7. Provisions Applicable Only to Non-Consumer-Goods Transactions.

a. "Dual-Status" Rule. For transactions other than consumer-goods transactions, this Article approves what some cases have called the "dual-status" rule, under which a security interest may be a purchase-money security interest to some extent and a non-purchase-money security interest to some extent. (Concerning consumer-goods transactions, see subsection (h) [Maine cite subsection (8)] and Comment 8.) Some courts have found this rule to be explicit or implicit in the words "to the extent," found in former Section 9-107 and continued in subsections (b)(1) and (b)(2) [Maine cite subsection (2), paragraphs (a) and (b)]. The rule is made explicit in subsection (e) [Maine cite subsection (5)]. For non-consumer-goods transactions, this Article rejects the "transformation" rule adopted by some cases, under which any cross-collateralization, refinancing, or the like destroys the purchase-money status entirely.

Consider, for example, what happens when a $10,000 loan secured by a purchase-money security interest is refinanced by the original lender, and, as part of the transaction, the debtor borrows an additional $2,000 secured by the collateral. Subsection (f) [Maine cite subsection (6)] resolves any doubt that the security interest remains a purchase-money security interest. Under subsection (b) [Maine cite subsection (2)], however, it enjoys purchase-money status only to the extent of $10,000.

b. Allocation of Payments. Continuing with the example, if the debtor makes a $1,000 payment on the $12,000 obligation, then one must determine the extent to which the security interest remains a purchase-money security interest-$9,000 or $10,000. Subsection (e)(1) [Maine cite subsection (5), paragraph (a)] expresses the overriding principle, applicable in cases other than consumer-goods transactions, for determining the extent to which a security interest is a purchase-money security interest under these circumstances: freedom of contract, as limited by principle of reasonableness. An unconscionable method of application, for example, is not a reasonable one and so would not be given effect under subsection (e)(1) [Maine cite subsection (5), paragraph (a)]. In the absence of agreement, subsection (e)(2) [Maine cite subsection (5), paragraph (b)]