§ 9—324. Priority of purchase-money security interests
(a) Except as otherwise provided in subsection (g) of this section, a perfected purchase
money security interest in goods other than inventory or livestock has priority over
a conflicting security interest in the same goods, and, except as otherwise provided
in section 9—327 of this title, a perfected security interest in its identifiable proceeds also has priority, if
the purchase-money security interest is perfected when the debtor receives possession
of the collateral or within 20 days thereafter.
(b) Subject to subsection (c) of this section and except as otherwise provided in subsection
(g) of this section, a perfected purchase-money security interest in inventory has
priority over a conflicting security interest in the same inventory, has priority
over a conflicting security interest in chattel paper or an instrument constituting
proceeds of the inventory and in proceeds of the chattel paper, if so provided in
section 9—330 of this title, and, except as otherwise provided in section 9—327 of this title, also has priority in identifiable cash proceeds of the inventory to the extent the
identifiable cash proceeds are received on or before the delivery of the inventory
to a buyer, if:
(1) the purchase-money security interest is perfected when the debtor receives possession
of the inventory;
(2) the purchase-money secured party sends a signed notification to the holder of the
conflicting security interest;
(3) the holder of the conflicting security interest receives the notification within five
years before the debtor receives possession of the inventory; and
(4) the notification states that the person sending the notification has or expects to
acquire a purchase-money security interest in inventory of the debtor and describes
the inventory.
(c) Subdivisions (b)(2) through (4) of this section apply only if the holder of the conflicting
security interest had filed a financing statement covering the same types of inventory:
(1) if the purchase-money security interest is perfected by filing, before the date of
the filing; or
(2) if the purchase-money security interest is temporarily perfected without filing or
possession under subsection 9—312(f) of this title, before the beginning of the 20-day period thereunder.
(d) Subject to subsection (e) of this section and except as otherwise provided in subsection
(g) of this section, a perfected purchase-money security interest in livestock that
are farm products has priority over a conflicting security interest in the same livestock,
and, except as otherwise provided in section 9—327 of this title, a perfected security interest in their identifiable proceeds and identifiable products
in their unmanufactured states also has priority, if:
(1) the purchase-money security interest is perfected when the debtor receives possession
of the livestock;
(2) the purchase-money secured party sends a signed notification to the holder of the
conflicting security interest;
(3) the holder of the conflicting security interest receives the notification within six
months before the debtor receives possession of the livestock; and
(4) the notification states that the person sending the notification has or expects to
acquire a purchase-money security interest in livestock of the debtor and describes
the livestock.
(e) Subdivisions (d)(2) through (4) of this section apply only if the holder of the conflicting
security interest had filed a financing statement covering the same types of livestock:
(1) if the purchase-money security interest is perfected by filing, before the date of
the filing; or
(2) if the purchase-money security interest is temporarily perfected without filing or
possession under subsection 9—312(f) of this title, before the beginning of the 20-day period thereunder.
(f) Except as otherwise provided in subsection (g) of this section, a perfected purchase-money
security interest in software has priority over a conflicting security interest in
the same collateral, and, except as otherwise provided in section 9—327 of this title, a perfected security interest in its identifiable proceeds also has priority, to
the extent that the purchase-money security interest in the goods in which the software
was acquired for use has priority in the goods and proceeds of the goods under this
section.
(g) If more than one security interest qualifies for priority in the same collateral under
subsection (a), (b), (d), or (f) of this section:
(1) a security interest securing an obligation incurred as all or part of the price of
the collateral has priority over a security interest securing an obligation incurred
for value given to enable the debtor to acquire rights in or the use of collateral;
and
(2) in all other cases, subsection 9—322(a) of this title applies to the qualifying security interests. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001; amended 2025, No. 17, § 9, eff. July 1, 2025.)