-9-203, Mississippi Code of 1972, is 1999
amended as follows: 2000
75-9-203. (a) A security interest attaches to collateral 2001
when it becomes enforceable against the debtor with respect to the 2002
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collateral, unless an agreement expressly postpones the time of 2003
attachment. 2004
(b) Except as otherwise provided in subsections (c) through 2005
(i), a security interest is enforceable against the debtor and 2006
third parties with respect to the collateral only if: 2007
(1) Value has been given; 2008
(2) The debtor has rights in the collateral or the 2009
power to transfer rights in the collateral to a secured party; and 2010
(3) One (1) of the following conditions is met: 2011
(A) The debtor has * * * signed a security 2012
agreement that provides a description of the collateral and, if 2013
the security interest covers timber to be cut, a description of 2014
the land concerned; 2015
(B) The collateral is not a certificated security 2016
and is in the possession of the secured party under Section 2017
75-9-313 pursuant to the debtor's security agreement; 2018
(C) The collateral is a certificated security in 2019
registered form and the security certificate has been delivered to 2020
the secured party under Section 75-8-301 pursuant to the debtor's 2021
security agreement; * * * 2022
(D) The collateral is controllable accounts, 2023
controllable electronic records, controllable payment intangibles, 2024
deposit accounts, * * * electronic documents, electronic money, 2025
investment property, or letter-of-credit rights, * * * and the 2026
secured party has control under Section 75-7-106, 75-9-104, 2027
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75-9-105A, 75-9-106, * * * 75-9-107, or 75-9-107A pursuant to the 2028
debtor's security agreement * * *; or 2029
(E) The collateral is chattel paper and the 2030
secured party has possession and control under Section 75-9-314A 2031
pursuant to the debtor's security agreement. 2032
(c) Subsection (b) is subject to Section 75-4-210 on the 2033
security interest of a collecting bank, Section 75-5-118 on the 2034
security interest of a letter-of-credit issuer or nominated 2035
person, Section 75-9-110 on a security interest arising under 2036
Article 2 or 2A of Title 75, and Section 75-9-206 on security 2037
interests in investment property. 2038
(d) A person becomes bound as debtor by a security agreement 2039
entered into by another person if, by operation of law other than 2040
this article or by contract: 2041
(1) The security agreement becomes effective to create 2042
a security interest in the person's property; or 2043
(2) The person becomes generally obligated for the 2044
obligations of the other person, including the obligation secured 2045
under the security agreement, and acquires or succeeds to all or 2046
substantially all of the assets of the other person. 2047
(e) If a new debtor becomes bound as debtor by a security 2048
agreement entered into by another person: 2049
(1) The agreement satisfies subsection (b)(3) with 2050
respect to existing or after-acquired property of the new debtor 2051
to the extent the property is described in the agreement; and 2052
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(2) Another agreement is not necessary to make a 2053
security interest in the property enforceable. 2054
(f) The attachment of a security interest in collateral 2055
gives the secured party the rights to proceeds provided by Section 2056
75-9-315 and is also attachment of a security interest in a 2057
supporting obligation for the collateral. 2058
(g) The attachment of a security interest in a right to 2059
payment or performance secured by a security interest or other 2060
lien on personal or real property is also attachment of a security 2061
interest in the security interest, mortgage, or other lien. 2062
(h) The attachment of a security interest in a securities 2063
account is also attachment of a security interest in the security 2064
entitlements carried in the securities account. 2065
(i) The attachment of a security interest in a commodity 2066
account is also attachment of a security interest in the commodity 2067
contracts carried in the commodity account. 2068
SECTION 25. Section 75-9-204, Mississippi Code of 1972, is 2069
amended as follows: 2070
75-9-204. (a) Except as otherwise provided in subsection 2071
(b), a security agreement may create or provide for a security 2072
interest in after-acquired collateral. 2073
(b) Subject to subsection (b.1), a security interest does 2074
not attach under a term constituting an after-acquired property 2075
clause to: 2076
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(1) Consumer goods, other than an accession when given 2077
as additional security, unless the debtor acquires rights in them 2078
within ten (10) days after the secured party gives value; or 2079
(2) A commercial tort claim. 2080
(b.1) Subsection (b) does not prevent a security interest 2081
from attaching: 2082
(1) To consumer goods as proceeds under Section 2083
75-9-315(a) or commingled goods under Section 75-9-336(c); 2084
(2) To a commercial tort claim as proceeds under 2085
Section 75-9-315(a); or 2086
(3) Under an after-acquired property clause to property 2087
that is proceeds of consumer goods or a commercial tort claim. 2088
(c) A security agreement may provide that collateral 2089
secures, or that accounts, chattel paper, payment intangibles, or 2090
promissory notes are sold in connection with, future advances or 2091
other value, whether or not the advances or value are given 2092
pursuant to commitment. 2093
SECTION 26. Section 75-9-208, Mississippi Code of 1972, is 2094
amended as follows: 2095
75-9-208. (a) This section applies to cases in which there 2096
is no outstanding secured obligation and the secured party is not 2097
committed to make advances, incur obligations, or otherwise give 2098
value. 2099
(b) Within ten (10) days after receiving * * * a signed 2100
demand by the debtor: 2101
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(1) A secured party having control of a deposit account 2102
under Section 75-9-104(a)(2) shall send to the bank with which the 2103
deposit account is maintained * * * a signed record that releases 2104
the bank from any further obligation to comply with instructions 2105
originated by the secured party; 2106
(2) A secured party having control of a deposit account 2107
under Section 75-9-104(a)(3) shall: 2108
(A) Pay the debtor the balance on deposit in the 2109
deposit account; or 2110
(B) Transfer the balance on deposit into a deposit 2111
account in the debtor's name; 2112
(3) * * * A secured party, other than a buyer, having 2113
control under Section 75-9-105 of an authoritative electronic copy 2114
of a record evidencing chattel paper shall transfer control of the 2115
electronic copy to the debtor or a person designated by the 2116
debtor; 2117
(4) A secured party having control of investment 2118
property under Section 75-8-106(d)(2) or 75-9-106(b) shall send to 2119
the securities intermediary or commodity intermediary with which 2120
the security entitlement or commodity contract is maintained * * * 2121
a signed record that releases the securities intermediary or 2122
commodity intermediary from any further obligation to comply with 2123
entitlement orders or directions originated by the secured party; 2124
(5) A secured party having control of a 2125
letter-of-credit right under Section 75-9-107 shall send to each 2126
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person having an unfulfilled obligation to pay or deliver proceeds 2127
of the letter of credit to the secured party * * * a signed 2128
release from any further obligation to pay or deliver proceeds of 2129
the letter of credit to the secured party; * * * 2130
(6) * * * A secured party having control under Section 2131
75-7-106 of an authoritative electronic copy of an electronic 2132
document shall transfer control of the electronic copy to the 2133
debtor or a person designated by the debtor; 2134
(7) A secured party having control under Section 2135
75-9-105A of electronic money shall transfer control of the 2136
electronic money to the debtor or a person designated by the 2137
debtor; and 2138
(8) A secured party having control under Section 2139
75-12-105 of a controllable electronic record, other than a buyer 2140
of a controllable account or controllable payment intangible 2141
evidenced by the controllable electronic record, shall transfer 2142
control of the controllable electronic record to the debtor or a 2143
person designated by the debtor. 2144
SECTION 27. Section 75-9-304, Mississippi Code of 1972, is 2145
amended as follows: 2146
75-9-304. (a) The local law of a bank's jurisdiction 2147
governs perfection, the effect of perfection or nonperfection, and 2148
the priority of a security interest in a deposit account 2149
maintained with that bank even if the transaction does not bear 2150
any relation to the bank's jurisdiction. 2151
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(b) The following rules determine a bank's jurisdiction for 2152
purposes of this part: 2153
(1) If an agreement between the bank and its customer 2154
governing the deposit account expressly provides that a particular 2155
jurisdiction is the bank's jurisdiction for purposes of this part, 2156
this article, or the Uniform Commercial Code, that jurisdiction is 2157
the bank's jurisdiction. 2158
(2) If paragraph (1) does not apply and an agreement 2159
between the bank and its customer governing the deposit account 2160
expressly provides that the agreement is governed by the law of a 2161
particular jurisdiction, that jurisdiction is the bank's 2162
jurisdiction. 2163
(3) If neither paragraph (1) nor paragraph (2) applies 2164
and an agreement between the bank and its customer governing the 2165
deposit account expressly provides that the deposit account is 2166
maintained at an office in a particular jurisdiction, that 2167
jurisdiction is the bank's jurisdiction. 2168
(4) If none of the preceding paragraphs applies, the 2169
bank's jurisdiction is the jurisdiction in which the office 2170
identified in an account statement as the office serving the 2171
customer's account is located. 2172
(5) If none of the preceding paragraphs applies, the 2173
bank's jurisdiction is the jurisdiction in which the chief 2174
executive office of the bank is located. 2175
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SECTION 28. Section 75-9-305, Mississippi Code of 1972, is 2176
amended as follows: 2177
75-9-305. (a) Except as otherwise provided in subsection 2178
(c), the following rules apply: 2179
(1) While a security certificate is located in a 2180
jurisdiction, the local law of that jurisdiction governs 2181
perfection, the effect of perfection or nonperfection, and the 2182
priority of a security interest in the certificated security 2183
represented thereby. 2184
(2) The local law of the issuer's jurisdiction as 2185
specified in Section 75-8-110(d) governs perfection, the effect of 2186
perfection or nonperfection, and the priority of a security 2187
interest in an uncertificated security. 2188
(3) The local law of the securities intermediary's 2189
jurisdiction as specified in Section 75-8-110(e) governs 2190
perfection, the effect of perfection or nonperfection, and the 2191
priority of a security interest in a security entitlement or 2192
securities account. 2193
(4) The local law of the commodity intermediary's 2194
jurisdiction governs perfection, the effect of perfection or 2195
nonperfection, and the priority of a security interest in a 2196
commodity contract or commodity account. 2197
(5) Paragraphs (2), (3), and (4) apply even if the 2198
transaction does not bear any relation to the jurisdiction. 2199
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(b) The following rules determine a commodity intermediary's 2200
jurisdiction for purposes of this part: 2201
(1) If an agreement between the commodity intermediary 2202
and commodity customer governing the commodity account expressly 2203
provides that a particular jurisdiction is the commodity 2204
intermediary's jurisdiction for purposes of this part, this 2205
article, or the Uniform Commercial Code, that jurisdiction is the 2206
commodity intermediary's jurisdiction. 2207
(2) If paragraph (1) does not apply and an agreement 2208
between the commodity intermediary and commodity customer 2209
governing the commodity account expressly provides that the 2210
agreement is governed by the law of a particular jurisdiction, 2211
that jurisdiction is the commodity intermediary's jurisdiction. 2212
(3) If neither paragraph (1) nor paragraph (2) applies 2213
and an agreement between the commodity intermediary and commodity 2214
customer governing the commodity account expressly provides that 2215
the commodity account is maintained at an office in a particular 2216
jurisdiction, that jurisdiction is the commodity intermediary's 2217
jurisdiction. 2218
(4) If none of the preceding paragraphs applies, the 2219
commodity intermediary's jurisdiction is the jurisdiction in which 2220
the office identified in an account statement as the office 2221
serving the commodity customer's account is located. 2222
(5) If none of the preceding paragraphs applies, the 2223
commodity intermediary's jurisdiction is the jurisdiction in which 2224
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the chief executive office of the commodity intermediary is 2225
located. 2226
(c) The local law of the jurisdiction in which the debtor is 2227
located governs: 2228
(1) Perfection of a security interest in investment 2229
property by filing; 2230
(2) Automatic perfection of a security interest in 2231
investment property created by a broker or securities 2232
intermediary; and 2233
(3) Automatic perfection of a security interest in a 2234
commodity contract or commodity account created by a commodity 2235
intermediary. 2236
SECTION 29. The following shall be codified as Section 2237
75-9-306A, Mississippi Code of 1972: 2238
75-9-306A. Law Governing Perfection and Priority of Security 2239
Interests in Chattel Paper. (a) Except as provided in subsection 2240
(d), if chattel paper is evidenced only by an authoritative 2241
electronic copy of the chattel paper or is evidenced by an 2242
authoritative electronic copy and an authoritative tangible copy, 2243
the local law of the chattel paper's jurisdiction governs 2244
perfection, the effect of perfection or nonperfection, and the 2245
priority of a security interest in the chattel paper, even if the 2246
transaction does not bear any relation to the chattel paper's 2247
jurisdiction. 2248
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(b) The following rules determine the chattel paper's 2249
jurisdiction under this section: 2250
(1) If the authoritative electronic copy of the record 2251
evidencing chattel paper, or a record attached to or logically 2252
associated with the electronic copy and readily available for 2253
review, expressly provides that a particular jurisdiction is the 2254
chattel paper's jurisdiction for purposes of this part, this 2255
chapter, or the Uniform Commercial Code, that jurisdiction is the 2256
chattel paper's jurisdiction. 2257
(2) If paragraph (1) does not apply and the rules of 2258
the system in which the authoritative electronic copy is recorded 2259
are readily available for review and expressly provide that a 2260
particular jurisdiction is the chattel paper's jurisdiction for 2261
purposes of this part, this chapter, or the Uniform Commercial 2262
Code, that jurisdiction is the chattel paper's jurisdiction. 2263
(3) If paragraphs (1) and (2) do not apply and the 2264
authoritative electronic copy, or a record attached to or 2265
logically associated with the electronic copy and readily 2266
available for review, expressly provides that the chattel paper is 2267
governed by the law of a particular jurisdiction, that 2268
jurisdiction is the chattel paper's jurisdiction. 2269
(4) If paragraphs (1), (2), and (3) do not apply and 2270
the rules of the system in which the authoritative electronic copy 2271
is recorded are readily available for review and expressly provide 2272
that the chattel paper or the system is governed by the law of a 2273
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particular jurisdiction, that jurisdiction is the chattel paper's 2274
jurisdiction. 2275
(5) If paragraphs (1) through (4) do not apply, the 2276
chattel paper's jurisdiction is the jurisdiction in which the 2277
debtor is located. 2278
(c) If an authoritative tangible copy of a record evidences 2279
chattel paper and the chattel paper is not evidenced by an 2280
authoritative electronic copy, while the authoritative tangible 2281
copy of the record evidencing chattel paper is located in a 2282
jurisdiction, the local law of that jurisdiction governs: 2283
(1) Perfection of a security interest in the chattel 2284
paper by possession under Section 75-9-314A; and 2285
(2) The effect of perfection or nonperfection and the 2286
priority of a security interest in the chattel paper. 2287
(d) The local law of the jurisdiction in which the debtor is 2288
located governs perfection of a security interest in chattel paper 2289
by filing. 2290
SECTION 30. The following shall be codified as Section 2291
75-9-306B, Mississippi Code of 1972: 2292
75-9-306B. Law Governing Perfection and Priority of Security 2293
Interests in Controllable Accounts, Controllable Electronic 2294
Records, and Controllable Payment Intangibles. (a) Except as 2295
provided in subsection (b), the local law of the controllable 2296
electronic record's jurisdiction specified in Section 75-12-107(c) 2297
and (d) governs perfection, the effect of perfection or 2298
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nonperfection, and the priority of a security interest in a 2299
controllable electronic record and a security interest in a 2300
controllable account or controllable payment intangible evidenced 2301
by the controllable electronic record. 2302
(b) The local law of the jurisdiction in which the debtor is 2303
located governs: 2304
(1) Perfection of a security interest in a controllable 2305
account, controllable electronic record, or controllable payment 2306
intangible by filing; and 2307
(2) Automatic perfection of a security interest in a 2308
controllable payment intangible created by a sale of the 2309
controllable payment intangible. 2310
SECTION 31. Section 75-9-312, Mississippi Code of 1972, is 2311
amended as follows: 2312
75-9-312. Perfection of Security Interests in Chattel Paper, 2313
Controllable Accounts, Controllable Electronic Records, 2314
Controllable Payment Intangibles, Deposit Accounts, Negotiable 2315
Documents, Goods Covered by Documents, Instruments, Investment 2316
Property, Letter-of-Credit Rights, and Money; Perfection by 2317
Permissive Filing; Temporary Perfection Without Filing. (a) A 2318
security interest in chattel paper, * * * controllable accounts, 2319
controllable electronic records, controllable payment intangibles, 2320
instruments, * * * investment property, or negotiable documents 2321
may be perfected by filing. 2322
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(b) Except as otherwise provided in Section 75-9-315(c) and 2323
(d) for proceeds: 2324
(1) A security interest in a deposit account may be 2325
perfected only by control under Section 75-9-314; 2326
(2) And except as otherwise provided in Section 2327
75-9-308(d), a security interest in a letter-of-credit right may 2328
be perfected only by control under Section 75-9-314; * * * 2329
(3) A security interest in tangible money may be 2330
perfected only by the secured party's taking possession under 2331
Section 75-9-313 * * *; and 2332
(4) A security interest in electronic money may be 2333
perfected only by control under Section 75-9-314. 2334
(c) While goods are in the possession of a bailee that has 2335
issued a negotiable document covering the goods: 2336
(1) A security interest in the goods may be perfected 2337
by perfecting a security interest in the document; and 2338
(2) A security interest perfected in the document has 2339
priority over any security interest that becomes perfected in the 2340
goods by another method during that time. 2341
(d) While goods are in the possession of a bailee that has 2342
issued a nonnegotiable document covering the goods, a security 2343
interest in the goods may be perfected by: 2344
(1) Issuance of a document in the name of the secured 2345
party; 2346
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(2) The bailee's receipt of notification of the secured 2347
party's interest; or 2348
(3) Filing as to the goods. 2349
(e) A security interest in certificated securities, 2350
negotiable documents, or instruments is perfected without filing 2351
or the taking of possession or control for a period of twenty (20) 2352
days from the time it attaches to the extent that it arises for 2353
new value given under * * * a signed security agreement. 2354
(f) A perfected security interest in a negotiable document 2355
or goods in possession of a bailee, other than one that has issued 2356
a negotiable document for the goods, remains perfected for twenty 2357
(20) days without filing if the secured party makes available to 2358
the debtor the goods or documents representing the goods for the 2359
purpose of: 2360
(1) Ultimate sale or exchange; or 2361
(2) Loading, unloading, storing, shipping, 2362
transshipping, manufacturing, processing, or otherwise dealing 2363
with them in a manner preliminary to their sale or exchange. 2364
(g) A perfected security interest in a certificated security 2365
or instrument remains perfected for twenty (20) days without 2366
filing if the secured party delivers the security certificate or 2367
instrument to the debtor for the purpose of: 2368
(1) Ultimate sale or exchange; or 2369
(2) Presentation, collection, enforcement, renewal or 2370
registration of transfer. 2371
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(h) After the twenty-day period specified in subsection (e), 2372
(f), or (g) expires, perfection depends upon compliance with this 2373
article. 2374
SECTION 32. The following shall be codified as Section 2375
75-9-314A, Mississippi Code of 1972: 2376
75-9-314A. Perfection by Possession and Control of Chattel 2377
Paper. (a) A secured party may perfect a security interest in 2378
chattel paper by taking possession of each authoritative tangible 2379
copy of the record evidencing the chattel paper and obtaining 2380
control of each authoritative electronic copy of the electronic 2381
record evidencing the chattel paper. 2382
(b) A security interest is perfected under subsection (a) 2383
not earlier than the time the secured party takes possession and 2384
obtains control and remains perfected under subsection (a) only 2385
while the secured party retains possession and control. 2386
(c) Section 75-9-313(c) and (f) through (i) applies to 2387
perfection by possession of an authoritative tangible copy of a 2388
record evidencing chattel paper. 2389
SECTION 33. Section 75-9-317, Mississippi Code of 1972, is 2390
amended as follows: 2391
75-9-317. (a) A security interest or agricultural lien is 2392
subordinate to the rights of: 2393
(1) A person entitled to priority under Section 2394
75-9-322; and 2395
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(2) Except as otherwise provided in subsection (e), a 2396
person that becomes a lien creditor before the earlier of the 2397
time: 2398
(A) The security interest or agricultural lien is 2399
perfected; or 2400
(B) One (1) of the conditions specified in Section 2401
75-9-203(b)(3) is met and a financing statement covering the 2402
collateral is filed. 2403
(b) Except as otherwise provided in subsection (e), a buyer, 2404
other than a secured party * * * of goods, instruments, tangible 2405
documents, or a certificated security takes free of a security 2406
interest or agricultural lien if the buyer gives value and 2407
receives delivery of the collateral without knowledge of the 2408
security interest or agricultural lien and before it is perfected. 2409
(c) Except as otherwise provided in subsection (e), a lessee 2410
of goods takes free of a security interest or agricultural lien if 2411
the lessee gives value and receives delivery of the collateral 2412
without knowledge of the security interest or agricultural lien 2413
and before it is perfected. 2414
(d) Subject to subsections (f) through (i), a licensee of a 2415
general intangible or a buyer, other than a secured party, of 2416
collateral other than * * * electronic money, * * * goods, 2417
instruments, tangible documents, or a certificated security takes 2418
free of a security interest if the licensee or buyer gives value 2419
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without knowledge of the security interest and before it is 2420
perfected. 2421
(e) Except as otherwise provided in Sections 75-9-320 and 2422
75-9-321, if a person files a financing statement with respect to 2423
a purchase-money security interest before or within twenty (20) 2424
days after the debtor receives delivery of the collateral, the 2425
security interest takes priority over the rights of a buyer, 2426
lessee, or lien creditor which arise between the time the security 2427
interest attaches and the time of filing. 2428
(f) A buyer, other than a secured party, of chattel paper 2429
takes free of a security interest if, without knowledge of the 2430
security interest and before it is perfected, the buyer gives 2431
value and: 2432
(1) Receives delivery of each authoritative tangible 2433
copy of the record evidencing the chattel paper; and 2434
(2) If each authoritative electronic copy of the record 2435
evidencing the chattel paper can be subjected to control under 2436
Section 75-9-105, obtains control of each authoritative electronic 2437
copy. 2438
(g) A buyer of an electronic document takes free of a 2439
security interest if, without knowledge of the security interest 2440
and before it is perfected, the buyer gives value and, if each 2441
authoritative electronic copy of the document can be subjected to 2442
control under 75-7-106, obtains control of each authoritative 2443
electronic copy. 2444
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(h) A buyer of a controllable electronic record takes free 2445
of a security interest if, without knowledge of the security 2446
interest and before it is perfected, the buyer gives value and 2447
obtains control of the controllable electronic record. 2448
(i) A buyer, other than a secured party, of a controllable 2449
account or a controllable payment intangible takes free of a 2450
security interest if, without knowledge of the security interest 2451
and before it is perfected, the buyer gives value and obtains 2452
control of the controllable account or controllable payment 2453
intangible. 2454
SECTION 34. Section 75-9-323, Mississippi Code of 1972, is 2455
amended as follows: 2456
75-9-323. (a) Except as otherwise provided in subsection 2457
(c), for purposes of determining the priority of a perfected 2458
security interest under Section 75-9-322(a)(1), perfection of the 2459
security interest dates from the time an advance is made to the 2460
extent that the security interest secures an advance that: 2461
(1) Is made while the security interest is perfected 2462
only: 2463
(A) Under Section 75-9-309 when it attaches; or 2464
(B) Temporarily under Section 75-9-312(e), (f), or 2465
(g); and 2466
(2) Is not made pursuant to a commitment entered into 2467
before or while the security interest is perfected by a method 2468
other than under Section 75-9-309 or 75-9-312(e), (f), or (g). 2469
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(b) Except as otherwise provided in subsection (c), a 2470
security interest is subordinate to the rights of a person that 2471
becomes a lien creditor to the extent that the security interest 2472
secures an advance made more than forty-five (45) days after the 2473
person becomes a lien creditor unless the advance is made: 2474
(1) Without knowledge of the lien; or 2475
(2) Pursuant to a commitment entered into without 2476
knowledge of the lien. 2477
(c) Subsections (a) and (b) do not apply to a security 2478
interest held by a secured party that is a buyer of accounts, 2479
chattel paper, payment intangibles, or promissory notes or a 2480
consignor. 2481
(d) Except as otherwise provided in subsection (e), a buyer 2482
of goods * * * takes free of a security interest to the extent 2483
that it secures advances made after the earlier of: 2484
(1) The time the secured party acquires knowledge of 2485
the buyer's purchase; or 2486
(2) Forty-five (45) days after the purchase. 2487
(e) Subsection (d) does not apply if the advance is made 2488
pursuant to a commitment entered into without knowledge of the 2489
buyer's purchase and before the expiration of the forty-five-day 2490
period. 2491
(f) Except as otherwise provided in subsection (g), a lessee 2492
of goods * * * takes the leasehold interest free of a security 2493
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interest to the extent that it secures advances made after the 2494
earlier of: 2495
(1) The time the secured party acquires knowledge of 2496
the lease; or 2497
(2) Forty-five (45) days after the lease contract 2498
becomes enforceable. 2499
(g) Subsection (f) does not apply if the advance is made 2500
pursuant to a commitment entered into without knowledge of the 2501
lease and before the expiration of the forty-five-day period. 2502
SECTION 35. The following shall be codified as Section 2503
75-9-326A, Mississippi Code of 1972: 2504
75-9-326A. Priority of Security Interest in Controllable 2505
Account, Controllable Electronic Record, and Controllable Payment 2506
Intangible. A security interest in a controllable account, 2507
controllable electronic record, or controllable payment intangible 2508
held by a secured party having control of the account, electronic 2509
record, or payment intangible has priority over a conflicting 2510
security interest held by a secured party that does not have 2511
control. 2512
SECTION 36. Section 75-9-330, Mississippi Code of 1972, is 2513
amended as follows: 2514
75-9-330. (a) A purchaser of chattel paper has priority 2515
over a security interest in the chattel paper which is claimed 2516
merely as proceeds of inventory subject to a security interest if: 2517
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(1) In good faith and in the ordinary course of the 2518
purchaser's business, the purchaser gives new value * * *, takes 2519
possession of each authoritative tangible copy of the record 2520
evidencing the chattel paper * * *, and obtains control * * * 2521
under Section 75-9-105 of each authoritative electronic copy of 2522
the record evidencing the chattel paper * * *; and 2523
(2) * * * Authoritative copies of the record evidencing 2524
the chattel paper do not indicate that * * * the chattel paper has 2525
been assigned to an identified assignee other than the purchaser. 2526
(b) A purchaser of chattel paper has priority over a 2527
security interest in the chattel paper which is claimed other than 2528
merely as proceeds of inventory subject to a security interest if 2529
the purchaser gives new value * * *, takes possession of each 2530
authoritative tangible copy of the record evidencing the chattel 2531
paper * * *, and obtains control * * * under Section 75-9-105 of 2532
each authoritative electronic copy of the record evidencing the 2533
chattel paper * * * in good faith, in the ordinary course of the 2534
purchaser's business, and without knowledge that the purchase 2535
violates the rights of the secured party. 2536
(c) Except as otherwise provided in Section 75-9-327, a 2537
purchaser having priority in chattel paper under subsection (a) or 2538
(b) also has priority in proceeds of the chattel paper to the 2539
extent that: 2540
(1) Section 75-9-322 provides for priority in the 2541
proceeds; or 2542
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(2) The proceeds consist of the specific goods covered 2543
by the chattel paper or cash proceeds of the specific goods, even 2544
if the purchaser's security interest in the proceeds is 2545
unperfected. 2546
(d) Except as otherwise provided in Section 75-9-331(a), a 2547
purchaser of an instrument has priority over a security interest 2548
in the instrument perfected by a method other than possession if 2549
the purchaser gives value and takes possession of the instrument 2550
in good faith and without knowledge that the purchase violates the 2551
rights of the secured party. 2552
(e) For purposes of subsections (a) and (b), the holder of a 2553
purchase-money security interest in inventory gives new value for 2554
chattel paper constituting proceeds of the inventory. 2555
(f) For purposes of subsections (b) and (d), if the 2556
authoritative copies of the record evidencing chattel paper or an 2557
instrument * * * indicate that * * * the chattel paper or 2558
instrument has been assigned to an identified secured party other 2559
than the purchaser, a purchaser of the chattel paper or instrument 2560
has knowledge that the purchase violates the rights of the secured 2561
party. 2562
SECTION 37. Section 75-9-332, Mississippi Code of 1972, is 2563
amended as follows: 2564
75-9-332. (a) A transferee of tangible money takes the 2565
money free of a security interest * * * if the transferee receives 2566
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possession of the money without acting in collusion with the 2567
debtor in violating the rights of the secured party. 2568
(b) A transferee of funds from a deposit account takes the 2569
funds free of a security interest in the deposit account * * * if 2570
the transferee receives the funds without acting in collusion with 2571
the debtor in violating the rights of the secured party. 2572
(c) A transferee of electronic money takes the money free of 2573
a security interest if the transferee obtains control of the money 2574
without acting in collusion with the debtor in violating the 2575
rights of the secured party. 2576
SECTION 38. Section 75-9-406, Mississippi Code of 1972, is 2577
amended as follows: 2578
75-9-406. (a) Subject to subsections (b) through (i) and 2579
(l), an account debtor on an account, chattel paper, or a payment 2580
intangible may discharge its obligation by paying the assignor 2581
until, but not after, the account debtor receives a 2582
notification, * * * signed by the assignor or the assignee, that 2583
the amount due or to become due has been assigned and that payment 2584
is to be made to the assignee. After receipt of the notification, 2585
the account debtor may discharge its obligation by paying the 2586
assignee and may not discharge the obligation by paying the 2587
assignor. 2588
(b) Subject to subsections (h) and (l), notification is 2589
ineffective under subsection (a): 2590
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(1) If it does not reasonably identify the rights 2591
assigned; 2592
(2) To the extent that an agreement between an account 2593
debtor and a seller of a payment intangible limits the account 2594
debtor's duty to pay a person other than the seller and the 2595
limitation is effective under law other than this article; or 2596
(3) At the option of an account debtor, if the 2597
notification notifies the account debtor to make less than the 2598
full amount of any installment or other periodic payment to the 2599
assignee, even if: 2600
(A) Only a portion of the account, chattel paper, 2601
or payment intangible has been assigned to that assignee; 2602
(B) A portion has been assigned to another 2603
assignee; or 2604
(C) The account debtor knows that the assignment 2605
to that assignee is limited. 2606
(c) Subject to subsections (h) and (l), if requested by the 2607
account debtor, an assignee shall seasonably furnish reasonable 2608
proof that the assignment has been made. Unless the assignee 2609
complies, the account debtor may discharge its obligation by 2610
paying the assignor, even if the account debtor has received a 2611
notification under subsection (a). 2612
(d) In this subsection, "promissory note" includes a 2613
negotiable instrument that evidences chattel paper. Except as 2614
otherwise provided in subsection (e) and Sections 75-2A-303 and 2615
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75-9-407, and subject to subsection (h), a term in an agreement 2616
between an account debtor and an assignor or in a promissory note 2617
is ineffective to the extent that it: 2618
(1) Prohibits, restricts, or requires the consent of 2619
the account debtor or person obligated on the promissory note to 2620
the assignment or transfer of, or the creation, attachment, 2621
perfection or enforcement of a security interest in, the account, 2622
chattel paper, payment intangible, or promissory note; or 2623
(2) Provides that the assignment or transfer or the 2624
creation, attachment, perfection, or enforcement of the security 2625
interest may give rise to a default, breach, right of recoupment, 2626
claim, defense, termination, right of termination, or remedy under 2627
the account, chattel paper, payment intangible, or promissory 2628
note. 2629
(e) Subsection (d) does not apply to the sale of a payment 2630
intangible or promissory note, other than a sale pursuant to a 2631
disposition under Section 75-9-610 or an acceptance of collateral 2632
under Section 75-9-620. 2633
(f) Except as otherwise provided in Sections 75-2A-303 and 2634
75-9-407 and subject to subsections (h) and (i), a rule of law, 2635
statute or regulation that prohibits, restricts, or requires the 2636
consent of a government, governmental body or official, or account 2637
debtor to the assignment or transfer of, or creation of a security 2638
interest in, an account or chattel paper is ineffective to the 2639
extent that the rule of law, statute, or regulation: 2640
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(1) Prohibits, restricts, or requires the consent of 2641
the government, governmental body or official, or account debtor 2642
to the assignment or transfer of, or the creation, attachment, 2643
perfection, or enforcement of a security interest in the account 2644
or chattel paper; or 2645
(2) Provides that the assignment or transfer or the 2646
creation, attachment, perfection, or enforcement of the security 2647
interest may give rise to a default, breach, right of recoupment, 2648
claim, defense, termination, right of termination, or remedy under 2649
the account or chattel paper. 2650
(g) Subject to subsections (h) and (l), an account debtor 2651
may not waive or vary its option under subsection (b)(3). 2652
(h) This section is subject to law other than this article 2653
which establishes a different rule for an account debtor who is an 2654
individual and who incurred the obligation primarily for personal, 2655
family, or household purposes. 2656
(i) This section does not apply to an assignment of a 2657
health-care-insurance receivable. 2658
(j) This section prevails over any inconsistent provision of 2659
an existing or future statute, rule or regulation of this state 2660
unless the provision is contained in a statute of this state, 2661
refers expressly to this section, and states that the provision 2662
prevails over this section. 2663
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(k) Subsections (d), (f), and (j) do not apply to a security 2664
interest in an ownership interest in a general partnership, 2665
limited partnership, or limited liability company. 2666
(l) Subsections (a), (b), (c), and (g) do not apply to a 2667
controllable account or controllable payment intangible. 2668
SECTION 39. Section 75-9-408, Mississippi Code of 1972, is 2669
amended as follows: 2670
75-9-408. (a) Except as otherwise provided in subsection 2671
(b), a term in a promissory note or in an agreement between an 2672
account debtor and a debtor which relates to a 2673
health-care-insurance receivable or a general intangible, 2674
including a contract, permit, license, or franchise, and which 2675
term prohibits, restricts, or requires the consent of the person 2676
obligated on the promissory note or the account debtor to, the 2677
assignment or transfer of, or creation, attachment, or perfection 2678
of a security interest in, the promissory note, 2679
health-care-insurance receivable, or general intangible, is 2680
ineffective to the extent that the term: 2681
(1) Would impair the creation, attachment, or 2682
perfection of a security interest; or 2683
(2) Provides that the assignment or transfer or the 2684
creation, attachment, or perfection of the security interest may 2685
give rise to a default, breach, right of recoupment, claim, 2686
defense, termination, right of termination, or remedy under the 2687
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promissory note, health-care-insurance receivable, or general 2688
intangible. 2689
(b) Subsection (a) applies to a security interest in a 2690
payment intangible or promissory note only if the security 2691
interest arises out of a sale of the payment intangible or 2692
promissory note, other than a sale pursuant to a disposition under 2693
Section 75-9-610 or an acceptance of collateral under Section 2694
75-9-620. 2695
(c) A rule of law, statute, or regulation that prohibits, 2696
restricts, or requires the consent of a government, governmental 2697
body or official, person obligated on a promissory note, or 2698
account debtor to the assignment or transfer of, or creation of a 2699
security interest in, a promissory note, health-care-insurance 2700
receivable, or general intangible, including a contract, permit, 2701
license, or franchise between an account debtor and a debtor, is 2702
ineffective to the extent that the rule of law, statute, or 2703
regulation: 2704
(1) Would impair the creation, attachment, or 2705
perfection of a security interest; or 2706
(2) Provides that the assignment or transfer or the 2707
creation, attachment, or perfection of the security interest may 2708
give rise to a default, breach, right of recoupment, claim, 2709
defense, termination, right of termination, or remedy under the 2710
promissory note, health-care-insurance receivable, or general 2711
intangible. 2712
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(d) To the extent that a term in a promissory note or in an 2713
agreement between an account debtor and a debtor which relates to 2714
a health-care-insurance receivable or general intangible or a rule 2715
of law, statute, or regulation described in subsection (c) would 2716
be effective under law other than this article but is ineffective 2717
under subsection (a) or (c), the creation, attachment, or 2718
perfection of a security interest in the promissory note, 2719
health-care-insurance receivable, or general intangible: 2720
(1) Is not enforceable against the person obligated on 2721
the promissory note or the account debtor; 2722
(2) Does not impose a duty or obligation on the person 2723
obligated on the promissory note or the account debtor; 2724
(3) Does not require the person obligated on the 2725
promissory note or the account debtor to recognize the security 2726
interest, pay or render performance to the secured party, or 2727
accept payment or performance from the secured party; 2728
(4) Does not entitle the secured party to use or assign 2729
the debtor's rights under the promissory note, 2730
health-care-insurance receivable, or general intangible, including 2731
any related information or materials furnished to the debtor in 2732
the transaction giving rise to the promissory note, 2733
health-care-insurance receivable, or general intangible; 2734
(5) Does not entitle the secured party to use, assign, 2735
possess, or have access to any trade secrets or confidential 2736
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information of the person obligated on the promissory note or the 2737
account debtor; and 2738
(6) Does not entitle the secured party to enforce the 2739
security interest in the promissory note, health-care-insurance 2740
receivable, or general intangible. 2741
(e) This section prevails over any inconsistent provision of 2742
an existing or future statute, rule or regulation of this state 2743
unless the provision is contained in a statute of this state, 2744
refers expressly to this section, and states that the provision 2745
prevails over this section. 2746
(f) This section does not apply to a security interest in an 2747
ownership interest in a general partnership, limited partnership, 2748
or limited liability company. 2749
(g) In this section, "promissory note" includes a negotiable 2750
instrument that evidences chattel paper. 2751
SECTION 40. Section 75-9-605, Mississippi Code of 1972, is 2752
amended as follows: 2753
75-9-605. (a) Except as provided in subsection (b), a 2754
secured party does not owe a duty based on its status as secured 2755
party: 2756
(1) To a person that is a debtor or obligor, unless the 2757
secured party knows: 2758
(A) That the person is a debtor or obligor; 2759
(B) The identity of the person; and 2760
(C) How to communicate with the person; or 2761
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(2) To a secured party or lienholder that has filed a 2762
financing statement against a person, unless the secured party 2763
knows: 2764
(A) That the person is a debtor; and 2765
(B) The identity of the person. 2766
(b) A secured party owes a duty based on its status as a 2767
secured party to a person if, at the time the secured party 2768
obtains control of collateral that is a controllable account, 2769
controllable electronic record, or controllable payment intangible 2770
or at the time the security interest attaches to the collateral, 2771
whichever is later: 2772
(1) The person is a debtor or obligor; and 2773
(2) The secured party knows that the information in 2774
subsection (a)(1)(A), (B), or (C) relating to the person is not 2775
provided by the collateral, a record attached to or logically 2776
associated with the collateral, or the system in which the 2777
collateral is recorded. 2778
SECTION 41. Section 75-9-613, Mississippi Code of 1972, is 2779
amended as follows: 2780
75-9-613. (a) Except in a consumer-goods transaction, the 2781
following rules apply: 2782
(1) The contents of a notification of disposition are 2783
sufficient if the notification: 2784
(A) Describes the debtor and the secured party; 2785
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(B) Describes the collateral that is the subject 2786
of the intended disposition; 2787
(C) States the method of intended disposition; 2788
(D) States that the debtor is entitled to an 2789
accounting of the unpaid indebtedness and states the charge, if 2790
any, for an accounting; and 2791
(E) States the time and place of a public 2792
disposition or the time after which any other disposition is to be 2793
made. 2794
(2) Whether the contents of a notification that lacks 2795
any of the information specified in paragraph (1) are nevertheless 2796
sufficient is a question of fact. 2797
(3) The contents of a notification providing 2798
substantially the information specified in paragraph (1) are 2799
sufficient, even if the notification includes: 2800
(A) Information not specified by that paragraph; 2801
or 2802
(B) Minor errors that are not seriously 2803
misleading. 2804
(4) A particular phrasing of the notification is not 2805
required. 2806
(5) The following form of notification and the form 2807
appearing in Section * * * 75-9-614(a)(3), when completed in 2808
accordance with the instructions in subsection (b) and Section 2809
75-9-614(b), each provides sufficient information: 2810
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* * * 2811
NOTIFICATION OF DISPOSITION OF COLLATERAL 2812
To: (Name of debtor, obligor, or other person to which the 2813
notification is sent) 2814
From: (Name, address, and telephone number of secured party) 2815
{1} Name of any debtor that is not an addressee: (Name of 2816
each debtor) 2817
{2} We will sell (describe collateral) (to the highest 2818
qualified bidder) at public sale. A sale could include a lease or 2819
license. The sale will be held as follows: 2820
(Date) 2821
(Time) 2822
(Place) 2823
{3} We will sell (describe collateral) at private sale 2824
sometime after (date). A sale could include a lease or license. 2825
{4} You are entitled to an accounting of the unpaid 2826
indebtedness secured by the property that we intend to sell or, as 2827
applicable, lease or license. 2828
{5} If you request an accounting you must pay a charge of $ 2829
(amount). 2830
{6} You may request an accounting by calling us at 2831
(telephone number). 2832
[End of Form] 2833
(b) The following instructions apply to the form of 2834
notification in subsection (a)(5): 2835
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(1) The instructions in this subsection refer to the 2836
numbers in braces before items in the form of notification in 2837
subsection (a)(5). Do not include the numbers or braces in the 2838
notification. The numbers and braces are used only for the 2839
purpose of these instructions. 2840
(2) Include and complete item {1} only if there is a 2841
debtor that is not an addressee of the notification and list the 2842
name or names. 2843
(3) Include and complete either item {2}, if the 2844
notification relates to a public disposition of the collateral, or 2845
item {3}, if the notification relates to a private disposition of 2846
the collateral. If item {2} is included, include the words "to 2847
the highest qualified bidder" only if applicable. 2848
(4) Include and complete items {4} and {6}. 2849
(5) Include and complete item {5} only if the sender 2850
will charge the recipient for an accounting. 2851
SECTION 42. Section 75-9-614, Mississippi Code of 1972, is 2852
amended as follows: 2853
75-9-614. (a) In a consumer-goods transaction, the 2854
following rules apply: 2855
(1) A notification of disposition must provide the 2856
following information: 2857
(A) The information specified in Section * * * 2858
75-9-613(a)(1); 2859
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(B) A description of any liability for a 2860
deficiency of the person to which the notification is sent; 2861
(C) A telephone number from which the amount that 2862
must be paid to the secured party to redeem the collateral under 2863
Section 75-9-623 is available; and 2864
(D) A telephone number or mailing address from 2865
which additional information concerning the disposition and the 2866
obligation secured is available. 2867
(2) A particular phrasing of the notification is not 2868
required. 2869
(3) The following form of notification, when completed 2870
in accordance with the instructions in subsection (b), provides 2871
sufficient information: 2872
* * * 2873
(Name and address of secured party) 2874
(Date) 2875
NOTICE OF OUR PLAN TO SELL PROPERTY 2876
(Name and address of any obligor who is also a debtor) 2877
Subject: (Identify transaction) 2878
We have your (describe collateral), because you broke 2879
promises in our agreement. 2880
{1} We will sell (describe collateral) at public sale. A 2881
sale could include a lease or license. The sale will be held as 2882
follows: 2883
(Date) 2884
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(Time) 2885
(Place) 2886
You may attend the sale and bring bidders if you want. 2887
{2} We will sell (describe collateral) at private sale 2888
sometime after (date). A sale could include a lease or license. 2889
{3} The money that we get from the sale, after paying our 2890
costs, will reduce the amount you owe. If we get less money than 2891
you owe, you (will or will not, as applicable) still owe us the 2892
difference. If we get more money than you owe, you will get the 2893
extra money, unless we must pay it to someone else. 2894
{4} You can get the property back at any time before we sell 2895
it by paying us the full amount you owe, not just the past due 2896
payments, including our expenses. To learn the exact amount you 2897
must pay, call us at (telephone number). 2898
{5} If you want us to explain to you in (writing) (writing 2899
or in (description of electronic record)) (description of 2900
electronic record) how we have figured the amount that you owe us, 2901
{6} call us at (telephone number) (or) (write us at (secured 2902
party's address)) (or contact us by (description of electronic 2903
communication method)) {7} and request (a written explanation) (a 2904
written explanation or an explanation in (description of 2905
electronic record)) (an explanation in (description of electronic 2906
record)). 2907
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{8} We will charge you $ (amount) for the explanation if we 2908
sent you another written explanation of the amount you owe us 2909
within the last six (6) months. 2910
{9} If you need more information about the sale (call us at 2911
(telephone number)) (or) (write us at (secured party's address)) 2912
(or contact us by (description of electronic 2913
communication method)). 2914
{10} We are sending this notice to the following other 2915
people who have an interest in (describe collateral) or who owe 2916
money under your agreement: 2917
(Names of all other debtors and obligors, if any) 2918
(4) A notification in the form of paragraph (3) is 2919
sufficient, even if additional information appears at the end of 2920
the form. 2921
(5) A notification in the form of paragraph (3) is 2922
sufficient, even if it includes errors in information not required 2923
by paragraph (1), unless the error is misleading with respect to 2924
rights arising under this article. 2925
(6) If a notification under this section is not in the 2926
form of paragraph (3), law other than this article determines the 2927
effect of including information not required by paragraph (1). 2928
[End of Form] 2929
(b) The following instructions apply to the form of 2930
notification in subsection (a)(3): 2931
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(1) The instructions in this subsection refer to the 2932
numbers in braces before items in the form of notification in 2933
subsection (a)(3). Do not include the numbers or braces in the 2934
notification. The numbers and braces are used only for the 2935
purposes of these instructions. 2936
(2) Include and complete either item {1}, if the 2937
notification relates to a public disposition of the collateral, or 2938
item {2}, if the notification relates to a private disposition of 2939
the collateral. 2940
(3) Include and complete items {3}, {4}, {5}, {6}, and 2941
{7}. 2942
(4) In item {5}, include and complete any one (1) of 2943
the three (3) alternative methods for the explanation—writing, 2944
writing or electronic record, or electronic record. 2945
(5) In item {6}, include the telephone number. In 2946
addition, the sender may include and complete either or both of 2947
the two (2) additional alternative methods of communication—2948
writing or electronic communication—for the recipient of the 2949
notification to communicate with the sender. Neither of the two 2950
(2) additional methods of communication is required to be 2951
included. 2952
(6) In item {7}, include and complete the method or 2953
methods for the explanation—writing, writing or electronic record, 2954
or electronic record—included in item {5}. 2955
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(7) Include and complete item {8} only if a written 2956
explanation is included in item {5} as a method for communicating 2957
the explanation and the sender will charge the recipient for 2958
another written explanation. 2959
(8) In item {9}, include either the telephone number or 2960
the address or both the telephone number and the address. In 2961
addition, the sender may include and complete the additional 2962
method of communication—electronic communication—for the recipient 2963
of the notification to communicate with the sender. The 2964
additional method of electronic communication is not required to 2965
be included. 2966
(9) If item {10} does not apply, insert "None" after 2967
"agreement:". 2968
SECTION 43. Section 75-9-628, Mississippi Code of 1972, is 2969
amended as follows: 2970
75-9-628. (a) * * * Subject to subsection (f), unless a 2971
secured party knows that a person is a debtor or obligor, knows 2972
the identity of the person, and knows how to communicate with the 2973
person: 2974
(1) The secured party is not liable to the person, or 2975
to a secured party or lienholder that has filed a financing 2976
statement against the person, for failure to comply with this 2977
article; and 2978
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(2) The secured party's failure to comply with this 2979
article does not affect the liability of the person for a 2980
deficiency. 2981
(b) Subject to subsection (f), a secured party is not liable 2982
because of its status as secured party: 2983
(1) To a person that is a debtor or obligor, unless the 2984
secured party knows: 2985
(A) That the person is a debtor or obligor; 2986
(B) The identity of the person; and 2987
(C) How to communicate with the person; or 2988
(2) To a secured party or lienholder that has filed a 2989
financing statement against a person, unless the secured party 2990
knows: 2991
(A) That the person is a debtor; and 2992
(B) The identity of the person. 2993
(c) A secured party is not liable to any person, and a 2994
person's liability for a deficiency is not affected, because of 2995
any act or omission arising out of the secured party's reasonable 2996
belief that a transaction is not a consumer-goods transaction or a 2997
consumer transaction or that goods are not consumer goods, if the 2998
secured party's belief is based on its reasonable reliance on: 2999
(1) A debtor's representation concerning the purpose 3000
for which collateral was to be used, acquired, or held; or 3001
(2) An obligor's representation concerning the purpose 3002
for which a secured obligation was incurred. 3003
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(d) A secured party is not liable to any person under 3004
Section 75-9-625(c)(2) for its failure to comply with Section 3005
75-9-616. 3006
(e) A secured party is not liable under Section 3007
75-9-625(c)(2) more than once with respect to any one (1) secured 3008
obligation. 3009
(f) Subsections (a) and (b) do not apply to limit the 3010
liability of a secured party to a person if, at the time the 3011
secured party obtains control of collateral that is a controllable 3012
account, controllable electronic record, or controllable payment 3013
intangible or at the time the security interest attaches to the 3014
collateral, whichever is later: 3015
(1) The person is a debtor or obligor; and 3016
(2) The secured party knows that the information in 3017
subsection (b)(1)(A), (B), or (C) relating to the person is not 3018
provided by the collateral, a record attached to or logically 3019
associated with the collateral, or the system in which the 3020
collateral is recorded. 3021
SECTION 44. The following shall be codified as Section 3022
75-12-101, Mississippi Code of 1972: 3023
75-12-101. Title. This article shall be known and may be 3024
cited as Uniform Commercial Code—Controllable Electronic Records. 3025
SECTION 45. The following shall be codified as Section 3026
75-12-102, Mississippi Code of 1972: 3027
75-12-102. Definitions. (a) In this article: 3028
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(1) "Controllable electronic record" means a record 3029
stored in an electronic medium that can be subjected to control 3030
under Section 75-12-105. The term does not include a controllable 3031
account, a controllable payment intangible, a deposit account, an 3032
electronic copy of a record evidencing chattel paper, an 3033
electronic document of title, electronic money, investment 3034
property, or a transferable record. 3035
(2) "Qualifying purchaser" means a purchaser of a 3036
controllable electronic record or an interest in a controllable 3037
electronic record that obtains control of the controllable 3038
electronic record for value, in good faith, and without notice of 3039
a claim of a property right in the controllable electronic record. 3040
(3) "Transferable record" has the meaning provided for 3041
that term in: 3042
(A) Section 201(a)(1) of the Electronic Signatures 3043
in Global and National Commerce Act, 15 U.S.C. Section 7021(a)(1), 3044
as amended; or 3045
(B) Section 75-12-31. 3046
(4) "Value" has the meaning provided in Section 3047
75-3-303(a), as if references in that subsection to an 3048
"instrument" were references to a controllable account, 3049
controllable electronic record, or controllable payment 3050
intangible. 3051
(b) The definitions in Article 9 of "account debtor," 3052
"controllable account," "controllable payment intangible," 3053
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"chattel paper," "deposit account," "electronic money," and 3054
"investment property" apply to this chapter. 3055
(c) Article 1 contains general definitions and principles of 3056
construction and interpretation applicable throughout this 3057
chapter. 3058
SECTION 46. The following shall be codified as Section 3059
75-12-103, Mississippi Code of 1972: 3060
75-12-103. Relation to Article 9 and Consumer Laws. (a) If 3061
there is conflict between this article and Article 9, Article 9 3062
governs. 3063
(b) A transaction subject to this article is subject to: 3064
(1) Any applicable rule of law that establishes a 3065
different rule for consumers; 3066
(2) Any other statute or regulation that regulates the 3067
rates, charges, agreements, and practices for loans, credit sales, 3068
or other extensions of credit; and 3069
(3) Any consumer-protection statute or regulation. 3070
SECTION 47. The following shall be codified as Section 3071
75-12-104, Mississippi Code of 1972: 3072
75-12-104. Rights in Controllable Account, Controllable 3073
Electronic Record, and Controllable Payment Intangible. (a) This 3074
section applies to the acquisition and purchase of rights in a 3075
controllable account or controllable payment intangible, including 3076
the rights and benefits under subsections (c), (d), (e), (g), and 3077
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(h) of a purchaser and qualifying purchaser, in the same manner 3078
this section applies to a controllable electronic record. 3079
(b) To determine whether a purchaser of a controllable 3080
account or a controllable payment intangible is a qualifying 3081
purchaser, the purchaser obtains control of the account or payment 3082
intangible if it obtains control of the controllable electronic 3083
record that evidences the account or payment intangible. 3084
(c) Except as provided in this section, law other than this 3085
article determines whether a person acquires a right in a 3086
controllable electronic record and the right the person acquires. 3087
(d) A purchaser of a controllable electronic record acquires 3088
all rights in the controllable electronic record that the 3089
transferor had or had power to transfer, except that a purchaser 3090
of a limited interest in a controllable electronic record acquires 3091
rights only to the extent of the interest purchased. 3092
(e) A qualifying purchaser acquires its rights in the 3093
controllable electronic record free of a claim of a property right 3094
in the controllable electronic record. 3095
(f) Except as provided in subsections (a) and (e) for a 3096
controllable account and a controllable payment intangible or law 3097
other than this article, a qualifying purchaser takes a right to 3098
payment, right to performance, or other interest in property 3099
evidenced by the controllable electronic record subject to a claim 3100
of a property right in the right to payment, right to performance, 3101
or other interest in property. 3102
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(g) An action may not be asserted against a qualifying 3103
purchaser based on both a purchase by the qualifying purchaser of 3104
a controllable electronic record and a claim of a property right 3105
in another controllable electronic record, whether the action is 3106
framed in conversion, replevin, constructive trust, equitable 3107
lien, or other theory. 3108
(h) Filing of a financing statement under Article 9 is not 3109
notice of a claim of a property right in a controllable electronic 3110
record. 3111
SECTION 48. The following shall be codified as Section 3112
75-12-105, Mississippi Code of 1972: 3113
75-12-105. Control of Controllable Electronic Record. (a) 3114
A person has control of a controllable electronic record if the 3115
electronic record, a record attached to or logically associated 3116
with the electronic record, or a system in which the electronic 3117
record is recorded: 3118
(1) Gives the person: 3119
(A) Power to avail itself of substantially all the 3120
benefit from the electronic record; and 3121
(B) Exclusive power, subject to subsection (b), 3122
to: 3123
(i) Prevent others from availing themselves 3124
of substantially all the benefit from the electronic record; and 3125
(ii) Transfer control of the electronic 3126
record to another person or cause another person to obtain control 3127
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of another controllable electronic record as a result of the 3128
transfer of the electronic record; and 3129
(2) Enables the person readily to identify itself in 3130
any way, including by name, identifying number, cryptographic key, 3131
office, or account number, as having the powers specified in 3132
paragraph (1). 3133
(b) Subject to subsection (c), a power is exclusive under 3134
subsection (a)(1)(B)(i) and (ii) even if: 3135
(1) The controllable electronic record, a record 3136
attached to or logically associated with the electronic record, or 3137
a system in which the electronic record is recorded limits the use 3138
of the electronic record or has a protocol programmed to cause a 3139
change, including a transfer or loss of control or a modification 3140
of benefits afforded by the electronic record; or 3141
(2) The power is shared with another person. 3142
(c) A power of a person is not shared with another person 3143
under subsection (b)(2) and the person's power is not exclusive 3144
if: 3145
(1) The person can exercise the power only if the power 3146
also is exercised by the other person; and 3147
(2) The other person: 3148
(A) Can exercise the power without exercise of the 3149
power by the person; or 3150
(B) Is the transferor to the person of an interest 3151
in the controllable electronic record or a controllable account or 3152
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controllable payment intangible evidenced by the controllable 3153
electronic record. 3154
(d) If a person has the powers specified in subsection 3155
(a)(1)(B)(i) and (ii), the powers are presumed to be exclusive. 3156
(e) A person has control of a controllable electronic record 3157
if another person, other than the transferor to the person of an 3158
interest in the controllable electronic record or a controllable 3159
account or controllable payment intangible evidenced by the 3160
controllable electronic record: 3161
(1) Has control of the electronic record and 3162
acknowledges that it has control on behalf of the person; or 3163
(2) Obtains control of the electronic record after 3164
having acknowledged that it will obtain control of the electronic 3165
record on behalf of the person. 3166
(f) A person that has control under this section is not 3167
required to acknowledge that it has control on behalf of another 3168
person. 3169
(g) If a person acknowledges that it has or will obtain 3170
control on behalf of another person, unless the person otherwise 3171
agrees or law other than this article or Article 9 otherwise 3172
provides, the person does not owe any duty to the other person and 3173
is not required to confirm the acknowledgement to any other 3174
person. 3175
SECTION 49. The following shall be codified as Section 3176
75-12-106, Mississippi Code of 1972: 3177
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75-12-106. Discharge of Account Debtor on Controllable 3178
Account or Controllable Payment Intangible. (a) An account 3179
debtor on a controllable account or controllable payment 3180
intangible may discharge its obligation by paying: 3181
(1) The person having control of the controllable 3182
electronic record that evidences the controllable account or 3183
controllable payment intangible; or 3184
(2) Except as provided in subsection (b), a person that 3185
formerly had control of the controllable electronic record. 3186
(b) Subject to subsection (d), the account debtor may not 3187
discharge its obligation by paying a person that formerly had 3188
control of the controllable electronic record if the account 3189
debtor receives a notification that: 3190
(1) Is signed by a person that formerly had control or 3191
the person to which control was transferred; 3192
(2) Reasonably identifies the controllable account or 3193
controllable payment intangible; 3194
(3) Notifies the account debtor that control of the 3195
controllable electronic record that evidences the controllable 3196
account or controllable payment intangible was transferred; 3197
(4) Identifies the transferee, in any reasonable way, 3198
including by name, identifying number, cryptographic key, office, 3199
or account number; and 3200
(5) Provides a commercially reasonable method by which 3201
the account debtor is to pay the transferee. 3202
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(c) After receipt of a notification that complies with 3203
subsection (b), the account debtor may discharge its obligation by 3204
paying in accordance with the notification and may not discharge 3205
the obligation by paying a person that formerly had control. 3206
(d) Subject to subsection (h), notification is ineffective 3207
under subsection (b): 3208
(1) Unless, before the notification is sent, the 3209
account debtor and the person that, at that time, had control of 3210
the controllable electronic record that evidences the controllable 3211
account or controllable payment intangible agree in a signed 3212
record to a commercially reasonable method by which a person may 3213
furnish reasonable proof that control has been transferred; 3214
(2) To the extent an agreement between the account 3215
debtor and seller of a payment intangible limits the account 3216
debtor's duty to pay a person other than the seller and the 3217
limitation is effective under law other than this article; or 3218
(3) At the option of the account debtor, if the 3219
notification notifies the account debtor to: 3220
(A) Divide a payment; 3221
(B) Make less than the full amount of an 3222
installment or other periodic payment; or 3223
(C) Pay any part of a payment by more than one (1) 3224
method or to more than one (1) person. 3225
(e) Subject to subsection (h), if requested by the account 3226
debtor, the person giving the notification under subsection (b) 3227
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reasonably shall furnish reasonable proof, using the method in the 3228
agreement referred to in subsection (d)(1), that control of the 3229
controllable electronic record has been transferred. Unless the 3230
person complies with the request, the account debtor may discharge 3231
its obligation by paying a person that formerly had control, even 3232
if the account debtor has received a notification under subsection 3233
(b). 3234
(f) A person furnishes reasonable proof under subsection (e) 3235
that control has been transferred if the person demonstrates, 3236
using the method in the agreement referred to in subsection 3237
(d)(1), that the transferee has the power to: 3238
(1) Avail itself of substantially all the benefit from 3239
the controllable electronic record; 3240
(2) Prevent others from availing themselves of 3241
substantially all the benefit from the controllable electronic 3242
record; and 3243
(3) Transfer the powers specified in paragraphs (1) and 3244
(2) to another person. 3245
(g) Subject to subsection (h), an account debtor may not 3246
waive or vary its rights under subsections (d)(1) and (e) or its 3247
option under subsection (d)(3). 3248
(h) This section is subject to law other than this article 3249
which establishes a different rule for an account debtor who is an 3250
individual and who incurred the obligation primarily for personal, 3251
family, or household purposes. 3252
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SECTION 50. The following shall be codified as Section 3253
75-12-107, Mississippi Code of 1972: 3254
75-12-107. Governing Law. (a) Except as provided in 3255
subsection (b), the local law of a controllable electronic 3256
record's jurisdiction governs a matter covered by this article. 3257
(b) For a controllable electronic record that evidences a 3258
controllable account or controllable payment intangible, the local 3259
law of the controllable electronic record's jurisdiction governs a 3260
matter covered by Section 75-12-106 unless an effective agreement 3261
determines that the local law of another jurisdiction governs. 3262
(c) The following rules determine a controllable electronic 3263
record's jurisdiction under this section: 3264
(1) If the controllable electronic record, or a record 3265
attached to or logically associated with the controllable 3266
electronic record and readily available for review, expressly 3267
provides that a particular jurisdiction is the controllable 3268
electronic record's jurisdiction for purposes of this article or 3269
the Uniform Commercial Code, that jurisdiction is the controllable 3270
electronic record's jurisdiction. 3271
(2) If paragraph (1) does not apply and the rules of 3272
the system in which the controllable electronic record is recorded 3273
are readily available for review and expressly provide that a 3274
particular jurisdiction is the controllable electronic record's 3275
jurisdiction for purposes of this article or the Uniform 3276
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Commercial Code, that jurisdiction is the controllable electronic 3277
record's jurisdiction. 3278
(3) If paragraphs (1) and (2) do not apply and the 3279
controllable electronic record, or a record attached to or 3280
logically associated with the controllable electronic record and 3281
readily available for review, expressly provides that the 3282
controllable electronic record is governed by the law of a 3283
particular jurisdiction, that jurisdiction is the controllable 3284
electronic record's jurisdiction. 3285
(4) If paragraphs (1), (2), and (3) do not apply and 3286
the rules of the system in which the controllable electronic 3287
record is recorded are readily available for review and expressly 3288
provide that the controllable electronic record or the system is 3289
governed by the law of a particular jurisdiction, that 3290
jurisdiction is the controllable electronic record's jurisdiction. 3291
(5) If paragraphs (1) through (4) do not apply, the 3292
controllable electronic record's jurisdiction is the District of 3293
Columbia. 3294
(d) If subsection (c)(5) applies and Article 12 is not in 3295
effect in the District of Columbia without material modification, 3296
the governing law for a matter covered by this chapter is the law 3297
of the District of Columbia as though Article 12 were in effect in 3298
the District of Columbia without material modification. For 3299
purposes of this subsection, "Article 12" means Article 12 of 3300
Uniform Commercial Code Amendments (2022). 3301
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(e) To the extent subsections (a) and (b) provide that the 3302
local law of the controllable electronic record's jurisdiction 3303
governs a matter covered by this article, that law governs even if 3304
the matter or a transaction to which the matter relates does not 3305
bear any relation to the controllable electronic record's 3306
jurisdiction. 3307
(f) The rights acquired under Section 75-12-104 by a 3308
purchaser or qualifying purchaser are governed by the law 3309
applicable under this section at the time of purchase. 3310
SECTION 51. The following shall be codified as Section 3311
75-12A-101, Mississippi Code of 1972: 3312
PART 1 3313
GENERAL PROVISIONS AND DEFINITIONS 3314
75-12A-101. Title. This article may be cited and shall be 3315
known as Transitional Provisions for Uniform Commercial Code 3316
Amendments (2022). 3317
SECTION 52. The following shall be codified as Section 3318
75-12A-102, Mississippi Code of 1972: 3319
75-12A-102. Definitions. (a) In this article: 3320
(1) "Adjustment date" means July 1, 2025, or the date 3321
that is one (1) year after the effective date of this act, 3322
whichever is later. 3323
(2) "Article 12" means Article 12 of the Uniform 3324
Commercial Code. 3325
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(3) "Article 12 property" means a controllable account, 3326
controllable electronic record, or controllable payment 3327
intangible. 3328
(b) The following definitions in other articles of the 3329
Uniform Commercial Code apply to this article. 3330
"Controllable account". Section 75-9-102. 3331
"Controllable electronic record". Section 75-12-102. 3332
"Controllable payment intangible". Section 75-9-102. 3333
"Electronic money". Section 75-9-102. 3334
"Financing statement". Section 75-9-102. 3335
(c) Article 1 contains general definitions and principles of 3336
construction and interpretation applicable throughout this 3337
article. 3338
SECTION 53. The following shall be codified as Section 3339
75-12A-201, Mississippi Code of 1972: 3340
PART 2 3341
GENERAL TRANSITIONAL PROVISION 3342
75-12A-201. Saving Clause. Except as provided in Part 3, a 3343
transaction validly entered into before the effective date of this 3344
act and the rights, duties, and interests flowing from the 3345
transaction remain valid thereafter and may be terminated, 3346
completed, consummated, or enforced as required or permitted by 3347
law other than the Uniform Commercial Code or, if applicable, the 3348
Uniform Commercial Code, as though this act had not taken effect. 3349
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SECTION 54. The following shall be codified as Section 3350
75-12A-301, Mississippi Code of 1972: 3351
PART 3 3352
TRANSITIONAL PROVISIONS FOR ARTICLES 9 AND 12 3353
75-12A-301. Saving Clause. (a) Except as provided in this 3354
part, Article 9 as amended by this act and Article 12 apply to a 3355
transaction, lien, or other interest in property, even if the 3356
transaction, lien, or interest was entered into, created, or 3357
acquired before the effective date of this act. 3358
(b) Except as provided in subsection (c) and Sections 3359
75-12A-302 through 75-12A-306: 3360
(1) A transaction, lien, or interest in property that 3361
was validly entered into, created, or transferred before the 3362
effective date of this act and was not governed by the Uniform 3363
Commercial Code, but would be subject to Article 9 as amended by 3364
this act or Article 12 if it had been entered into, created, or 3365
transferred on or after the effective date of this act, including 3366
the rights, duties, and interests flowing from the transaction, 3367
lien, or interest, remains valid on and after the effective date 3368
of this act; and 3369
(2) The transaction, lien, or interest may be 3370
terminated, completed, consummated, and enforced as required or 3371
permitted by this act or by the law that would apply if this act 3372
had not taken effect. 3373
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(c) This act does not affect an action, case, or proceeding 3374
commenced before the effective date of this act. 3375
SECTION 55. The following shall be codified as Section 3376
75-12A-302, Mississippi Code of 1972: 3377
75-12A-302. Security Interest Perfected Before Effective 3378
Date. (a) A security interest that is enforceable and perfected 3379
immediately before the effective date of this act is a perfected 3380
security interest under this act if, on the effective date of this 3381
act, the requirements for enforceability and perfection under this 3382
act are satisfied without further action. 3383
(b) If a security interest is enforceable and perfected 3384
immediately before the effective date of this act, but the 3385
requirements for enforceability or perfection under this act are 3386
not satisfied on the effective date of this act, the security 3387
interest: 3388
(1) Is a perfected security interest until the earlier 3389
of the time perfection would have ceased under the law in effect 3390
immediately before the effective date of this act or the 3391
adjustment date; 3392
(2) Remains enforceable thereafter only if the security 3393
interest satisfies the requirements for enforceability under 3394
Section 75-9-203, as amended by this act, before the adjustment 3395
date; and 3396
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(3) Remains perfected thereafter only if the 3397
requirements for perfection under this act are satisfied before 3398
the time specified in paragraph (1). 3399
SECTION 56. The following shall be codified as Section 3400
75-12A-303, Mississippi Code of 1972: 3401
75-12A-303. Security Interest Unperfected Before Effective 3402
Date. A security interest that is enforceable immediately before 3403
the effective date of this act but is unperfected at that time: 3404
(1) Remains an enforceable security interest until the 3405
adjustment date; 3406
(2) Remains enforceable thereafter if the security 3407
interest becomes enforceable under Section 75-9-203, as amended by 3408
this act, on the effective date of this act or before the 3409
adjustment date; and 3410
(3) Becomes perfected: 3411
(A) Without further action, on the effective date 3412
of this act if the requirements for perfection under this act are 3413
satisfied before or at that time; or 3414
(B) When the requirements for perfection are 3415
satisfied if the requirements are satisfied after that time. 3416
SECTION 57. The following shall be codified as Section 3417
75-12A-304, Mississippi Code of 1972: 3418
75-12A-304. Effectiveness of Actions Taken Before Effective 3419
Date. (a) If action, other than the filing of a financing 3420
statement, is taken before the effective date of this act and the 3421
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action would have resulted in perfection of the security interest 3422
had the security interest become enforceable before the effective 3423
date of this act, the action is effective to perfect a security 3424
interest that attaches under this act before the adjustment date. 3425
An attached security interest becomes unperfected on the 3426
adjustment date unless the security interest becomes a perfected 3427
security interest under this act before the adjustment date. 3428
(b) The filing of a financing statement before the effective 3429
date of this act is effective to perfect a security interest on 3430
the effective date of this act to the extent the filing would 3431
satisfy the requirements for perfection under this act. 3432
(c) The taking of an action before the effective date of 3433
this act is sufficient for the enforceability of a security 3434
interest on the effective date of this act if the action would 3435
satisfy the requirements for enforceability under this act. 3436
SECTION 58. The following shall be codified as Section 3437
75-12A-305, Mississippi Code of 1972: 3438
75-12A-305. Priority. (a) Subject to subsections (b) and 3439
(c) of this section, this act determines the priority of 3440
conflicting claims to collateral. 3441
(b) Subject to subsection (c) of this section, if the 3442
priorities of claims to collateral were established before the 3443
effective date of this act, Article 9 as in effect before the 3444
effective date of this act determines priority. 3445
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(c) On the adjustment date, to the extent the priorities 3446
determined by Article 9 as amended by this act modify the 3447
priorities established before the effective date of this act, the 3448
priorities of claims to Article 12 property and electronic money 3449
established before the effective date of this act cease to apply. 3450
SECTION 59. The following shall be codified as Section 3451
75-12A-306, Mississippi Code of 1972: 3452
75-12A-306. Priority of Claims When Priority Rules of 3453
Article 9 Do Not Apply. (a) Subject to subsections (b) and (c) 3454
of this section, Article 12 determines the priority of conflicting 3455
claims to Article 12 property when the priority rules of Article 9 3456
as amended by this act do not apply. 3457
(b) Subject to subsection (c) of this section, when the 3458
priority rules of Article 9 as amended by this act do not apply 3459
and the priorities of claims to Article 12 property were 3460
established before the effective date of this act, law other than 3461
Article 12 determines priority. 3462
(c) When the priority rules of Article 9 as amended by this 3463
act do not apply, to the extent the priorities determined by this 3464
act modify the priorities established before the effective date of 3465
this act, the priorities of claims to Article 12 property 3466
established before the effective date of this act cease to apply 3467
on the adjustment date. 3468
SECTION 60. Section 75-1-101, Mississippi Code of 1972, is 3469
amended as follows: 3470
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75-1-101. (a) Chapters 1 through * * * 11, and Article 12 3471
and 12A of Chapter 12, of Title 75 shall be known and may be cited 3472
as the Uniform Commercial Code. 3473
(b) This chapter may be cited as Article 1 when referring to 3474
the general provisions of the Uniform Commercial Code or as 3475
Uniform Commercial Code - General Provisions. 3476
(c) Chapters 1 through * * * 11, and Article 12 and 12A of 3477
Chapter 12, of Title 75 are numbered to correspond to the 3478
numbering of the articles of the Uniform Commercial Code * * *. 3479
Chapters 1 through 11 of Title 75 may be referred to as 3480
"Articles." 3481
SECTION 61. Section 75-1-306, Mississippi Code of 1972, is 3482
amended as follows: 3483
75-1-306. Waiver or renunciation of claim or right after 3484
breach. A claim or right arising out of an alleged breach may be 3485
discharged in whole or in part without consideration by agreement 3486
of the aggrieved party in * * * a signed record. 3487
SECTION 62. Section 75-2-201, Mississippi Code of 1972, is 3488
amended as follows: 3489
75-2-201. (1) Except as otherwise provided in this section, 3490
a contract for the sale of goods for the price of Five Hundred 3491
Dollars ($500.00) or more is not enforceable by way of action or 3492
defense unless there is * * * a record sufficient to indicate that 3493
a contract for sale has been made between the parties and signed 3494
by the party against whom enforcement is sought or by * * * the 3495
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party's authorized agent or broker. A * * * record is not 3496
insufficient because it omits or incorrectly states a term agreed 3497
upon but the contract is not enforceable under this * * * 3498
subsection beyond the quantity of goods shown in * * * the record. 3499
(2) Between merchants if within a reasonable time a * * * 3500
record in confirmation of the contract and sufficient against the 3501
sender is received and the party receiving it has reason to know 3502
its contents, it satisfies the requirements of subsection (1) 3503
against * * * the party unless * * * notice in a record of 3504
objection to its contents is given within ten (10) days after it 3505
is received. 3506
(3) A contract which does not satisfy the requirements of 3507
subsection (1) but which is valid in other respects is 3508
enforceable: 3509
(a) If the goods are to be specially manufactured for 3510
the buyer and are not suitable for sale to others in the ordinary 3511
course of the seller's business and the seller, before notice of 3512
repudiation is received and under circumstances which reasonably 3513
indicate that the goods are for the buyer, has made either a 3514
substantial beginning of their manufacture or commitments for 3515
their procurement; or 3516
(b) If the party against whom enforcement is sought 3517
admits in the party's pleading, testimony or otherwise in court 3518
that a contract for sale was made, but the contract is not 3519
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enforceable under this provision beyond the quantity of goods 3520
admitted; or 3521
(c) With respect to goods for which payment has been 3522
made and accepted or which have been received and accepted 3523
(Section 2-606) [Section 75-2-606]. 3524
SECTION 63. Section 75-2-202, Mississippi Code of 1972, is 3525
amended as follows: 3526
75-2-202. Terms with respect to which the confirmatory 3527
memoranda of the parties agree or which are otherwise set forth in 3528
a * * * record intended by the parties as a final expression of 3529
their agreement with respect to such terms as are included therein 3530
may not be contradicted by evidence of any prior agreement or of a 3531
contemporaneous oral agreement but may be explained or 3532
supplemented: 3533
(a) By course of performance, course of dealing or 3534
usage of trade (Section 75-1-303); and 3535
(b) By evidence of consistent additional terms unless 3536
the court finds the * * * record to have been intended also as a 3537
complete and exclusive statement of the terms of the agreement. 3538
SECTION 64. Section 75-2-203, Mississippi Code of 1972, is 3539
amended as follows: 3540
75-2-203. The affixing of a seal to a * * * record 3541
evidencing a contract for sale or an offer to buy or to sell goods 3542
does not constitute the * * * record a sealed instrument and the 3543
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law with respect to sealed instruments does not apply to such a 3544
contract or offer. 3545
SECTION 65. Section 75-2-205, Mississippi Code of 1972, is 3546
amended as follows: 3547
75-2-205. An offer by a merchant to buy or sell goods in a 3548
signed * * * record which by its terms gives assurance that it 3549
will be held open is not revocable, for lack of consideration, 3550
during the time stated or if no time is stated for a reasonable 3551
time, but in no event may such period of irrevocability exceed 3552
three (3) months; but any such term of assurance on a form 3553
supplied by the offeree must be separately signed by the offeror. 3554
SECTION 66. Section 75-2-209, Mississippi Code of 1972, is 3555
amended as follows: 3556
75-2-209. Modification, Rescission, and Waiver. (1) An 3557
agreement modifying a contract within this chapter needs no 3558
consideration to be binding. 3559
(2) A signed agreement which excludes modification or 3560
rescission except by a signed writing or other signed record 3561
cannot be otherwise modified or rescinded, but except as between 3562
merchants such a requirement on a form supplied by the merchant 3563
must be separately signed by the other party. 3564
(3) The requirements of the statute of frauds section of 3565
this chapter (Section 2-201) [Section 75-2-201] must be satisfied 3566
if the contract as modified is within its provisions. 3567
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(4) Although an attempt at modification or rescission does 3568
not satisfy the requirements of subsection (2) or (3) it can 3569
operate as a waiver. 3570
(5) A party who has made a waiver affecting an executory 3571
portion of the contract may retract the waiver by reasonable 3572
notification received by the other party that strict performance 3573
will be required of any term waived, unless the retraction would 3574
be unjust in view of a material change of position in reliance on 3575
the waiver. 3576
SECTION 67. Section 75-2A-107, Mississippi Code of 1972, is 3577
amended as follows: 3578
75-2A-107. Any claim or right arising out of an alleged 3579
default or breach of warranty may be discharged in whole or in 3580
part without consideration by a * * * waiver or renunciation in a 3581
signed * * * record delivered by the aggrieved party. 3582
SECTION 68. Section 75-2A-201, Mississippi Code of 1972, is 3583
amended as follows: 3584
75-2A-201. (1) A lease contract is not enforceable by way 3585
of action or defense unless: 3586
(a) The total payments to be made under the lease 3587
contract, excluding payments for options to renew or buy, are less 3588
than One Thousand Dollars ($1,000.00); or 3589
(b) There is a * * * record, signed by the party 3590
against whom enforcement is sought or by that party's authorized 3591
agent, sufficient to indicate that a lease contract has been made 3592
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between the parties and to describe the goods leased and the lease 3593
term. 3594
(2) Any description of leased goods or of the lease term is 3595
sufficient and satisfies subsection (1)(b), whether or not it is 3596
specific, if it reasonably identifies what is described. 3597
(3) A * * * record is not insufficient because it omits or 3598
incorrectly states a term agreed upon, but the lease contract is 3599
not enforceable under subsection (1)(b) beyond the lease term and 3600
the quantity of goods shown in the * * * record. 3601
(4) A lease contract that does not satisfy the requirements 3602
of subsection (1), but which is valid in other respects, is 3603
enforceable: 3604
(a) If the goods are to be specially manufactured or 3605
obtained for the lessee and are not suitable for lease or sale to 3606
others in the ordinary course of the lessor's business, and the 3607
lessor, before notice of repudiation is received and under 3608
circumstances that reasonably indicate that the goods are for the 3609
lessee, has made either a substantial beginning of their 3610
manufacture or commitments for their procurement; 3611
(b) If the party against whom enforcement is sought 3612
admits in that party's pleading, testimony or otherwise in court 3613
that a lease contract was made, but the lease contract is not 3614
enforceable under this provision beyond the quantity of goods 3615
admitted; or 3616
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(c) With respect to goods that have been received and 3617
accepted by the lessee. 3618
(5) The lease term under a lease contract referred to in 3619
subsection (4) is: 3620
(a) If there is a * * * record signed by the party 3621
against whom enforcement is sought or by that party's authorized 3622
agent specifying the lease term, the term so specified; 3623
(b) If the party against whom enforcement is sought 3624
admits in that party's pleading, testimony or otherwise in court a 3625
lease term, the term so admitted; or 3626
(c) A reasonable lease term. 3627
SECTION 69. Section 75-2A-202, Mississippi Code of 1972, is 3628
amended as follows: 3629
75-2A-202. Terms with respect to which the confirmatory 3630
memoranda of the parties agree or which are otherwise set forth in 3631
a * * * record intended by the parties as a final expression of 3632
their agreement with respect to such terms as are included therein 3633
may not be contradicted by evidence of any prior agreement or of a 3634
contemporaneous oral agreement but may be explained or 3635
supplemented: 3636
(a) By course of dealing or usage of trade or by course 3637
of performance; and 3638
(b) By evidence of consistent additional terms unless 3639
the court finds the * * * record to have been intended also as a 3640
complete and exclusive statement of the terms of the agreement. 3641
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SECTION 70. Section 75-2A-203, Mississippi Code of 1972, is 3642
amended as follows: 3643
75-2A-203. The affixing of a seal to a * * * record 3644
evidencing a lease contract or an offer to enter into a lease 3645
contract does not render the * * * record a sealed instrument and 3646
the law with respect to sealed instruments does not apply to the 3647
lease contract or offer. 3648
SECTION 71. Section 75-2A-205, Mississippi Code of 1972, is 3649
amended as follows: 3650
75-2A-205. An offer by a merchant to lease goods to or from 3651
another person in a signed * * * record that by its terms gives 3652
assurance it will be held open is not revocable, for lack of 3653
consideration, during the time stated or, if no time is stated, 3654
for a reasonable time, but in no event may the period of 3655
irrevocability exceed three (3) months. Any such term of 3656
assurance on a form supplied by the offeree must be separately 3657
signed by the offeror. 3658
SECTION 72. Section 75-2A-208, Mississippi Code of 1972, is 3659
amended as follows: 3660
75-2A-208. Modification, Rescission, and Waiver. (1) An 3661
agreement modifying a lease contract needs no consideration to be 3662
binding. 3663
(2) A signed lease agreement that excludes modification or 3664
rescission except by a signed * * * record may not be otherwise 3665
modified or rescinded, but, except as between merchants, such a 3666
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requirement on a form supplied by a merchant must be separately 3667
signed by the other party. 3668
(3) Although an attempt at modification or rescission does 3669
not satisfy the requirements of subsection (2), it may operate as 3670
a waiver. 3671
(4) A party who has made a waiver affecting an executory 3672
portion of a lease contract may retract the waiver by reasonable 3673
notification received by the other party that strict performance 3674
will be required of any term waived, unless the retraction would 3675
be unjust in view of a material change of position in reliance on 3676
the waiver. 3677
SECTION 73. Section 75-3-401, Mississippi Code of 1972, is 3678
amended as follows: 3679
75-3-401. Signature Necessary for Liability on 3680
Instrument. * * * A person is not liable on an instrument unless 3681
(i) the person signed the instrument, or (ii) the person is 3682
represented by an agent or representative who signed the 3683
instrument and the signature is binding on the represented person 3684
under Section 75-3-402. 3685
* * * 3686
SECTION 74. Section 75-4A-103, Mississippi Code of 1972, is 3687
amended as follows: 3688
75-4A-103. (a) In this chapter: 3689
(1) "Payment order" means an instruction of a sender to 3690
a receiving bank, transmitted orally * * * or in a record, to pay, 3691
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or to cause another bank to pay, a fixed or determinable amount of 3692
money to a beneficiary if: 3693
(i) The instruction does not state a condition to 3694
payment to the beneficiary other than time of payment; 3695
(ii) The receiving bank is to be reimbursed by 3696
debiting an account of, or otherwise receiving payment from, the 3697
sender; and 3698
(iii) The instruction is transmitted by the sender 3699
directly to the receiving bank or to an agent, funds-transfer 3700
system, or communication system for transmittal to the receiving 3701
bank. 3702
(2) "Beneficiary" means the person to be paid by the 3703
beneficiary's bank. 3704
(3) "Beneficiary's bank" means the bank identified in a 3705
payment order in which an account of the beneficiary is to be 3706
credited pursuant to the order or which otherwise is to make 3707
payment to the beneficiary if the order does not provide for 3708
payment to an account. 3709
(4) "Receiving bank" means the bank to which the 3710
sender's instruction is addressed. 3711
(5) "Sender" means the person giving the instruction to 3712
the receiving bank. 3713
(b) If an instruction complying with subsection (a)(1) is to 3714
make more than one (1) payment to a beneficiary, the instruction 3715
is a separate payment order with respect to each payment. 3716
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(c) A payment order is issued when it is sent to the 3717
receiving bank. 3718
SECTION 75. Section 75-4A-203, Mississippi Code of 1972, is 3719
amended as follows: 3720
75-4A-203. (a) If an accepted payment order is not, under 3721
Section 75-4A-202(a), an authorized order of a customer identified 3722
as sender, but is effective as an order of the customer pursuant 3723
to Section 75-4A-202(b), the following rules apply: 3724
(1) By express * * * agreement evidenced by a record, 3725
the receiving bank may limit the extent to which it is entitled to 3726
enforce or retain payment of the payment order. 3727
(2) The receiving bank is not entitled to enforce or 3728
retain payment of the payment order if the customer proves that 3729
the order was not caused, directly or indirectly, by a person (i) 3730
entrusted at any time with duties to act for the customer with 3731
respect to payment orders or the security procedure, or (ii) who 3732
obtained access to transmitting facilities of the customer or who 3733
obtained, from a source controlled by the customer and without 3734
authority of the receiving bank, information facilitating breach 3735
of the security procedure, regardless of how the information was 3736
obtained or whether the customer was at fault. Information 3737
includes any access device, computer software, or the like. 3738
(b) This section applies to amendments of payment orders to 3739
the same extent it applies to payment orders. 3740
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SECTION 76. Section 75-4A-207, Mississippi Code of 1972, is 3741
amended as follows: 3742
75-4A-207. (a) Subject to subsection (b), if, in a payment 3743
order received by the beneficiary's bank, the name, bank account 3744
number, or other identification of the beneficiary refers to a 3745
nonexistent or unidentifiable person or account, no person has 3746
rights as a beneficiary of the order and acceptance of the order 3747
cannot occur. 3748
(b) If a payment order received by the beneficiary's bank 3749
identifies the beneficiary both by name and by an identifying or 3750
bank account number and the name and number identify different 3751
persons, the following rules apply: 3752
(1) Except as otherwise provided in subsection (c), if 3753
the beneficiary's bank does not know that the name and number 3754
refer to different persons, it may rely on the number as the 3755
proper identification of the beneficiary of the order. The 3756
beneficiary's bank need not determine whether the name and number 3757
refer to the same person. 3758
(2) If the beneficiary's bank pays the person 3759
identified by name or knows that the name and number identify 3760
different persons, no person has rights as beneficiary except the 3761
person paid by the beneficiary's bank if that person was entitled 3762
to receive payment from the originator of the funds transfer. If 3763
no person has rights as beneficiary, acceptance of the order 3764
cannot occur. 3765
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(c) If (i) a payment order described in subsection (b) is 3766
accepted, (ii) the originator's payment order described the 3767
beneficiary inconsistently by name and number, and (iii) the 3768
beneficiary's bank pays the person identified by number as 3769
permitted by subsection (b)(1), the following rules apply: 3770
(1) If the originator is a bank, the originator is 3771
obliged to pay its order. 3772
(2) If the originator is not a bank and proves that the 3773
person identified by number was not entitled to receive payment 3774
from the originator, the originator is not obliged to pay its 3775
order unless the originator's bank proves that the originator, 3776
before acceptance of the originator's order, had notice that 3777
payment of a payment order issued by the originator might be made 3778
by the beneficiary's bank on the basis of an identifying or bank 3779
account number even if it identifies a person different from the 3780
named beneficiary. Proof of notice may be made by any admissible 3781
evidence. The originator's bank satisfies the burden of proof if 3782
it proves that the originator, before the payment order was 3783
accepted, signed a * * * record stating the information to which 3784
the notice relates. 3785
(d) In a case governed by subsection (b)(1), if the 3786
beneficiary's bank rightfully pays the person identified by number 3787
and that person was not entitled to receive payment from the 3788
originator, the amount paid may be recovered from that person to 3789
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the extent allowed by the law governing mistake and restitution as 3790
follows: 3791
(1) If the originator is obliged to pay its payment 3792
order as stated in subsection (c), the originator has the right to 3793
recover. 3794
(2) If the originator is not a bank and is not obliged 3795
to pay its payment order, the originator's bank has the right to 3796
recover. 3797
SECTION 77. Section 75-4A-208, Mississippi Code of 1972, is 3798
amended as follows: 3799
75-4A-208. (a) This subsection applies to a payment order 3800
identifying an intermediary bank or the beneficiary's bank only by 3801
an identifying number. 3802
(1) The receiving bank may rely on the number as the 3803
proper identification of the intermediary or beneficiary's bank 3804
and need not determine whether the number identifies a bank. 3805
(2) The sender is obliged to compensate the receiving 3806
bank for any loss and expenses incurred by the receiving bank as a 3807
result of its reliance on the number in executing or attempting to 3808
execute the order. 3809
(b) This subsection applies to a payment order identifying 3810
an intermediary bank or the beneficiary's bank both by name and an 3811
identifying number if the name and number identify different 3812
persons. 3813
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(1) If the sender is a bank, the receiving bank may 3814
rely on the number as the proper identification of the 3815
intermediary or beneficiary's bank if the receiving bank, when it 3816
executes the sender's order, does not know that the name and 3817
number identify different persons. The receiving bank need not 3818
determine whether the name and number refer to the same person or 3819
whether the number refers to a bank. The sender is obliged to 3820
compensate the receiving bank for any loss and expenses incurred 3821
by the receiving bank as a result of its reliance on the number in 3822
executing or attempting to execute the order. 3823
(2) If the sender is not a bank and the receiving bank 3824
proves that the sender, before the payment order was accepted, had 3825
notice that the receiving bank might rely on the number as the 3826
proper identification of the intermediary or beneficiary's bank 3827
even if it identifies a person different from the bank identified 3828
by name, the rights and obligations of the sender and the 3829
receiving bank are governed by subsection (b)(1), as though the 3830
sender were a bank. Proof of notice may be made by any admissible 3831
evidence. The receiving bank satisfies the burden of proof if it 3832
proves that the sender, before the payment order was accepted, 3833
signed a * * * record stating the information to which the notice 3834
relates. 3835
(3) Regardless of whether the sender is a bank, the 3836
receiving bank may rely on the name as the proper identification 3837
of the intermediary or beneficiary's bank if the receiving bank, 3838
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at the time it executes the sender's order, does not know that the 3839
name and number identify different persons. The receiving bank 3840
need not determine whether the name and number refer to the same 3841
person. 3842
(4) If the receiving bank knows that the name and 3843
number identify different persons, reliance on either the name or 3844
the number in executing the sender's payment order is a breach of 3845
the obligation stated in Section 75-4A-302(a)(1). 3846
SECTION 78. Section 75-4A-210, Mississippi Code of 1972, is 3847
amended as follows: 3848
75-4A-210. (a) A payment order is rejected by the receiving 3849
bank by a notice of rejection transmitted to the sender 3850
orally * * * or in * * * a record. A notice of rejection need not 3851
use any particular words and is sufficient if it indicates that 3852
the receiving bank is rejecting the order or will not execute or 3853
pay the order. Rejection is effective when the notice is given if 3854
transmission is by a means that is reasonable in the 3855
circumstances. If notice of rejection is given by a means that is 3856
not reasonable, rejection is effective when the notice is 3857
received. If an agreement of the sender and receiving bank 3858
establishes the means to be used to reject a payment order, (i) 3859
any means complying with the agreement is reasonable and (ii) any 3860
means not complying is not reasonable unless no significant delay 3861
in receipt of the notice resulted from the use of the noncomplying 3862
means. 3863
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(b) This subsection applies if a receiving bank other than 3864
the beneficiary's bank fails to execute a payment order despite 3865
the existence on the execution date of a withdrawable credit 3866
balance in an authorized account of the sender sufficient to cover 3867
the order. If the sender does not receive notice of rejection of 3868
the order on the execution date and the authorized account of the 3869
sender does not bear interest, the bank is obliged to pay interest 3870
to the sender on the amount of the order for the number of days 3871
elapsing after the execution date to the earlier of the day the 3872
order is canceled pursuant to Section 75-4A-211(d) or the day the 3873
sender receives notice or learns that the order was not executed, 3874
counting the final day of the period as an elapsed day. If the 3875
withdrawable credit balance during that period falls below the 3876
amount of the order, the amount of interest is reduced 3877
accordingly. 3878
(c) If a receiving bank suspends payments, all unaccepted 3879
payment orders issued to it are deemed rejected at the time the 3880
bank suspends payments. 3881
(d) Acceptance of a payment order precludes a later 3882
rejection of the order. Rejection of a payment order precludes a 3883
later acceptance of the order. 3884
SECTION 79. Section 75-4A-211, Mississippi Code of 1972, is 3885
amended as follows: 3886
75-4A-211. (a) A communication of the sender of a payment 3887
order cancelling or amending the order may be transmitted to the 3888
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receiving bank orally * * * or in * * * a record. If a security 3889
procedure is in effect between the sender and the receiving bank, 3890
the communication is not effective to cancel or amend the order 3891
unless the communication is verified pursuant to the security 3892
procedure or the bank agrees to the cancellation or amendment. 3893
(b) Subject to subsection (a), a communication by the sender 3894
cancelling or amending a payment order is effective to cancel or 3895
amend the order if notice of the communication is received at a 3896
time and in a manner affording the receiving bank a reasonable 3897
opportunity to act on the communication before the bank accepts 3898
the payment order. 3899
(c) After a payment order has been accepted, cancellation or 3900
amendment of the order is not effective unless the receiving bank 3901
agrees or a funds-transfer system rule allows cancellation or 3902
amendment without agreement of the bank. 3903
(1) With respect to a payment order accepted by a 3904
receiving bank other than the beneficiary's bank, cancellation or 3905
amendment is not effective unless a conforming cancellation or 3906
amendment of the payment order issued by the receiving bank is 3907
also made. 3908
(2) With respect to a payment order accepted by the 3909
beneficiary's bank, cancellation or amendment is not effective 3910
unless the order was issued in execution of an unauthorized 3911
payment order, or because of a mistake by a sender in the funds 3912
transfer which resulted in the issuance of a payment order (i) 3913
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that is a duplicate of a payment order previously issued by the 3914
sender, (ii) that orders payment to a beneficiary not entitled to 3915
receive payment from the originator, or (iii) that orders payment 3916
in an amount greater than the amount the beneficiary was entitled 3917
to receive from the originator. If the payment order is canceled 3918
or amended, the beneficiary's bank is entitled to recover from the 3919
beneficiary any amount paid to the beneficiary to the extent 3920
allowed by the law governing mistake and restitution. 3921
(d) An unaccepted payment order is canceled by operation of 3922
law at the close of the fifth funds-transfer business day of the 3923
receiving bank after the execution date or payment date of the 3924
order. 3925
(e) A canceled payment order cannot be accepted. If an 3926
accepted payment order is canceled, the acceptance is nullified 3927
and no person has any right or obligation based on the acceptance. 3928
Amendment of a payment order is deemed to be cancellation of the 3929
original order at the time of amendment and issue of a new payment 3930
order in the amended form at the same time. 3931
(f) Unless otherwise provided in an agreement of the parties 3932
or in a funds-transfer system rule, if the receiving bank, after 3933
accepting a payment order, agrees to cancellation or amendment of 3934
the order by the sender or is bound by a funds-transfer system 3935
rule allowing cancellation or amendment without the bank's 3936
agreement, the sender, whether or not cancellation or amendment is 3937
effective, is liable to the bank for any loss and expenses, 3938
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including reasonable attorney's fees, incurred by the bank as a 3939
result of the cancellation or amendment or attempted cancellation 3940
or amendment. 3941
(g) A payment order is not revoked by the death or legal 3942
incapacity of the sender unless the receiving bank knows of the 3943
death or of an adjudication of incapacity by a court of competent 3944
jurisdiction and has reasonable opportunity to act before 3945
acceptance of the order. 3946
(h) A funds-transfer system rule is not effective to the 3947
extent it conflicts with subsection (c)(2). 3948
SECTION 80. Section 75-4A-305, Mississippi Code of 1972, is 3949
amended as follows: 3950
75-4A-305. (a) If a funds transfer is completed but 3951
execution of a payment order by the receiving bank in breach of 3952
Section 75-4A-302 results in delay in payment to the beneficiary, 3953
the bank is obliged to pay interest to either the originator or 3954
the beneficiary of the funds transfer for the period of delay 3955
caused by the improper execution. Except as provided in 3956
subsection (c), additional damages are not recoverable. 3957
(b) If execution of a payment order by a receiving bank in 3958
breach of Section 75-4A-302 results in (i) noncompletion of the 3959
funds transfer, (ii) failure to use an intermediary bank 3960
designated by the originator, or (iii) issuance of a payment order 3961
that does not comply with the terms of the payment order of the 3962
originator, the bank is liable to the originator for its expenses 3963
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in the funds transfer and for incidental expenses and interest 3964
losses, to the extent not covered by subsection (a), resulting 3965
from the improper execution. Except as provided in subsection 3966
(c), additional damages are not recoverable. 3967
(c) In addition to the amounts payable under subsections (a) 3968
and (b), damages, including consequential damages, are recoverable 3969
to the extent provided in an express * * * agreement of the 3970
receiving bank, evidenced by a record. 3971
(d) If a receiving bank fails to execute a payment order it 3972
was obliged by express agreement to execute, the receiving bank is 3973
liable to the sender for its expenses in the transaction and for 3974
incidental expenses and interest losses resulting from the failure 3975
to execute. Additional damages, including consequential damages, 3976
are recoverable to the extent provided in an express written 3977
agreement of the receiving bank, evidenced by a record, but are 3978
not otherwise recoverable. 3979
(e) Reasonable attorney's fees are recoverable if demand for 3980
compensation under subsection (a) or (b) is made and refused 3981
before an action is brought on the claim. If a claim is made for 3982
breach of an agreement under subsection (d) and the agreement does 3983
not provide for damages, reasonable attorney's fees are 3984
recoverable if demand for compensation under subsection (d) is 3985
made and refused before an action is brought on the claim. 3986
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(f) Except as stated in this section, the liability of a 3987
receiving bank under subsections (a) and (b) may not be varied by 3988
agreement. 3989
SECTION 81. Section 75-5-104, Mississippi Code of 1972, is 3990
amended as follows: 3991
75-5-104. A letter of credit, confirmation, advice, 3992
transfer, amendment or cancellation may be issued in any form that 3993
is a signed record * * *. 3994
SECTION 82. Section 75-7-102, Mississippi Code of 1972, is 3995
amended as follows: 3996
75-7-102. (a) In this chapter, unless the context otherwise 3997
requires: 3998
(1) "Bailee" means a person that by a warehouse 3999
receipt, bill of lading, or other document of title acknowledges 4000
possession of goods and contracts to deliver them. 4001
(2) "Carrier" means a person that issues a bill of 4002
lading. 4003
(3) "Consignee" means a person named in a bill of 4004
lading to which or to whose order the bill promises delivery. 4005
(4) "Consignor" means a person named in a bill of 4006
lading as the person from which the goods have been received for 4007
shipment. 4008
(5) "Delivery order" means a record that contains an 4009
order to deliver goods directed to a warehouse, carrier, or other 4010
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person that in the ordinary course of business issues warehouse 4011
receipts or bills of lading. 4012
(6) [Reserved] 4013
(7) "Goods" means all things that are treated as 4014
movable for the purposes of a contract for storage or 4015
transportation. 4016
(8) "Issuer" means a bailee that issues a document of 4017
title or, in the case of an unaccepted delivery order, the person 4018
that orders the possessor of goods to deliver. The term includes 4019
a person for which an agent or employee purports to act in issuing 4020
a document if the agent or employee has real or apparent authority 4021
to issue documents, even if the issuer did not receive any goods, 4022
the goods were misdescribed, or in any other respect the agent or 4023
employee violated the issuer's instructions. 4024
(9) "Person entitled under the document" means the 4025
holder, in the case of a negotiable document of title, or the 4026
person to which delivery of the goods is to be made by the terms 4027
of, or pursuant to instructions in a record under, a nonnegotiable 4028
document of title. 4029
(10) [Reserved] 4030
(11) * * * [Reserved.] 4031
(12) "Shipper" means a person that enters into a 4032
contract of transportation with a carrier. 4033
(13) "Warehouse" means a person engaged in the business 4034
of storing goods for hire. 4035
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(b) Definitions in other chapters applying to this chapter 4036
and the sections in which they appear are: 4037
(1) "Contract for sale," Section 75-2-106. 4038
(2) "Lessee in the ordinary course of business," 4039
Section 75-2A-103. 4040
(3) "'Receipt' of goods," Section 75-2-103. 4041
(c) In addition, Chapter 1 of this title contains general 4042
definitions and principles of construction and interpretation 4043
applicable throughout this chapter. 4044
SECTION 83. Section 75-8-102, Mississippi Code of 1972, is 4045
amended as follows: 4046
75-8-102. (a) In this chapter: 4047
(1) "Adverse claim" means a claim that a claimant has a 4048
property interest in a financial asset and that it is a violation 4049
of the rights of the claimant for another person to hold, 4050
transfer, or deal with the financial asset. 4051
(2) "Bearer form," as applied to a certificated 4052
security, means a form in which the security is payable to the 4053
bearer of the security certificate according to its terms but not 4054
by reason of an indorsement. 4055
(3) "Broker" means a person defined as a broker or 4056
dealer under the federal securities laws, but without excluding a 4057
bank acting in that capacity. 4058
(4) "Certificated security" means a security that is 4059
represented by a certificate. 4060
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(5) "Clearing corporation" means: 4061
(i) A person that is registered as a "clearing 4062
agency" under the federal securities laws; 4063
(ii) A federal reserve bank; or 4064
(iii) Any other person that provides clearance or 4065
settlement services with respect to financial assets that would 4066
require it to register as a clearing agency under the federal 4067
securities laws but for an exclusion or exemption from the 4068
registration requirement, if its activities as a clearing 4069
corporation, including promulgation of rules, are subject to 4070
regulation by a federal or state governmental authority. 4071
(6) "Communicate" means to: 4072
(i) Send a signed * * * record; or 4073
(ii) Transmit information by any mechanism agreed 4074
upon by the persons transmitting and receiving the information. 4075
(7) "Entitlement holder" means a person identified in 4076
the records of a securities intermediary as the person having a 4077
security entitlement against the securities intermediary. If a 4078
person acquires a security entitlement by virtue of Section 4079
75-8-501(b)(2) or (3), that person is the entitlement holder. 4080
(8) "Entitlement order" means a notification 4081
communicated to a securities intermediary directing transfer or 4082
redemption of a financial asset to which the entitlement holder 4083
has a security entitlement. 4084
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(9) "Financial asset," except as otherwise provided in 4085
Section 75-8-103, means: 4086
(i) A security; 4087
(ii) An obligation of a person or a share, 4088
participation, or other interest in a person or in property or an 4089
enterprise of a person, which is, or is of a type, dealt in or 4090
traded on financial markets, or which is recognized in any area in 4091
which it is issued or dealt in as a medium for investment; or 4092
(iii) Any property that is held by a securities 4093
intermediary for another person in a securities account if the 4094
securities intermediary has expressly agreed with the other person 4095
that the property is to be treated as a financial asset under this 4096
chapter. As context requires, the term means either the interest 4097
itself or the means by which a person's claim to it is evidenced, 4098
including a certificated or uncertificated security, a security 4099
certificate, or a security entitlement. 4100
(10) [Reserved] 4101
(11) "Indorsement" means a signature that alone or 4102
accompanied by other words is made on a security certificate in 4103
registered form or on a separate document for the purpose of 4104
assigning, transferring, or redeeming the security or granting a 4105
power to assign, transfer, or redeem it. 4106
(12) "Instruction" means a notification communicated to 4107
the issuer of an uncertificated security which directs that the 4108
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transfer of the security be registered or that the security be 4109
redeemed. 4110
(13) "Registered form," as applied to a certificated 4111
security, means a form in which: 4112
(i) The security certificate specifies a person 4113
entitled to the security; and 4114
(ii) A transfer of the security may be registered 4115
upon books maintained for that purpose by or on behalf of the 4116
issuer, or the security certificate so states. 4117
(14) "Securities intermediary" means: 4118
(i) A clearing corporation; or 4119
(ii) A person, including a bank or broker, that in 4120
the ordinary course of its business maintains securities accounts 4121
for others and is acting in that capacity. 4122
(15) "Security," except as otherwise provided in 4123
Section 75-8-103, means an obligation of an issuer or a share, 4124
participation, or other interest in an issuer or in property or an 4125
enterprise of an issuer: 4126
(i) Which is represented by a security certificate 4127
in bearer or registered form, or the transfer of which may be 4128
registered upon books maintained for that purpose by or on behalf 4129
of the issuer; 4130
(ii) Which is one (1) of a class or series or by 4131
its terms is divisible into a class or series of shares, 4132
participations, interests, or obligations; and 4133
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(iii) Which: 4134
(A) Is, or is of a type, dealt in or traded 4135
on securities exchanges or securities markets; or 4136
(B) Is a medium for investment and by its 4137
terms expressly provides that it is a security governed by this 4138
chapter. 4139
(16) "Security certificate" means a certificate 4140
representing a security. 4141
(17) "Security entitlement" means the rights and 4142
property interest of an entitlement holder with respect to a 4143
financial asset specified in Part 5 of this chapter. 4144
(18) "Uncertificated security" means a security that is 4145
not represented by a certificate. 4146
(b) * * * The following definitions * * * in this chapter 4147
and * * * other chapters apply to this chapter: 4148
Appropriate person Section 75-8-107 4149
Control Section 75-8-106 4150
Controllable account Section 75-9-102 4151
Controllable electronic record Section 75-12-102 4152
Controllable payment intangible Section 75-9-102 4153
Delivery Section 75-8-301 4154
Investment company security Section 75-8-103 4155
Issuer Section 75-8-201 4156
Overissue Section 75-8-210 4157
Protected purchaser Section 75-8-303 4158
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Securities account Section 75-8-501 4159
(c) In addition, Chapter 1 contains general definitions and 4160
principles of construction and interpretation applicable 4161
throughout this chapter. 4162
(d) The characterization of a person, business, or 4163
transaction for purposes of this chapter does not determine the 4164
characterization of the person, business, or transaction for 4165
purposes of any other law, regulation, or rule. 4166
SECTION 84. Section 75-9-207, Mississippi Code of 1972, is 4167
amended as follows: 4168
75-9-207. (a) Except as otherwise provided in subsection 4169
(d), a secured party shall use reasonable care in the custody and 4170
preservation of collateral in the secured party's possession. In 4171
the case of chattel paper or an instrument, reasonable care 4172
includes taking necessary steps to preserve rights against prior 4173
parties unless otherwise agreed. 4174
(b) Except as otherwise provided in subsection (d), if a 4175
secured party has possession of collateral: 4176
(1) Reasonable expenses, including the cost of 4177
insurance and payment of taxes or other charges, incurred in the 4178
custody, preservation, use, or operation of the collateral are 4179
chargeable to the debtor and are secured by the collateral; 4180
(2) The risk of accidental loss or damage is on the 4181
debtor to the extent of a deficiency in any effective insurance 4182
coverage; 4183
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(3) The secured party shall keep the collateral 4184
identifiable, but fungible collateral may be commingled; and 4185
(4) The secured party may use or operate the 4186
collateral: 4187
(A) For the purpose of preserving the collateral 4188
or its value; 4189
(B) As permitted by an order of a court having 4190
competent jurisdiction; or 4191
(C) Except in the case of consumer goods, in the 4192
manner and to the extent agreed by the debtor. 4193
(c) Except as otherwise provided in subsection (d), a 4194
secured party having possession of collateral or control of 4195
collateral under Section 75-7-106, 75-9-104, 75-9-105, 75-9-105A, 4196
75-9-106 * * *, 75-9-107, or 75-9-107A: 4197
(1) May hold as additional security any proceeds, 4198
except money or funds, received from the collateral; 4199
(2) Shall apply money or funds received from the 4200
collateral to reduce the secured obligation, unless remitted to 4201
the debtor; and 4202
(3) May create a security interest in the collateral. 4203
(d) If the secured party is a buyer of accounts, chattel 4204
paper, payment intangibles, or promissory notes or a consignor: 4205
(1) Subsection (a) does not apply unless the secured 4206
party is entitled under an agreement: 4207
(A) To charge back uncollected collateral; or 4208
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(B) Otherwise to full or limited recourse against 4209
the debtor or a secondary obligor based on the nonpayment or other 4210
default of an account debtor or other obligor on the collateral; 4211
and 4212
(2) Subsections (b) and (c) do not apply. 4213
SECTION 85. Section 75-9-209, Mississippi Code of 1972, is 4214
amended as follows: 4215
75-9-209. (a) Except as otherwise provided in subsection 4216
(c), this section applies if: 4217
(1) There is no outstanding secured obligation; and 4218
(2) The secured party is not committed to make 4219
advances, incur obligations, or otherwise give value. 4220
(b) Within ten (10) days after receiving * * * a signed 4221
demand by the debtor, a secured party shall send to an account 4222
debtor that has received notification under Section 75-9-406(a) or 4223
75-12-106(b) of an assignment to the secured party as 4224
assignee * * * a signed record that releases the account debtor 4225
from any further obligation to the secured party. 4226
(c) This section does not apply to an assignment 4227
constituting the sale of an account, chattel paper, or payment 4228
intangible. 4229
SECTION 86. Section 75-9-210, Mississippi Code of 1972, is 4230
amended as follows: 4231
75-9-210. (a) In this section: 4232
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(1) "Request" means a record of a type described in 4233
paragraph (2), (3), or (4). 4234
(2) "Request for an accounting" means a record * * * 4235
signed by a debtor requesting that the recipient provide an 4236
accounting of the unpaid obligations secured by collateral and 4237
reasonably identifying the transaction or relationship that is the 4238
subject of the request. 4239
(3) "Request regarding a list of collateral" means a 4240
record * * * signed by a debtor requesting that the recipient 4241
approve or correct a list of what the debtor believes to be the 4242
collateral securing an obligation and reasonably identifying the 4243
transaction or relationship that is the subject of the request. 4244
(4) "Request regarding a statement of account" means a 4245
record * * * signed by a debtor requesting that the recipient 4246
approve or correct a statement indicating what the debtor believes 4247
to be the aggregate amount of unpaid obligations secured by 4248
collateral as of a specified date and reasonably identifying the 4249
transaction or relationship that is the subject of the request. 4250
(b) Subject to subsections (c), (d), (e), and (f), a secured 4251
party, other than a buyer of accounts, chattel paper, payment 4252
intangibles, or promissory notes or a consignor, shall comply with 4253
a request within fourteen (14) days after receipt: 4254
(1) In the case of a request for an accounting, 4255
by * * * signing and sending to the debtor an accounting; and 4256
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(2) In the case of a request regarding a list of 4257
collateral or a request regarding a statement of account, by * * * 4258
signing and sending to the debtor an approval or correction. 4259
(c) A secured party that claims a security interest in all 4260
of a particular type of collateral owned by the debtor may comply 4261
with a request regarding a list of collateral by sending to the 4262
debtor * * * a signed record including a statement to that effect 4263
within fourteen (14) days after receipt. 4264
(d) A person that receives a request regarding a list of 4265
collateral, claims no interest in the collateral when it receives 4266
the request, and claimed an interest in the collateral at an 4267
earlier time shall comply with the request within fourteen (14) 4268
days after receipt by sending to the debtor * * * a signed record: 4269
(1) Disclaiming any interest in the collateral; and 4270
(2) If known to the recipient, providing the name and 4271
mailing address of any assignee of or successor to the recipient's 4272
interest in the collateral. 4273
(e) A person that receives a request for an accounting or a 4274
request regarding a statement of account, claims no interest in 4275
the obligations when it receives the request, and claimed an 4276
interest in the obligations at an earlier time shall comply with 4277
the request within fourteen (14) days after receipt by sending to 4278
the debtor * * * a signed record: 4279
(1) Disclaiming any interest in the obligations; and 4280
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(2) If known to the recipient, providing the name and 4281
mailing address of any assignee of or successor to the recipient's 4282
interest in the obligations. 4283
(f) A debtor is entitled without charge to one (1) response 4284
to a request under this section during any six-month period. The 4285
secured party may require payment of a charge not exceeding 4286
Twenty-five Dollars ($25.00) for each additional response. 4287
SECTION 87. Section 75-9-301, Mississippi Code of 1972, is 4288
amended as follows: 4289
75-9-301. Except as otherwise provided in Sections 75-9-303 4290
through * * * 75-9-306B, the following rules determine the law 4291
governing perfection, the effect of perfection or nonperfection, 4292
and the priority of a security interest in collateral: 4293
(1) Except as otherwise provided in this section, while 4294
a debtor is located in a jurisdiction, the local law of that 4295
jurisdiction governs perfection, the effect of perfection or 4296
nonperfection, and the priority of a security interest in 4297
collateral. 4298
(2) While collateral is located in a jurisdiction, the 4299
local law of that jurisdiction governs perfection, the effect of 4300
perfection or nonperfection, and the priority of a possessory 4301
security interest in that collateral. 4302
(3) Except as otherwise provided in paragraph (4), 4303
while * * * negotiable tangible documents, goods, instruments, or 4304
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tangible money * * * is located in a jurisdiction, the local law 4305
of that jurisdiction governs: 4306
(A) Perfection of a security interest in the goods 4307
by filing a fixture filing; 4308
(B) Perfection of a security interest in timber to 4309
be cut; and 4310
(C) The effect of perfection or nonperfection and 4311
the priority of a nonpossessory security interest in the 4312
collateral. 4313
(4) The local law of the jurisdiction in which the 4314
wellhead or minehead is located governs perfection, the effect of 4315
perfection or nonperfection, and the priority of a security 4316
interest in as-extracted collateral. 4317
SECTION 88. Section 75-9-310, Mississippi Code of 1972, is 4318
amended as follows: 4319
75-9-310. (a) Except as otherwise provided in subsection 4320
(b) and Section 75-9-312(b), a financing statement must be filed 4321
to perfect all security interests and agricultural liens. 4322
(b) The filing of a financing statement is not necessary to 4323
perfect a security interest: 4324
(1) That is perfected under Section 75-9-308(d), (e), 4325
(f), or (g); 4326
(2) That is perfected under Section 75-9-309 when it 4327
attaches; 4328
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(3) In property subject to a statute, regulation, or 4329
treaty described in Section 75-9-311(a); 4330
(4) In goods in possession of a bailee which is 4331
perfected under Section 75-9-312(d)(1) or (2); 4332
(5) In certificated securities, documents, goods or 4333
instruments which is perfected without filing, control or 4334
possession under Section 75-9-312(e), (f), or (g); 4335
(6) In collateral in the secured party's possession 4336
under Section 75-9-313; 4337
(7) In a certificated security which is perfected by 4338
delivery of the security certificate to the secured party under 4339
Section 75-9-313; 4340
(8) In controllable accounts, controllable electronic 4341
records, controllable payment intangibles, deposit accounts, * * * 4342
electronic documents, investment property, or letter-of-credit 4343
rights which is perfected by control under Section 75-9-314; 4344
(8.1) In chattel paper which is perfected by possession 4345
and control under Section 75-9-314A; 4346
(9) In proceeds which is perfected under Section 4347
75-9-315; or 4348
(10) That is perfected under Section 75-9-316. 4349
(c) If a secured party assigns a perfected security interest 4350
or agricultural lien, a filing under this article is not required 4351
to continue the perfected status of the security interest against 4352
creditors of and transferees from the original debtor. 4353
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SECTION 89. Section 75-9-313, Mississippi Code of 1972, is 4354
amended as follows: 4355
75-9-313. (a) Except as otherwise provided in subsection 4356
(b), a secured party may perfect a security interest in * * * 4357
goods, instruments, negotiable tangible documents, or tangible 4358
money * * * by taking possession of the collateral. A secured 4359
party may perfect a security interest in certificated securities 4360
by taking delivery of the certificated securities under Section 4361
75-8-301. 4362
(b) With respect to goods covered by a certificate of title 4363
issued by this state, a secured party may perfect a security 4364
interest in the goods by taking possession of the goods only in 4365
the circumstances described in Section 75-9-316(d). 4366
(c) With respect to collateral other than certificated 4367
securities and goods covered by a document, a secured party takes 4368
possession of collateral in the possession of a person other than 4369
the debtor, the secured party, or a lessee of the collateral from 4370
the debtor in the ordinary course of the debtor's business, when: 4371
(1) The person in possession * * * signs a record 4372
acknowledging that it holds possession of the collateral for the 4373
secured party's benefit; or 4374
(2) The person takes possession of the collateral after 4375
having * * * signed a record acknowledging that it will hold 4376
possession of the collateral for the secured party's benefit. 4377
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(d) If perfection of a security interest depends upon 4378
possession of the collateral by a secured party, perfection 4379
occurs * * * not earlier than the time the secured party takes 4380
possession and continues only while the secured party retains 4381
possession. 4382
(e) A security interest in a certificated security in 4383
registered form is perfected by delivery when delivery of the 4384
certificated security occurs under Section 75-8-301 and remains 4385
perfected by delivery until the debtor obtains possession of the 4386
security certificate. 4387
(f) A person in possession of collateral is not required to 4388
acknowledge that it holds possession for a secured party's 4389
benefit. 4390
(g) If a person acknowledges that it holds possession for 4391
the secured party's benefit: 4392
(1) The acknowledgment is effective under subsection 4393
(c) or Section 75-8-301(a), even if the acknowledgment violates 4394
the rights of a debtor; and 4395
(2) Unless the person otherwise agrees or law other 4396
than this article otherwise provides, the person does not owe any 4397
duty to the secured party and is not required to confirm the 4398
acknowledgment to another person. 4399
(h) A secured party having possession of collateral does not 4400
relinquish possession by delivering the collateral to a person 4401
other than the debtor or a lessee of the collateral from the 4402
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PAGE 176 (ens\kr)

debtor in the ordinary course of the debtor's business if the 4403
person was instructed before the delivery or is instructed 4404
contemporaneously with the delivery: 4405
(1) To hold possession of the collateral for the 4406
secured party's benefit; or 4407
(2) A secured party does not relinquish possession, 4408
even if a delivery under subsection (h) violates the rights of a 4409
debtor. A person to which collateral is delivered under 4410
subsection (h) does not owe any duty to the secured party and is 4411
not required to confirm the delivery to another person unless the 4412
person otherwise agrees or law other than this article otherwise 4413
provides. 4414
SECTION 90. Section 75-9-314, Mississippi Code of 1972, is 4415
amended as follows: 4416
75-9-314. (a) A security interest in * * * controllable 4417
accounts, controllable electronic records, controllable payment 4418
intangibles, deposit accounts, electronic documents, electronic 4419
money, investment property, or letter-of-credit rights may be 4420
perfected by control of the collateral under Section 75-7-106, 4421
75-9-104, * * * 75-9-105A, 75-9-106 * * *, 75-9-107, or 75-9-107A. 4422
(b) A security interest in * * * controllable accounts, 4423
controllable electronic records, controllable payment intangibles, 4424
deposit accounts, electronic documents, electronic money, or 4425
letter-of-credit rights is perfected by control under Section 4426
75-7-106, 75-9-104, * * * 75-9-105A, * * * 75-9-107, or 4427
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75-9-107A * * * not earlier than the time the secured party 4428
obtains control and remains perfected by control only while the 4429
secured party retains control. 4430
(c) A security interest in investment property is perfected 4431
by control under Section 75-9-106 * * * not earlier than the time 4432
the secured party obtains control and remains perfected by control 4433
until: 4434
(1) The secured party does not have control; and 4435
(2) One (1) of the following occurs: 4436
(A) If the collateral is a certificated security, 4437
the debtor has or acquires possession of the security certificate; 4438
(B) If the collateral is an uncertificated 4439
security, the issuer has registered or registers the debtor as the 4440
registered owner; or 4441
(C) If the collateral is a security entitlement, 4442
the debtor is or becomes the entitlement holder. 4443
SECTION 91. Section 75-9-316, Mississippi Code of 1972, is 4444
amended as follows: 4445
75-9-316. (a) A security interest perfected pursuant to the 4446
law of the jurisdiction designated in Section 75-9-301(1) * * *, 4447
75-9-305(c), 75-9-306A(d), or 75-9-306B(b) remains perfected until 4448
the earliest of: 4449
(1) The time perfection would have ceased under the law 4450
of that jurisdiction; 4451
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(2) The expiration of four (4) months after a change of 4452
the debtor's location to another jurisdiction; or 4453
(3) The expiration of one (1) year after a transfer of 4454
collateral to a person that thereby becomes a debtor and is 4455
located in another jurisdiction. 4456
(b) If a security interest described in subsection (a) 4457
becomes perfected under the law of the other jurisdiction before 4458
the earliest time or event described in that subsection, it 4459
remains perfected thereafter. If the security interest does not 4460
become perfected under the law of the other jurisdiction before 4461
the earliest time or event, it becomes unperfected and is deemed 4462
never to have been perfected as against a purchaser of the 4463
collateral for value. 4464
(c) A possessory security interest in collateral, other than 4465
goods covered by a certificate of title and as-extracted 4466
collateral consisting of goods, remains continuously perfected if: 4467
(1) The collateral is located in one (1) jurisdiction 4468
and subject to a security interest perfected under the law of that 4469
jurisdiction; 4470
(2) Thereafter the collateral is brought into another 4471
jurisdiction; and 4472
(3) Upon entry into the other jurisdiction, the 4473
security interest is perfected under the law of the other 4474
jurisdiction. 4475
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(d) Except as otherwise provided in subsection (e), a 4476
security interest in goods covered by a certificate of title which 4477
is perfected by any method under the law of another jurisdiction 4478
when the goods become covered by a certificate of title from this 4479
state remains perfected until the security interest would have 4480
become unperfected under the law of the other jurisdiction had the 4481
goods not become so covered. 4482
(e) A security interest described in subsection (d) becomes 4483
unperfected as against a purchaser of the goods for value and is 4484
deemed never to have been perfected as against a purchaser of the 4485
goods for value if the applicable requirements for perfection 4486
under Section 75-9-311(b) or 75-9-313 are not satisfied before the 4487
earlier of: 4488
(1) The time the security interest would have become 4489
unperfected under the law of the other jurisdiction had the goods 4490
not become covered by a certificate of title from this state; or 4491
(2) The expiration of four (4) months after the goods 4492
had become so covered. 4493
(f) A security interest in chattel paper, controllable 4494
accounts, controllable electronic records, controllable payment 4495
intangibles, deposit accounts, letter-of-credit rights, or 4496
investment property which is perfected under the law of the 4497
chattel paper's jurisdiction, the controllable electronic record's 4498
jurisdiction, the bank's jurisdiction, the issuer's jurisdiction, 4499
a nominated person's jurisdiction, the securities intermediary's 4500
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PAGE 180 (ens\kr)

jurisdiction, or the commodity intermediary's jurisdiction, as 4501
applicable, remains perfected until the earlier of: 4502
(1) The time the security interest would have become 4503
unperfected under the law of that jurisdiction; or 4504
(2) The expiration of four (4) months after a change of 4505
the applicable jurisdiction to another jurisdiction. 4506
(g) If a security interest described in subsection (f) 4507
becomes perfected under the law of the other jurisdiction before 4508
the earlier of the time or the end of the period described in that 4509
subsection, it remains perfected thereafter. If the security 4510
interest does not become perfected under the law of the other 4511
jurisdiction before the earlier of that time or the end of that 4512
period, it becomes unperfected and is deemed never to have been 4513
perfected as against a purchaser of the collateral for value. 4514
(h) The following rules apply to collateral to which a 4515
security interest attaches within four (4) months after the debtor 4516
changes its location to another jurisdiction: 4517
(1) A financing statement filed before the change 4518
pursuant to the law of the jurisdiction designated in Section 4519
75-9-301(1) or 75-9-305(c) is effective to perfect a security 4520
interest in the collateral if the financing statement would have 4521
been effective to perfect a security interest in the collateral if 4522
the debtor had not changed its location. 4523
(2) If a security interest that is perfected by a 4524
financing statement that is effective under paragraph (1) becomes 4525
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perfected under the law of the other jurisdiction before the 4526
earlier of the time the financing statement would have become 4527
ineffective under the law of the jurisdiction designated in 4528
Section 75-9-301(1) or 75-9-305(c) or the expiration of the 4529
four-month period, it remains perfected thereafter. If the 4530
security interest does not become perfected under the law of the 4531
other jurisdiction before the earlier time or event, it becomes 4532
unperfected and is deemed never to have been perfected as against 4533
a purchaser of the collateral for value. 4534
(i) If a financing statement naming an original debtor is 4535
filed pursuant to the law of the jurisdiction designated in 4536
Section 75-9-301(1) or 75-9-305(c) and the new debtor is located 4537
in another jurisdiction, the following rules apply: 4538
(1) The financing statement is effective to perfect a 4539
security interest in collateral acquired by the new debtor before, 4540
and within four (4) months after, the new debtor becomes bound 4541
under Section 75-9-203(d), if the financing statement would have 4542
been effective to perfect a security interest in the collateral 4543
had the collateral been acquired by the original debtor. 4544
(2) A security interest perfected by the financing 4545
statement and which becomes perfected under the law of the other 4546
jurisdiction before the earlier of the time the financing 4547
statement would have become ineffective under the law of the 4548
jurisdiction designated in Section 75-9-301(1) or 75-9-305(c) or 4549
the expiration of the four-month period remains perfected 4550
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thereafter. A security interest that is perfected by the 4551
financing statement but which does not become perfected under the 4552
law of the other jurisdiction before the earlier time or event 4553
becomes unperfected and is deemed never to have been perfected as 4554
against a purchaser of the collateral for value. 4555
SECTION 92. Section 75-9-324, Mississippi Code of 1972, is 4556
amended as follows: 4557
75-9-324. (a) Except as otherwise provided in subsection 4558
(g), a perfected purchase-money security interest in goods other 4559
than inventory or livestock has priority over a conflicting 4560
security interest in the same goods, and, except as otherwise 4561
provided in Section 75-9-327, a perfected security interest in its 4562
identifiable proceeds also has priority, if the purchase-money 4563
security interest is perfected when the debtor receives possession 4564
of the collateral or within twenty (20) days thereafter. 4565
(b) Subject to subsection (c) and except as otherwise 4566
provided in subsection (g), a perfected purchase-money security 4567
interest in inventory has priority over a conflicting security 4568
interest in the same inventory, has priority over a conflicting 4569
security interest in chattel paper or an instrument constituting 4570
proceeds of the inventory and in proceeds of the chattel paper, if 4571
so provided in Section 75-9-330, and, except as otherwise provided 4572
in Section 75-9-327, also has priority in identifiable cash 4573
proceeds of the inventory to the extent the identifiable cash 4574
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proceeds are received on or before the delivery of the inventory 4575
to a buyer, if: 4576
(1) The purchase-money security interest is perfected 4577
when the debtor receives possession of the inventory; 4578
(2) The purchase-money secured party sends * * * a 4579
signed notification to the holder of the conflicting security 4580
interest; 4581
(3) The holder of the conflicting security interest 4582
receives the notification within five (5) years before the debtor 4583
receives possession of the inventory; and 4584
(4) The notification states that the person sending the 4585
notification has or expects to acquire a purchase-money security 4586
interest in inventory of the debtor and describes the inventory. 4587
(c) Subsections (b)(2) through (4) apply only if the holder 4588
of the conflicting security interest had filed a financing 4589
statement covering the same types of inventory: 4590
(1) If the purchase-money security interest is 4591
perfected by filing, before the date of the filing; or 4592
(2) If the purchase-money security interest is 4593
temporarily perfected without filing or possession under Section 4594
75-9-312(f), before the beginning of the twenty-day period 4595
thereunder. 4596
(d) Subject to subsection (e) and except as otherwise 4597
provided in subsection (g), a perfected purchase-money security 4598
interest in livestock that are farm products has priority over a 4599
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conflicting security interest in the same livestock, and, except 4600
as otherwise provided in Section 75-9-327, a perfected security 4601
interest in their identifiable proceeds and identifiable products 4602
in their unmanufactured states also has priority, if: 4603
(1) The purchase-money security interest is perfected 4604
when the debtor receives possession of the livestock; 4605
(2) The purchase-money secured party sends * * * a 4606
signed notification to the holder of the conflicting security 4607
interest; 4608
(3) The holder of the conflicting security interest 4609
receives the notification within six (6) months before the debtor 4610
receives possession of the livestock; and 4611
(4) The notification states that the person sending the 4612
notification has or expects to acquire a purchase-money security 4613
interest in livestock of the debtor and describes the livestock. 4614
(e) Subsections (d)(2) through (4) apply only if the holder 4615
of the conflicting security interest had filed a financing 4616
statement covering the same types of livestock: 4617
(1) If the purchase-money security interest is 4618
perfected by filing, before the date of the filing; or 4619
(2) If the purchase-money security interest is 4620
temporarily perfected without filing or possession under Section 4621
75-9-312(f), before the beginning of the twenty-day period 4622
thereunder. 4623
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(f) Except as otherwise provided in subsection (g), a 4624
perfected purchase-money security interest in software has 4625
priority over a conflicting security interest in the same 4626
collateral, and, except as otherwise provided in Section 75-9-327, 4627
a perfected security interest in its identifiable proceeds also 4628
has priority, to the extent that the purchase-money security 4629
interest in the goods in which the software was acquired for use 4630
has priority in the goods and proceeds of the goods under this 4631
section. 4632
(g) If more than one (1) security interest qualifies for 4633
priority in the same collateral under subsection (a), (b), (d), or 4634
(f): 4635
(1) A security interest securing an obligation incurred 4636
as all or part of the price of the collateral has priority over a 4637
security interest securing an obligation incurred for value given 4638
to enable the debtor to acquire rights in or the use of 4639
collateral; and 4640
(2) In all other cases, Section 75-9-322(a) applies to 4641
the qualifying security interests. 4642
SECTION 93. Section 75-9-331, Mississippi Code of 1972, is 4643
amended as follows: 4644
75-9-331. Priority of Rights of Purchasers of Controllable 4645
Accounts, Controllable Electronic Records, Controllable Payment 4646
Intangibles, Instruments, Documents, and Securities Under Other 4647
Articles; Priority of Interests in Financial Assets and Security 4648
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Entitlements and Protection Against Assertion of Claim Under 4649
Articles 8 and 12. (a) This article does not limit the rights of 4650
a holder in due course of a negotiable instrument, a holder to 4651
which a negotiable document of title has been duly 4652
negotiated, * * * a protected purchaser of a security, or a 4653
qualifying purchaser of a controllable account, controllable 4654
electronic record, or controllable payment intangible. These 4655
holders or purchasers take priority over an earlier security 4656
interest, even if perfected, to the extent provided in Articles 3, 4657
7, * * * 8, and 12. 4658
(b) This article does not limit the rights of or impose 4659
liability on a person to the extent that the person is protected 4660
against the assertion of a claim under Article 8 or 12. 4661
(c) Filing under this article does not constitute notice of 4662
a claim or defense to the holders, or purchasers, or persons 4663
described in subsections (a) and (b). 4664
SECTION 94. Section 75-9-334, Mississippi Code of 1972, is 4665
amended as follows: 4666
75-9-334. (a) A security interest under this article may be 4667
created in goods that are fixtures or may continue in goods that 4668
become fixtures. A security interest does not exist under this 4669
article in ordinary building materials incorporated into an 4670
improvement on land. 4671
(b) This article does not prevent creation of an encumbrance 4672
upon fixtures under real property law. 4673
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(c) In cases not governed by subsections (d) through (h), a 4674
security interest in fixtures is subordinate to a conflicting 4675
interest of an encumbrancer or owner of the related real property 4676
other than the debtor. 4677
(d) Except as otherwise provided in subsection (h), a 4678
perfected security interest in fixtures has priority over a 4679
conflicting interest of an encumbrancer or owner of the real 4680
property if the debtor has an interest of record in or is in 4681
possession of the real property and: 4682
(1) The security interest is a purchase-money security 4683
interest; 4684
(2) The interest of the encumbrancer or owner arises 4685
before the goods become fixtures; and 4686
(3) The security interest is perfected by a fixture 4687
filing before the goods become fixtures or within twenty (20) days 4688
thereafter. 4689
(e) A perfected security interest in fixtures has priority 4690
over a conflicting interest of an encumbrancer or owner of the 4691
real property if: 4692
(1) The debtor has an interest of record in the real 4693
property or is in possession of the real property and the security 4694
interest: 4695
(A) Is perfected by a fixture filing before the 4696
interest of the encumbrancer or owner is of record; and 4697
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(B) Has priority over any conflicting interest of 4698
a predecessor in title of the encumbrancer or owner; 4699
(2) Before the goods become fixtures, the security 4700
interest is perfected by any method permitted by this article and 4701
the fixtures are readily removable: 4702
(A) Factory or office machines; 4703
(B) Equipment that is not primarily used or leased 4704
for use in the operation of the real property; or 4705
(C) Replacements of domestic appliances that are 4706
consumer goods; 4707
(3) The conflicting interest is a lien on the real 4708
property obtained by legal or equitable proceedings after the 4709
security interest was perfected by any method permitted by this 4710
article; or 4711
(4) The security interest is: 4712
(A) Created in a manufactured home in a 4713
manufactured-home transaction; and 4714
(B) Perfected pursuant to a statute described in 4715
Section 75-9-311(a)(2). 4716
(f) A security interest in fixtures, whether or not 4717
perfected, has priority over a conflicting interest of an 4718
encumbrancer or owner of the real property if: 4719
(1) The encumbrancer or owner has, in * * * a signed 4720
record, consented to the security interest or disclaimed an 4721
interest in the goods as fixtures; or 4722
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(2) The debtor has a right to remove the goods as 4723
against the encumbrancer or owner. 4724
(g) The priority of the security interest under paragraph 4725
(f)(2) continues for a reasonable time if the debtor's right to 4726
remove the goods as against the encumbrancer or owner terminates. 4727
(h) A mortgage is a construction mortgage to the extent that 4728
it secures an obligation incurred for the construction of an 4729
improvement on land, including the acquisition cost of the land, 4730
if a recorded record of the mortgage so indicates. Except as 4731
otherwise provided in subsections (e) and (f), a security interest 4732
in fixtures is subordinate to a construction mortgage if a record 4733
of the mortgage is recorded before the goods become fixtures and 4734
the goods become fixtures before the completion of the 4735
construction. A mortgage has this priority to the same extent as 4736
a construction mortgage to the extent that it is given to 4737
refinance a construction mortgage. 4738
(i) A perfected security interest in crops growing on real 4739
property has priority over a conflicting interest of an 4740
encumbrancer or owner of the real property if the debtor has an 4741
interest of record in or is in possession of the real property. 4742
SECTION 95. Section 75-9-341, Mississippi Code of 1972, is 4743
amended as follows: 4744
75-9-341. Except as otherwise provided in Section 4745
75-9-340(c), and unless the bank otherwise agrees in * * * a 4746
signed record, a bank's rights and duties with respect to a 4747
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deposit account maintained with the bank are not terminated, 4748
suspended, or modified by: 4749
(1) The creation, attachment, or perfection of a 4750
security interest in the deposit account; 4751
(2) The bank's knowledge of the security interest; or 4752
(3) The bank's receipt of instructions from the secured 4753
party. 4754
SECTION 96. Section 75-9-404, Mississippi Code of 1972, is 4755
amended as follows: 4756
75-9-404. (a) Unless an account debtor has made an 4757
enforceable agreement not to assert defenses or claims, and 4758
subject to subsections (b) through (e), the rights of an assignee 4759
are subject to: 4760
(1) All terms of the agreement between the account 4761
debtor and assignor and any defense or claim in recoupment arising 4762
from the transaction that gave rise to the contract; and 4763
(2) Any other defense or claim of the account debtor 4764
against the assignor which accrues before the account debtor 4765
receives a notification of the assignment * * * signed by the 4766
assignor or the assignee. 4767
(b) Subject to subsection (c) and except as otherwise 4768
provided in subsection (d), the claim of an account debtor against 4769
an assignor may be asserted against an assignee under subsection 4770
(a) only to reduce the amount the account debtor owes. 4771
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(c) This section is subject to law other than this article 4772
which establishes a different rule for an account debtor who is an 4773
individual and who incurred the obligation primarily for personal, 4774
family, or household purposes. 4775
(d) In a consumer transaction, if a record evidences the 4776
account debtor's obligation, law other than this article requires 4777
that the record include a statement to the effect that the account 4778
debtor's recovery against an assignee with respect to claims and 4779
defenses against the assignor may not exceed amounts paid by the 4780
account debtor under the record, and the record does not include 4781
such a statement, the extent to which a claim of an account debtor 4782
against the assignor may be asserted against an assignee is 4783
determined as if the record included such a statement. 4784
(e) This section does not apply to an assignment of a 4785
health-care-insurance receivable. 4786
SECTION 97. Section 75-9-509, Mississippi Code of 1972, is 4787
amended as follows: 4788
75-9-509. (a) A person may file an initial financing 4789
statement, amendment that adds collateral covered by a financing 4790
statement, or amendment that adds a debtor to a financing 4791
statement only if: 4792
(1) The debtor authorizes the filing in * * * a signed 4793
record or pursuant to subsection (b) or (c); or 4794
(2) The person holds an agricultural lien that has 4795
become effective at the time of filing and the financing statement 4796
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covers only collateral in which the person holds an agricultural 4797
lien. 4798
(b) By * * * signing or becoming bound as debtor by a 4799
security agreement, a debtor or new debtor authorizes the filing 4800
of an initial financing statement, and an amendment, covering: 4801
(1) The collateral described in the security agreement; 4802
and 4803
(2) Property that becomes collateral under Section 4804
75-9-315(a)(2), whether or not the security agreement expressly 4805
covers proceeds. 4806
(c) By acquiring collateral in which a security interest or 4807
agricultural lien continues under Section 75-9-315(a)(1), a debtor 4808
authorizes the filing of an initial financing statement, and an 4809
amendment, covering the collateral and property that becomes 4810
collateral under Section 75-9-315(a)(2). 4811
(d) A person may file an amendment other than an amendment 4812
that adds collateral covered by a financing statement or an 4813
amendment that adds a debtor to a financing statement only if: 4814
(1) The secured party of record authorizes the filing; 4815
or 4816
(2) The amendment is a termination statement for a 4817
financing statement as to which the secured party of record has 4818
failed to file or send a termination statement as required by 4819
Section 75-9-513(a) or (c), the debtor authorizes the filing, and 4820
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the termination statement indicates that the debtor authorized it 4821
to be filed. 4822
(e) If there is more than one (1) secured party of record 4823
for a financing statement, each secured party of record may 4824
authorize the filing of an amendment under subsection (d). 4825
SECTION 98. Section 75-9-513, Mississippi Code of 1972, is 4826
amended as follows: 4827
75-9-513. (a) A secured party shall cause the secured party 4828
of record for a financing statement to file a termination 4829
statement for the financing statement if the financing statement 4830
covers consumer goods and: 4831
(1) There is no obligation secured by the collateral 4832
covered by the financing statement and no commitment to make an 4833
advance, incur an obligation, or otherwise give value; or 4834
(2) The debtor did not authorize the filing of the 4835
initial financing statement. 4836
(b) To comply with subsection (a), a secured party shall 4837
cause the secured party of record to file the termination 4838
statement: 4839
(1) Within one (1) month after there is no obligation 4840
secured by the collateral covered by the financing statement and 4841
no commitment to make an advance, incur an obligation, or 4842
otherwise give value; or 4843
(2) If earlier, within twenty (20) days after the 4844
secured party receives * * * a signed demand from a debtor. 4845
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(c) In cases not governed by subsection (a), within twenty 4846
(20) days after a secured party receives * * * a signed demand 4847
from a debtor, the secured party shall cause the secured party of 4848
record for a financing statement to send to the debtor a 4849
termination statement for the financing statement or file the 4850
termination statement in the filing office if: 4851
(1) Except in the case of a financing statement 4852
covering accounts or chattel paper that has been sold or goods 4853
that are the subject of a consignment, there is no obligation 4854
secured by the collateral covered by the financing statement and 4855
no commitment to make an advance, incur an obligation, or 4856
otherwise give value; 4857
(2) The financing statement covers accounts or chattel 4858
paper that has been sold but as to which the account debtor or 4859
other person obligated has discharged its obligation; 4860
(3) The financing statement covers goods that were the 4861
subject of a consignment to the debtor but are not in the debtor's 4862
possession; or 4863
(4) The debtor did not authorize the filing of the 4864
initial financing statement. 4865
(d) Except as otherwise provided in Section 75-9-510, upon 4866
the filing of a termination statement with the filing office, the 4867
financing statement to which the termination statement relates 4868
ceases to be effective. Except as otherwise provided in Section 4869
75-9-510, for purposes of Sections 75-9-519(g), 75-9-522(a) and 4870
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75-9-523(c), the filing with the filing office of a termination 4871
statement relating to a financing statement that indicates that 4872
the debtor is a transmitting utility also causes the effectiveness 4873
of the financing statement to lapse. 4874
SECTION 99. Section 75-9-601, Mississippi Code of 1972, is 4875
amended as follows: 4876
75-9-601. (a) After default, a secured party has the rights 4877
provided in this part and, except as otherwise provided in Section 4878
75-9-602, those provided by agreement of the parties. A secured 4879
party: 4880
(1) May reduce a claim to judgment, foreclose, or 4881
otherwise enforce the claim, security interest, or agricultural 4882
lien by any available judicial procedure; and 4883
(2) If the collateral is documents, may proceed either 4884
as to the documents or as to the goods they cover. 4885
(b) A secured party in possession of collateral or control 4886
of collateral under Section 75-7-106, 75-9-104, 75-9-105, 4887
75-9-105A, 75-9-106 * * *, 75-9-107, or 75-9-107A has the rights 4888
and duties provided in Section 75-9-207. 4889
(c) The rights under subsections (a) and (b) are cumulative 4890
and may be exercised simultaneously. 4891
(d) Except as otherwise provided in subsection (g) and 4892
Section 75-9-605, after default, a debtor and an obligor have the 4893
rights provided in this part and by agreement of the parties. 4894
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(e) If a secured party has reduced its claim to judgment, 4895
the lien of any levy that may be made upon the collateral by 4896
virtue of an execution based upon the judgment relates back to the 4897
earliest of: 4898
(1) The date of perfection of the security interest or 4899
agricultural lien in the collateral; 4900
(2) The date of filing a financing statement covering 4901
the collateral; or 4902
(3) Any date specified in a statute under which the 4903
agricultural lien was created. 4904
(f) A sale pursuant to an execution is a foreclosure of the 4905
security interest or agricultural lien by judicial procedure 4906
within the meaning of this section. A secured party may purchase 4907
at the sale and thereafter hold the collateral free of any other 4908
requirements of this chapter. 4909
(g) Except as otherwise provided in Section 75-9-607(c), 4910
this part imposes no duties upon a secured party that is a 4911
consignor or is a buyer of accounts, chattel paper, payment 4912
intangibles, or promissory notes. 4913
SECTION 100. Section 75-9-608, Mississippi Code of 1972, is 4914
amended as follows: 4915
75-9-608. (a) If a security interest or agricultural lien 4916
secures payment or performance of an obligation, the following 4917
rules apply: 4918
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(1) A secured party shall apply or pay over for 4919
application the cash proceeds of collection or enforcement under 4920
Section 75-9-607 in the following order to: 4921
(A) The reasonable expenses of collection and 4922
enforcement and, to the extent provided for by agreement and not 4923
prohibited by law, reasonable attorney's fees and legal expenses 4924
incurred by the secured party; 4925
(B) The satisfaction of obligations secured by the 4926
security interest or agricultural lien under which the collection 4927
or enforcement is made; and 4928
(C) The satisfaction of obligations secured by any 4929
subordinate security interest in or other lien on the collateral 4930
subject to the security interest or agricultural lien under which 4931
the collection or enforcement is made if the secured party 4932
receives * * * a signed demand for proceeds before distribution of 4933
the proceeds is completed. 4934
(2) If requested by a secured party, a holder of a 4935
subordinate security interest or other lien shall furnish 4936
reasonable proof of the interest or lien within a reasonable time. 4937
Unless the holder complies, the secured party need not comply with 4938
the holder's demand under paragraph (1)(C). 4939
(3) A secured party need not apply or pay over for 4940
application noncash proceeds of collection and enforcement under 4941
Section 75-9-607 unless the failure to do so would be commercially 4942
unreasonable. A secured party that applies or pays over for 4943
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application noncash proceeds shall do so in a commercially 4944
reasonable manner. 4945
(4) A secured party shall account to and pay a debtor 4946
for any surplus, and the obligor is liable for any deficiency. 4947
(b) If the underlying transaction is a sale of accounts, 4948
chattel paper, payment intangibles, or promissory notes, the 4949
debtor is not entitled to any surplus, and the obligor is not 4950
liable for any deficiency. 4951
SECTION 101. Section 75-9-611, Mississippi Code of 1972, is 4952
amended as follows: 4953
75-9-611. (a) In this section, "notification date" means 4954
the earlier of the date on which: 4955
(1) A secured party sends to the debtor and any 4956
secondary obligor * * * a signed notification of disposition; or 4957
(2) The debtor and any secondary obligor waive the 4958
right to notification. 4959
(b) Except as otherwise provided in subsection (d), a 4960
secured party that disposes of collateral under Section 75-9-610 4961
shall send to the persons specified in subsection (c) a 4962
reasonable * * * signed notification of disposition. 4963
(c) To comply with subsection (b), the secured party shall 4964
send * * * a signed notification of disposition to: 4965
(1) The debtor; 4966
(2) Any secondary obligor; and 4967
(3) If the collateral is other than consumer goods: 4968
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(A) Any other person from which the secured party 4969
has received, before the notification date, * * * a signed 4970
notification of a claim of an interest in the collateral; 4971
(B) Any other secured party or lienholder that, 4972
ten (10) days before the notification date, held a security 4973
interest in or other lien on the collateral perfected by the 4974
filing of a financing statement that: 4975
(i) Identified the collateral; 4976
(ii) Was indexed under the debtor's name as 4977
of that date; and 4978
(iii) Was filed in the office in which to 4979
file a financing statement against the debtor covering the 4980
collateral as of that date; and 4981
(C) Any other secured party that, ten (10) days 4982
before the notification date, held a security interest in the 4983
collateral perfected by compliance with a statute, regulation, or 4984
treaty described in Section 75-9-311(a). 4985
(d) Subsection (b) does not apply if the collateral is 4986
perishable or threatens to decline speedily in value or is of a 4987
type customarily sold on a recognized market. 4988
(e) A secured party complies with the requirement for 4989
notification prescribed by subsection (c)(3)(B) if: 4990
(1) Not later than twenty (20) days or earlier than 4991
thirty (30) days before the notification date, the secured party 4992
requests, in a commercially reasonable manner, information 4993
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concerning financing statements indexed under the debtor's name in 4994
the office indicated in subsection (c)(3)(B); and 4995
(2) Before the notification date, the secured party: 4996
(A) Did not receive a response to the request for 4997
information; or 4998
(B) Received a response to the request for 4999
information and sent * * * a signed notification of disposition to 5000
each secured party or other lienholder named in that response 5001
whose financing statement covered the collateral. 5002
SECTION 102. Section 75-9-615, Mississippi Code of 1972, is 5003
amended as follows: 5004
75-9-615. (a) A secured party shall apply or pay over for 5005
application the cash proceeds of disposition under Section 5006
75-9-610 in the following order to: 5007
(1) The reasonable expenses of retaking, holding, 5008
preparing for disposition, processing, and disposing, and, to the 5009
extent provided for by agreement and not prohibited by law, 5010
reasonable attorney's fees and legal expenses incurred by the 5011
secured party; 5012
(2) The satisfaction of obligations secured by the 5013
security interest or agricultural lien under which the disposition 5014
is made; 5015
(3) The satisfaction of obligations secured by any 5016
subordinate security interest in or other subordinate lien on the 5017
collateral if: 5018
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(A) The secured party receives from the holder of 5019
the subordinate security interest or other lien * * * a signed 5020
demand for proceeds before distribution of the proceeds is 5021
completed; and 5022
(B) In a case in which a consignor has an interest 5023
in the collateral, the subordinate security interest or other lien 5024
is senior to the interest of the consignor; and 5025
(4) A secured party that is a consignor of the 5026
collateral if the secured party receives from the consignor * * * 5027
a signed demand for proceeds before distribution of the proceeds 5028
is completed. 5029
(b) If requested by a secured party, a holder of a 5030
subordinate security interest or other lien shall furnish 5031
reasonable proof of the interest or lien within a reasonable time. 5032
Unless the holder does so, the secured party need not comply with 5033
the holder's demand under subsection (a)(3). 5034
(c) A secured party need not apply or pay over for 5035
application noncash proceeds of disposition under Section 75-9-610 5036
unless the failure to do so would be commercially unreasonable. A 5037
secured party that applies or pays over for application noncash 5038
proceeds shall do so in a commercially reasonable manner. 5039
(d) If the security interest under which a disposition is 5040
made secures payment or performance of an obligation, after making 5041
the payments and applications required by subsection (a) and 5042
permitted by subsection (c): 5043
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(1) Unless subsection (a)(4) requires the secured party 5044
to apply or pay over cash proceeds to a consignor, the secured 5045
party shall account to and pay a debtor for any surplus; and 5046
(2) The obligor is liable for any deficiency. 5047
(e) If the underlying transaction is a sale of accounts, 5048
chattel paper, payment intangibles, or promissory notes: 5049
(1) The debtor is not entitled to any surplus; and 5050
(2) The obligor is not liable for any deficiency. 5051
(f) The surplus or deficiency following a disposition is 5052
calculated based on the amount of proceeds that would have been 5053
realized in a disposition complying with this part to a transferee 5054
other than the secured party, a person related to the secured 5055
party, or a secondary obligor if: 5056
(1) The transferee in the disposition is the secured 5057
party, a person related to the secured party, or a secondary 5058
obligor; and 5059
(2) The amount of proceeds of the disposition is 5060
significantly below the range of proceeds that a complying 5061
disposition to a person other than the secured party, a person 5062
related to the secured party, or a secondary obligor would have 5063
brought. 5064
(g) A secured party that receives cash proceeds of a 5065
disposition in good faith and without knowledge that the receipt 5066
violates the rights of the holder of a security interest or other 5067
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lien that is not subordinate to the security interest or 5068
agricultural lien under which the disposition is made: 5069
(1) Takes the cash proceeds free of the security 5070
interest or other lien; 5071
(2) Is not obligated to apply the proceeds of the 5072
disposition to the satisfaction of obligations secured by the 5073
security interest or other lien; and 5074
(3) Is not obligated to account to or pay the holder of 5075
the security interest or other lien for any surplus. 5076
SECTION 103. Section 75-9-616, Mississippi Code of 1972, is 5077
amended as follows: 5078
75-9-616. (a) In this section: 5079
(1) "Explanation" means a * * * record that: 5080
(A) States the amount of the surplus or 5081
deficiency; 5082
(B) Provides an explanation in accordance with 5083
subsection (c) of how the secured party calculated the surplus or 5084
deficiency; 5085
(C) States, if applicable, that future debits, 5086
credits, charges, including additional credit service charges or 5087
interest, rebates, and expenses may affect the amount of the 5088
surplus or deficiency; and 5089
(D) Provides a telephone number or mailing address 5090
from which additional information concerning the transaction is 5091
available. 5092
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(2) "Request" means a record: 5093
(A) * * * Signed by a debtor or consumer obligor; 5094
(B) Requesting that the recipient provide an 5095
explanation; and 5096
(C) Sent after disposition of the collateral under 5097
Section 75-9-610. 5098
(b) In a consumer-goods transaction in which the debtor is 5099
entitled to a surplus or a consumer obligor is liable for a 5100
deficiency under Section 75-9-615, the secured party shall: 5101
(1) Send an explanation to the debtor or consumer 5102
obligor, as applicable, after the disposition and: 5103
(A) Before or when the secured party accounts to 5104
the debtor and pays any surplus or first makes * * * demand in a 5105
record on the consumer obligor after the disposition for payment 5106
of the deficiency; and 5107
(B) Within fourteen (14) days after receipt of a 5108
request; or 5109
(2) In the case of a consumer obligor who is liable for 5110
a deficiency, within fourteen (14) days after receipt of a 5111
request, send to the consumer obligor a record waiving the secured 5112
party's right to a deficiency. 5113
(c) To comply with subsection (a)(1)(B), * * * an 5114
explanation must provide the following information in the 5115
following order: 5116
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(1) The aggregate amount of obligations secured by the 5117
security interest under which the disposition was made, and, if 5118
the amount reflects a rebate of unearned interest or credit 5119
service charge, an indication of that fact, calculated as of a 5120
specified date: 5121
(A) If the secured party takes or receives 5122
possession of the collateral after default, not more than 5123
thirty-five (35) days before the secured party takes or receives 5124
possession; or 5125
(B) If the secured party takes or receives 5126
possession of the collateral before default or does not take 5127
possession of the collateral, not more than thirty-five (35) days 5128
before the disposition; 5129
(2) The amount of proceeds of the disposition; 5130
(3) The aggregate amount of the obligations after 5131
deducting the amount of proceeds; 5132
(4) The amount, in the aggregate or by type, and types 5133
of expenses, including expenses of retaking, holding, preparing 5134
for disposition, processing, and disposing of the collateral, and 5135
attorney's fees secured by the collateral which are known to the 5136
secured party and relate to the current disposition; 5137
(5) The amount, in the aggregate or by type, and types 5138
of credits, including rebates of interest or credit service 5139
charges, to which the obligor is known to be entitled and which 5140
are not reflected in the amount in paragraph (1); and 5141
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(6) The amount of the surplus or deficiency. 5142
(d) A particular phrasing of the explanation is not 5143
required. An explanation complying substantially with the 5144
requirements of subsection (a) is sufficient, even if it includes 5145
minor errors that are not seriously misleading. 5146
(e) A debtor or consumer obligor is entitled without charge 5147
to one (1) response to a request under this section during any 5148
six-month period in which the secured party did not send to the 5149
debtor or consumer obligor an explanation pursuant to subsection 5150
(b)(1). The secured party may require payment of a charge not 5151
exceeding Twenty-five Dollars ($25.00) for each additional 5152
response. 5153
SECTION 104. Section 75-9-619, Mississippi Code of 1972, is 5154
amended as follows: 5155
75-9-619. (a) In this section, "transfer statement" means a 5156
record * * * signed by a secured party stating: 5157
(1) That the debtor has defaulted in connection with an 5158
obligation secured by specified collateral; 5159
(2) That the secured party has exercised its 5160
post-default remedies with respect to the collateral; 5161
(3) That, by reason of the exercise, a transferee has 5162
acquired the rights of the debtor in the collateral; and 5163
(4) The name and mailing address of the secured party, 5164
debtor, and transferee. 5165
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(b) A transfer statement entitles the transferee to the 5166
transfer of record of all rights of the debtor in the collateral 5167
specified in the statement in any official filing, recording, 5168
registration, or certificate-of-title system covering the 5169
collateral. If a transfer statement is presented with the 5170
applicable fee and request form to the official or office 5171
responsible for maintaining the system, the official or office 5172
shall: 5173
(1) Accept the transfer statement; 5174
(2) Promptly amend its records to reflect the transfer; 5175
and 5176
(3) If applicable, issue a new appropriate certificate 5177
of title in the name of the transferee. 5178
(c) A transfer of the record or legal title to collateral to 5179
a secured party under subsection (b) or otherwise is not of itself 5180
a disposition of collateral under this article and does not of 5181
itself relieve the secured party of its duties under this article. 5182
SECTION 105. Section 75-9-620, Mississippi Code of 1972, is 5183
amended as follows: 5184
75-9-620. (a) Except as otherwise provided in subsection 5185
(g), a secured party may accept collateral in full or partial 5186
satisfaction of the obligation it secures only if: 5187
(1) The debtor consents to the acceptance under 5188
subsection (c); 5189
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(2) The secured party does not receive, within the time 5190
set forth in subsection (d), a notification of objection to the 5191
proposal * * * signed by: 5192
(A) A person to which the secured party was 5193
required to send a proposal under Section 75-9-621; or 5194
(B) Any other person, other than the debtor, 5195
holding an interest in the collateral subordinate to the security 5196
interest that is the subject of the proposal; 5197
(3) If the collateral is consumer goods, the collateral 5198
is not in the possession of the debtor when the debtor consents to 5199
the acceptance; and 5200
(4) Subsection (e) does not require the secured party 5201
to dispose of the collateral or the debtor waives the requirement 5202
pursuant to Section 75-9-624. 5203
(b) A purported or apparent acceptance of collateral under 5204
this section is ineffective unless: 5205
(1) The secured party consents to the acceptance 5206
in * * * a signed record or sends a proposal to the debtor; and 5207
(2) The conditions of subsection (a) are met. 5208
(c) For purposes of this section: 5209
(1) A debtor consents to an acceptance of collateral in 5210
partial satisfaction of the obligation it secures only if the 5211
debtor agrees to the terms of the acceptance in a record * * * 5212
signed after default; and 5213
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(2) A debtor consents to an acceptance of collateral in 5214
full satisfaction of the obligation it secures only if the debtor 5215
agrees to the terms of the acceptance in a record * * * signed 5216
after default or the secured party: 5217
(A) Sends to the debtor after default a proposal 5218
that is unconditional or subject only to a condition that 5219
collateral not in the possession of the secured party be preserved 5220
or maintained; 5221
(B) In the proposal, proposes to accept collateral 5222
in full satisfaction of the obligation it secures; and 5223
(C) Does not receive a notification of 5224
objection * * * signed by the debtor within twenty (20) days after 5225
the proposal is sent. 5226
(d) To be effective under subsection (a)(2), a notification 5227
of objection must be received by the secured party: 5228
(1) In the case of a person to which the proposal was 5229
sent pursuant to Section 75-9-621, within twenty (20) days after 5230
notification was sent to that person; and 5231
(2) In other cases: 5232
(A) Within twenty (20) days after the last 5233
notification was sent pursuant to Section 75-9-621; or 5234
(B) If a notification was not sent, before the 5235
debtor consents to the acceptance under subsection (c). 5236
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(e) A secured party that has taken possession of collateral 5237
shall dispose of the collateral pursuant to Section 75-9-610 5238
within the time specified in subsection (f) if: 5239
(1) Sixty percent (60%) of the cash price has been paid 5240
in the case of a purchase-money security interest in consumer 5241
goods; or 5242
(2) Sixty percent (60%) of the principal amount of the 5243
obligation secured has been paid in the case of a 5244
nonpurchase-money security interest in consumer goods. 5245
(f) To comply with subsection (e), the secured party shall 5246
dispose of the collateral: 5247
(1) Within ninety (90) days after taking possession; or 5248
(2) Within any longer period to which the debtor and 5249
all secondary obligors have agreed in an agreement to that effect 5250
entered into and * * * signed after default. 5251
(g) In a consumer transaction, a secured party may not 5252
accept collateral in partial satisfaction of the obligation it 5253
secures. 5254
SECTION 106. Section 75-9-621, Mississippi Code of 1972, is 5255
amended as follows: 5256
75-9-621. (a) A secured party that desires to accept 5257
collateral in full or partial satisfaction of the obligation it 5258
secures shall send its proposal to: 5259
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(1) Any person from which the secured party has 5260
received, before the debtor consented to the acceptance, * * * a 5261
signed notification of a claim of an interest in the collateral; 5262
(2) Any other secured party or lienholder that, ten 5263
(10) days before the debtor consented to the acceptance, held a 5264
security interest in or other lien on the collateral perfected by 5265
the filing of a financing statement that: 5266
(A) Identified the collateral; 5267
(B) Was indexed under the debtor's name as of that 5268
date; and 5269
(C) Was filed in the office or offices in which to 5270
file a financing statement against the debtor covering the 5271
collateral as of that date; and 5272
(3) Any other secured party that, ten (10) days before 5273
the debtor consented to the acceptance, held a security interest 5274
in the collateral perfected by compliance with a statute, 5275
regulation, or treaty described in Section 75-9-311(a). 5276
(b) A secured party that desires to accept collateral in 5277
partial satisfaction of the obligation it secures shall send its 5278
proposal to any secondary obligor in addition to the persons 5279
described in subsection (a). 5280
SECTION 107. Section 75-9-624, Mississippi Code of 1972, is 5281
amended as follows: 5282
75-9-624. (a) A debtor or secondary obligor may waive the 5283
right to notification of disposition of collateral under Section 5284
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ST: Uniform Commercial Code; revise.
75-9-611 only by an agreement to that effect entered into 5285
and * * * signed after default. 5286
(b) A debtor may waive the right to require disposition of 5287
collateral under Section 75-9-620(e) only by an agreement to that 5288
effect entered into and * * * signed after default. 5289
(c) Except in a consumer-goods transaction, a debtor or 5290
secondary obligor may waive the right to redeem collateral under 5291
Section 75-9-623 only by an agreement to that effect entered into 5292
and * * * signed after default. 5293
SECTION 108. Sections 79-13-505 and 79-29-711, Mississippi 5294
Code of 1972, which are the provisions of law that affect the 5295
enforceability of limitations on assignments of partnership 5296
interests and financial interests in domestic limited liability 5297
companies, are repealed. 5298
SECTION 109. (1) Sections 44 through 50 shall be codified 5299
as a new Article 12 within Chapter 12 of Title 75. 5300
(2) Sections 51 through 59 shall be codified as a new 5301
Article 12A within Chapter 12 of Title 75. 5302
SECTION 110. Sections 75-12-1 through 75-12-39, which 5303
constitute the Uniform Electronic Transaction Act, shall be placed 5304
within a new Article 1 within Chapter 12 of Title 75. The 5305
references to "this chapter" within Sections 75-12-1 through 5306
75-12-39 shall be revised to "this article" by the code publisher. 5307
SECTION 111. This act shall take effect and be in force from 5308
and after July 1, 2026. 5309