§ 9318 Debtor'S Retained Collateral Rights

Commercial Code·California

AI SummaryVerified

Key Takeaways

•If you sell something like a promise to pay money (like an IOU), you don’t own it anymore.
•If the buyer doesn’t officially record their ownership, you might still seem like the owner to others.
•This rule helps figure out who really owns the IOU if there’s a fight about it.

Example

You sell your friend’s IOU to someone else but don’t tell anyone officially.

If the person you sold it to doesn’t record it, you might still look like the owner to others, even though you sold it.

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

Official Source

View on CA.gov

§ 9318 Debtor'S Retained Collateral Rights

(a) A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold. (b) For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold. (Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.)

Last verified: January 23, 2026

Key Terms

debtor account chattel paper payment intangible promissory note legal or equitable interest security interest unperfected

References

Official text at leginfo.legislature.ca.gov
California Legislature. Commercial Code. Section 9318.

§ 9318 Debtor'S Retained Collateral Rights

Commercial Code·California

AI SummaryVerified

§ 9318 Debtor'S Retained Collateral Rights

Key Takeaways

•If you sell something like a promise to pay money (like an IOU), you don’t own it anymore.
•If the buyer doesn’t officially record their ownership, you might still seem like the owner to others.
•This rule helps figure out who really owns the IOU if there’s a fight about it.

Example

You sell your friend’s IOU to someone else but don’t tell anyone officially.

If the person you sold it to doesn’t record it, you might still look like the owner to others, even though you sold it.

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

Official Source

View on CA.gov

§ 9318 Debtor'S Retained Collateral Rights

Last verified: January 23, 2026

Key Terms

debtor account chattel paper payment intangible promissory note legal or equitable interest security interest unperfected

References

Official text at leginfo.legislature.ca.gov
California Legislature. Commercial Code. Section 9318.

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References