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Electronic Chattel Paper Under Revised Article 9: Updating the Concept of Embodied Rights for Electronic Commerce

Jane K. Winn

University of Washington - School of Law

September 26, 1999

When UCC Article 9 was revised in 1998, a new provision governing “electronic chattel paper” (ECP) was added. “Chattel paper” is widely used in certain industries to finance the purchase of equipment, and includes loans and leases. Under former Article 9, chattel paper financers who took possession of the chattel paper could gain priority over other secured lenders who ear-lier perfected by filing, and equipment financers sought assurances they could retain this su-per-priority status if they switched from paper to electronic records. The concept of perfection by “control” of financial assets held in electronic form had been established with the revisions of UCC Article 8 in 1994, but a new model for control of electronic chattel paper was deemed necessary because chattel paper market institutions differed significantly from market institutions covered by the revised Article 8 provisions. Revised Article 9 provides that ECP must consist of a single authoritative copy of the chattel paper record or records which is unique, identifiable, and generally unalterable. This represents a significant innovation in commercial law because it updates the concept of rights embodied in the representation of financial assets, rather than accommodating the growth of account-based systems of tracking ownership of financial assets.

Number of Pages in PDF File: 15

Keywords: Article 9, secured transactions, commercial law, chattel paper, electronic chattel paper, electronic negotiability, electronic contracting

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Date posted: September 26, 2010  

Suggested Citation

Winn, Jane K., Electronic Chattel Paper Under Revised Article 9: Updating the Concept of Embodied Rights for Electronic Commerce (September 26, 1999). Available at SSRN: https://ssrn.com/abstract=1682782 or http://dx.doi.org/10.2139/ssrn.1682782

Contact Information

Jane Winn (Contact Author)
University of Washington - School of Law ( email )
William H. Gates Hall
Box 353020
Seattle, WA 98105-3020
United States

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