Revised Article 9 of the Uniform Commercial Code: Implications for the Canadian Personal Property Security Acts

Abstract

The Personal Property, Security, Acts" (PPSAs) in effect in the Canadian common law provinces have their intellectual roots in the 1972 version of Article 9 (Secured Trans- actions) of the Uniform Commercial Code in the United States. Article 9 has recently, undergone a complete revision. This article offers a comparative overview of the new regime. The authors begin by identifying those features of the new Article 9 for which analogous provision already is made in all or most of the PPSAs. They then analyze certain other new features, which they do not believe should be exported to a Canadian context. The most notable of these are the designation of the debtor's law as the universal choice of law rule for perfection (but not priority) of all security, interests, and the introduction of special perfection and priority rules for security interests in deposit accounts and sales of "payment intangibles." The authors then review a miscellany of other provisions of the new Article 9 which they believe do merit consideration for adaptation into the PPSAs, including an explicit provision for cross-collateralization in purchase money inventory financing. In their conclusion, the authors offer some more general observations on the overall style and policy implications of the new Article 9. They conclude that the increased emphasis on more detailed and specialized rules may paradoxically lead to greater uncertainty because of the increased complexity. More fundamentally, it puts into question the basic premise of both Article 9 and the PPSAs that the functional identity of all secured transactions demands an essentially unitary regulatory framework.