§ 26-1-9.1-103 — Purchase-money security interest; application of payment; burden of establishing

Indiana § 26-1-9.1-103

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 9.1: Secured Transactions

Text

(a) In this section:
(1) "Purchase-money collateral" means goods or software that
secures a purchase-money obligation incurred with respect to that
collateral.
(2) "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.
(b) A security interest in goods is a purchase-money security
interest:
(1) to the extent that the goods are purchase-money collateral with
respect to that security interest;
(2) 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
respect to other inventory in which the secured party holds or held
a purchase-money security interest; and
(3) 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.
(c) 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:
(1) the debtor acquired its interest in the software in an integrated
transaction in which it acquired an interest in the goods; and
(2) the debtor acquired its interest in the software for the principal
purpose of using the software in the goods.
(d) The security interest of a consignor in goods that are the subject
of a consignment is a purchase-money security interest in inventory.
(e) 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:
(1) in accordance with any reasonable method of application to
which the parties agree;
(2) 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
(3) in the absence of an agreement to a reasonable method and a
timely manifestation of the obligor's intention, in the following
order:
(A) To obligations that are not secured.
(B) If more than one (1) obligation is secured, to obligations
secured by purchase-money security interests in the order in
which those obligations were incurred.
(f) A purchase-money security interest does not lose its status as
such, even if:
(1) the purchase-money collateral also secures an obligation that
is not a purchase-money obligation;
(2) collateral that is not purchase-money collateral also secures
the purchase-money obligation; or
(3) the purchase-money obligation has been renewed, refinanced,
consolidated, or restructured.
(g) 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.

Legislative History

As added by P.L.57-2000, SEC.45.