U.C.C. Article 9, Filing-Based Authority, and Fundamental Property Principles: A Reply to Professor Plank
Steven L. Harris
IIT Chicago-Kent College of Law
Charles W. Mooney Jr.
University of Pennsylvania Law School
September 1, 2013
Business Lawyer, Vol. 69, Pp. 79-92, Nov. 2013
U of Penn, Inst for Law & Econ Research Paper No. 14-13
Chicago-Kent College of Law Research Paper No. 2014-07
Uniform Commercial Code Article 9 generally follows the common-law principle that one cannot give rights in property that one does not have (nemo dat quod non habet). In many circumstances, however, Article 9’s priority rules, including its rule awarding priority to the first security interest that is perfected or as to which a financing statement has been filed, trump nemo dat and enable a debtor to grant a senior security interest in property that the debtor previously had encumbered. In this article, Professors Steven Harris and Charles Mooney argue that, properly understood, the first-to-file-or-perfect rule confers upon a debtor the power to create a security interest in accounts and other rights to payment that the debtor has already sold and in which it retains no interest. In doing so, they take issue with Professor Thomas Plank, whose argument to the contrary appeared in the February 2013 issue of The Business Lawyer.
Number of Pages in PDF File: 15
Keywords: Article 9, UCC, security interests, priority, first-to-file-or-perfect, nemo dat
JEL Classification: K11, K20Accepted Paper Series
Date posted: February 22, 2014 ; Last revised: June 23, 2014
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