Article 9 of the Uniform Commercial Code was drafted in such a manner as to cover almost all consensual security interests in personal property. With relatively few exceptions, the Article expressly applies "to any transaction (regardless of its form) which is intended to create a security interest in personal property." Therefore, in any consideration of the possible application of Article 9 to a particular set of facts, the first and most basic question to be resolved is whether a security interest exists. Ordinarily, the result of such an inquiry is not particularly elusive, but this fact should not obscure the potential seriousness of the problem. As one distinguished commentator has noted, "[i]n most instances it will be obvious if a secured transaction is intended, but occasionally it will not be clear, and in any event 'security interest' is a defined term. Like all defined terms in the Code, its definition must be carefully examined." The latter point is something of an understatement, to say the least. In fact, the complex issues of perfection, enforcement and priority, which are at the heart of so much of the Article 9 litigation, should not even be approached by the bench or the bar until it is clear that a security interest is actually present.
Claxton, Joseph Epps
"Lease or Security Interest: A Classic Problem of Commercial Law,"
Mercer Law Review: Vol. 28:
3, Article 2.
Available at: https://digitalcommons.law.mercer.edu/jour_mlr/vol28/iss3/2