Okla. Stat. tit. 12A § 1-9-401

Current through Laws 2024, c. 453.

Section 1-9-401 - Alienability of debtor's rights

(a) Except as otherwise provided in subsection (b) of this section and Sections 1-9-406, 1-9-407, 1-9-408, and 1-9-409 of this title, whether a debtor's rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this article.

(b) An agreement between the debtor and secured party which prohibits a transfer of the debtor's rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.

Okla. Stat. tit. 12A, § 1-9-401

Added by Laws 2000 , SB 1519, c. 371, § 70, eff. 7/1/2001.

Oklahoma Code Comment

Section 9-401 is the successor to old section 9-311 and covers alienability of the debtor's rights. Old Oklahoma section 9-311 contained a non-uniform amendment. After providing that the debtor's rights in collateral may be voluntarily or involuntarily transferred notwithstanding a provision in the security agreement prohibiting any transfer or making the transfer constitute a default, former Oklahoma section 9-311 also stated that the interest so transferred is subject to the creditor's security interest if it is properly perfected, and that nothing stated in former section 9-311 should be construed to be inconsistent with 21 Okla. Stat. section 1834 (which makes concealing, selling, or disposing of property covered by a chattel mortgage or conditional sales contract a felony unless the secured party has consented in writing).

Both of these statutory clauses in former section 9-311 seem to be mostly clarifications of traditional law which will apply (though this is not now specified) with equal force under revised Article 9. Under revised section 9- 401(b) , the interest transferred by the debtor in violation of the security agreement will still be subject to the secured party's existing security interest, whether the security interest is perfected or not. This security interest, however, may lose its priority in the process. See, for example, Official Comment 7 to revised section 9-401 .

Concerning the risk of revised section 9-401 not being construed inconsistently with 21 Okla. Stat. section 1834, nothing contained in revised section 9-401 would appear to detract from the criminal statute and courts should not read revised section 9-401 to undo anything in 21 Okla. Stat. section 1834 .