(810 ILCS 5/Art. 9 Pt. 2 Sub. 1 heading)
SUBPART 1.
EFFECTIVENESS AND ATTACHMENT
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(810 ILCS 5/9-201) (from Ch. 26, par. 9-201)
Sec. 9-201.
General effectiveness of security agreement.
(a) General effectiveness. Except as otherwise provided in the Uniform
Commercial Code, a security agreement is effective according to its terms
between
the parties, against purchasers of the collateral, and against creditors.
(b) Applicable consumer laws and other law. A transaction subject to
this Article is subject to any applicable rule of law, statute, or regulation
which establishes a
different
rule for
consumers, including:
(1) the Retail Installment Sales Act;
(2) the Motor Vehicle Retail Installment Sales Act;
(3) Article II of Chapter 3 of the Illinois Vehicle
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(4) Article IIIB of the Boat Registration and Safety
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(5) the Pawnbroker Regulation Act;
(6) the Motor Vehicle Leasing Act;
(7) the Consumer Installment Loan Act; and
(8) the Consumer Deposit Security Act of 1987.
(c) Other applicable law controls. In case of conflict between this Article
and a rule of law, statute, or regulation described in subsection
(b), the rule
of law,
statute, or regulation controls. Failure to comply with a rule of law,
statute, or
regulation
described in subsection (b) has only the effect such rule of law, statute, or
regulation
specifies.
(d) Further deference to other applicable law. This Article does not:
(1) validate any rate, charge, agreement, or practice
| | that violates a rule of law, statute, or regulation described in subsection (b); or
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(2) extend the application of the rule of law,
| | statute, or regulation to a transaction not otherwise subject to it.
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(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-202) (from Ch. 26, par. 9-202)
Sec. 9-202.
Title to collateral immaterial.
Except as otherwise provided
with
respect to consignments or sales of accounts, chattel paper, payment
intangibles, or
promissory notes, the provisions of this Article with regard to rights and
obligations
apply whether title to collateral is in the secured party or the debtor.
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-203) (from Ch. 26, par. 9-203)
Sec. 9-203. Attachment and enforceability of security interest; proceeds;
supporting obligations; formal requisites.
(a) Attachment. A security interest attaches to collateral when it becomes
enforceable against the debtor with respect to the collateral, unless an
agreement
expressly postpones the time of attachment.
(b) Enforceability. Except as otherwise provided in subsections (c)
through (i), a security interest is enforceable against the debtor and third
parties
with respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the
| | power to transfer rights in the collateral to a secured party; and
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(3) one of the following conditions is met:
(A) the debtor has authenticated a security
| | agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;
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(B) the collateral is not a certificated security
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(C) the collateral is a certificated security in
| | registered form and the security certificate has been delivered to the secured party under Section 8-301 pursuant to the debtor's security agreement; or
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(D) the collateral is deposit accounts,
| | electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under Section 7-106, 9-104, 9-105, 9-106, or 9-107 pursuant to the debtor's security agreement.
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(c) Other UCC provisions. Subsection (b) is subject to Section 4-210 on
the security interest of a collecting bank, Section 5-118 on the security interest of a
letter-of-credit issuer or nominated person, Section 9-110 on a security interest
arising under Article 2 or 2A, and Section 9-206 on security interests in investment
property.
(d) When person becomes bound by another person's security
agreement. A person becomes bound as debtor by a security agreement entered
into by another person if, by operation of law other than this Article or by contract:
(1) the security agreement becomes effective to
| | create a security interest in the person's property; or
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(2) the person becomes generally obligated for the
| | obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.
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(e) Effect of new debtor becoming bound. If a new debtor becomes
bound as debtor by a security agreement entered into by another person:
(1) the agreement satisfies subsection (b)(3) with
| | respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and
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(2) another agreement is not necessary to make a
| | security interest in the property enforceable.
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(f) Proceeds and supporting obligations. The attachment of a security
interest in collateral gives the secured party the rights to proceeds provided
by
Section 9-315 and is also attachment of a security interest in a supporting
obligation for the collateral.
(g) Lien securing right to payment. The attachment of a security interest
in a right to payment or performance secured by a security interest or other
lien on
personal or real property is also attachment of a security interest in the
security
interest, mortgage, or other lien.
(h) Security entitlement carried in securities account. The attachment
of a security interest in a securities account is also attachment of a security
interest
in the security entitlements carried in the securities account.
(i) Commodity contracts carried in commodity account. The
attachment of a security interest in a commodity account is also attachment of
a
security interest in the commodity contracts carried in the commodity
account.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-204) (from Ch. 26, par. 9-204)
Sec. 9-204.
After-acquired property; future advances.
(a) After-acquired collateral. Except as otherwise provided in subsection
(b), a security agreement may create or provide for a security interest in
after-acquired collateral.
(b) When after-acquired property clause not effective. A security
interest does not attach under a term constituting an after-acquired property
clause
to:
(1) consumer goods, other than an accession when
| | given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value; or
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(2) a commercial tort claim.
(c) Future advances and other value. A security agreement may provide
that collateral secures, or that accounts, chattel paper, payment intangibles,
or
promissory notes are sold in connection with, future advances or other value,
whether or not the advances or value are given pursuant to commitment.
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-205) (from Ch. 26, par. 9-205)
Sec. 9-205.
Use or disposition of collateral permissible.
(a) When security interest not invalid or fraudulent. A security interest
is not invalid or fraudulent against creditors solely because:
(1) the debtor has the right or ability to:
(A) use, commingle, or dispose of all or part of
| | the collateral, including returned or repossessed goods;
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(B) collect, compromise, enforce, or otherwise
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(C) accept the return of collateral or make
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(D) use, commingle, or dispose of proceeds; or
(2) the secured party fails to require the debtor to
| | account for proceeds or replace collateral.
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(b) Requirements of possession not relaxed. This Section does not relax
the requirements of possession if attachment, perfection, or enforcement of a
security interest depends upon possession of the collateral by the secured
party.
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-205.1) (from Ch. 26, par. 9-205.1)
Sec. 9-205.1.
Listing by debtor of purchasers or receivers of
collateral. A secured party may require that the debtor include as
part of the security agreement a list of persons to whom the debtor desires
to sell or otherwise dispose of the collateral.
The debtor shall not sell or otherwise dispose of the collateral to a person
not included in that list unless the debtor has notified the secured party
of his desire to sell or otherwise dispose of the collateral to such person
at least 7 days prior to the sale or other disposition.
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-206) (from Ch. 26, par. 9-206)
Sec. 9-206.
Security interest arising in purchase or delivery of financial
asset.
(a) Security interest when person buys through securities
intermediary. A security interest in favor of a securities intermediary
attaches to a
person's security entitlement if:
(1) the person buys a financial asset through the
| | securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and
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(2) the securities intermediary credits the financial
| | asset to the buyer's securities account before the buyer pays the securities intermediary.
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(b) Security interest secures obligation to pay for financial asset. The
security interest described in subsection (a) secures the person's obligation
to pay
for the financial asset.
(c) Security interest in payment against delivery transaction. A
security interest in favor of a person that delivers a certificated security or other
financial asset represented by a writing attaches to the security or other financial
asset if:
(1) the security or other financial asset:
(A) in the ordinary course of business is
| | transferred by delivery with any necessary indorsement or assignment; and
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(B) is delivered under an agreement between
| | persons in the business of dealing with such securities or financial assets; and
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(2) the agreement calls for delivery against payment.
(d) Security interest secures obligation to pay for delivery. The security
interest described in subsection (c) secures the obligation to make payment for
the
delivery.
(Source: P.A. 91-893, eff. 7-1-01.)
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