§ 41-09-03 — (9-103) Purchase-money security interest - Application of payments - Burden of establishing

North Dakota § 41-09-03

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-09: Secured Transactions

Text

Burden of establishing.
1. 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. 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 respect to other inventory in which the secured party holds or held a
purchase-money security 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. 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 the debtor 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. The security interest of a consignor in goods that are the subject of a consignment is a
purchase-money security interest in inventory.
5. 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. 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. 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.