§ 28:9-504. Indication of collateral.

UNIFORM COMMERCIAL CODE COMMENT

Source

Former Section 9-402(1).

Indication of Collateral

To comply with Section 9-502(a), a financing statement must "indicate" the collateral it covers. A financing statement sufficiently indicates collateral claimed to be covered by the financing statement if it satisfies the purpose of conditioning perfection on the filing of a financing statement, i.e., if it provides notice that a person may have a security interest in the collateral claimed. See Section 9-502, Comment 2. In particular, an indication of collateral that would have satisfied the requirements of former Section 9-402(l) (i.e., "a statement indicating the types, or describing the items, of collateral") suffices under Section 9- 502(a). An indication may satisfy the requirements of Section 9-502(a), even if it would not have satisfied the requirements of former Section 9- 402(l).

This section provides two safe harbors. Under paragraph (l), a "description" of the collateral (as the term is explained in Section 9-108) suffices as an indication for purposes of the sufficiency of a financing statement.

Debtors sometimes create a security interest in all, or substantially all, of their assets.  To accommodate this practice, paragraph (2) expands the class of sufficient collateral references to embrace "an indication that the financing statement covers all assets or all personal property."  If the property in question belongs to the debtor and is personal property, any searcher will know that the property is covered by the financing statement.   Of course, regardless of its breadth, a financing statement has no effect with respect to property indicated but to which a security interest has not attached.  Note that a broad statement of this kind (e.g., "all debtor's personal property") would not be a sufficient "description" for purposes of a security agreement. See Sections 9-203(b)(3)(A), 9-108.  It follows that a somewhat narrower description than "all assets," e.g., "all assets other than automobiles," is sufficient for purposes of this section, even if it does not suffice for purposes of a security agreement.

Legislative History of Laws

For Law 13-201, see notes following § 28:9-101.