Key Takeaways

  • UCC § 9-109 outlines the scope of Article 9 of the Uniform Commercial Code, primarily addressing security interests in personal property and fixtures.
  • It covers various transaction types including sales of accounts, consignments, and agricultural liens.
  • The section does not apply to interests in real property, certain wage assignments, or liens created by other statutes.
  • The phrase “UCC 9-109 1 license plate requirements” is often misused by sovereign citizens who claim exemption from government regulations—claims that have no legal basis.
  • Misinterpretations of UCC 9-109 can lead to legal consequences if used to defy vehicle registration laws.

UCC 9-109 of the Uniform Commercial Code (UCC) governs how a security interest is created in personal property to secure debt. 

Uniform Commercial Code (U.C.C.) UCC 9-109. SCOPE

Section 109 of article 9 relates to:

  • Transactions, regardless of their form, that establish interest in personal fixtures or property by contract
  • Agricultural liens
  • The sale of accounts, payment intangibles, chattel paper, or promissory notes
  • Consignments
  • A security interest arising under ORS 72.4010 (Passing of title), 72.5050 (Seller's shipment under reservation), 72.7110 (Buyer's remedies in general) (3), or 72A.5080 (Lessee's remedies) (5), as provided in ORS 79.0110 (UCC 9-110. Security interests arising under ORS chapter 72 or 72A)
  • A security interest arising under ORS 74.2100 (Security interest of collecting bank in items) or 75.1180 (Security interest of issuer or nominated person).

Except as otherwise provided in subsections (c) and (d), this article applies to:

  1. A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract
  2. An agricultural lien
  3. A sale of accounts, chattel paper, payment intangibles, or promissory notes
  4. A consignment
  5. A security interest arising under Section 2-401, 2-505, 2-711(3), or 2A-508(5), as provided in Section 9-110
  6. A security interest arising under Section 4-210 or 5-118.

The application of this article to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this article does not apply.

This article does not apply to the extent that:

  1. A statute, regulation, or treaty of the United States preempts this article;
  2. Another statute of this state expressly governs the creation, perfection, priority, or enforcement of a security interest created by this state or a governmental unit of this state
  3. A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit
  4. The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under Section 5-114.

This article does not apply to:

  1. A landlord's lien, other than an agricultural lien
  2. A lien, other than an agricultural lien, given by statute or other rules of law for services or materials, but Section 9-333 applies with respect to priority of the lien
  3. An assignment of a claim for wages, salary, or other compensation of an employee
  4. A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose
  5. An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only
  6. An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract
  7. An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness
  8. A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but Sections 9-315 and 9-322 apply with respect to proceeds and priorities in proceeds
  9. An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral
  10. A right of recoupment or set-off, but:
    • Section 9-340 applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts
    • Section 9-404 applies with respect to defenses or claims of an account debtor
  11. The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:
    • Liens on real property in Sections 9-203 and 9-308
    • Fixtures in Section 9-334
    • Fixture filings in Sections 9-501, 9-502, 9-512, 9-516, and 9-519
    • Security agreements covering personal and real property in Section 9-604
  12. An assignment of a claim arising in tort, other than a commercial tort claim, but Sections 9-315 and 9-322 apply with respect to proceeds and priorities in proceeds
  13. An assignment of a deposit account in a consumer transaction, but Sections 9-315 and 9-322 apply with respect to proceeds and priorities in proceeds

Misinterpretation of UCC 9-109 1 License Plate Requirements

A growing number of individuals—particularly those affiliated with the "sovereign citizen" movement—invoke UCC 9-109 1 license plate requirements in an attempt to challenge vehicle registration laws or claim exemption from license plate mandates. These claims are based on a misinterpretation of UCC § 9-109 and have no grounding in valid legal precedent.

UCC § 9-109 governs secured transactions involving personal property, fixtures, and certain intangible assets such as accounts and chattel paper. It does not address vehicle registration, license plate requirements, or motor vehicle laws, which are governed by state motor vehicle codes and federal transportation regulations.

Here’s what to understand:

  • UCC 9-109 applies to commercial financing and security interests—not to personal identification documents like driver’s licenses or license plates.
  • No provision in UCC 9-109 grants individuals the right to operate vehicles without state-issued license plates or registration.
  • Courts across the U.S. have consistently rejected the sovereign citizen argument that they are not subject to traffic or registration laws.
  • Misusing UCC terminology to avoid legal obligations such as licensing or registration can result in fines, vehicle impoundment, and even arrest.

If you’re involved in a legitimate legal dispute involving a security interest under UCC § 9-109, consult an experienced attorney. UpCounsel provides access to top legal professionals who can help interpret and apply UCC rules correctly.

Frequently Asked Questions

  1. What does UCC 9-109 actually cover?
    UCC § 9-109 outlines the scope of Article 9, which governs security interests in personal property, fixtures, certain sales of receivables, and agricultural liens.
  2. Does UCC 9-109 apply to license plates or vehicle registration?
    No. Vehicle registration and license plate requirements are governed by state motor vehicle laws, not the UCC.
  3. What is the meaning of “UCC 9-109 1 license plate requirements”?
    The phrase is often used by individuals who misinterpret UCC § 9-109 to argue against vehicle registration laws. It has no legal standing in that context.
  4. Who typically misuses UCC 9-109?
    The misuse is common among members of the "sovereign citizen" movement, who claim to be outside the jurisdiction of state and federal laws—a claim repeatedly rejected by courts.
  5. Can I use UCC 9-109 in a legal defense against traffic citations?
    No. Attempting to use UCC § 9-109 as a defense against traffic laws or licensing requirements is legally invalid and may lead to more severe consequences.

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