Under the Uniform Commercial Code, which article governs secured commercial paper?

Under the Uniform Commercial Code, which article governs secured commercial paper?

• A. Article 9
• B. Article 3
• C. Article 2
• D. Article 4

Answer: (B)

Commercial paper refers to negotiable instruments like promissory notes and checks. Under the UCC, those instruments are governed by Article 3, which covers their creation, transfer, payment, and enforcement. When such a note is secured by collateral, the security arrangement itself falls under Article 9, but that doesn’t change which article governs the instrument. So the article governing secured commercial paper—the instrument itself—is Article 3. Other articles address different areas: Article 9 handles security interests in personal property, Article 2 covers sales of goods, and Article 4 deals with bank deposits and collections.

Commercial paper refers to negotiable instruments like promissory notes and checks. Under the UCC, those instruments are governed by Article 3, which covers their creation, transfer, payment, and enforcement. When such a note is secured by collateral, the security arrangement itself falls under Article 9, but that doesn’t change which article governs the instrument. So the article governing secured commercial paper—the instrument itself—is Article 3. Other articles address different areas: Article 9 handles security interests in personal property, Article 2 covers sales of goods, and Article 4 deals with bank deposits and collections.