Scope of Article 9: Transactions

This page includes a writing template for analyzing this topic and usage notes to guide its application. In general, the template is designed to serve as a starting point for your analysis. It should be adapted to fit the specific facts of your case and your professor’s preferences.

Writing Template

Note: Article 9 applies to (1) transactions that create or purport to create a security interest in (2) personal property or fixtures (i.e., collateral) to secure payment or performance of an obligation.

Issue

I: The issue is whether transactions creates or purports to create a security interest.

Analysis

R: Transactions that create or purport to create a security interest include (1) promissory notes (i.e., loans), and (2) sales of accounts, chattel paper, and payment intangibles, and promissory notes. Transactions that may qualify include to (3) lease-purchase agreements, (4) agricultural liens, and (5) consignments.

A: Here, [apply rule to facts to identify the number and types of transactions].

Consignments

R: A consignment occurs when a consignor (the owner of goods) delivers goods to a consignee (a merchant) for the purpose of sale. Under Article 9, a consignment is subject to its provisions if (1) the goods are delivered to a consignee who regularly deals in such goods, (2) the consignee is not generally known by its creditors to sell goods on consignment, (3) the value of the goods is at least $1,000, and (4) the goods are be intended for commercial, not consumer, purposes.

A: Here, [apply rules to facts].

C: Therefore, the transaction involving [good at issue] [was/was not] a consignment, and [is/is not] subject to Article 9.

Agricultural Liens

R: Article 9 applies to agricultural liens when the lien is created by statute to secure payment for goods, services, or financing related to agricultural activities, such as the production of crops or livestock.

A: Here, [apply rule to facts].

C: Therefore, Article 9 [applies/does not apply] to the agricultural lien.

Lease Purchase Agreements

R: Article 9 applies to lease-purchase agreements when the economic reality of the agreement indicates that it is a disguised secured transaction. Specifically, Article 9 will govern if (1) the lessee is obligated to purchase the goods for nominal or no additional consideration at the end of the lease term, (2) the lease payments effectively pay off the purchase price of the goods, and (3) the lessee has no meaningful option to return the goods, implying that the lessee is essentially acquiring ownership through the lease.

A: Here, [apply rule to facts].

C: Therefore, Article 9 [applies/does not apply] to the lease purchase agreement.

Conclusion

C: Therefore, transactions [purports/does not purport] to create a security interest.

Note: Explicit Statement of the Excluded Transaction Types

Thus, Article 9 does not apply to (1) transactions governed by other federal, state, or foreign laws, (2) most transactions involving interests in or liens on land (e.g., mortgages), and (3) assignments of claims for wages. It also does not apply to (4) assignments of tort claims, (5) assignments of deposit accounts in consumer transactions or (6) state statutory or common law liens given for services or materials (e.g., mechanics’ liens) unless they concern priorities or personal property.

Notes

JurisJotter templates synthesize legal principles into a practical format that supports the development of well-structured, point-rich analyses in a timed exam.

The template features (1) headers identifying the overall issue, analysis, and conclusion. If the analysis begins with an umbrella rule that identifies elements, factors, or steps of the analysis, it will be followed by subheaders that signpost the analysis of each component.

The template also features (2) IRAC labels at the beginning of each paragraph. These headers and labels are included for educational purposes, offering guidance on structuring your analysis. Your usage of the headers is optional but can be helpful to readers. We advise against including the IRAC labels in submitted work.

The templates serve as a general guide for writing and should be adapted to align with (1) your specific factual circumstances and (2) your professor’s preferences, particularly if your professor provides explicit formulations of rules or analyses. For example, you may add or subtract an element or modify its language. Regardless of whether your professor provides explicit formulations, (3) this template will assist you in crafting point-rich analyses.

Please note that these templates are writing aids and not finished products. They are efficiently designed for exam essays to demonstrate conceptual understanding; thus, they are not comprehensive outlines with historical context or dicta.

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