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HomeCommercial CodeDiv. 9Ch. 3§ 9332 Transferee Rights Against Security Interests

§ 9332 Transferee Rights Against Security Interests

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

§ 9332 Transferee Rights Against Security Interests

This law says that if you receive cash, money from a bank account, or electronic money and you didn't work with the debtor to cheat the person who has a legal claim on that money, you keep it free of that claim.

Key Takeaways

  • •You keep cash, deposit funds, or electronic money free of a security claim if you receive it without colluding with the debtor.
  • •Collusion means you worked with the debtor to violate the secured party's rights.
  • •The rule applies to three types of money: tangible money, deposit account funds, and electronic money.

Example

A friend gives you cash as a gift, and you didn't know the cash was supposed to be used to pay back a loan that the friend's lender had a claim on.

Because you got the cash without colluding with your friend to hide it from the lender, the law lets you keep the cash even though the lender had a security interest in it.

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

Official Source
View on CA.gov

§ 9332 Transferee Rights Against Security Interests

(a) A transferee of tangible money takes the money free of a security interest if the transferee receives possession of the money without acting in collusion with the debtor in violating the rights of the secured party. (b) A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account if the transferee receives the funds without acting in collusion with the debtor in violating the rights of the secured party. (c) A transferee of electronic money takes the money free of a security interest if the transferee obtains control of the money without acting in collusion with the debtor in violating the rights of the secured party. (Amended by Stats. 2023, Ch. 210, Sec. 53. (SB 95) Effective January 1, 2024.)

Last verified: January 10, 2026

Key Terms

transfereetangible moneydeposit accountelectronic moneysecurity interestcollusion with the debtorrights of the secured party

Related Statutes

  • § 9304 Bank Deposit Account Security
  • § 9327 Priority Conflicting Security Interests Deposit Ac
  • § 9341 Bank Account Security Interests
  • § 10307 Lessee Creditor Rights
  • § 1310 Subordination Of Obligations

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 9332.
View Official Source