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NORTH CAROLINA STATUTES AND CODES

§ 25-9-109. Scope.

2. Applicability of Article.

§ 25‑9‑109. Scope.

(a)        General scope ofArticle. – Except as otherwise provided in subsections (c) and (d) of thissection, this Article applies to:

(1)        A transaction,regardless of its form, that creates a security interest in personal propertyor fixtures by contract;

(2)        An agriculturallien;

(3)        A sale of accounts,chattel paper, payment intangibles, or promissory notes;

(4)        A consignment;

(5)        A security interestarising under G.S. 25‑2‑401, 25‑2‑505, 25‑2‑711(3),or 25‑2A‑508(5), as provided in G.S. 25‑9‑110; and

(6)        A security interestarising under G.S. 25‑4‑208 or G.S. 25‑5‑118.

(b)        Security interestin secured obligation. – The application of this Article to a security interestin a secured obligation is not affected by the fact that the obligation isitself secured by a transaction or interest to which this Article does notapply.

(c)        Extent to whichArticle does not apply. – This Article does not apply to the extent that:

(1)        A statute,regulation, or treaty of the United States preempts this Article;

(2)        Repealed by SessionLaws 2001‑218, s. 2.

(3)        A statute of anotherstate, a foreign country, or a governmental unit of another state or a foreigncountry, other than a statute generally applicable to security interests,expressly governs creation, perfection, priority, or enforcement of a securityinterest created by the state, country, or governmental unit; or

(4)        The rights of atransferee beneficiary or nominated person under a letter of credit areindependent and superior under G.S. 25‑5‑114.

(d)        Inapplicability ofArticle. – This Article does not apply to:

(1)        A landlord's lien,other than an agricultural lien;

(2)        A lien, other thanan agricultural lien, given by statute or other rule of law for services ormaterials, but G.S. 25‑9‑333 applies with respect to priority ofthe lien;

(3)        An assignment of aclaim 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 thebusiness out of which they arose;

(5)        An assignment ofaccounts, chattel paper, payment intangibles, or promissory notes which is forthe purpose of collection only;

(6)        An assignment of aright to payment under a contract to an assignee that is also obligated toperform under the contract;

(7)        An assignment of asingle account, payment intangible, or promissory note to an assignee in fullor partial satisfaction of a preexisting indebtedness;

(8)        A transfer of aninterest in or an assignment of a claim under a policy of insurance, other thanan assignment by or to a health‑care provider of a health‑care‑insurancereceivable and any subsequent assignment of the right to payment, but G.S. 25‑9‑315and G.S. 25‑9‑322 apply with respect to proceeds and priorities inproceeds;

(9)        An assignment of aright represented by a judgment, other than a judgment taken on a right topayment that was collateral;

(10)      A right of recoupmentor setoff, but:

a.         G.S. 25‑9‑340applies with respect to the effectiveness of rights of recoupment or setoffagainst deposit accounts; and

b.         G.S. 25‑9‑404applies with respect to defenses or claims of an account debtor;

(11)      The creation ortransfer of an interest in or lien on real property, including a lease or rentsthereunder, except to the extent that provision is made for:

a.         Liens on realproperty in G.S. 25‑9‑203 and G.S. 25‑9‑308;

b.         Fixtures in G.S. 25‑9‑334;

c.         Fixture filings inG.S. 25‑9‑501, 25‑9‑502, 25‑9‑512, 25‑9‑516,and 25‑9‑519; and

d.         Security agreementscovering personal and real property in G.S. 25‑9‑604;

(12)      An assignment of aclaim arising in tort, other than a commercial tort claim, but G.S. 25‑9‑315and G.S. 25‑9‑322 apply with respect to proceeds and priorities inproceeds;

(13)      An assignment of adeposit account in a consumer transaction, but G.S. 25‑9‑315 andG.S. 25‑9‑322 apply with respect to proceeds and priorities inproceeds; or

(14)      The creation,perfection, priority, or enforcement of any lien on, assignment of, pledge of,or security in, any revenues, rights, funds, or other tangible or intangibleassets created, made, or granted by this State or a governmental unit in thisState, including the assignment of rights as secured party in securityinterests granted by any party subject to the provisions of this Article tothis State or a governmental unit in this State, to secure, directly orindirectly, any bond, note, other evidence of indebtedness, or other paymentobligations for borrowed money issued by, or in connection with, installment orlease purchase financings by, this State or a governmental unit in this State.However, notwithstanding this subdivision, this Article does apply to thecreation, perfection, priority, and enforcement of security interests createdby this State or a governmental unit in this State in equipment or fixtures. (1965, c. 700, s. 1; 1975, c.862, s. 7; 2000‑169, s. 1; 2001‑218, s. 2.)

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