Texas Business and Commerce Code 9.109 – Scope

(a) Except as otherwise provided in Subsections (c), (d), and (e), this chapter 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 § 2.401, 2.505, 2.711(c), or 2A.508(e), as provided in § 9.110; and
(6) a security interest arising under § 4.210 or 5.118.
(b) The application of this chapter 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 chapter does not apply.

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Terms Used In Texas Business and Commerce Code 9.109

• Assets : (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Beneficiary : A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
• Contract : A legal written agreement that becomes binding when signed.
• Deed : The legal instrument used to transfer title in real property from one person to another.
• Equitable : Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
• Fraud : Intentional deception resulting in injury to another.
• Lease : A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
• Lien : A claim against real or personal property in satisfaction of a debt.
• Obligation : An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Person : includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
• Personal property : All property that is not real property.
• Property : means real and personal property. See Texas Government Code 311.005
• Real property : Land, and all immovable fixtures erected on, growing on, or affixed to the land.
• Recourse : An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
• Rule : includes regulation. See Texas Government Code 311.005
• Statute : A law passed by a legislature.
• Tort : A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.
• United States : includes a department, bureau, or other agency of the United States of America. See Texas Government Code 311.005

(c) This chapter does not apply to the extent that:
(1) a statute , regulation, or treaty of the United States preempts this chapter;
(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; or
(4) the rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under § 5.114.
(d) This chapter 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 rule of law for services or materials, but § 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 that 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:
(A) § 9.340 applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and
(B) § 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, as defined by § 64.001, Property Code, the interest of a vendor or vendee in a contract for deed to purchase an interest in real property, or the interest of an optionor or optionee in an option to purchase an interest in real property, except to the extent that provision is made for:
(A) liens on real property in Sections 9.203 and 9.308;
(B) fixtures in Section 9.334;
(C) fixture filings in Sections 9.501, 9.502, 9.512, 9.516, and 9.519; and
(D) 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, other than a nonnegotiable certificate of deposit, in a consumer transaction, but Sections 9.315 and 9.322 apply with respect to proceeds and priorities in proceeds; or
(14) an oil and gas lien arising under Chapter 67, Property Code.
(e) The application of this chapter to the sale of accounts, chattel paper, payment intangibles, or promissory notes is not to recharacterize that sale as a transaction to secure indebtedness but to protect purchasers of those assets by providing a notice filing system. For all purposes, in the absence of fraud or intentional misrepresentation, the parties’ characterization of a transaction as a sale of such assets shall be conclusive that the transaction is a sale and is not a secured transaction and that title, legal and equitable , has passed to the party characterized as the purchaser of those assets regardless of whether the secured party has any recourse against the debtor, whether the debtor is entitled to any surplus, or any other term of the parties’ agreement.