UCC 9-102 Definitions: Collateral, Proceeds, and Secured Parties

The definitions in UCC 9-102 are the vocabulary that controls every other rule in Article 9 of the Uniform Commercial Code, the law that governs secured transactions in personal property. The section lists roughly 80 defined terms, and each one does real work: how collateral is classified, who counts as the debtor, when a security interest is enforceable, and how a lender perfects and keeps priority all turn on getting these definitions right. Misreading one can leave a lender unperfected, subordinate to another creditor, or without a security interest at all.¹

The definitions fall into a few working groups: tangible goods and their subcategories, intangible collateral, specialized collateral that requires control, the parties to the transaction, the reach of a security interest into proceeds, and the paperwork that makes it all enforceable. A 2022 revision added new terms for digital assets, and whether those apply depends on your state.

Goods and the Four Use-Based Categories

Under 9-102(a)(44), “goods” means all things that are movable when a security interest attaches. The term also pulls in fixtures, standing timber under a contract for sale, unborn animals, growing crops, and manufactured homes. Embedded software counts as part of the goods when the program is customarily considered part of the product or when buying the product gives the right to use it. Accounts, deposit accounts, chattel paper, investment property, instruments, and minerals still in the ground are not goods.¹

Once something qualifies as goods, Article 9 places it in exactly one of four use-based categories. The categories are mutually exclusive, and the classification controls which perfection rules apply.

Consumer goods, under 9-102(a)(23), are items bought or used primarily for personal, family, or household purposes. A car driven to work, a kitchen refrigerator, or a laptop used for personal email all qualify.
Inventory, under 9-102(a)(48), covers goods held for sale or lease, goods furnished or to be furnished under a service contract, and raw materials or work in process. A car on a dealer’s lot is inventory; the same car in a buyer’s driveway is consumer goods.
Farm products, under 9-102(a)(34), means crops, livestock, aquatic goods produced in farming operations, and supplies used or produced in farming. The category only applies while the debtor is actually engaged in a farming operation.
Equipment, under 9-102(a)(33), is the catch-all. Goods that are not consumer goods, inventory, or farm products are equipment. Business machinery, delivery trucks, and office furniture typically land here.

Why the sorting matters: a purchase-money security interest in consumer goods perfects automatically without a filing, while a purchase-money interest in inventory requires a filed financing statement and advance notice to competing secured parties. Classify the collateral wrong and the lender can end up unperfected and subordinate to other creditors.¹

Fixtures and As-Extracted Collateral

Two goods-adjacent definitions handle the border with real property. Fixtures, under 9-102(a)(41), are goods so connected to real property that an interest in them arises under real property law, like a furnace bolted into a building or a built-in commercial elevator. A secured party who wants priority over a real estate lender generally needs to make a “fixture filing” in the local land records rather than relying on a standard financing statement.

As-extracted collateral, under 9-102(a)(6), covers oil, gas, or other minerals subject to a security interest created before extraction, where the interest attaches as the minerals come out of the ground. It also covers accounts arising from the sale of those minerals at the wellhead or minehead. The definition lets a single security interest follow minerals from the earth into their sale proceeds.¹

Intangible Collateral

Modern lending depends on assets that cannot be touched, and Article 9 slots them into several defined categories.

Accounts

An “account” under 9-102(a)(2) is a right to payment of a monetary obligation for property sold, services rendered, insurance policies issued, energy provided, and several other listed categories. These are what businesses call accounts receivable. Rights to payment already covered by another category, including chattel paper, deposit accounts, investment property, and commercial tort claims, are excluded.¹

Payment Intangibles

A “payment intangible” under 9-102(a)(61) is a general intangible where the debtor’s main obligation is to pay money. The practical difference from an account is that payment intangibles arise from transactions that do not fit the account definition’s list. Loan participations are a common example. When a lender buys payment intangibles outright, perfection is automatic without a filing.

Chattel Paper and Instruments

Chattel paper, under 9-102(a)(11), is a record or set of records that evidences both a monetary obligation and a security interest in specific goods, or a lease of specific goods. The standard example is a vehicle financing contract: the document itself proves both the buyer’s debt and the lender’s lien on the car. That contract can then serve as collateral for a secondary loan, which is how dealer floor-plan financing works.¹

An “instrument” under 9-102(a)(47) is a negotiable instrument or any other writing that evidences a right to monetary payment and is of a type normally transferred by physical delivery. Promissory notes are the usual example. The difference from chattel paper is that an instrument stands alone as a payment obligation without bundling in a security interest or lease. A “promissory note” is separately defined in 9-102(a)(65) as an instrument containing a promise to pay rather than an order to pay.

General Intangibles

A “general intangible” under 9-102(a)(42) is the residual category for personal property that does not fit any other defined type. Patents, trademarks, goodwill, software that does not qualify as goods, and contract rights that are not accounts all land here. Because these assets cannot be physically possessed, a secured party perfects by filing a financing statement. Labeling an account as a general intangible, or the reverse, can produce priority disputes because the perfection rules diverge.

Collateral That Requires Control

A handful of defined categories cannot be perfected by filing alone. For these, the secured party has to obtain “control,” usually through an agreement with the institution that holds the asset.

Deposit Accounts

A “deposit account” under 9-102(a)(29) is a demand, time, savings, or similar account held at a bank. Investment property and accounts evidenced by an instrument are excluded. Filing a financing statement does not perfect a security interest in a deposit account; the secured party needs control, typically through a three-party control agreement with the bank.¹

Investment Property

Under 9-102(a)(49), “investment property” means a security (certificated or uncertificated), a security entitlement, a securities account, a commodity contract, or a commodity account. A brokerage account holding stocks is investment property, and a lender who wants the strongest priority position needs a control agreement with the broker.

Commercial Tort Claims

A “commercial tort claim” under 9-102(a)(13) is a tort claim where the claimant is either an organization or an individual whose claim arose in the course of business. Personal injury and wrongful death claims are explicitly excluded. A commercial tort claim cannot be described by type alone in a security agreement; the agreement has to describe the specific claim with enough detail to identify it, so the lender needs to know about the claim before closing.¹

Letter-of-Credit Rights

A “letter-of-credit right” under 9-102(a)(51) is a right to payment or performance under a letter of credit, but not the beneficiary’s right to demand payment itself. Transfer of that demand right is governed by Article 5, not Article 9. A security interest in letter-of-credit rights is perfected by control.

Debtor, Obligor, and Secured Party

Three defined roles run through Article 9, and the distinction between them matters after default.

The “debtor” under 9-102(a)(28) is the person with an ownership interest in the collateral, other than the security interest itself. The “secured party” under 9-102(a)(73) is the person who holds the security interest. In a straightforward loan, the borrower is both the debtor and the obligor, and the lender is the secured party.¹

The “obligor” under 9-102(a)(59) is the person who owes payment or performance on the secured obligation. The debtor and the obligor are often the same person, but not always. A parent who pledges a certificate of deposit to secure a child’s business loan is the debtor (the parent owns the collateral), while the child is the obligor (the child owes the debt). Article 9 requires specific notices to the debtor and different notices to the obligor after default. A secured party who sends notices to the wrong person can lose the right to collect any deficiency remaining after the collateral is sold.²

Collateral and Proceeds

“Collateral” under 9-102(a)(12) is the property subject to a security interest or agricultural lien. The definition is broader than it looks: it includes proceeds the security interest attaches to, accounts and chattel paper that have been sold outright, and consigned goods.¹

“Proceeds” under 9-102(a)(64) is whatever is acquired when collateral is sold, leased, licensed, exchanged, or otherwise disposed of. When a dealer sells a car from inventory, the cash is proceeds. When that cash is deposited, the resulting account balance is proceeds. If the car is totaled instead, the insurance payout is proceeds. The concept keeps a security interest attached to value as it changes form, and UCC 9-315 carries the perfection forward automatically for 21 days unless one of several conditions is met.³

Security Agreement, Record, and Signing

A “security agreement” under 9-102(a)(74) is an agreement that creates or provides for a security interest. The label on the document is irrelevant; what matters is whether the agreement actually grants a security interest in identified collateral. Under UCC 9-203, a security interest becomes enforceable only when value has been given, the debtor has rights in the collateral, and the debtor has signed a security agreement describing the collateral.¹

Two supporting definitions make electronic deals work. A “record” under 9-102(a)(70) is information inscribed on a tangible medium or stored electronically in retrievable form, which lets a security agreement exist entirely as an electronic file. Under the original Article 9, “authenticate” in 9-102(a)(7) covered both signing on paper and adopting an electronic record through a sound, symbol, or process, as long as the party had present intent to adopt the record. Clicking “I agree” on a digital loan document counts; an automatically generated system log does not.

A security agreement with an inadequate collateral description, or one that was never properly signed, is unenforceable. The lender in that situation does not just have a technical problem. The lender has no security interest at all and stands in line with unsecured creditors if the borrower defaults or files for bankruptcy.

Purchase-Money Terms

UCC 9-102 indexes two definitions that live in 9-103 and carry a priority advantage. “Purchase-money collateral” is goods or software securing a purchase-money obligation related to that collateral. A “purchase-money obligation” is debt incurred as all or part of the price of the collateral, or for value given to enable the debtor to acquire the collateral, as long as the value is actually used that way.⁴

These definitions matter because a purchase-money security interest in goods other than inventory can beat an earlier-filed security interest if the purchase-money lender files its financing statement within 20 days after the debtor takes possession. For inventory, the purchase-money lender gets priority by filing before delivery and notifying the existing secured party. Lenders financing a specific asset rely on these definitions to carve out priority even when another creditor holds a blanket lien on all the debtor’s assets.

The 2022 Amendments and Digital Assets

A significant revision finalized in 2022 updates Article 9 for digital assets and related technology. As of early 2025, at least 25 jurisdictions had enacted the amendments, with more considering adoption.

The term “authenticate” has been eliminated. The amendments expand the Article 1 definition of “sign” to cover electronic signatures, so a separate Article 9 term is no longer needed, and states that adopted the amendments have repealed 9-102(a)(7). The day-to-day effect is small because electronic signatures were already valid under the old language, but the terminology in loan documents has shifted.

More substantively, the amendments add collateral categories for digital assets. A “controllable electronic record,” defined in new Article 12, is a record stored electronically that can be subjected to control, which captures assets like cryptocurrency tokens and other blockchain-based property. Two new Article 9 definitions build on it: a “controllable account” under 9-102(a)(27A) is an account evidenced by a controllable electronic record, and a “controllable payment intangible” under 9-102(a)(27B) is a payment intangible evidenced by a controllable electronic record. Lenders can take and perfect security interests in these digital assets using control-based mechanisms similar to those already used for deposit accounts and investment property.

Before relying on any specific definition, confirm whether your state has adopted the 2022 amendments. The applicable text, and in some cases the available collateral categories, can turn on that answer.

1
Legal Information Institute. UCC 9-102 – Definitions and Index of Definitions
2
Legal Information Institute. UCC 9-626 – Action in Which Deficiency or Surplus Is in Issue
3
Legal Information Institute. UCC 9-315 – Secured Party’s Rights on Disposition of Collateral
4
Legal Information Institute. UCC 9-103 – Purchase-Money Security Interest