| | | 9-103. Former Section 9-103 generally addresses which State's | | law governs "perfection and the effect of perfection or non- | | perfection of" security interests. See, e.g., former Section 9- | | 103(1)(b). This Article follows the broader and more precise | | formulation in former Section 9-103(6)(b), which was revised in | | connection with the promulgation of Revised Article 8 in 1994: | | "perfection, the effect of perfection or non-perfection, and the | | priority of" security interests. Priority, in this context, | | subsumes all of the rules in Part 3, including "cut off" or "take | | free" rules such as Sections 9-317(b), (c), and (d) [Maine cite | | section 9-1317, subsections (2), (3) and (4)], 9-320(a), (b), and | | (d) [Maine cite section 9-1320, subsections (1), (2) and (4)], | | and 9-332 [Maine cite section 9-1332]. This subpart does not | | address choice of law for other purposes. For example, the law | | applicable to issues such as attachment, validity, | | characterization (e.g., true lease or security interest), and | | enforcement is governed by the rules in Section 1-105; that | | governing law typically is specified in the same agreement that | | contains the security agreement. And, another jurisdiction's law | | may govern other third-party matters addressed in this Article. | | See Section 9-401 [Maine cite section 9-1401], Comment 3. |
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| | | 3. Scope of Referral. In designating the jurisdiction whose | | law governs, this Article directs the court to apply only the | | substantive ("local") law of a particular jurisdiction and not | | its choice-of-law rules. |
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| | | Example 1: Litigation over the priority of a security | | interest in accounts arises in State X. State X has adopted the | | official text of this Article, which provides that priority is | | determined by the local law of the jurisdiction in which the | | debtor is located. See Section 9-301(1) [Maine cite section 9- | | 1301, subsection (1)]. The debtor is located in State Y. Even | | if State Y has retained former Article 9 or enacted a nonuniform | | choice-of-law rule (e.g., one that provides that perfection is | | governed by the law of State Z), a State X court should look only | | to the substantive law of State Y and disregard State Y's choice- | | of-law rule. State Y's substantive law (e.g., its Section 9-501 | | [Maine cite section 9-1501]) provides that financing statements | | should be filed in a filing office in State Y. Note, however, | | that if the identical perfection issue were to be litigated in | | State Y, the court would look to State Y's former Section 9-103 | | or nonuniform 9-301 and conclude that a filing in State Y is | | ineffective. |
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| | | Example 2: In the preceding Example, assume that State X has | | adopted the official text of this Article, and State Y has | | adopted a nonuniform Section 9-301(1) under which perfection is | | governed by the whole law of State X, including its choice-of-law | | rules. If litigation occurs in State X, the court should look to |
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