§ 554.9103 — Purchase-money security interest — application of payments — burden of establishing

Iowa § 554.9103

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

establishing.
1. Definitions. In this section:
a. “purchase-money collateral” means goods or software that secures a purchase-money
obligation incurred with respect to that collateral; and
b. “purchase-money obligation” means an obligation of an obligor incurred as all or part
of the price of the collateral or for value given to enable the debtor to acquire rights in or the
use of the collateral if the value is in fact so used.
2. Purchase-money security interest in goods. A security interest in goods is a
purchase-money security interest:
a. to the extent that the goods are purchase-money collateral with respect to that security
interest;
b. if the security interest is in inventory that is or was purchase-money collateral, also
to the extent that the security interest secures a purchase-money obligation incurred with
respecttootherinventoryinwhichthesecuredpartyholdsorheldapurchase-moneysecurity
interest; and
c. also to the extent that the security interest secures a purchase-money obligation
incurred with respect to software in which the secured party holds or held a purchase-money
security interest.
3. Purchase-money security interest in software. A security interest in software is a
purchase-money security interest to the extent that the security interest also secures a
purchase-money obligation incurred with respect to goods in which the secured party holds
or held a purchase-money security interest if:
a. the debtor acquired its interest in the software in an integrated transaction in which it
acquired an interest in the goods; and
b. the debtor acquired its interest in the software for the principal purpose of using the
software in the goods.
4. Consignor’s inventory purchase-money security interest. The security interest of a
consignor in goods that are the subject of a consignment is a purchase-money security
interest in inventory.
5. Application of payment in nonconsumer-goods transaction. In a transaction
other than a consumer-goods transaction, if the extent to which a security interest is a
purchase-money security interest depends on the application of a payment to a particular
obligation, the payment must be applied:
a. in accordance with any reasonable method of application to which the parties agree;

b. in the absence of the parties’ agreement to a reasonable method, in accordance with
any intention of the obligor manifested at or before the time of payment; or
c. in the absence of an agreement to a reasonable method and a timely manifestation of
the obligor’s intention, in the following order:
(1) to obligations that are not secured; and
(2) if more than one obligation is secured, to obligations secured by purchase-money
security interests in the order in which those obligations were incurred.
6. No loss of status of purchase-money security interest in nonconsumer-goods
transaction. In a transaction other than a consumer-goods transaction, a purchase-money
security interest does not lose its status as such, even if:
a. the purchase-money collateral also secures an obligation that is not a purchase-money
obligation;
b. collateral that is not purchase-money collateral also secures the purchase-money
obligation; or
c. the purchase-money obligation has been renewed, refinanced, consolidated, or
restructured.
7. Burden of proof in nonconsumer-goods transaction. In a transaction other than a
consumer-goods transaction, a secured party claiming a purchase-money security interest
has the burden of establishing the extent to which the security interest is a purchase-money
security interest.
8. Nonconsumer-goods transactions — no inference. The limitation of the rules in
subsections 5, 6, and 7 to transactions other than consumer-goods transactions is intended
to leave to the court the determination of the proper rules in consumer-goods transactions.
The court may not infer from that limitation the nature of the proper rule in consumer-goods
transactions and may continue to apply established approaches.