State Codes and Statutes
Statutes > Utah > Title-70a > Chapter-09a > 70a-9a-10370A-9a-103. Purchase-money security interest -- Application of payments --Burden of establishing.
(1) In this section:
(a) "purchase-money collateral" means goods or software that secures a purchase-moneyobligation incurred with respect to that collateral; and
(b) "purchase-money obligation" means an obligation of an obligor incurred as all or partof the price of the collateral or for value given to enable the debtor to acquire rights in or the useof the collateral if the value is in fact so used.
(2) A security interest in goods is a purchase-money security interest:
(a) to the extent that the goods are purchase-money collateral with respect to that securityinterest;
(b) if the security interest is in inventory that is or was purchase-money collateral, also tothe extent that the security interest secures a purchase-money obligation incurred with respect toother inventory in which the secured party holds or held a purchase-money security interest; and
(c) also to the extent that the security interest secures a purchase-money obligationincurred with respect to software in which the secured party holds or held a purchase-moneysecurity interest.
(3) A security interest in software is a purchase-money security interest to the extent thatthe security interest also secures a purchase-money obligation incurred with respect to goods inwhich the secured party holds or held a purchase-money security interest if:
(a) the debtor acquired its interest in the software in an integrated transaction in which itacquired an interest in the goods; and
(b) the debtor acquired its interest in the software for the principal purpose of using thesoftware in the goods.
(4) The security interest of a consignor in goods that are the subject of a consignment is apurchase-money security interest in inventory.
(5) In a transaction other than a consumer-goods transaction, if the extent to which asecurity interest is a purchase-money security interest depends on the application of a payment toa particular obligation, the payment must be applied:
(a) in accordance with any reasonable method of application to which the parties agree;
(b) in the absence of the parties' agreement to a reasonable method, in accordance withany intention of the obligor manifested at or before the time of payment; or
(c) in the absence of an agreement to a reasonable method and a timely manifestation ofthe obligor's intention, in the following order:
(i) to obligations that are not secured; and
(ii) if more than one obligation is secured, to obligations secured by purchase-moneysecurity interests in the order in which those obligations were incurred.
(6) In a transaction other than a consumer-goods transaction, a purchase-money securityinterest does not lose its status as such, even if:
(a) the purchase-money collateral also secures an obligation that is not a purchase-moneyobligation;
(b) collateral that is not purchase-money collateral also secures the purchase-moneyobligation; or
(c) the purchase-money obligation has been renewed, refinanced, consolidated, orrestructured.
(7) In a transaction other than a consumer-goods transaction, a secured party claiming apurchase-money security interest has the burden of establishing the extent to which the securityinterest is a purchase-money security interest.
(8) The limitation of the rules in Subsections (5), (6), and (7) to transactions other thanconsumer-goods transactions is intended to leave to the court the determination of the proper rulesin consumer-goods transactions. The court may not infer from that limitation the nature of theproper rule in consumer-goods transactions and may continue to apply established approaches.
Enacted by Chapter 252, 2000 General Session
