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HomeCommercial CodeDiv. 9Ch. 3§ 9309 Automatic Perfection Of Security Interests

§ 9309 Automatic Perfection Of Security Interests

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 9309 Automatic Perfection Of Security Interests

Key Takeaways

  • •If you buy something like a TV or a fridge on credit, the store automatically has a right to take it back if you don’t pay—no extra paperwork needed.
  • •If a business sells a small bunch of its unpaid bills to someone else, that sale is protected right away without extra steps.
  • •If a doctor or hospital gets paid later by insurance for treating you, they automatically have a right to that money if you owe them.
  • •If you win the lottery and sell your future winnings to someone else, that sale is protected right away.

Example

You buy a new phone from a store and agree to pay for it in monthly installments.

The store automatically has the right to take the phone back if you stop paying—no need for them to file extra papers to protect that right.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 9309 Automatic Perfection Of Security Interests

The following security interests are perfected when they attach: (1) A purchase money security interest in consumer goods, except as otherwise provided in subdivision (b) of Section 9311 with respect to consumer goods that are subject to a statute or treaty described in subdivision (a) of Section 9311. (2) An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles. (3) A sale of a payment intangible. (4) A sale of a promissory note. (5) A security interest created by the assignment of a health care insurance receivable to the provider of the health care goods or services. (6) A security interest arising under Section 2401 or 2505, under subdivision (3) of Section 2711, or under subdivision (5) of Section 10508, until the debtor obtains possession of the collateral. (7) A security interest of a collecting bank arising under Section 4210. (8) A security interest of an issuer or nominated person arising under Section 5118. (9) A security interest arising in the delivery of a financial asset under subdivision (c) of Section 9206. (10) A security interest in investment property created by a broker or securities intermediary. (11) A security interest in a commodity contract or a commodity account created by a commodity intermediary. (12) An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder. (13) A security interest created by an assignment of a beneficial interest in a decedent’s estate. (14) A sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance. (Amended by Stats. 2003, Ch. 235, Sec. 3. Effective January 1, 2004.)

Last verified: January 23, 2026

Key Terms

securityinsurancecommodityassignmentpossessioncontractpropertybenefit

Related Statutes

  • § 9305 Security Interest Perfection Rules
  • § 9109 Applicability Of Division
  • § 9330 Purchaser Priority Over Security Interest
  • § 2402 Seller Creditor Rights Limits
  • § 11303 Bank Overpayment And Duplicate Orders

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 9309.
View Official Source