Chapter 336 — Title

336.0A-101 Title This section gives the official name to the transitional provisions that help bridge the gap between old and new UCC … 336.0A-102 Definitions This section defines key terms used in the transitional provisions, including 'adjustment date' (August 1, 2025), … 336.0A-201 Saving Clause Transactions that were valid before August 1, 2024, stay valid after the new UCC amendments take effect. Existing rights … 336.0A-301 Saving Clause The new UCC amendments (Articles 9 and 12) generally apply to transactions, liens, and property interests even if they … 336.0A-302 Security Interest Perfected Before Effective Date A security interest that was properly perfected before August 1, 2024, stays perfected under the new law if the new … 336.0A-303 Security Interest Unperfected Before Effective Date A security interest that was valid but not perfected before August 1, 2024, stays enforceable until the adjustment date … 336.0A-304 Effectiveness of Actions Taken Before Effective Date Steps taken before August 1, 2024, to perfect or enforce a security interest can still count under the new law. A … 336.0A-305 Priority The new UCC rules determine priority of competing claims to collateral, but priorities already established before August … 336.0A-306 Priority of Claims When Priority Rules of Article 9 Do Not Apply When Article 9 priority rules do not apply, Article 12 determines priority for claims to controllable electronic records … 336.1-101 Short Titles This section gives the official names to Minnesota's Uniform Commercial Code (Chapter 336) and to Article 1, the General … 336.1-102 Scope of Article Article 1's general rules apply to all transactions covered by any other article of the UCC. 336.1-103 Construction of Uniform Commercial Code to Promote Its Purposes and Policies; Applicability of Supplemental Principles of Law The UCC should be read broadly to simplify and modernize business law, make it uniform across states, and allow business … 336.1-104 Construction Against Implied Repeal Later laws should not be read as silently canceling parts of the UCC if there is any reasonable way to read them … 336.1-105 Severability If any part of the UCC is found unconstitutional or invalid, the rest of the code remains in effect. 336.1-106 Use of Singular and Plural; Gender In the UCC, singular words include the plural and vice versa, and words of any gender include all genders. 336.1-107 Section Captions The section headings in the UCC are legally part of the code, not just labels. 336.1-108 Relation to Electronic Signatures in Global and National Commerce Act Minnesota's UCC overrides parts of the federal E-SIGN Act (electronic signatures law) but preserves consumer protections … 336.1-109 This section has been repealed or relocated. 336.1-110 Uniform Commercial Code Account This section creates a state treasury account funded by secretary of state filing fees to pay for maintaining the UCC … 336.1-201 General Definitions This section defines over 40 key terms used throughout the entire UCC, including 'agreement,' 'buyer in ordinary … 336.1-202 Notice; Knowledge This section defines when a person has 'notice' or 'knowledge' of a fact under the UCC. A person has notice if they … 336.1-203 Lease Distinguished From Security Interest This section sets out how to tell whether a transaction labeled as a 'lease' is really a secured loan in disguise. If … 336.1-204 Value A person gives 'value' for rights under the UCC by extending credit, taking them as security for a debt, accepting … 336.1-205 Reasonable Time; Seasonableness What counts as a 'reasonable time' to take action under the UCC depends on the circumstances. Acting 'seasonably' means … 336.1-206 Presumptions When the UCC creates a presumption about a fact, that fact must be accepted as true unless the other side presents … 336.1-207 This section has been repealed or relocated. 336.1-208 This section has been repealed or relocated. 336.1-209 This section has been repealed or relocated. 336.1-301 Territorial Applicability; Parties' Power to Choose Applicable Law Parties to a commercial transaction can choose which state's UCC governs their deal, as long as the transaction has a … 336.1-302 Variation by Agreement Parties can generally change UCC rules by agreement, except they cannot waive the duties of good faith, diligence, … 336.1-303 Course of Performance, Course of Dealing, and Usage of Trade How the parties have actually performed a contract, their history of past dealings, and customs in their industry all … 336.1-304 Obligation of Good Faith Every contract and duty under the UCC carries a duty of good faith -- meaning honesty and fair dealing. 336.1-305 Remedies to Be Liberally Administered UCC remedies should be applied generously so the injured party ends up in the same position as if the contract had been … 336.1-306 Waiver or Renunciation of Claim or Right After Breach A party can give up a claim or right arising from a breach of contract without needing to receive anything in return, as … 336.1-307 Prima Facie Evidence by Third-party Documents A bill of lading, insurance certificate, inspector's report, or similar third-party document that appears genuine is … 336.1-308 Performance or Acceptance Under Reservation of Rights If you perform or accept performance 'under protest' or 'without prejudice,' you do not give up your right to complain … 336.1-309 Option to Accelerate at Will A contract clause letting a lender demand early payment 'at will' or when it feels 'insecure' can only be used in good … 336.1-310 Subordinated Obligations A creditor can agree that its right to payment is subordinate to (ranked below) another creditor's right. This … 336.10-101 This section has been repealed or relocated. 336.10-102 Laws Repealed; Provision for Transition This section lists specific Minnesota statutes that were repealed when the UCC was adopted, with provisions to handle … 336.10-103 General Repealer All laws inconsistent with the UCC are repealed, except as provided in the following section. 336.10-104 This section has been repealed or relocated. 336.10-105 Effective Date The UCC became effective in Minnesota on July 1, 1966, and applies to transactions on or after that date. 336.11-101 This section has been repealed or relocated. 336.11-102 This section has been repealed or relocated. 336.11-103 This section has been repealed or relocated. 336.11-104 This section has been repealed or relocated. 336.11-105 This section has been repealed or relocated. 336.11-106 This section has been repealed or relocated. 336.11-107 This section has been repealed or relocated. 336.11-108 This section has been repealed or relocated. 336.12-101 Title This section gives the official name to Article 12: Uniform Commercial Code -- Controllable Electronic Records. 336.12-102 Definitions This section defines key terms for Article 12, including 'controllable electronic record,' 'qualifying purchaser,' and … 336.12-103 Relation to Article 9 and Consumer Laws If Article 12 conflicts with Article 9 (Secured Transactions), Article 9 prevails. Consumer protection laws also apply … 336.12-104 Rights in Controllable Account, Controllable Electronic Record, and Controllable Payment Intangible This section establishes rules for acquiring rights in controllable electronic records, controllable accounts, and … 336.12-105 Control of Controllable Electronic Record A person has 'control' of a controllable electronic record if the system gives them the power to benefit from the … 336.12-106 Discharge of Account Debtor on Controllable Account or Controllable Payment Intangible An account debtor on a controllable account or controllable payment intangible can pay the person who has control of the … 336.12-107 Governing Law The law governing a controllable electronic record is the law of its jurisdiction, which is determined by the record … 336.2-101 Short Title This section gives the official name to Article 2 of the UCC: Uniform Commercial Code -- Sales. 336.2-102 Scope; Certain Security and Other Transactions Excluded From This Article Article 2 applies to sales of goods. For hybrid transactions that mix goods and services, the article applies fully if … 336.2-103 Definitions and Index of Definitions This section defines key terms for Article 2, including 'buyer,' 'receipt of goods,' 'seller,' and other important … 336.2-104 Definitions: 'merchant'; 'between Merchants'; 'financing Agency.' This section defines 'merchant' as a person who deals in goods of a certain kind or has special knowledge about them. It … 336.2-105 Definitions: Transferability; 'goods'; 'future' Goods; 'lot'; 'commercial Unit.' This section defines 'goods' as all movable things at the time of the sale, including growing crops, unborn animals, and … 336.2-106 Definitions: 'contract'; 'agreement'; 'contract for Sale'; 'sale'; 'present Sale'; 'conforming to Contract'; 'termination'; 'cancellation'; 'hybrid Transaction.' This section defines 'sale' as the transfer of title from seller to buyer for a price, and also defines related terms … 336.2-107 Goods to Be Severed From Realty; Recording Goods that are attached to land (like timber, minerals, or a building to be removed) can be sold under Article 2 if the … 336.2-201 Formal Requirements; Statute of Frauds A contract for the sale of goods worth $500 or more must be in writing to be enforceable, with some exceptions. … 336.2-202 Final Written Expression; Parol or Extrinsic Evidence A written contract that the parties intended as final cannot be contradicted by earlier oral or written agreements. … 336.2-203 Seals Inoperative The 'seal' (a formal wax or paper seal once used on contracts) has no special legal significance in a sale of goods. 336.2-204 Formation in General A sales contract can be formed in any way that shows agreement, including by conduct. Even if the exact moment of … 336.2-205 Firm Offers A written offer by a merchant to buy or sell goods that says it will be held open is binding and cannot be revoked for … 336.2-206 Offer and Acceptance in Formation of Contract Unless the offer clearly says otherwise, it can be accepted in any reasonable manner, including by starting to ship the … 336.2-207 Additional Terms in Acceptance or Confirmation A written acceptance or confirmation that adds different or additional terms from the offer still creates a contract, … 336.2-208 This section has been repealed or relocated. 336.2-209 Modification, Rescission and Waiver An agreement to modify a sales contract needs no new consideration (payment) to be binding. However, the duty of good … 336.2-210 Delegation of Performance; Assignment of Rights A party can generally delegate their duties and assign their rights under a sales contract, unless the other party has a … 336.2-301 General Obligations of Parties The seller must transfer and deliver the goods, and the buyer must accept and pay for them, in accordance with the … 336.2-302 Unconscionable Contract or Clause A court may refuse to enforce a contract or contract clause that it finds unconscionable -- meaning so unfair that no … 336.2-303 Allocation or Division of Risks When a party dies or becomes unable to manage their affairs during a sales contract, special allocation of risk rules … 336.2-304 Price Payable in Money, Goods, Realty, or Otherwise The price in a sales contract can be payable in money or in other goods. If the price is partly or fully in goods, each … 336.2-305 Open Price Term If the parties leave the price open, the price is a reasonable price at the time of delivery. If the price is to be set … 336.2-306 Output, Requirements and Exclusive Dealings A contract to buy all of a buyer's requirements or all of a seller's output is valid. The quantity must be in good faith … 336.2-307 Delivery in Single Lot or Several Lots Unless the contract says otherwise, all goods in a sale must be delivered in a single lot, and payment is due only when … 336.2-308 Absence of Specified Place for Delivery Unless the contract says otherwise, delivery happens at the seller's place of business (or home if they have no … 336.2-309 Absence of Specific Time Provisions; Notice of Termination If the contract does not set a delivery time, it must happen within a reasonable time. Either party can end an … 336.2-310 Open Time for Payment or Running of Credit; Authority to Ship Under Reservation Unless the contract says otherwise, payment is due when and where the buyer receives the goods. If delivery is by … 336.2-311 Options and Cooperation Respecting Performance If the contract lets one party choose details like shipping arrangements or assortment of goods, they must make the … 336.2-312 Warranty of Title and Against Infringement; Buyer's Obligation Against Infringement A seller warrants that they have good title to the goods, the transfer is rightful, and the goods are free of any … 336.2-313 Express Warranties by Affirmation, Promise, Description, Sample When a seller makes a specific promise, describes the goods, or shows a sample, those statements become express … 336.2-314 Implied Warranty; Merchantability; Usage of Trade When a merchant sells goods, there is an automatic implied warranty that the goods are merchantable -- meaning they work … 336.2-315 Implied Warranty; Fitness for Particular Purpose If a seller knows the buyer needs goods for a specific purpose and the buyer relies on the seller's expertise to choose … 336.2-316 Exclusion or Modification of Warranties Sellers can limit or exclude warranties, but must follow specific rules. To disclaim the implied warranty of … 336.2-317 Cumulation and Conflict of Warranties Express or Implied Express warranties, implied warranties of merchantability, and implied warranties of fitness for a particular purpose … 336.2-318 Third-party Beneficiaries of Warranties Express or Implied Warranty protections extend beyond the original buyer to anyone who may reasonably be expected to use or be affected by … 336.2-319 F.o.b. and F.a.s. Terms F.O.B. (free on board) and F.A.S. (free alongside) are shipping terms that determine when the seller's delivery duty … 336.2-320 C.i.f. and C.& F. Terms C.I.F. means the price includes the cost of goods, insurance, and freight. C. & F. means it includes cost and freight … 336.2-321 C.i.f. or C.& F.: 'net Landed Weights'; 'payment on Arrival'; Warranty of Condition on Arrival In a C.I.F. or C. & F. contract with a 'net landed weights' or similar term, the price is based on the actual quantity … 336.2-322 Delivery 'ex-ship.' A 'delivery ex-ship' term means the seller must discharge the goods from the vessel at the named port and bear all risk … 336.2-323 Form of Bill of Lading Required in Overseas Shipment; 'overseas.' This section covers when an 'on board' bill of lading is required in overseas shipping. Unless the contract requires … 336.2-324 'no Arrival, No Sale' Term A contract for sale 'no arrival, no sale' means the seller must ship conforming goods, but if they never arrive through … 336.2-325 'letter of Credit' Term; 'confirmed Credit.' A letter of credit term in a sales contract means the buyer must establish the letter of credit before the seller's … 336.2-326 Sale on Approval and Sale or Return; Rights of Creditors Goods delivered on 'sale on approval' remain the seller's property until the buyer accepts. Goods delivered on 'sale or … 336.2-327 Special Incidents of Sale on Approval and Sale or Return In a sale on approval, the buyer may use the goods, risk of loss stays with the seller until acceptance, and return is … 336.2-328 Sale by Auction In a sale by auction, each lot is a separate sale completed when the auctioneer says 'sold.' A bid can be retracted … 336.2-401 Passing of Title; Reservation for Security; Limited Application of This Section Title to goods passes from seller to buyer when the seller completes their delivery obligations under the contract. A … 336.2-402 Rights of Seller's Creditors Against Sold Goods A seller's creditors can generally treat goods still in the seller's possession as belonging to the seller, even if the … 336.2-403 Power to Transfer; Good Faith Purchase of Goods; 'entrusting.' A person with voidable title (such as a buyer who bounced a check) can transfer good title to a good-faith purchaser for … 336.2-501 Insurable Interest in Goods; Manner of Identification of Goods The buyer gets a special property interest in goods once they are identified to the contract. This interest exists even … 336.2-502 Buyer's Right to Goods on Seller's Repudiation, Failure to Deliver, or Insolvency A buyer who has paid part or all of the price can recover identified goods from the seller if the seller becomes … 336.2-503 Manner of Seller's Tender of Delivery The seller must put and hold conforming goods at the buyer's disposal and give reasonable notice for the buyer to take … 336.2-504 Shipment by Seller When a contract requires the seller to ship goods by carrier, the seller must make a reasonable contract with the … 336.2-505 Seller's Shipment Under Reservation A seller can reserve a security interest in goods by shipping them under their own name or through a negotiable bill of … 336.2-506 Rights of Financing Agency A financing agency that pays or purchases a draft drawn by a seller on a buyer acquires the seller's rights in the … 336.2-507 Effect of Seller's Tender; Delivery on Condition A proper tender of delivery entitles the seller to payment and gives the buyer a duty to accept the goods. If payment is … 336.2-508 Cure by Seller of Improper Tender or Delivery; Replacement If the buyer rejects goods and the time for delivery has not yet passed, the seller can fix the problem and make a new, … 336.2-509 Risk of Loss in the Absence of Breach Risk of loss passes to the buyer when the carrier receives the goods (for shipment contracts) or when the goods arrive … 336.2-510 Effect of Breach on Risk of Loss If goods are defective, the risk of loss stays with the seller until the defects are fixed. If the buyer rightfully … 336.2-511 Tender of Payment by Buyer; Payment by Check Tender of payment is a condition of the seller's duty to deliver. The buyer can pay by any commercially normal method … 336.2-512 Payment by Buyer Before Inspection If payment is due before inspection, the buyer must pay when conforming documents are presented, but payment does not … 336.2-513 Buyer's Right to Inspection of Goods The buyer has the right to inspect goods before paying or accepting them, at any reasonable time and place and in any … 336.2-514 When Documents Deliverable on Acceptance; When on Payment When a contract requires payment against documents of title, payment is due when the documents are presented, regardless … 336.2-515 Preserving Evidence of Goods in Dispute If there is a dispute about the condition of goods, either party can ask for an inspection by an official inspector or … 336.2-601 Buyer's Rights on Improper Delivery If goods delivered do not conform to the contract in any respect, the buyer may reject all of them, accept all of them, … 336.2-602 Manner and Effect of Rightful Rejection Rejection of goods must be within a reasonable time after delivery and the buyer must notify the seller. After … 336.2-603 Merchant Buyer's Duties as to Rightfully Rejected Goods A merchant buyer who rejects goods while the seller has no agent nearby must follow the seller's reasonable … 336.2-604 Buyer's Options as to Salvage of Rightfully Rejected Goods If the seller gives no instructions within a reasonable time after being notified of rejection, the buyer can store the … 336.2-605 Waiver of Buyer's Objections by Failure to Particularize A buyer who fails to state a particular defect when rejecting goods cannot later use that defect to justify the … 336.2-606 What Constitutes Acceptance of Goods A buyer accepts goods by telling the seller they are acceptable, by failing to reject them after a reasonable time for … 336.2-607 Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over After accepting goods, a buyer must notify the seller of any breach within a reasonable time or lose the right to any … 336.2-608 Revocation of Acceptance in Whole or in Part A buyer who already accepted goods can later revoke that acceptance if a defect substantially impairs the goods' value, … 336.2-609 Right to Adequate Assurance of Performance If one party has reasonable grounds to feel insecure about the other's performance, they can demand adequate assurance … 336.2-610 Anticipatory Repudiation If one party clearly indicates they will not perform, the other party can wait for performance for a commercially … 336.2-611 Retraction of Anticipatory Repudiation A party who repudiates (says they will not perform) can retract the repudiation before the other party cancels, … 336.2-612 'installment Contract'; Breach In an installment contract (multiple deliveries), the buyer can reject a non-conforming installment only if the defect … 336.2-613 Casualty to Identified Goods If identified goods are totally destroyed before risk of loss passes to the buyer, through no fault of either party, the … 336.2-614 Substituted Performance If the agreed shipping or payment method becomes unavailable, a commercially reasonable substitute must be used and … 336.2-615 Excuse by Failure of Presupposed Conditions A seller is excused from timely delivery if performance becomes impracticable due to an unforeseen event -- like a … 336.2-616 Procedure on Notice Claiming Excuse When the seller notifies the buyer of a delay or allocation under section 336.2-615, the buyer can cancel the contract … 336.2-701 Remedies for Breach of Collateral Contracts Not Impaired The rights and remedies of the seller and buyer can overlap, and using one remedy does not bar another unless … 336.2-702 Seller's Remedies on Discovery of Buyer's Insolvency If a seller discovers the buyer is insolvent, the seller can stop delivery and demand cash payment. If the buyer … 336.2-703 Seller's Remedies in General This section lists all the remedies available to the seller when the buyer breaches, including withholding delivery, … 336.2-704 Seller's Right to Identify Goods to the Contract Notwithstanding Breach or to Salvage Unfinished Goods When the buyer breaches, the seller can identify conforming goods to the contract and either resell them or hold them … 336.2-705 Seller's Stoppage of Delivery in Transit or Otherwise A seller can stop delivery of goods in transit if they discover the buyer is insolvent or in breach. For insolvency, the … 336.2-706 Seller's Resale Including Contract for Resale After the buyer breaches, the seller can resell the goods and recover the difference between the contract price and the … 336.2-707 'person in the Position of a Seller.' A person in the position of a seller (like an agent who has paid for or is responsible for the goods) has the same … 336.2-708 Seller's Damages for Nonacceptance or Repudiation If the buyer breaches, the seller can recover the difference between the contract price and the market price at the time … 336.2-709 Action for the Price The seller can sue for the full contract price when the buyer has accepted the goods, conforming goods are lost or … 336.2-710 Seller's Incidental Damages A seller who does not get paid can recover incidental damages, including costs of stopping delivery, transporting, … 336.2-711 Buyer's Remedies in General; Buyer's Security Interest in Rejected Goods When the seller breaches, the buyer can cancel the contract, recover prepayments, cover (buy substitute goods), and sue … 336.2-712 'cover'; Buyer's Procurement of Substitute Goods After the seller breaches, the buyer can 'cover' by making a reasonable substitute purchase in good faith. The buyer can … 336.2-713 Buyer's Damages for Nondelivery or Repudiation If the buyer does not cover, they can recover the difference between the market price at the time of breach and the … 336.2-714 Buyer's Damages for Breach in Regard to Accepted Goods When a buyer has accepted goods that breach a warranty, the buyer can recover damages measured as the difference between … 336.2-715 Buyer's Incidental and Consequential Damages Buyers can recover incidental damages (such as inspection, shipping, and cover costs) and consequential damages (losses … 336.2-716 Buyer's Right to Specific Performance or Replevin A court can order specific performance (forcing the seller to actually deliver the goods) when the goods are unique or … 336.2-717 Deduction of Damages From the Price The buyer can deduct damages from any part of the price still owed, as long as the buyer notifies the seller of the … 336.2-718 Liquidation or Limitation of Damages; Deposits A sales contract can set a reasonable amount of liquidated damages (a pre-set penalty for breach). A term setting … 336.2-719 Contractual Modification or Limitation of Remedy Contracts may limit buyer remedies to repair or replacement, but if that limited remedy fails its essential purpose, … 336.2-720 Effect of 'cancellation' or 'rescission' on Claims for Antecedent Breach Unless the buyer has accepted the goods, the seller's damages for breach are not affected by any change in ownership of … 336.2-721 Remedies for Fraud Remedies for fraud include all remedies available for non-fraudulent breach. Rescission (undoing the contract) does not … 336.2-722 Who Can Sue Third Parties for Injury to Goods A party to a sales contract or anyone with a direct interest can sue a third party for injuries to their goods. If the … 336.2-723 Proof of Market Price; Time and Place If an anticipatory repudiation goes to trial before the delivery date, damages are measured by the market price at the … 336.2-724 Admissibility of Market Quotations When market price is relevant to damages, evidence from professional market reports or similar publications is … 336.2-725 Statute of Limitations in Contracts for Sale Lawsuits for breach of a sales contract must be filed within four years of when the breach occurred. The parties can … 336.2A-101 Short Title This section gives the official name to Article 2A of the UCC: Uniform Commercial Code -- Leases. 336.2A-102 Scope Article 2A applies to any transaction that creates a lease of goods, regardless of its form. 336.2A-103 Definitions and Index of Definitions This section defines key terms for Article 2A, including 'lease,' 'lessee,' 'lessor,' 'finance lease,' 'consumer lease,' … 336.2A-104 Leases Subject to Other Statutes A lease that is also a secured transaction is governed by both Article 2A and Article 9 (Secured Transactions). In a … 336.2A-105 Territorial Application of Article to Goods Covered by Certificate of Title For leases, the applicable law is determined by the location of the goods. The parties can choose a different state's … 336.2A-106 Limitation on Power of Parties to Consumer Lease to Choose Applicable Law and Judicial Forum In a consumer lease, the parties cannot choose a law that gives the consumer fewer protections than the consumer would … 336.2A-107 Waiver or Renunciation of Claim or Right After Default A waiver or renunciation of a claim or right after default must be in a signed writing, and is enforceable against the … 336.2A-108 Unconscionability A court can refuse to enforce a lease or lease clause that is unconscionable (extremely unfair). In a consumer lease, … 336.2A-109 Option to Accelerate at Will An option to accelerate at will or when a party feels insecure can only be exercised in good faith -- the party must … 336.2A-201 Statute of Frauds A lease creating total payment obligations of $1,000 or more must be in writing to be enforceable. Exceptions exist for … 336.2A-202 Final Expression; Parol or Extrinsic Evidence A written lease intended as final cannot be contradicted by prior agreements. It can be supplemented by course of … 336.2A-203 Seals Inoperative Seals (formal wax or paper seals) on lease documents have no legal effect. 336.2A-204 Formation in General A lease can be formed in any way that shows the parties agreed, even if the exact moment of agreement is uncertain or … 336.2A-205 Firm Offers A written offer by a merchant to lease goods that says it will be held open is irrevocable for the stated period (up to … 336.2A-206 Offer and Acceptance in Formation of Lease Contract A lease offer can be accepted in any manner and by any medium reasonable under the circumstances. 336.2A-207 This section has been repealed or relocated. 336.2A-208 Modification, Rescission and Waiver An agreement to modify a lease needs no new consideration. If the lease requires modifications in writing, an oral … 336.2A-209 Lessee Under Finance Lease as Beneficiary of Supply Contract In a finance lease, the lessee receives the benefit of the supply contract's warranties automatically. The supplier's … 336.2A-210 Express Warranties An express warranty by the lessor is created by any affirmation of fact, promise, description, or sample that becomes … 336.2A-211 Warranties Against Interference and Against Infringement; Lessee's Obligation Against Infringement In a finance lease, the lessee receives the supplier's warranties automatically, but the lessor does not make their own … 336.2A-212 Implied Warranty of Merchantability Unless modified or excluded, a lessor who is a merchant in goods of the kind makes an implied warranty that the goods … 336.2A-213 Implied Warranty of Fitness for Particular Purpose If the lessor knows the lessee needs the goods for a particular purpose and the lessee relies on the lessor's expertise … 336.2A-214 Exclusion or Modification of Warranties The implied warranties of merchantability and fitness can be excluded or modified. To exclude merchantability, the word … 336.2A-215 Cumulation and Conflict of Warranties Express or Implied Express warranties, implied warranties of merchantability, and fitness for particular purpose are construed as … 336.2A-216 Third-party Beneficiaries of Express and Implied Warranties A lessor's warranty extends to the lessee's family, household, and guests if they could reasonably be expected to use or … 336.2A-217 Identification The identification of goods to a lease agreement follows Article 2's rules for sales. Goods are identified when the … 336.2A-218 Insurance and Proceeds In a finance lease, insurance risk stays on the lessee from the start. In other leases, the lessor generally bears … 336.2A-219 Risk of Loss Risk of loss is retained by the lessor in a non-finance lease and passes to the lessee as specified in the lease. In a … 336.2A-220 Effect of Default on Risk of Loss If goods are defective, risk of loss stays with the lessor until the defects are fixed or the lessee accepts despite the … 336.2A-221 Casualty to Identified Goods If identified goods are destroyed through no fault of either party before delivery, the lease is voided. If partially … 336.2A-301 Enforceability of Lease Contract A lease is enforceable between the parties and against purchasers of the goods and creditors, subject to other UCC … 336.2A-302 Title to and Possession of Goods A lessor's creditors generally cannot reach goods that have been identified to a lease and are in the lessee's … 336.2A-303 Alienability of Party's Interest Under Lease Contract or of Lessor's Residual Interest in Goods; Delegation of Performance; Transfer of Rights A lease provision banning transfer of an interest in the lease or making a transfer a default is generally enforceable. … 336.2A-304 Subsequent Lease of Goods by Lessor A buyer in the ordinary course of business who buys goods from a lessor takes free of any lease interest, unless the … 336.2A-305 Sale or Sublease of Goods by Lessee A buyer in the ordinary course of business or a lessee in the ordinary course of business takes free of an existing … 336.2A-306 Priority of Certain Liens Arising by Operation of Law The lessee's interest under a lease can be reached by the lessee's creditors through judicial process. 336.2A-307 Priority of Liens Arising by Attachment or Levy on, Security Interests in, and Other Claims to Goods A creditor of the lessor can treat goods subject to a lease as belonging to the lessor if the goods are in the lessor's … 336.2A-308 Special Rights of Creditors If a lease agreement gives the lessee an option to buy the goods, the lessee's interest is perfected as a security … 336.2A-309 Lessor's and Lessee's Rights When Goods Become Fixtures This section governs rights of lessor and lessee in goods that become fixtures (attached to real property). A perfected … 336.2A-310 Lessor's and Lessee's Rights When Goods Become Accessions This section governs rights of lessor and lessee in goods that are accessions (attached to other personal property). 336.2A-311 Priority Subject to Subordination This section addresses priority when goods subject to a lease become part of a whole (commingled or processed into other … 336.2A-401 Insecurity; Adequate Assurance of Performance A party may insist on strict performance of any obligation that is important enough to justify such insistence. 336.2A-402 Anticipatory Repudiation The lessee may anticipate future lease payments by prepaying, but must do so without penalty or discount unless the … 336.2A-403 Retraction of Anticipatory Repudiation If one party has reasonable grounds to feel insecure about the other's performance, they can demand adequate assurance … 336.2A-404 Substituted Performance A lessor is excused from timely delivery of goods if performance becomes impracticable due to unforeseen circumstances, … 336.2A-405 Excused Performance If the goods are damaged without the lessee's fault, the lessee can treat the lease as void or accept the damaged goods … 336.2A-406 Procedure on Excused Performance When the lessor notifies the lessee of a delay or allocation under section 336.2A-404, the lessee can cancel or accept … 336.2A-407 Irrevocable Promises; Finance Leases In a finance lease that is not a consumer lease, the lessee's promises become irrevocable and independent when the … 336.2A-501 Default; Procedure This section defines default in a lease agreement and states that a party is in default when they fail to perform a … 336.2A-502 Notice After Default The parties can identify events of default and remedies in their lease agreement. The lease can also set conditions for … 336.2A-503 Modification or Impairment of Rights and Remedies Lease remedies should be liberally administered. Damages put the aggrieved party in the same position as if the lease … 336.2A-504 Liquidation of Damages A lease can provide for liquidated damages (pre-set amounts for breach) that are reasonable in light of anticipated or … 336.2A-505 Cancellation and Termination and Effect of Cancellation, Termination, Rescission, or Fraud on Rights and Remedies A party canceling a lease retains rights to any remedy for past defaults. Cancellation does not affect rights already … 336.2A-506 Statute of Limitations An action for default under a lease must be begun within four years. The limitation period begins when the default … 336.2A-507 Proof of Market Rent; Time and Place This section lists remedies available to the lessor when the lessee defaults, including canceling the lease, recovering … 336.2A-508 Lessee's Remedies This section lists remedies available to the lessee when the lessor defaults, including canceling the lease, recovering … 336.2A-509 Lessee's Rights on Improper Delivery; Rightful Rejection The lessee has the right to reject goods that do not conform to the lease. Rejection must be within a reasonable time … 336.2A-510 Installment Lease Contracts; Rejection and Default In an installment lease (multiple deliveries), the lessee can reject a non-conforming delivery only if the defect … 336.2A-511 Merchant Lessee's Duties as to Rightfully Rejected Goods A merchant lessee who rejects goods must follow the lessor's reasonable instructions. If the goods are perishable and … 336.2A-512 Lessee's Duties as to Rightfully Rejected Goods The lessee may reject goods and wait for the lessor to cure the defect. If the time for performance has not yet passed, … 336.2A-513 Cure by Lessor of Improper Tender or Delivery; Replacement If the lessor fails to cure after rejection, the lessee has a security interest in the rejected goods for any rent or … 336.2A-514 Waiver of Lessee's Objections The lessee has a duty to take reasonable care of rejected goods in their possession until the lessor can take them back. 336.2A-515 Acceptance of Goods Acceptance of goods occurs when the lessee signals acceptance, fails to reject after a reasonable opportunity to … 336.2A-516 Effect of Acceptance of Goods; Notice of Default; Burden of Establishing Default After Acceptance; Notice of Claim or Litigation to Person Answerable Over If the lessee accepts goods that later turn out to be non-conforming, the lessee must notify the lessor within a … 336.2A-517 Revocation of Acceptance of Goods A lessee can revoke acceptance if a non-conformity substantially impairs the value of the goods. Revocation must occur … 336.2A-518 Cover; Substitute Goods After the lessor defaults, the lessee can 'cover' by leasing substitute goods. The lessee can recover the difference … 336.2A-519 Lessee's Damages for Nondelivery, Repudiation, Default, and Breach of Warranty in Regard to Accepted Goods If the lessee does not cover, they can recover damages based on the difference between the present value of the market … 336.2A-520 Lessee's Incidental and Consequential Damages The lessee may recover incidental damages (costs incurred because of the lessor's breach) and consequential damages … 336.2A-521 Lessee's Right to Specific Performance or Replevin A lessee with a rightful lien on rejected goods can hold or resell them to satisfy the lien. 336.2A-522 Lessee's Right to Goods on Lessor's Insolvency A lessee may recover goods from the lessor if the lessor becomes insolvent within 10 days after receiving the first … 336.2A-523 Lessor's Remedies When the lessee defaults, the lessor can cancel the lease, proceed with goods not yet delivered, and exercise remedies … 336.2A-524 Lessor's Right to Identify Goods to Lease Contract After the lessee's default, the lessor can dispose of the goods by lease, sale, or other means. The disposition must be … 336.2A-525 Lessor's Right to Possession of Goods After default, the lessor may repossess goods without judicial process if it can be done without breach of the peace. … 336.2A-526 Lessor's Stoppage of Delivery in Transit or Otherwise After default, the lessor can identify goods to the lease and exercise rights as a seller, including the right to … 336.2A-527 Lessor's Rights to Dispose of Goods After the lessee defaults, the lessor can recover damages based on the difference between the present value of the … 336.2A-528 Lessor's Damages for Nonacceptance, Failure to Pay, Repudiation, or Other Default After the lessee defaults, the lessor can recover the present value of remaining lease payments if the lessor is unable … 336.2A-529 Lessor's Action for the Rent After the lessee defaults, the lessor can recover accrued and unpaid rent, the present value of future rent as it comes … 336.2A-530 Lessor's Incidental Damages The lessor can recover incidental damages resulting from the lessee's default, including costs of stopping delivery, … 336.2A-531 Standing to Sue Third Parties for Injury to Goods If the lessee is in default, the lessor can enforce a security interest in the goods. In a finance lease, the lessor may … 336.3-101 Short Title This section gives the official name to Article 3: Uniform Commercial Code -- Negotiable Instruments. 336.3-102 Subject Matter Article 3 applies to negotiable instruments. It does not apply to money, payment orders under Article 4A, or securities … 336.3-103 Definitions This section defines key terms for Article 3, including 'issue,' 'negotiation,' 'ordinary care,' 'party,' 'promise,' … 336.3-104 Negotiable Instrument A negotiable instrument is a written, unconditional promise or order to pay a fixed amount of money, payable on demand … 336.3-105 Issue of Instrument An instrument is payable to 'order' if it says 'pay to the order of' a named person. An instrument is payable to … 336.3-106 Unconditional Promise or Order A promise or order is unconditional unless it states a condition to payment, is subject to another writing, or says … 336.3-107 Instrument Payable in Foreign Money If a negotiable instrument is payable in a foreign currency, it can be paid in that currency or in an equivalent amount … 336.3-108 Payable on Demand or at Definite Time An instrument is payable on demand if it says so, is payable at sight, or does not state a time. An instrument is … 336.3-109 Payable to Bearer or to Order An instrument payable to a named person is a 'promise to order.' An instrument not payable to a named person is a … 336.3-110 Identification of Person to Whom Instrument is Payable An instrument can identify the payee by name, office, account number, or other description. If ambiguous, the instrument … 336.3-111 Place of Payment If a place of payment is stated in the instrument, payment is due there. If no place is stated, payment is due at the … 336.3-112 Interest Interest may be stated in the instrument or determined by reference to an outside source. If an instrument says it bears … 336.3-113 Date of Instrument If an instrument is undated, the date of issue is the date it is first delivered. A date on an instrument is presumed … 336.3-114 Contradictory Terms of Instrument If an instrument says it is payable on a certain date but there is a dispute, the date written on the instrument … 336.3-115 Incomplete Instrument If there is a conflict between handwritten terms, typewritten terms, and printed terms on an instrument, handwritten … 336.3-116 Joint and Several Liability; Contribution When two or more persons sign an instrument as makers or drawers, they are jointly and severally liable unless the … 336.3-117 Other Agreements Affecting Instrument The UCC rules apply to negotiable instruments even if the transaction also involves other laws, like surety (guarantor) … 336.3-118 Statute of Limitations This section sets statutes of limitations: 6 years for a note payable at a definite time (from due date), 6 years for a … 336.3-119 Notice of Right to Defend Action A notice of the right to defend must be given in reasonable detail and in a record. It applies to instruments as it does … 336.3-120 This section has been repealed or relocated. 336.3-121 This section has been repealed or relocated. 336.3-122 This section has been repealed or relocated. 336.3-201 Negotiation Negotiation is the transfer of an instrument that gives the transferee the status of a holder. For bearer instruments, … 336.3-202 Negotiation Subject to Rescission Negotiation is effective even if it was obtained by fraud, illegality, or from a minor. It can be rescinded (undone) … 336.3-203 Transfer of Instrument; Rights Acquired by Transfer A transfer for value gives the transferee the rights the transferor had, plus any rights of a holder in due course if … 336.3-204 Endorsement An endorsement is a signature on an instrument for the purpose of negotiating it, restricting payment, or incurring … 336.3-205 Special Endorsement; Blank Endorsement; Anomalous Endorsement A 'restrictive' endorsement, such as 'for deposit only,' limits what can be done with the instrument. A bank that takes … 336.3-206 Restrictive Endorsement A restrictive endorsement is effective against all persons except a holder in due course who took without notice of the … 336.3-207 Reacquisition A reacquisition of an instrument by a prior holder discharges any intervening party's endorsement and liability. 336.3-208 This section has been repealed or relocated. 336.3-301 Person Entitled to Enforce Instrument A 'person entitled to enforce' an instrument means the holder, a nonholder in possession with the rights of a holder, or … 336.3-302 Holder in Due Course A holder in due course (HDC) is someone who took a negotiable instrument for value, in good faith, without notice of … 336.3-303 Value and Consideration A person gives value for an instrument by performing the promise for which it was issued, acquiring a security interest … 336.3-304 Overdue Instrument A person has notice that an instrument is overdue if a demand instrument was presented more than a reasonable time after … 336.3-305 Defenses and Claims in Recoupment A holder in due course takes free of personal defenses like lack of consideration or breach of warranty, but subject to … 336.3-306 Claims to an Instrument A person taking an instrument, other than a holder in due course, is subject to claims of ownership or possession by … 336.3-307 Notice of Breach of Fiduciary Duty If the validity of a signature is at issue, the person claiming under the signature must prove it is valid. However, a … 336.3-308 Proof of Signatures and Status as Holder in Due Course The signer of an instrument can assert defenses and claims in recoupment against the person entitled to enforce. A … 336.3-309 Enforcement of Lost, Destroyed, or Stolen Instrument A person who loses an instrument or has it stolen can still enforce it by proving they were entitled to enforce it when … 336.3-310 Effect of Instrument on Obligation for Which Taken If a check or note is given for an underlying obligation, the obligation is suspended until the instrument is paid or … 336.3-311 Accord and Satisfaction by Use of Instrument If a person sends a check marked 'payment in full' for a disputed debt, and the creditor cashes it, the debt is … 336.3-312 Lost, Destroyed, or Stolen Cashier's Check, Teller's Check, or Certified Check If a cashier's check, teller's check, or certified check is lost, stolen, or destroyed, the person entitled to enforce … 336.3-401 Signature Necessary for Liability on Instrument A person is liable on a negotiable instrument only if they signed it or an authorized agent signed for them. 336.3-402 Signature by Representative If a representative signs an instrument on behalf of a represented person and the instrument identifies both, the … 336.3-403 Unauthorized Signature An unauthorized signature on an instrument does not bind the person whose name was used, but does bind the unauthorized … 336.3-404 Impostors; Fictitious Payees If an impostor tricks someone into issuing an instrument, or a dishonest employee creates a fictitious payee, the … 336.3-405 Employer's Responsibility for Fraudulent Endorsement by Employee If an employer entrusts an employee with responsibility for instruments and the employee makes a fraudulent endorsement, … 336.3-406 Negligence Contributing to Forged Signature or Alteration of Instrument If a person's negligence substantially contributes to a forged signature or alteration of an instrument, they cannot … 336.3-407 Alteration An alteration is an unauthorized change to an instrument that modifies a party's obligation. A fraudulent alteration … 336.3-408 Drawee Not Liable on Unaccepted Draft A draft (like a check) does not by itself create an obligation of the drawee (the bank) to any holder. The drawee … 336.3-409 Acceptance of Draft; Certified Check Acceptance is the drawee's signed agreement to pay a draft. It must be written on the draft. A bank certifying a check … 336.3-410 Acceptance Varying Draft An acceptance of a draft cannot change the drawer's order except to add a definite payment date. If the acceptance … 336.3-411 Refusal to Pay Cashier's Checks, Teller's Checks, and Certified Checks A bank that issues or certifies a cashier's check, teller's check, or certified check is obligated to pay it. The bank … 336.3-412 Obligation of Issuer of Note or Cashier's Check The issuer of a note is obligated to pay the note according to its terms when it was issued, or if not issued, when it … 336.3-413 Obligation of Acceptor The drawer of a draft is obligated to pay the amount of the draft if the drawee dishonors it. If the draft is … 336.3-414 Obligation of Drawer An acceptor (such as a certifying bank) is obligated to pay the draft according to its terms at the time of acceptance. 336.3-415 Obligation of Endorser An accommodation party is someone who signs an instrument to guarantee payment for another party. They are liable in the … 336.3-416 Transfer Warranties A person who transfers a negotiable instrument for value warrants that they are entitled to enforce it, all signatures … 336.3-417 Presentment Warranties A person who presents an instrument for payment warrants to the payor that they are entitled to payment, the instrument … 336.3-418 Payment or Acceptance by Mistake If a bank pays a check by mistake (e.g., on a forged endorsement), it can recover the payment from the person who … 336.3-419 Instruments Signed for Accommodation An accommodation party is one who signs an instrument without receiving direct benefit to guarantee another's payment. … 336.3-420 Conversion of Instrument Conversion of an instrument occurs when a bank or other person pays on a forged endorsement. The true owner of the … 336.3-501 Presentment Presentment means a demand for payment or acceptance made to the maker, drawee, or acceptor. The holder must present the … 336.3-502 Dishonor Dishonor occurs when the instrument is properly presented and payment or acceptance is refused. The specific rules for … 336.3-503 Notice of Dishonor If an instrument is dishonored, notice of dishonor must be given to endorsers and drawers. Notice can be given by any … 336.3-504 Excused Presentment and Notice of Dishonor Excused presentment occurs when the person expected to pay is dead or insolvent, the instrument has been dishonored by … 336.3-505 Evidence of Dishonor If notice of dishonor is excused, certain parties' liability continues even without notice. Notice is excused when the … 336.3-506 This section has been repealed or relocated. 336.3-507 This section has been repealed or relocated. 336.3-508 This section has been repealed or relocated. 336.3-509 This section has been repealed or relocated. 336.3-510 This section has been repealed or relocated. 336.3-511 This section has been repealed or relocated. 336.3-601 Discharge and Effect of Discharge An obligation on an instrument is discharged when the obligor pays, when the instrument is canceled, or when discharge … 336.3-602 Payment An instrument is paid to the extent that payment is made to or for the benefit of the person entitled to enforce it. … 336.3-603 Tender of Payment If a person entitled to enforce an instrument refuses a proper tender of payment, a subsequent holder cannot recover … 336.3-604 Discharge by Cancellation or Renunciation A person entitled to enforce an instrument can discharge it by intentionally destroying or canceling it, or by … 336.3-605 Discharge of Secondary Obligors If a holder releases the primary obligor, agrees to extend the due date, or materially modifies the obligation without … 336.3-606 This section has been repealed or relocated. 336.3-701 This section has been repealed or relocated. 336.3-801 This section has been repealed or relocated. 336.3-802 This section has been repealed or relocated. 336.3-803 This section has been repealed or relocated. 336.3-804 This section has been repealed or relocated. 336.3-805 This section has been repealed or relocated. 336.4-101 Short Title This section gives the official name to Article 4: Uniform Commercial Code -- Bank Deposits and Collections. 336.4-102 Applicability Article 4 applies to items handled by banks for collection, payment, or presentment. If there is a conflict with Article … 336.4-103 Variation by Agreement; Measure of Damages; Action Constituting Ordinary Care Banks can vary most Article 4 provisions by agreement. However, no agreement can disclaim a bank's responsibility for … 336.4-104 Definitions and Index of Definitions This section defines key terms for Article 4, including 'account,' 'afternoon,' 'banking day,' 'clearing house,' … 336.4-105 'bank'; 'depositary Bank'; 'intermediary Bank'; 'collecting Bank'; 'payor Bank'; 'presenting Bank' A 'depositary bank' is the first bank where an item is deposited. A 'payor bank' is the bank that pays the check. Banks … 336.4-106 Payable Through or Payable at Bank; Collecting Bank A payable-through or payable-at bank designated on a draft is not the drawee. The payable-through bank acts as a … 336.4-107 Separate Office of Bank For bank processing deadlines, a bank can set a cutoff time (no earlier than 2:00 PM) for items received. Items received … 336.4-108 Time of Receipt of Items When computing time for bank deadlines, intervening Saturdays, Sundays, and holidays are excluded for a bank that does … 336.4-109 Delays Unless stated otherwise, Article 4 provisions do not apply to Article 3 provisions that are not specifically overridden. 336.4-110 Electronic Presentment An agreement between banks establishing an electronic presentment program is valid. Banks can agree to present items … 336.4-111 Statute of Limitations The measure of damages for bank failure to exercise ordinary care is the amount of the item less any amount that could … 336.4-201 Status of Collecting Bank as Agent and Provisional Status of Credits; Applicability of Article; Item Endorsed 'pay Any Bank' Unless a contrary intent is shown, a bank is an agent or sub-agent of the depositor for collecting items. The … 336.4-202 Responsibility for Collection or Return; When Action Timely A collecting bank must use ordinary care in presenting, sending, and collecting items. Ordinary care for most banks … 336.4-203 Effect of Instructions A collecting bank is not liable if a prior party gave it bad instructions or sent a defective item. The bank may follow … 336.4-204 Methods of Sending and Presenting; Sending Directly to Payor Bank A collecting bank must send items by a reasonably prompt method, considering the amount, number of items, cost, and … 336.4-205 Depositary Bank Holder of Unendorsed Item A depositary bank that takes an item for collection becomes a holder if the customer was a holder, even if the bank's … 336.4-206 Transfer Between Banks A restrictive endorsement by a customer (like 'for deposit only') is effective against a depositary bank. Other … 336.4-207 Transfer Warranties A customer or collecting bank that transfers an item warrants that they are entitled to enforce it, all signatures are … 336.4-208 Presentment Warranties A collecting bank has a security interest in items and their proceeds until the bank receives final settlement. This … 336.4-209 Encoding and Retention Warranties If a collecting bank gives value for an item, it can be a holder in due course and take free of personal defenses. 336.4-210 Security Interest of Collecting Bank in Items, Accompanying Documents, and Proceeds A collecting bank can present a documentary draft (draft accompanied by documents of title) for acceptance or payment. … 336.4-211 When Bank Gives Value for Purposes of Holder in Due Course If a bank sends items directly to a payor bank, credit given is provisional until the collecting bank receives final … 336.4-212 Presentment by Notice of Item Not Payable by, Through, or at Bank; Liability of Drawer or Endorser A presenting bank (the one presenting the check for payment) is responsible for presenting the item properly and is not … 336.4-213 Medium and Time of Settlement by Bank A collecting bank is not liable beyond the amount of the item plus any charges incurred, and it is not liable if it … 336.4-214 Right of Chargeback or Refund; Liability of Collecting Bank; Return of Item If a collecting bank settles provisionally for an item and the item is later dishonored, the bank can charge back the … 336.4-215 Final Payment of Item by Payor Bank; When Provisional Debits and Credits Become Final; When Certain Credits Become Available for Withdrawal A check is 'finally paid' by the payor bank when it pays in cash, settles without the right to revoke, makes a … 336.4-216 Insolvency and Preference Subject to Article 4, items are property of the person who owns the underlying obligation. If a bank holds items as … 336.4-301 Deferred Posting; Recovery of Payment by Return of Items; Time of Dishonor; Return of Items by Payor Bank A payor bank may pay or return a demand item (like a check) by the bank's midnight deadline (midnight the business day … 336.4-302 Payor Bank's Responsibility for Late Return of Item If a payor bank is properly presented with a demand item and does not pay or return it by its midnight deadline, the … 336.4-303 When Items Subject to Notice, Stop-payment Order, Legal Process, or Setoff; Order in Which Items May Be Charged or Certified A stop-payment order, knowledge of the customer's death, or similar legal process must be received by the bank early … 336.4-401 When Bank May Charge Customer's Account A bank may charge a customer's account for a properly payable item even if the charge creates an overdraft. An item is … 336.4-402 Bank's Liability to Customer for Wrongful Dishonor; Time of Determining Insufficiency of Account A bank that wrongfully dishonors a properly payable item is liable to the customer for damages actually caused by the … 336.4-403 Customer's Right to Stop Payment; Burden of Proof of Loss A customer can order the bank to stop payment on a check. A stop-payment order must be received in time to give the bank … 336.4-404 Bank Not Obliged to Pay Check More Than Six Months Old A bank is not obligated to pay a check that is more than 6 months old (stale check), but it may pay in good faith if it … 336.4-405 Death or Incompetence of Customer A customer's death or incompetence does not revoke the bank's authority to pay items until the bank knows of it and has … 336.4-406 Customer's Duty to Discover and Report Unauthorized Signature or Alteration A customer must examine their bank statements promptly and report unauthorized signatures or alterations. A customer who … 336.4-407 Payor Bank's Right to Subrogation on Improper Payment If a bank pays a check when it should not have (like paying over a stop-payment order), the bank is subrogated to (steps … 336.4-501 Handling of Documentary Drafts; Duty to Send for Presentment and to Notify Customer of Dishonor A collecting bank must present documentary items or send notice of them by the business day following receipt. 336.4-502 Presentment of 'on Arrival' Drafts If a drawee of a documentary draft refuses to accept or pay, the presenting bank must use diligence and good faith in … 336.4-503 Responsibility of Presenting Bank for Documents and Goods; Report of Reasons for Dishonor; Referee in Case of Need A presenting bank must deliver documents to the drawee when the drawee accepts the draft. If the draft is payable more … 336.4-504 Privilege of Presenting Bank to Deal With Goods; Security Interest for Expenses The presenting bank acts in good faith and with reasonable care by following the instructions of the party who sent the … 336.4A-101 Short Title This section gives the official name to Article 4A: Uniform Commercial Code -- Funds Transfers. 336.4A-102 Subject Matter This section states that Article 4A does not apply to fund transfers governed by the federal Electronic Fund Transfer … 336.4A-103 Payment Order-definitions This section defines key terms including 'payment order' (an instruction to a bank to pay), 'beneficiary' (the person to … 336.4A-104 Funds Transfer-definitions A 'funds transfer' is the series of transactions from the originator's payment order to acceptance by the beneficiary's … 336.4A-105 Other Definitions This section defines additional terms for Article 4A, including 'authorized account,' 'bank,' 'customer,' … 336.4A-106 Time Payment Order is Received A payment order is issued when it is sent or delivered to the receiving bank. It does not matter when it is received. 336.4A-107 Federal Reserve Regulations and Operating Circulars Federal Reserve regulations and operating circulars supersede any inconsistent provision of Article 4A. Fund-transfer … 336.4A-108 Relationship to Electronic Fund Transfer Act Article 4A does not apply to a fund transfer if any step in the process is governed by the Electronic Fund Transfer Act … 336.4A-201 Security Procedure A 'security procedure' is a procedure agreed upon by a bank and its customer for verifying the authenticity of payment … 336.4A-202 Authorized and Verified Payment Orders If a bank accepts a payment order that it verified using an agreed security procedure, and the procedure was … 336.4A-203 Unenforceability of Certain Verified Payment Orders If a payment order was unauthorized and the bank's security procedure was not commercially reasonable, the bank bears … 336.4A-204 Refund of Payment and Duty of Customer to Report With Respect to Unauthorized Payment Order If a bank accepts a payment order that contains an error (wrong amount, wrong beneficiary) and the error was not … 336.4A-205 Erroneous Payment Orders If a payment order identifies the beneficiary by both name and account number and the name and number refer to different … 336.4A-206 Transmission of Payment Order Through Funds-transfer or Other Communication System If a payment order identifies an intermediary bank by both name and number and they do not match, the receiving bank can … 336.4A-207 Misdescription of Beneficiary The originator's payment obligation to the beneficiary is discharged when the beneficiary's bank accepts the payment … 336.4A-208 Misdescription of Intermediary Bank or Beneficiary's Bank Payment by the originator to the originator's bank occurs when the originator's bank accepts the payment order and … 336.4A-209 Acceptance of Payment Order The beneficiary's bank accepts a payment order when it pays the beneficiary, notifies the beneficiary that the account … 336.4A-210 Rejection of Payment Order If a receiving bank (other than the beneficiary's bank) does not execute or reject a payment order by the end of the … 336.4A-211 Cancellation and Amendment of Payment Order A sender can cancel or amend a payment order, but the cancellation or amendment must be received before the receiving … 336.4A-212 Liability and Duty of Receiving Bank Regarding Unaccepted Payment Order The liability of a receiving bank for failing to execute or improperly executing a payment order is limited to interest … 336.4A-301 Execution and Execution Date A receiving bank other than the beneficiary's bank executes a payment order by issuing its own payment order to carry … 336.4A-302 Obligations of Receiving Bank in Execution of Payment Order A receiving bank that accepts a payment order must issue its own order by the end of the next funds-transfer business … 336.4A-303 Erroneous Execution of Payment Order If a receiving bank issues a payment order that varies from the sender's instructions (wrong amount, wrong beneficiary … 336.4A-304 Duty of Sender to Report Erroneously Executed Payment Order A receiving bank that fails to execute a payment order it was obligated to execute is liable for interest losses and … 336.4A-305 Liability for Late or Improper Execution or Failure to Execute Payment Order A receiving bank is liable for interest and expenses if it incorrectly executes a payment order. If the error causes the … 336.4A-401 Payment Date The originator must pay the originator's bank when the bank accepts the payment order. If the originator does not pay, … 336.4A-402 Obligation of Sender to Pay Receiving Bank A sender of a payment order must pay the receiving bank when the bank accepts the order. If the sender is a bank, … 336.4A-403 Payment by Sender to Receiving Bank Payment of a sender's obligation to a receiving bank occurs when the receiving bank receives final settlement through a … 336.4A-404 Obligation of Beneficiary's Bank to Pay and Give Notice to Beneficiary If the beneficiary's bank accepts a payment order but does not pay the beneficiary on the payment date, the bank must … 336.4A-405 Payment by Beneficiary's Bank to Beneficiary If a funds transfer is not completed, a sender who paid a receiving bank is entitled to a refund with interest. The … 336.4A-406 Payment by Originator to Beneficiary; Discharge of Underlying Obligation The originator's obligation to pay the beneficiary is discharged when the beneficiary's bank accepts a payment order for … 336.4A-501 Variation by Agreement and Effect of Funds-transfer System Rule A funds transfer is completed when the beneficiary's bank accepts a payment order for the beneficiary's benefit. 336.4A-502 Creditor Process Served on Receiving Bank; Setoff by Beneficiary's Bank A receiving bank's rights to recover payment for a payment order are not affected by the customer's setoff rights or … 336.4A-503 Injunction or Restraining Order With Respect to Funds Transfer If a receiving bank makes a payment to a beneficiary by mistake (wrong beneficiary, duplicate payment, overpayment), the … 336.4A-504 Order in Which Items and Payment Orders May Be Charged to Account; Order of Withdrawals From Account If a funds transfer is completed but the originator is not obligated to pay (e.g., because the payment order was … 336.4A-505 Preclusion of Objection to Debit of Customer's Account If a receiving bank makes an error in executing a funds transfer and the error is not timely objected to, the bank is … 336.4A-506 Rate of Interest The parties can choose which state's law governs a funds transfer. In the absence of agreement, the law of the receiving … 336.4A-507 Choice of Law Federal law governs funds transfers to the extent it provides rules. Otherwise, Article 4A applies. This section also … 336.5-101 Short Title This section gives the official name to Article 5: Uniform Commercial Code -- Letters of Credit. 336.5-102 Definitions Article 5 applies to letters of credit, including standby letters of credit. It does not apply to ordinary guarantees, … 336.5-103 Scope This section defines key terms for Article 5, including 'applicant' (the person who asks for the letter of credit), … 336.5-104 Formal Requirements A letter of credit must be in a record, be issued by a bank or other person, and contain a definite undertaking to pay. … 336.5-105 Consideration Consideration is not needed to issue, amend, transfer, or cancel a letter of credit. 336.5-106 Issuance, Amendment, Cancellation, and Duration A letter of credit is issued when the issuer sends it or an authorized person sends it. It is irrevocable unless it … 336.5-107 Confirmer, Nominated Person, and Adviser A confirmer (a bank that adds its own guarantee to a letter of credit) has the same obligations as the issuer. An … 336.5-108 Issuer's Rights and Obligations An issuer must honor a presentation that appears on its face to strictly comply with the terms of the letter of credit. … 336.5-109 Fraud and Forgery If a required document is forged or there is material fraud in the transaction, the issuer may refuse to honor the … 336.5-110 Warranties Article 5 is governed by the law of the jurisdiction selected by the parties. If no selection is made, the issuer's … 336.5-111 Remedies If an issuer wrongfully dishonors, the beneficiary can recover the amount of the letter of credit plus incidental … 336.5-112 Transfer of Letter of Credit A transfer of a letter of credit (or a right to draw under it) can only be made if the letter of credit allows it. The … 336.5-113 Transfer by Operation of Law A successor to a beneficiary (such as a corporation that merges with the beneficiary) can draw on the letter of credit … 336.5-114 Assignment of Proceeds An assignee of proceeds of a letter of credit can receive payment from the issuer, but only if the issuer consents. The … 336.5-115 Statute of Limitations An action for wrongful dishonor or breach of an obligation under a letter of credit must be brought within one year … 336.5-116 Choice of Law and Forum The liability of an issuer, confirmer, or nominated person under a letter of credit is governed by the law of the … 336.5-117 Subrogation of Issuer, Applicant, and Nominated Person Subrogation and assignment rights of the issuer and applicant after the letter of credit is honored or dishonored are … 336.5-118 Security Interest of Issuer or Nominated Person Article 5 preempts inconsistent provisions of other Minnesota statutes when it comes to letters of credit. 336.6-101 This section has been repealed or relocated. 336.6-102 This section has been repealed or relocated. 336.6-103 This section has been repealed or relocated. 336.6-104 This section has been repealed or relocated. 336.6-105 This section has been repealed or relocated. 336.6-106 This section has been repealed or relocated. 336.6-107 This section has been repealed or relocated. 336.6-108 This section has been repealed or relocated. 336.6-109 This section has been repealed or relocated. 336.6-110 This section has been repealed or relocated. 336.6-111 This section has been repealed or relocated. 336.7-101 Short Title This section gives the official name to Article 7: Uniform Commercial Code -- Documents of Title. 336.7-102 Definitions and Index of Definitions This section defines key terms for Article 7, including 'bailee,' 'carrier,' 'consignee,' 'document of title,' 'goods,' … 336.7-103 Relation of Article to Treaty or Statute Article 7 is subject to applicable regulatory statutes and treaties. Conflicting provisions of regulatory statutes and … 336.7-104 Negotiable and Nonnegotiable Document of Title A document of title is negotiable if it says the goods are to be delivered to bearer or to the order of a named person. … 336.7-105 Reissuance in Alternative Medium If goods are covered by both a tangible and electronic document of title, the electronic document controls. A person … 336.7-106 Control of Electronic Document of Title A person has 'control' of an electronic document of title if a system gives them the power to transfer the document and … 336.7-201 Person That May Issue a Warehouse Receipt; Storage Under Bond A person can store goods and issue a warehouse receipt for them even if the goods are owned by the warehouse. A … 336.7-202 Form of Warehouse Receipt; Effect of Omission A warehouse receipt must include the location, date, receipt number, person to whom goods are deliverable, storage rate, … 336.7-203 Liability for Nonreceipt or Misdescription A party damaged by a warehouse receipt that contains inaccurate information can recover from the issuer. An issuer who … 336.7-204 Duty of Care; Contractual Limitation of Warehouse's Liability A warehouse must exercise the care that a reasonably careful person would use for goods of the same type. The warehouse … 336.7-205 Title Under Warehouse Receipt Defeated in Certain Cases A warehouse may sell goods to satisfy its lien for storage charges. The title acquired by a buyer in good faith at such … 336.7-206 Termination of Storage at Warehouse's Option A warehouse that discovers a hazard in stored goods can require the depositor to remove them. If the depositor does not … 336.7-207 Goods Must Be Kept Separate; Fungible Goods If a warehouse stores fungible goods (like grain) together, each depositor owns a proportionate share of the mass. The … 336.7-208 Altered Warehouse Receipts A warehouse receipt may include altered terms as long as both parties agree. The issuer can include reasonable terms in … 336.7-209 Lien of Warehouse A warehouse has a lien on goods stored for storage charges, insurance, labor, transportation, and other charges. The … 336.7-210 Enforcement of Warehouse's Lien A warehouse can enforce its lien by selling the goods at a public or private sale after giving proper notice to the … 336.7-301 Liability for Nonreceipt or Misdescription; 'said to Contain'; 'shipper's Weight, Load, and Count'; Improper Handling A carrier issues a bill of lading when it receives goods for transport. The carrier must issue the bill to the consignor … 336.7-302 Through Bills of Lading and Similar Documents of Title A carrier is liable for damages caused by receiving goods from someone who is not authorized to ship them, misdescribing … 336.7-303 Diversion; Reconsignment; Change of Instructions The carrier can change the destination or delivery instructions for goods in transit if the person entitled to do so … 336.7-304 Tangible Bills of Lading in a Set A tangible bill of lading can be issued in multiple parts (a 'set'). Negotiation of one part defeats later negotiation … 336.7-305 Destination Bills Instead of issuing a bill of lading, a carrier can give a destination bill (issued at the destination) at the request of … 336.7-306 Altered Bills of Lading The carrier can change or add terms to a bill of lading that do not restrict the carrier's liability below what the law … 336.7-307 Lien of Carrier A carrier has a lien on the goods covered by a bill of lading for transportation charges, storage, and other charges. … 336.7-308 Enforcement of Carrier's Lien The carrier can enforce its lien by selling the goods at public auction or private sale after giving proper notice to … 336.7-309 Duty of Care; Contractual Limitation of Carrier's Liability A carrier must exercise the degree of care that a reasonably careful carrier would use. The carrier can limit its … 336.7-401 Irregularities in Issue of Receipt or Bill or Conduct of Issuer A bailee (warehouse or carrier) must deliver goods to the person entitled under the document of title. Delivery to the … 336.7-402 Duplicate Document of Title; Overissue A bailee with a good-faith doubt about who is entitled to the goods can require proof of entitlement, can interplead … 336.7-403 Obligation of Bailee to Deliver; Excuse A bailee can refuse to deliver goods until any lien for charges is satisfied and the document of title is surrendered. … 336.7-404 No Liability for Good Faith Delivery Pursuant to Document of Title A bailee is not liable for delivering goods in good faith to a person who appeared entitled, even if that person was not … 336.7-501 Form of Negotiation and Requirements of Due Negotiation A negotiable document of title payable to order is negotiated by endorsement and delivery. One payable to bearer is … 336.7-502 Rights Acquired by Due Negotiation A holder to whom a negotiable document is duly negotiated acquires title to the document, title to the goods, and the … 336.7-503 Document of Title to Goods Defeated in Certain Cases A document of title gives the holder rights against the bailee, but does not defeat a prior claim to the goods by a … 336.7-504 Rights Acquired in Absence of Due Negotiation; Effect of Diversion; Stoppage of Delivery The rights of a transferee of a non-negotiable document are limited to the rights the transferor had or had actual … 336.7-505 Indorser Not Guarantor for Other Parties An endorser of a document of title does not guarantee that the bailee will honor the document. The endorser does warrant … 336.7-506 Delivery Without Indorsement: Right to Compel Indorsement A person obligated to deliver a document of title must provide any necessary endorsement. If the person refuses, the … 336.7-507 Warranties on Negotiation or Delivery of Document of Title A person who negotiates a document of title warrants that the document is genuine, they have a right to negotiate it, … 336.7-508 Warranties of Collecting Bank as to Documents of Title A collecting bank or other intermediary that delivers a document of title received in good faith is not liable for the … 336.7-509 Adequate Compliance With Commercial Contract Article 7 does not limit the rights of a buyer, seller, or other person under any other law regarding lost, stolen, or … 336.7-601 Lost, Stolen, or Destroyed Documents of Title A bailee is excused from delivering goods if the document of title is properly stopped or the goods have been sold to … 336.7-602 Judicial Process Against Goods Covered by Negotiable Document of Title When goods are delivered in full or the bailee no longer has an obligation to deliver, the document of title must be … 336.7-603 Conflicting Claims; Interpleader A bailee that delivers goods to a person who is not entitled to them is liable for conversion (wrongful taking) of the … 336.7-703 Applicability This section provides that Article 7, as amended, applies to documents of title issued or updated after the effective … 336.7-704 Savings Clause This section identifies the specific statutory provisions that are repealed or replaced by the updated Article 7. 336.8-101 Short Title This section gives the official name to Article 8: Uniform Commercial Code -- Investment Securities. 336.8-102 Definitions This section defines key terms for Article 8, including 'certificated security,' 'uncertificated security,' 'entitlement … 336.8-103 Rules for Determining Whether Certain Obligations and Interests Are Securities or Financial Assets This section provides rules for determining whether an obligation is a security or other financial asset under Article … 336.8-104 Acquisition of Security or Financial Asset or Interest Therein A security can be acquired by purchase (for value), gift, or other transfer. A security can be 'certificated' … 336.8-105 Notice of Adverse Claim Notice of an adverse claim means a person knows that someone else claims an interest in a security. Whether a person has … 336.8-106 Control Control of a certificated security means the purchaser has taken delivery. Control of an uncertificated security means … 336.8-107 Whether Endorsement, Instruction, or Entitlement Order is Effective Whether a person has authority to transfer or deal with a security is determined by the law of the issuer's jurisdiction … 336.8-108 Warranties in Direct Holding A person who purchases a financial asset held through a securities intermediary in good faith, without notice of an … 336.8-109 Warranties in Indirect Holding The duty of a securities intermediary to its entitlement holder is governed by the rules of the securities exchange or … 336.8-110 Applicability; Choice of Law The local law of the issuer's jurisdiction governs the validity, transfer, and registration of a certificated security. … 336.8-111 Clearing Corporation Rules Article 8 has a four-year statute of limitations for enforcement actions. 336.8-112 Creditor's Legal Process If a person is required to deliver a certificated security, the buyer can demand a clean certificate in proper form for … 336.8-113 Statute of Frauds Inapplicable The obligation of a securities intermediary to an entitlement holder is not subject to attachment or levy, except by the … 336.8-114 Evidentiary Rules Concerning Certificated Securities A person who transfers a certificated security warrants that the certificate is genuine, they have authority to … 336.8-115 Securities Intermediary and Others Not Liable to Adverse Claimant Securities held through a securities intermediary are subject to the intermediary's jurisdiction for purposes of … 336.8-116 Securities Intermediary as Purchaser for Value A securities intermediary's jurisdiction is determined by the agreement with the entitlement holder, or if none, by the … 336.8-201 Issuer A security may be issued in registered form (naming the owner) or bearer form (transferable by delivery). An issuer can … 336.8-202 Issuer's Responsibility and Defenses; Notice of Defect or Defense An issuer is estopped (prevented) from denying the validity of a security that has been validly issued to a purchaser … 336.8-203 Staleness as Notice of Defect or Defense A security or financial asset is not rendered invalid by the fact that it was issued in violation of the issuer's … 336.8-204 Effect of Issuer's Restriction on Transfer An issuer may place a conspicuous restriction on transfer on the face of a certificated security. Unless noted on the … 336.8-205 Effect of Unauthorized Signature on Security Certificate If an employee of an issuer or transfer agent, entrusted with handling securities, creates a fraudulent security, the … 336.8-206 Completion or Alteration of Security Certificate An unauthorized signature on a security is ineffective, but the issuer is liable if the signature was placed by an … 336.8-207 Rights and Duties of Issuer With Respect to Registered Owners An issuer may treat the registered owner of a security as the person entitled to exercise all rights of ownership, even … 336.8-208 Effect of Signature of Authenticating Trustee, Registrar, or Transfer Agent A signature guarantee by a securities intermediary or other qualified person is sufficient for registration of transfer … 336.8-209 Issuer's Lien An issuer is not liable for registering a transfer or pledge of a security pursuant to an effective endorsement or … 336.8-210 Overissue If an over-issue of securities would result, the issuer may purchase identical securities and deliver them, or if … 336.8-301 Delivery Delivery of a certificated security occurs when the purchaser or a designated person acquires possession. Delivery of an … 336.8-302 Rights of Purchaser An endorsement is effective if made by the appropriate person (the registered owner, or someone authorized by them). 336.8-303 Protected Purchaser A 'protected purchaser' is a person who gives value, does not have notice of an adverse claim, and obtains control of … 336.8-304 Endorsement An endorsement of a certificated security in registered form is made by signing the certificate or a separate document. … 336.8-305 Instruction An instruction is a notification communicated to the issuer of an uncertificated security directing that the transfer or … 336.8-306 Effect of Guaranteeing Signature, Endorsement, or Instruction A person who guarantees a signature on a security certificate warrants that the signature is genuine, the signer is the … 336.8-307 Purchaser's Right to Requisites for Registration of Transfer A person who originates an instruction for an uncertificated security warrants that the instruction is authorized and … 336.8-308 This section has been repealed or relocated. 336.8-309 This section has been repealed or relocated. 336.8-310 This section has been repealed or relocated. 336.8-311 This section has been repealed or relocated. 336.8-312 This section has been repealed or relocated. 336.8-313 This section has been repealed or relocated. 336.8-314 This section has been repealed or relocated. 336.8-315 This section has been repealed or relocated. 336.8-316 This section has been repealed or relocated. 336.8-317 This section has been repealed or relocated. 336.8-318 This section has been repealed or relocated. 336.8-319 This section has been repealed or relocated. 336.8-320 This section has been repealed or relocated. 336.8-321 This section has been repealed or relocated. 336.8-401 Duty of Issuer to Register Transfer An issuer must register a transfer of a certificated security if the certificate is properly endorsed and presented with … 336.8-402 Assurance That Endorsement or Instruction is Effective An issuer may require an assurance that an endorsement or instruction is effective before registering a transfer. This … 336.8-403 Demand That Issuer Not Register Transfer If the issuer demands additional evidence of authority or validity (like an estate's proof of legal authority), the … 336.8-404 Wrongful Registration An issuer that registers a transfer based on an ineffective endorsement must try to recover the security or deliver a … 336.8-405 Replacement of Lost, Destroyed, or Wrongfully Taken Security Certificate If a certificated security is lost, destroyed, or stolen, the owner can get a replacement from the issuer by providing a … 336.8-406 Obligation to Notify Issuer of Lost, Destroyed, or Wrongfully Taken Security Certificate The issuer may appoint a transfer agent or registrar to handle the registration of transfers. The issuer is responsible … 336.8-407 Authenticating Trustee, Transfer Agent, and Registrar An authenticating trustee, transfer agent, or registrar who acts in good faith is not liable for losses arising from … 336.8-408 This section has been repealed or relocated. 336.8-501 Securities Account; Acquisition of Security Entitlement From Securities Intermediary A person acquires a 'security entitlement' when a securities intermediary credits a financial asset to the person's … 336.8-502 Assertion of Adverse Claim Against Entitlement Holder A person who acquires a security entitlement from a securities intermediary in good faith and without notice of an … 336.8-503 Property Interest of Entitlement Holder in Financial Asset Held by Securities Intermediary A securities intermediary must maintain financial assets sufficient to cover all of its entitlement holders' security … 336.8-504 Duty of Securities Intermediary to Maintain Financial Asset A securities intermediary must maintain financial assets corresponding to all security entitlements it has established … 336.8-505 Duty of Securities Intermediary With Respect to Payments and Distributions A securities intermediary must comply with the entitlement holder's instructions regarding the exercise of rights in a … 336.8-506 Duty of Securities Intermediary to Exercise Rights as Directed by Entitlement Holder A securities intermediary must exercise due care in holding and transferring financial assets under its control. 336.8-507 Duty of Securities Intermediary to Comply With Entitlement Order A securities intermediary must comply with an entitlement order directing transfer or redemption of a financial asset, … 336.8-508 Duty of Securities Intermediary to Change Entitlement Holder's Position to Other Form of Security Holding A securities intermediary must act with respect to payments and distributions on financial assets (like dividends) in … 336.8-509 Specification of Duties of Securities Intermediary by Other Statute or Regulation; Manner of Performance of Duties of Securities Intermediary and Exercise of Rights of Entitlement Holder The obligations of a securities intermediary can be modified by agreement with the entitlement holder and are subject to … 336.8-510 Rights of Purchaser of Security Entitlement From Entitlement Holder The rights of a purchaser of a security entitlement are governed by Article 8 and are separate from any rights the … 336.8-511 Priority Among Security Interests and Entitlement Holders A securities intermediary that holds a financial asset in a clearing corporation may satisfy its obligation to the … 336.8-601 Effective Date This section provides for the superseding of other inconsistent laws to the extent Article 8 provides different rules. 336.8-602 This section has been repealed or relocated. 336.8-603 Savings Clause This section addresses the transition from former Article 8 to the revised version and provides rules for pending … 336.9-101 Short Title This section gives the official name to Article 9: Uniform Commercial Code -- Secured Transactions. 336.9-102 Definitions and Index of Definitions This section defines over 80 key terms used in Article 9, including 'account,' 'chattel paper,' 'collateral,' 'debtor,' … 336.9-103 Purchase-money Security Interest; Application of Payments; Burden of Establishing A 'purchase-money security interest' (PMSI) arises when a lender provides funds to acquire collateral or a seller … 336.9-104 Control of Deposit Account A deposit account maintained with a bank can serve as collateral. Control of the deposit account is established by … 336.9-105 Control of Electronic Copy of Record Evidencing Chattel Paper Control of an electronic chattel paper is obtained when a single authoritative copy exists, the secured party is … 336.9-106 Control of Investment Property Control of investment property can be obtained through the securities intermediary's agreement to follow the secured … 336.9-107 Control of Letter of Credit Right Control of a letter-of-credit right is obtained when the issuer or nominated person consents to assignment of proceeds. 336.9-108 Sufficiency of Description A description of collateral in a security agreement is sufficient if it reasonably identifies the collateral. … 336.9-109 Scope Article 9 applies to any transaction that creates a security interest in personal property or fixtures by contract, … 336.9-110 Security Interests Arising Under Article 2 or 2a A security interest arising under Articles 2, 2A, or 4 is subject to Article 9, but certain filing and notification … 336.9-111 This section has been repealed or relocated. 336.9-112 This section has been repealed or relocated. 336.9-113 This section has been repealed or relocated. 336.9-114 This section has been repealed or relocated. 336.9-115 This section has been repealed or relocated. 336.9-116 This section has been repealed or relocated. 336.9-201 General Effectiveness of Security Agreement A security agreement is effective between the parties, against purchasers of the collateral, and against creditors, … 336.9-202 Title to Collateral Immaterial Title to collateral is irrelevant to whether a security interest exists. Article 9 applies regardless of who holds … 336.9-203 Attachment and Enforceability of Security Interest; Proceeds; Supporting Obligations; Formal Requisites A security interest is enforceable (attaches) when value has been given, the debtor has rights in the collateral, and … 336.9-204 After-acquired Property; Future Advances A security agreement can cover after-acquired property (collateral the debtor gets in the future). For consumer goods, … 336.9-205 Use or Disposition of Collateral Permissible A security interest is not invalid just because the debtor has the right to use, sell, or collect the collateral. This … 336.9-206 Security Interest Arising in Purchase or Delivery of Financial Asset A security interest does not make the secured party responsible for the debtor's actions with respect to the collateral. 336.9-207 Rights and Duties of Secured Party Having Possession or Control of Collateral A secured party in possession of collateral must use reasonable care to preserve it. The debtor bears the risk of loss … 336.9-208 Additional Duties of Secured Party Having Control of Collateral If the secured party has filed a financing statement and the obligation is fully paid, the secured party must send a … 336.9-209 Duties of Secured Party if Account Debtor Has Been Notified of Assignment If the obligation is fully satisfied, the secured party must take steps to release its control over deposit accounts, … 336.9-210 Request for Accounting; Request Regarding List of Collateral or Statement of Account A debtor can request that the secured party confirm the amount of the debt, the collateral covered, and any assignments. … 336.9-301 Law Governing Perfection and Priority of Security Interests The local law of the debtor's location governs perfection and priority of security interests in most collateral. For … 336.9-302 Law Governing Perfection and Priority of Agricultural Liens The law of the jurisdiction where goods covered by a certificate of title are covered governs perfection by notation on … 336.9-303 Law Governing Perfection and Priority of Security Interests in Goods Covered by a Certificate of Title Goods covered by a certificate of title from another jurisdiction become covered by a Minnesota certificate of title … 336.9-304 Law Governing Perfection and Priority of Security Interests in Deposit Accounts The law of the bank's jurisdiction governs perfection of a security interest in a deposit account. 336.9-305 Law Governing Perfection and Priority of Security Interests in Investment Property The law of the securities intermediary's jurisdiction governs perfection of a security interest in investment property … 336.9-306 Law Governing Perfection and Priority of Security Interests in Letter of Credit Rights The law of the issuer's or nominated person's jurisdiction governs perfection of a security interest in letter-of-credit … 336.9-307 Location of Debtor An individual debtor is located at their principal residence. An organization registered in a state is located in that … 336.9-308 When Security Interest or Agricultural Lien is Perfected; Continuity of Perfection A security interest is perfected when it has attached and all applicable steps for perfection have been taken. These … 336.9-309 Security Interest Perfected Upon Attachment Certain security interests are perfected automatically upon attachment without any filing or other action. These include … 336.9-310 When Filing Required to Perfect Security Interest or Agricultural Lien; Security Interests and Agricultural Liens to Which Filing Provisions Do Not Apply As a general rule, a financing statement must be filed to perfect a security interest. Exceptions include interests … 336.9-311 Perfection of Security Interests in Property Subject to Certain Statutes, Regulations, and Treaties A security interest in property subject to a certificate-of-title statute (like motor vehicles) is perfected by notation … 336.9-312 Perfection of Security Interests in Chattel Paper, Controllable Accounts, Controllable Electronic Records, Controllable Payment Intangibles, Deposit Accounts, Documents, Goods Covered by Documents, Instruments, Investment Property, Letter of Credit Rights, and Money; Perfection by Permissive Filing; Temporary Perfection Without Filing or Transfer of Possession Security interests in deposit accounts, electronic chattel paper, investment property, and letter-of-credit rights can … 336.9-313 When Possession by or Delivery to Secured Party Perfects Security Interest Without Filing A security interest in tangible collateral can be perfected by the secured party taking possession of it. Possession by … 336.9-314 Perfection by Control A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, and … 336.9-315 Secured Party's Rights on Disposition of Collateral and in Proceeds A security interest continues in collateral even after it is sold or otherwise disposed of, unless the secured party … 336.9-316 Effect of Change in Governing Law If a debtor moves to another state, a security interest perfected in the old state remains perfected for four months (or … 336.9-317 Interests That Take Priority Over or Take Free of Security Interest or Agricultural Lien An unperfected security interest loses to a lien creditor, a buyer who gives value without knowledge of the security … 336.9-318 No Interest Retained in Right to Payment That is Sold; Rights and Title of Seller of Account or Chattel Paper With Respect to Creditors and Purchasers A debtor that has sold or assigned accounts, chattel paper, payment intangibles, or promissory notes has no rights in … 336.9-319 Rights and Title of Consignee With Respect to Creditors and Purchasers If a person buys goods from a debtor's inventory in the ordinary course of business, the buyer takes free of the … 336.9-320 Buyer of Goods A buyer in the ordinary course of business takes free of a security interest created by the seller, even if the buyer … 336.9-321 Licensee of General Intangible and Lessee of Goods in Ordinary Course of Business A lessee in the ordinary course of business takes a lease interest free of a security interest in the goods, even if the … 336.9-322 Priorities Among Conflicting Security Interests in and Agricultural Liens on Same Collateral Priority among competing perfected security interests is generally determined by the order of filing or perfection -- … 336.9-323 Future Advances A security interest that is perfected when a future advance is made has priority from the time of initial filing for the … 336.9-324 Priority of Purchase-money Security Interests A purchase-money security interest in goods has priority over a conflicting security interest in the same goods if … 336.9-325 Priority of Security Interests in Transferred Collateral If a debtor transfers collateral to another person who also becomes a debtor, the original secured party has priority … 336.9-326 Priority of Security Interests Created by New Debtor A security interest of a transferee of a deposit account or securities account has priority over a security interest of … 336.9-327 Priority of Security Interests in Deposit Account A security interest in a deposit account perfected by control has priority over one not perfected by control. The bank … 336.9-328 Priority of Security Interests in Investment Property A security interest in investment property perfected by control has priority over one perfected by filing. A securities … 336.9-329 Priority of Security Interests in Letter of Credit Right A security interest in letter-of-credit rights perfected by control has priority over one not perfected by control. 336.9-330 Priority of Purchaser of Chattel Paper or Instrument A purchaser of chattel paper who gives new value and takes possession or control in the ordinary course of business has … 336.9-331 Priority of Rights of Purchasers of Controllable Accounts, Controllable Electronic Records, Controllable Payment Intangibles, Documents, Instruments, and Securities Under Other Articles; Priority of Interests in Financial Assets and Security Entitlements and Protection Against Assertion of Claim Under Articles 8 and 12 Article 9 does not limit the rights of a holder in due course of a negotiable instrument, a holder to whom a negotiable … 336.9-332 Transfer of Money; Transfer of Funds From Deposit Account A transferee of money takes free of a security interest unless acting in collusion with the debtor. A transferee of … 336.9-333 Priority of Certain Liens Arising by Operation of Law A possessory lien (like a mechanic's lien or an artisan's lien) has priority over a security interest in the same goods … 336.9-334 Priority of Security Interests in Fixtures and Crops A security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real … 336.9-335 Accessions A security interest in goods that become accessions (attached to other goods) continues in the accession and has … 336.9-336 Commingled Goods A security interest in goods that are commingled (mixed with other goods so they cannot be identified) attaches to the … 336.9-337 Priority of Security Interests in Goods Covered by Certificate of Title A security interest perfected under the law of another jurisdiction has priority over a conflicting interest that is … 336.9-338 Priority of Security Interest or Agricultural Lien Perfected by Filed Financing Statement Providing Certain Incorrect Information If a financing statement has misleading information, a purchase-money security interest may still have priority if the … 336.9-339 Priority Subject to Subordination Secured parties can agree among themselves on the priority of their competing security interests. Such subordination … 336.9-340 Effectiveness of Right of Recoupment or Setoff Against Deposit Account A bank may exercise its right of setoff against a deposit account even if a security interest in the account exists, as … 336.9-341 Bank's Rights and Duties With Respect to Deposit Account A bank's rights to setoff or to enforce a security interest in a deposit account are not affected by another person's … 336.9-342 Bank's Right to Refuse to Enter Into or Disclose Existence of Control Agreement A security interest in a nonnegotiable document is available as security for the goods covered by the document only if … 336.9-401 Alienability of Debtor's Rights A secured party's rights against the debtor and third parties arise from the security agreement. After default, the … 336.9-402 Secured Party Not Obligated on Contract of Debtor or in Tort The existence of a security interest in goods does not make the secured party responsible for the debtor's acts or … 336.9-403 Agreement Not to Assert Defenses Against Assignee An agreement between the debtor and account debtor does not prevent the secured party from enforcing its rights in … 336.9-404 Rights Acquired by Assignee; Claims and Defenses Against Assignee An account debtor can assert against an assignee any defense or claim it could assert against the original creditor, if … 336.9-405 Modification of Assigned Contract An account debtor must pay the assignee after receiving proper notification. Payment to the original creditor after … 336.9-406 Discharge of Account Debtor; Notification of Assignment; Identification and Proof of Assignment; Restrictions on Assignment of Accounts, Chattel Paper, Payment Intangibles, and Promissory Notes Ineffective After notification of an assignment of an account, the account debtor may pay only the assignee. A contract term … 336.9-407 Restrictions on Creation or Enforcement of Security Interest in Leasehold Interest or in Lessor's Residual Interest A contract term prohibiting assignment of a lease or restricting the lessor's rights does not prevent a security … 336.9-408 Restrictions on Assignment of Promissory Notes, Health-care-insurance Receivables, and Certain General Intangibles Ineffective A term in a promissory note, health-care receivable, or general intangible that restricts assignment is generally not … 336.9-409 Restrictions on Assignment of Letter of Credit Rights Ineffective A term in a letter-of-credit right that restricts assignment is generally not enforceable to prevent creation of a … 336.9-410 This section has been repealed or relocated. 336.9-411 This section has been repealed or relocated. 336.9-412 This section has been repealed or relocated. 336.9-413 This section has been repealed or relocated. 336.9-501 Filing Office A financing statement is filed in the office of the secretary of state. For fixtures and as-extracted collateral, a … 336.9-502 Contents of Financing Statement; Record of Mortgage as Financing Statement; Time of Filing Financing Statement A financing statement must include the debtor's name, the secured party's name, and a description of the collateral. A … 336.9-503 Name of Debtor and Secured Party The debtor's name on the financing statement must match the name on the debtor's driver's license (for individuals) or … 336.9-504 Indication of Collateral A description of collateral in a financing statement is sufficient if it reasonably identifies the collateral. A … 336.9-505 Filing and Compliance With Other Statutes and Treaties for Consignments, Leases, Other Bailments, and Other Transactions A filed financing statement can cover after-acquired property without any special language. 336.9-506 Effect of Errors or Omissions A financing statement with minor errors is still effective unless the errors make it seriously misleading. An incorrect … 336.9-507 Effect of Certain Events on Effectiveness of Financing Statement If collateral is transferred to a new owner, the original financing statement remains effective for four months. After … 336.9-508 Effectiveness of Financing Statement if New Debtor Becomes Bound by Security Agreement If a debtor changes its name, the original financing statement is effective for collateral acquired within four months … 336.9-509 Persons Entitled to File a Record A financing statement can only be filed with the debtor's authorization. Signing a security agreement automatically … 336.9-510 Effectiveness of Filed Record An amendment to a financing statement adds or changes information. It does not extend the filing's life. An amendment … 336.9-511 Secured Party of Record A secured party of record is the person named as secured party in the financing statement (or their assignee). Only the … 336.9-512 Amendment of Financing Statement An amendment that adds collateral or adds a debtor must be authorized by the debtor. An amendment filed by a person that … 336.9-513 Termination Statement When a secured obligation is paid in full, the secured party must send a termination statement within 20 days of demand … 336.9-5135 Termination of Wrongfully Filed Financing Statement; Reinstatement This section provides additional Minnesota-specific provisions for UCC termination statements. 336.9-514 Assignment of Powers of Secured Party of Record An assignment of a security interest can be reflected by filing an amendment to the financing statement naming the … 336.9-515 Duration and Effectiveness of Financing Statement; Effect of Lapsed Financing Statement A financing statement is effective for five years from the date of filing. It can be continued for another five years by … 336.9-516 What Constitutes Filing; Effectiveness of Filing The filing office must refuse to accept a financing statement that lacks required information, does not include the … 336.9-517 Effect of Indexing Errors The filing office must index a financing statement under the debtor's name. It must also index amendments, termination … 336.9-518 Claim Concerning Inaccurate or Wrongfully Filed Record A person who believes a financing statement is inaccurate can file an information statement to correct the record. The … 336.9-519 Numbering, Maintaining, and Indexing Records; Communicating Information Provided in Records The filing office must maintain a record of all filed documents and make them available for public inspection. 336.9-520 Acceptance and Refusal to Accept Record The filing office must refuse to accept a financing statement if the debtor's name is not provided or the filing does … 336.9-521 Uniform Form of Written Financing Statement and Amendment The filing office must maintain uniform forms for financing statements and amendments. The forms adopted by the … 336.9-522 Maintenance and Destruction of Records The filing office must maintain a record of filed financing statements that associates each with a unique file number … 336.9-523 Information From Filing Office; Sale or License of Records The filing office must provide information about filed financing statements, including the file number, names, and … 336.9-524 Delay by Filing Office This section establishes the fee schedule for filing financing statements, amendments, and search requests with the … 336.9-525 Fees The filing office fees for UCC filings are set by the secretary of state to cover the costs of the filing system. 336.9-526 Duty to Report The filing office must report to the governor and legislature on the operation of the filing system. 336.9-527 Satellite Offices Authorized The filing office must provide copies of filed financing statements on request for a fee. 336.9-528 Filing; Assignment of Filing Information at Satellite Offices This section addresses the Minnesota Secretary of State's duty to adopt rules for the administration of the UCC filing … 336.9-529 Maintenance and Retrieval of Documents and Data This section authorizes the Secretary of State to adopt rules and procedures for implementing the filing system … 336.9-530 Satellite Offices; Uniformity of Services Assured This section requires the filing office to maintain copies of filed records and make them available for public access. 336.9-531 Electronic Access; Liability; Retention The filing office must adopt uniform procedures consistent with Article 9 and applicable administrative rules. 336.9-601 Rights After Default; Judicial Enforcement; Consignor or Buyer of Accounts, Chattel Paper, Payment Intangibles, or Promissory Notes After default, a secured party has the rights provided in the security agreement and in Part 6 of Article 9. Rights and … 336.9-602 Waiver and Variance of Rights and Duties The debtor cannot waive or vary certain protective provisions of Article 9 in advance, including the right to redeem … 336.9-603 Agreement on Standards Concerning Rights and Duties The parties can agree on standards for the secured party's duties, as long as the standards are not manifestly … 336.9-604 Procedure if Security Agreement Covers Real Property or Fixtures If collateral is both personal property and fixtures, the secured party can proceed under either real property law or … 336.9-605 Unknown Debtor or Secondary Obligor A secured party has no duty to a person that is a debtor or obligor if it reasonably believes the person is not such a … 336.9-606 Time of Default for Agricultural Lien The time of default is determined by the security agreement and applicable law. 336.9-607 Collection and Enforcement by Secured Party After default, the secured party can collect payments owed on accounts, chattel paper, and other receivables. The … 336.9-608 Application of Proceeds of Collection or Enforcement; Liability for Deficiency and Right to Surplus A secured party must apply the cash proceeds of collection in a commercially reasonable manner. After paying costs and … 336.9-609 Secured Party's Right to Take Possession After Default After default, the secured party may take possession of the collateral without judicial process if it can be done … 336.9-610 Disposition of Collateral After Default After default, the secured party may sell, lease, license, or otherwise dispose of collateral in a commercially … 336.9-611 Notification Before Disposition of Collateral Before disposing of collateral, the secured party must send a reasonable notification to the debtor, any secondary … 336.9-612 Timeliness of Notification Before Disposition of Collateral A notification of disposition is sent within a reasonable time if sent at least 10 days before the sale. 336.9-613 Contents and Form of Notification Before Disposition of Collateral: General A notification of disposition is sufficient if it describes the debtor, the secured party, the collateral, the method of … 336.9-614 Contents and Form of Notification Before Disposition of Collateral: Consumer Goods Transaction For consumer transactions, the notification must include additional information, such as how to calculate the amount the … 336.9-615 Application of Proceeds of Disposition; Liability for Deficiency and Right to Surplus Proceeds of a sale after default are applied first to the costs of sale, then to the secured debt, then to subordinate … 336.9-616 Explanation of Calculation of Surplus or Deficiency In a consumer transaction, the secured party must provide an explanation of how the surplus or deficiency was … 336.9-617 Rights of Transferee of Collateral A transferee who purchases collateral at a properly conducted disposition takes free of the security interest and any … 336.9-618 Rights and Duties of Certain Secondary Obligors A secondary obligor (like a guarantor) who pays the secured debt becomes subrogated to the secured party's rights. 336.9-619 Transfer of Record or Legal Title A transfer of record or legal title of collateral after a properly conducted disposition is effective even without the … 336.9-620 Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral A secured party may accept collateral in full or partial satisfaction of the debt (strict foreclosure). The debtor must … 336.9-621 Notification of Proposal to Accept Collateral If the secured party proposes to accept collateral in satisfaction of the debt, certain parties can object within 20 … 336.9-622 Effect of Acceptance of Collateral When the secured party accepts collateral in satisfaction of the debt, the obligation is discharged, all subordinate … 336.9-623 Right to Redeem Collateral A debtor or other person can redeem collateral by paying the full amount of the secured obligation plus the secured … 336.9-624 Waiver In a consumer transaction, a debtor cannot waive the right to redeem collateral, the right to notification of … 336.9-625 Remedies for Secured Party's Failure to Comply With Article If a secured party fails to comply with Article 9's rules, the debtor can recover actual damages. In consumer … 336.9-626 Action in Which Deficiency or Surplus is in Issue In a non-consumer transaction, if the secured party fails to prove the disposition was commercially reasonable, the … 336.9-627 Determination of Whether Conduct Was Commercially Reasonable Whether a disposition of collateral was commercially reasonable is determined by looking at all the circumstances, … 336.9-628 Nonliability and Limitation on Liability of Secured Party; Liability of Secondary Obligor A person who acts in good faith reliance on a filed financing statement or other information is not liable for losses … 336.9-701 Effective Date This section addresses the transition from former Article 9 to the revised version. Transactions entered into before the … 336.9-702 Savings Clause Security interests that were valid under the old Article 9 remain valid under the revised version. 336.9-703 Security Interest Perfected Before Effective Date A security interest that was perfected under former Article 9 remains perfected if the new law's requirements are met. 336.9-704 Security Interest Unperfected Before Effective Date A security interest that was enforceable but unperfected under the old Article 9 can be perfected under the new law. 336.9-705 Effectiveness of Action Taken Before Effective Date A filing that was effective under former Article 9 remains effective under the new version for its remaining duration, … 336.9-706 When Initial Financing Statement Suffices to Continue Effectiveness of Financing Statement This section addresses when and how an initial financing statement can be filed instead of a continuation statement … 336.9-707 Amendment of Pre-effective Date Financing Statement This section provides rules for determining the priority of security interests that were created under former Article 9. 336.9-708 Persons Entitled to File Initial Financing Statement or Continuation Statement A person may take actions required by Article 9 before the effective date if the action would be required on the … 336.9-709 Priority Former Article 9 continues to apply to actions taken before the revision's effective date. 336.9-801 Effective Date This section addresses the 2010 transition from the 2001 version of Article 9 to the current version. 336.9-802 Savings Clause Security interests perfected under the 2001 version of Article 9 remain perfected under the 2010 amendments. 336.9-803 Security Interest Perfected Before Effective Date A security interest that was enforceable under the 2001 version remains enforceable under the 2010 amendments. 336.9-804 Security Interest Unperfected Before Effective Date A security interest that was not perfected under the 2001 version can be perfected under the 2010 amendments. 336.9-805 Effectiveness of Action Taken Before Effective Date A financing statement filed before the 2010 amendments' effective date remains effective for its remaining duration … 336.9-806 When Initial Financing Statement Suffices to Continue Effectiveness of Financing Statement This section provides rules for filing during the transition to the 2010 amendments. 336.9-807 Amendment of Pre-effective Date Financing Statement The 2010 amendments determine priority of security interests, subject to certain transitional rules for interests … 336.9-808 Person Entitled to File Initial Financing Statement or Continuation Statement A person may take actions required by the 2010 amendments before their effective date. 336.9-809 Priority Former Article 9 (2001 version) continues to apply to actions taken before the 2010 amendments' effective date.