Supplier Of Oil To Distributor Learns About UCC Consignment Rules The Hard Way

LexisNexis (September 30, 2016, 4:54 PM EDT) -- Although consignments of inventory are not true secured transactions, the drafters of the UCC have brought them within the scope of Article 9. UCC 9-103(d). A classic consignment arrangement is treated as a form of purchase-money security interest in inventory, with the consignor as the secured lender and the consignee as the debtor. As a result, the consignor will be in deep trouble if it fails to file a financing statement before delivery of the goods and to notify prior filers against the consignee of the...
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