§ 41-09-02 — (9-102) Definitions and index of definitions

1. In this chapter:
a. "Accession" means goods that are physically united with other goods in such a
manner that the identity of the original goods is not lost.
b. "Account", except as used in "account for", "account statement", "account to",
"commodity account" in subdivision p, "customer's account", "deposit account" in
subdivision gg, "on account of", and "statement of account", means:
(1) A right to payment of a monetary obligation, regardless of whether earned
by performance:
(a) For property that has been or is to be sold, leased, licensed, assigned,
or otherwise disposed of;
(b) For services rendered or to be rendered;
(c) For a policy of insurance issued or to be issued;
(d) For a secondary obligation incurred or to be incurred;
(e) For energy provided or to be provided;
(f) For the use or hire of a vessel under a charter or other contract;
(g) Arising out of the use of a credit or charge card or information
contained on or for use with the card; or
(h) As winnings in a lottery or other game of chance operated or
sponsored by a state, governmental unit of a state, or person licensed
or authorized to operate the game by a state or governmental unit of a
state.
(2) The term includes controllable accounts and a health care insurance
receivable. The term does not include:
(a) Chattel paper;
(b) Commercial tort claim;
(c) Deposit account;
(d) Investment property;
(e) Letter-of-credit right or letters of credit;
(f) Right to payment for any money or fund advanced or sold, other than
a right arising out of the use of a credit or charge card or information
contained on or for use with the card;
(g) Certificate of deposit; or
(h) Rights to payment evidenced by an instrument.
c. "Account debtor" means a person obligated on an account, chattel paper, or
general intangible. The term does not include a person obligated to pay a
negotiable instrument, even if the negotiable instrument evidences chattel paper.
d. "Accounting", except as used in "accounting for", means a record:
(1) Signed by a secured party;
(2) Indicating the aggregate unpaid secured obligations as of a date not more
than thirty-five days earlier or thirty-five days later than the date of the
record; and
(3) Identifying the components of the obligations in reasonable detail.
e. "Agricultural lien" means an interest in farm products:
(1) That secures payment or performance of an obligation for:
(a) Goods or services furnished in connection with a debtor's farming
operation or in connection with processing, production, or entrustment
of the farm products; or
(b) Rent on real property leased by a debtor in connection with the
debtor's farming operation;

(2) That is created by statute in favor of a person that:
(a) Furnished goods or services in connection with processing,
production, or entrustment of the farm product or in the ordinary
course of that person's business furnished goods or services to a
debtor in connection with a debtor's farming operation; or
(b) Leased real property to a debtor in connection with the debtor's
farming operation; and
(3) Of which the effectiveness does not depend on the person's possession of
the personal property.
f. "As-extracted collateral" means:
(1) Oil, gas, or other mineral that is subject to a security interest that:
(a) Is created by a debtor having an interest in the mineral before
extraction; and
(b) Attaches to the mineral as extracted; or
(2) Accounts arising out of the sale at the wellhead or minehead of oil, gas, or
other mineral in which the debtor had an interest before extraction.
g. "Assignee", except as used in "assignee for benefit of creditors", means a person
in whose favor a security interest that secures an obligation is created or provided
for under a security agreement, whether or not the obligation is outstanding or to
which an account, chattel paper, payment intangible, or promissory note has
been sold. The term includes a person to which a security interest has been
transferred by a secured party.
h. "Assignor" means a person that under a security agreement creates or provides
for a security interest that secures an obligation or sells an account, chattel paper,
payment intangible, or promissory note. The term includes a secured party that
has transferred a security interest to another person.
i. "Bank" means an organization engaged in the business of banking. The term
includes a savings bank, savings and loan association, credit union, and trust
company.
j. "Cash proceeds" means proceeds that are money, checks, deposit accounts,
certificates of deposit, or the like.
k. "Certificate of deposit" means a bank record of a sum of money which has been
received by the bank and a promise made by the bank to repay the sum of
money. The term does not include a deposit account. A certificate of deposit may
be negotiable, non-negotiable, nontransferable, certificated, or uncertificated.
l. "Certificate of title" means a certificate of title with respect to which a statute
provides for the security interest in question to be indicated on the certificate as a
condition or result of the security interest's obtaining priority over the rights of a
lien creditor with respect to the collateral. The term includes another record
maintained as an alternative to a certificate of title by the governmental unit that
issues certificates of title if a statute permits the security interest in question to be
indicated on the record as a condition or result of the security interest's obtaining
priority over the rights of a lien creditor with respect to the collateral.
m. "Certificated certificate of deposit" means a certificate of deposit that is
represented by a certificate.
n. "Chattel paper":
(1) Means:
(a) A right to payment of a monetary obligation secured by specific goods,
if the right to payment and security agreement are evidenced by a
record; or
(b) A right to payment of a monetary obligation owed by a lessee under a
lease agreement with respect to specific goods and a monetary
obligation owed by the lessee in connection with the transaction giving
rise to the lease, if:
[1] The right to payment and lease agreement are evidenced by a
record; and

[2] The predominant purpose of the transaction giving rise to the
lease was to give the lessee the right to possession and use of
the goods.
(2) Does not include a right to payment arising out of a charter or other contract
involving the use or hire of a vessel or a right to payment arising out of the
use of a credit or charge card or information contained on or for use with the
card.
o. "Collateral" means the property subject to a security interest or agricultural lien.
The term includes:
(1) Proceeds to which a security interest attaches;
(2) Accounts, chattel paper, payment intangibles, and promissory notes that
have been sold; and
(3) Goods that are the subject of a consignment.
p. "Commercial tort claim" means a claim arising in tort with respect to which:
(1) The claimant is an organization; or
(2) The claimant is an individual and the claim:
(a) Arose in the course of the claimant's business or profession; and
(b) Does not include damages arising out of personal injury to or the
death of an individual.
q. "Commodity account" means an account maintained by a commodity
intermediary in which a commodity contract is carried for a commodity customer.
r. "Commodity contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option, or another contract if the
contract or option is:
(1) Traded on or subject to the rules of a board of trade that has been
designated as a contract market for such a contract pursuant to federal
commodities laws; or
(2) Traded on a foreign commodity board of trade, exchange, or market and is
carried on the books of a commodity intermediary for a commodity
customer.
s. "Commodity customer" means a person for which a commodity intermediary
carries a commodity contract on the intermediary's books.
t. "Commodity intermediary" means a person that:
(1) Is registered as a futures commission merchant under federal commodities
law; or
(2) In the ordinary course of the person's business provides clearance or
settlement services for a board of trade that has been designated as a
contract market pursuant to federal commodities law.
u. "Communicate" means:
(1) To send a written or other tangible record;
(2) To transmit a record by any means agreed upon by the persons sending and
receiving the record; or
(3) In the case of transmission of a record to or by a filing office, to transmit a
record by any means prescribed by filing-office rule.
v. "Consignee" means a merchant to which goods are delivered in a consignment.
w. "Consignment" means a transaction, regardless of form, in which a person
delivers goods to a merchant for the purpose of sale and:
(1) The merchant:
(a) Deals in goods of that kind under a name other than the name of the
person making delivery;
(b) Is not an auctioneer; and
(c) Is not generally known by its creditors to be substantially engaged in
selling the goods of others;
(2) With respect to each delivery, the aggregate value of the goods is one
thousand dollars or more at the time of delivery;
(3) The goods are not consumer goods immediately before delivery; and

(4) The transaction does not create a security interest that secures an
obligation.
x. "Consignor" means a person that delivers goods to a consignee in a
consignment.
y. "Consumer debtor" means a debtor in a consumer transaction.
z. "Consumer goods" means goods that are used or bought for use primarily for
personal, family, or household purposes.
aa. "Consumer-goods transaction" means a consumer transaction in which:
(1) An individual incurs an obligation primarily for personal, family, or household
purposes; and
(2) A security interest in consumer goods secures the obligation.
bb. "Consumer obligor" means an obligor who is an individual and who incurred the
obligation as part of a transaction entered into primarily for personal, family, or
household purposes.
cc. "Consumer transaction" means a transaction in which:
(1) An individual incurs an obligation primarily for personal, family, or household
purposes;
(2) A security interest secures the obligation; and
(3) The collateral is held or acquired primarily for personal, family, or household
purposes. The term includes consumer-goods transactions.
dd. "Continuation statement" means an amendment of a financing statement which:
(1) Identifies, by its file number, the initial financing statement to which it relates;
and
(2) Indicates that it is a continuation statement for, or that it is filed to continue
the effectiveness of, the identified financing statement.
ee. "Controllable account" means an account evidenced by a controllable electronic
record that provides that the account debtor undertakes to pay the person that
has control under section 41-12-05 of the controllable electronic record.
ff. "Controllable payment intangible" means a payment intangible evidenced by a
controllable electronic record that provides that the account debtor undertakes to
pay the person that has control under section 41-12-05 of the controllable
electronic record.
gg. "Debtor" means:
(1) A person having an interest, other than a security interest or other lien, in
the collateral, regardless of whether the person is an obligor;
(2) A seller of accounts, chattel paper, payment intangibles, or promissory
notes; or
(3) A consignee.
hh. "Deposit account" means a demand, time, savings, passbook, or similar account
maintained with a bank. The term does not include investment property, a United
States central bank digital currency, or an account evidenced by a certificate of
deposit or an instrument.
ii. "Document" means a document of title or a receipt of the type described in
subsection 2 of section 41-07-07.
jj. "Electronic money" means money in an electronic form.
kk. "Encumbrance" means a right, other than an ownership interest, in real property.
The term includes mortgages and other liens on real property.
ll. "Equipment" means goods other than inventory, farm products, or consumer
goods.
mm. "Farm products" means goods, other than standing timber, subject to a lien
created under chapter 35-17, 35-30, or 35-31, or with respect to which the debtor
is engaged in a farming operation and which are:
(1) Crops grown, growing, or to be grown, including:
(a) Crops produced on trees, vines, and bushes; and
(b) Aquatic goods produced in aquacultural operations;

(2) Livestock, born or unborn, including aquatic goods produced in aquacultural
operations;
(3) Supplies used or produced in a farming operation; or
(4) Products of crops or livestock in their unmanufactured states.
nn. "Farming operation" means raising, cultivating, propagating, fattening, grazing, or
any other farming, livestock, or aquacultural operation.
oo. "File number" means the number assigned to an initial financing statement
pursuant to subsection 1 of section 41-09-90.
pp. "Filing office" means an office designated in section 41-09-72 as the place to file
a financing statement.
qq. "Filing-office rule" means a rule adopted under section 41-09-97.
rr. "Financing statement" means a record composed of an initial financing statement
and any filed record relating to the initial financing statement.
ss. "Fixture filing" means the filing of a financing statement covering goods that are
or are to become fixtures and satisfying subsections 1 and 2 of section 41-09-73.
The term includes the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
tt. "Fixtures" means goods that have become so related to particular real property
that an interest in them arises under real property law.
uu. "General intangible" means any personal property, including things in action,
other than accounts, certificates of deposit, chattel paper, commercial tort claims,
deposit accounts, documents, goods, instruments, investment property,
letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals
before extraction. The term includes controllable electronic records, payment
intangibles, and software.
vv. "Goods" means all things that are movable when a security interest attaches.
(1) The term includes:
(a) Fixtures;
(b) Standing timber that is to be cut and removed under a conveyance or
contract for sale;
(c) The unborn young of animals;
(d) Crops grown, growing, or to be grown, even if the crops are produced
on trees, vines, or bushes; and
(e) Manufactured homes.
(2) The term also includes a computer program embedded in goods and any
supporting information provided in connection with a transaction relating to
the program if:
(a) The program is associated with the goods in such a manner that the
program is customarily considered part of the goods; or
(b) By becoming the owner of the goods, a person acquires a right to use
the program in connection with the goods.
(3) The term does not include a computer program embedded in goods that
consist solely of the medium in which the program is embedded. The term
also does not include accounts, certificates of deposit, chattel paper,
commercial tort claims, deposit accounts, documents, general intangibles,
instruments, investment property, letter-of-credit rights, letters of credit,
money, or oil, gas, or other minerals before extraction.
ww. "Governmental unit" means a subdivision, agency, department, county, parish,
municipality, or other unit of the government of the United States, a state, or a
foreign country. The term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which interest is exempt
from income taxation under the laws of the United States.
xx. "Health care insurance receivable" means an interest in or claim under a policy of
insurance which is a right to payment of a monetary obligation for health care
goods or services provided or to be provided.

yy. "Instrument" means a negotiable instrument or any other writing that evidences a
right to the payment of a monetary obligation, is not itself a security agreement or
lease, and is of a type that in ordinary course of business is transferred by
delivery with any necessary indorsement or assignment. The term does not
include:
(1) Certificates of deposit;
(2) Investment property;
(3) Letters of credit;
(4) Writings that evidence a right to payment arising out of the use of a credit or
charge card or information contained on or for use with the card; or
(5) Writings that evidence chattel paper.
zz. "Inventory" means goods, other than farm products, that:
(1) Are leased by a person as lessor;
(2) Are held by a person for sale or lease or to be furnished under a contract of
service;
(3) Are furnished by a person under a contract of service; or
(4) Consist of raw materials, work in process, or materials used or consumed in
a business.
aaa. "Investment property" means a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract, or commodity
account.
bbb. "Jurisdiction of organization", with respect to a registered organization, means the
jurisdiction under whose law the organization is organized.
ccc. "Letter-of-credit right" means a right to payment or performance under a letter of
credit, regardless of whether the beneficiary has demanded or is at the time
entitled to demand payment or performance. The term does not include the right
of a beneficiary to demand payment or performance under a letter of credit.
ddd. "Lien creditor" means:
(1) A creditor that has acquired a lien on the property involved by attachment,
levy, or the like;
(2) An assignee for benefit of creditors from the time of assignment;
(3) A trustee in bankruptcy from the date of the filing of the petition; or
(4) A receiver in equity from the time of appointment.
eee. "Manufactured home" means a structure, transportable in one or more sections,
that, in the traveling mode, is eight body feet [2.44 meters] or more in width or
forty body feet [12.19 meters] or more in length, or, when erected on site, is three
hundred twenty square feet [29.73 square meters] or more, and which is built on
a permanent chassis and designed to be used as a dwelling with or without a
permanent foundation when connected to the required utilities, and includes the
plumbing, heating, air-conditioning, and electrical systems contained therein. The
term includes any structure that meets all of the requirements of this subdivision
except the size requirements and with respect to which the manufacturer
voluntarily files a certification required by the United States secretary of housing
and urban development and complies with the standards established under
title 42 of the United States Code.
fff. "Manufactured-home transaction" means a secured transaction:
(1) Which creates a purchase-money security interest in a manufactured home,
other than a manufactured home held as inventory; or
(2) In which a manufactured home, other than a manufactured home held as
inventory, is the primary collateral.
ggg. "Money" has the meaning in subsection 2 of section 41-01-09, but does not
include a deposit account or money in an electronic form that cannot be
subjected to control under section 41-09-05.1.
hhh. "Mortgage" means a consensual interest in real property, including fixtures, that
secures payment or performance of an obligation.

iii. "New debtor" means a person that becomes bound as debtor under subsection 4
of section 41-09-13 by a security agreement previously entered into by another
person.
jjj. "New value" means:
(1) Money;
(2) Money's worth in property, services, or new credit; or
(3) Release by a transferee of an interest in property previously transferred to
the transferee.
The term does not include an obligation substituted for another obligation.
kkk. "Noncash proceeds" means proceeds other than cash proceeds.
lll. "Non-negotiable certificate of deposit" means a bank record that contains an
acknowledgment that a sum of money has been received by the issuer and a
promise by the issuer to repay the sum of money other than a deposit account or
negotiable instrument.
mmm. "Nontransferable certificate of deposit" means a non-negotiable certificate of
deposit which may be transferred only on the books of the issuer, with the
consent of the issuer, or subject to other restrictions or considerations of the
issuer on transfer. The term does not include a deposit account.
nnn. "Obligor" means a person that, with respect to an obligation secured by a security
interest in or an agricultural lien on the collateral:
(1) Owes payment or other performance of the obligation;
(2) Has provided property other than the collateral to secure payment or other
performance of the obligation; or
(3) Is otherwise accountable in whole or in part for payment or other
performance of the obligation.
The term does not include issuers or nominated persons under a letter of credit.
ooo. "Original debtor", except as used in subsection 3 of section 41-09-30, means a
person that, as debtor, entered into a security agreement to which a new debtor
has become bound under subsection 4 of section 41-09-13.
ppp. "Payment intangible" means a general intangible under which the account
debtor's principal obligation is a monetary obligation. The term includes a
controllable payment intangible.
qqq. "Person related to", with respect to an individual, means:
(1) The spouse of the individual;
(2) A brother, brother-in-law, sister, or sister-in-law of the individual;
(3) An ancestor or lineal descendant of the individual or the individual's spouse;
or
(4) Any other relative, by blood or marriage, of the individual or the individual's
spouse who shares the same home with the individual.
rrr. "Person related to", with respect to an organization, means:
(1) A person directly or indirectly controlling, controlled by, or under common
control with the organization;
(2) An officer or director of, or a person performing similar functions with respect
to, the organization;
(3) An officer or director of, or a person performing similar functions with respect
to, a person described in paragraph 1;
(4) The spouse of an individual described in paragraph 1, 2, or 3; or
(5) An individual who is related by blood or marriage to an individual described
in paragraph 1, 2, 3, or 4 and shares the same home with the individual.
sss. "Proceeds", except as used in subsection 2 of section 41-09-106, means the
following property:
(1) Whatever is acquired upon the sale, lease, license, exchange, or other
disposition of collateral;
(2) Whatever is collected on, or distributed on account of, collateral;
(3) Rights arising out of collateral;

(4) To the extent of the value of collateral, claims arising out of the loss,
nonconformity, or interference with the use of, defects or infringement of
rights in, or damage to, the collateral; or
(5) To the extent of the value of collateral and to the extent payable to the
debtor or the secured party, insurance payable by reason of the loss or
nonconformity of, defects or infringement of rights in, or damage to, the
collateral.
ttt. "Promissory note" means an instrument that evidences a promise to pay a
monetary obligation, does not evidence an order to pay, and does not contain an
acknowledgment by a bank that the bank has received for deposit a sum of
money or funds.
uuu. "Proposal" means a record signed by a secured party which includes the terms
on which the secured party is willing to accept collateral in full or partial
satisfaction of the obligation it secures under sections 41-09-115 through