UCC Nevada
UCC Nevada
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ARTICLE 1
GENERAL PROVISIONS
PART 1
SHORT TITLES, SCOPE, CONSTRUCTION, SEVERABILITY AND ELECTRONIC SIGNATURES AND DELIVERY
NRS 104.1101 Short titles.
NRS 104.1102 Scope of Article 1.
NRS 104.1103 Construction of Uniform Commercial Code to promote underlying purposes and policies; applicability of
supplemental principles of law.
NRS 104.1104 Construction against implied repeal.
NRS 104.1105 Severability.
NRS 104.1106 Use of singular and plural; gender.
NRS 104.1108 Relation to Electronic Signatures in Global and National Commerce Act.
PART 2
GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
NRS 104.1201 General definitions.
NRS 104.1202 Notice; knowledge.
NRS 104.1203 Lease distinguished from security interest.
NRS 104.1204 Value.
NRS 104.1205 Reasonable time; seasonableness.
NRS 104.1206 Presumptions.
PART 3
TERRITORIAL APPLICABILITY AND GENERAL RULES
NRS 104.1301 Territorial applicability; parties’ power to choose applicable law.
NRS 104.1302 Variation by agreement.
NRS 104.1303 Course of performance, course of dealing and usage of trade.
NRS 104.1304 Obligation of good faith.
NRS 104.1305 Remedies to be liberally administered.
NRS 104.1306 Waiver or renunciation of claim or right after breach.
NRS 104.1307 Prima facie evidence by third-party documents.
NRS 104.1308 Performance or acceptance under reservation of rights.
NRS 104.1309 Option to accelerate at will.
NRS 104.1310 Subordinated obligations.
ARTICLE 2
SALES
PART 1
SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER
NRS 104.2101 Short title.
NRS 104.2102 Scope; certain security and other transactions excluded from this article.
NRS 104.2103 Definitions and index of definitions.
NRS 104.2104 Definitions: “Merchant”; “between merchants”; “financing agency.”
NRS 104.2105 Definitions: Transferability; “goods”; “future” goods; “lot”; “commercial unit.”
NRS 104.2106 Definitions: “Contract”; “agreement”; “contract for sale”; “sale”; “present sale”; “conforming” to contract;
“termination”; “cancellation.”
NRS 104.2107 Goods to be severed from realty: Recording.
PART 2
FORM , FORMATION AND READJUSTMENT OF CONTRACT
NRS 104.2201 Formal requirements; statute of frauds.
NRS 104.2202 Final written expression: Parol or extrinsic evidence.
NRS 104.2203 Seals inoperative.
NRS 104.2204 Formation in general.
NRS 104.2205 Firm offers.
NRS 104.2206 Offer and acceptance in formation of contract.
NRS 104.2207 Additional terms in acceptance or confirmation.
NRS 104.2209 Modification, rescission and waiver.
PART 3
GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT
NRS 104.2301 General obligations of parties.
NRS 104.2302 Unconscionable contract or clause.
NRS 104.2303 Allocation or division of risks.
NRS 104.2304 Price payable in money, goods, realty or otherwise.
NRS 104.2305 Open price term.
NRS 104.2306 Output, requirements and exclusive dealings.
NRS 104.2307 Delivery in single lot or several lots.
NRS 104.2308 Absence of specified place for delivery.
NRS 104.2309 Absence of specific time for action or duration of contract; notice of termination.
NRS 104.2310 Open time for payment or running of credit; authority to ship under reservation.
NRS 104.2311 Options and cooperation respecting performance.
NRS 104.2312 Warranty of title and against infringement; buyer’s obligation against infringement.
NRS 104.2313 Express warranties by affirmation, promise, description or sample.
NRS 104.2314 Implied warranty: Merchantability; usage of trade.
NRS 104.2315 Implied warranty: Fitness for particular purpose.
NRS 104.2316 Exclusion or modification of warranties.
NRS 104.2317 Cumulation and conflict of warranties express or implied.
NRS 104.2318 Third-party beneficiaries of warranties express or implied.
NRS 104.2319 F.O.B. and F.A.S. terms.
NRS 104.2320 C.I.F. and C. & F. terms.
NRS 104.2321 C.I.F. or C. & F.: “Net landed weights”; “payment on arrival”; warranty of condition on arrival.
NRS 104.2322 Delivery “ex-ship.”
NRS 104.2323 Form of bill of lading required in overseas shipment; “overseas.”
NRS 104.2324 “No arrival, no sale” term.
NRS 104.2325 “Letter of credit” term; “confirmed credit.”
NRS 104.2326 Sale on approval and sale or return; rights of creditors.
NRS 104.2327 Special incidents of sale on approval and sale or return.
NRS 104.2328 Sale by auction.
PART 4
TITLE, CREDITORS AND GOOD FAITH PURCHASERS
NRS 104.2401 Passing of title; reservation for security; limited application of this section.
NRS 104.2402 Rights of seller’s creditors against sold goods.
NRS 104.2403 Power to transfer; good faith purchase of goods; “entrusting.”
PART 5
PERFORMANCE
NRS 104.2501 Insurable interest in goods; manner of identification of goods.
NRS 104.2502 Buyer’s right to goods on seller’s repudiation, failure to deliver or insolvency.
NRS 104.2503 Manner of seller’s tender of delivery.
NRS 104.2504 Shipment by seller.
NRS 104.2505 Seller’s shipment under reservation.
NRS 104.2506 Rights of financing agency.
NRS 104.2507 Effect of seller’s tender; delivery on condition.
NRS 104.2508 Cure by seller of improper tender or delivery; replacement.
NRS 104.2509 Risk of loss in the absence of breach.
NRS 104.2510 Effect of breach on risk of loss.
NRS 104.2511 Tender of payment by buyer; payment by check.
NRS 104.2512 Payment by buyer before inspection.
NRS 104.2513 Buyer’s right to inspection of goods.
NRS 104.2514 When documents deliverable on acceptance; when on payment.
NRS 104.2515 Preserving evidence of goods in dispute.
PART 6
BREACH, REPUDIATION AND EXCUSE
NRS 104.2601 Buyer’s rights on improper delivery.
NRS 104.2602 Manner and effect of rightful rejection.
NRS 104.2603 Merchant buyer’s duties as to rightfully rejected goods.
NRS 104.2604 Buyer’s options as to salvage of rightfully rejected goods.
NRS 104.2605 Waiver of buyer’s objections by failure to particularize.
NRS 104.2606 What constitutes acceptance of goods.
NRS 104.2607 Effect of acceptance; notice of breach; burden of establishing breach after acceptance; notice of claim or
litigation to person answerable over.
NRS 104.2608 Revocation of acceptance in whole or in part.
NRS 104.2609 Right to adequate assurance of performance.
NRS 104.2610 Anticipatory repudiation.
NRS 104.2611 Retraction of anticipatory repudiation.
NRS 104.2612 “Installment contract”; breach.
NRS 104.2613 Casualty to identified goods.
NRS 104.2614 Substituted performance.
NRS 104.2615 Excuse by failure of presupposed conditions.
NRS 104.2616 Procedure on notice claiming excuse.
PART 7
REMEDIES
NRS 104.2701 Remedies for breach of collateral contracts not impaired.
NRS 104.2702 Seller’s remedies on discovery of buyer’s insolvency.
NRS 104.2703 Seller’s remedies in general.
NRS 104.2704 Seller’s right to identify goods to contract notwithstanding breach or to salvage unfinished goods.
NRS 104.2705 Seller’s stoppage of delivery in transit or otherwise.
NRS 104.2706 Seller’s resale including contract for resale.
NRS 104.2707 “Person in the position of a seller.”
NRS 104.2708 Seller’s damages for nonacceptance or repudiation.
NRS 104.2709 Action for price.
NRS 104.2710 Seller’s incidental damages.
NRS 104.2711 Buyer’s remedies in general; buyer’s security interest in rejected goods.
NRS 104.2712 “Cover”; buyer’s procurement of substitute goods.
NRS 104.2713 Buyer’s damages for nondelivery or repudiation.
NRS 104.2714 Buyer’s damages for breach in regard to accepted goods.
NRS 104.2715 Buyer’s incidental and consequential damages.
NRS 104.2716 Buyer’s right to specific performance or replevin.
NRS 104.2717 Deduction of damages from the price.
NRS 104.2718 Liquidation or limitation of damages; deposits.
NRS 104.2719 Contractual modification or limitation of remedy.
NRS 104.2720 Effect of “cancellation” or “rescission” on claims for antecedent breach.
NRS 104.2721 Remedies for fraud.
NRS 104.2722 Who can sue third parties for injury to goods.
NRS 104.2723 Proof of market price: Time and place.
NRS 104.2724 Admissibility of market quotations.
NRS 104.2725 Statute of limitations in contracts for sale.
ARTICLE 3
NEGOTIABLE INSTRUMENTS
PART 1
GENERAL PROVISIONS AND DEFINITIONS
NRS 104.3101 Short title.
NRS 104.3102 Subject matter.
NRS 104.3103 Definitions.
NRS 104.3104 Negotiable instrument.
NRS 104.3105 Issue of instrument.
NRS 104.3106 Unconditional promise or order.
NRS 104.3107 Instrument payable in foreign money.
NRS 104.3108 Payable on demand or at definite time.
NRS 104.3109 Payable to bearer or to order.
NRS 104.3110 Identification of person to whom instrument is payable.
NRS 104.3111 Place of payment.
NRS 104.3112 Interest.
NRS 104.3113 Date of instrument.
NRS 104.3114 Contradictory terms of instrument.
NRS 104.3115 Incomplete instruments.
NRS 104.3116 Joint and several liability; contribution.
NRS 104.3117 Other agreements affecting instrument.
NRS 104.3118 Statute of limitations.
NRS 104.3119 Notice of right to defend action.
PART 2
NEGOTIATION, TRANSFER AND ENDORSEMENT
NRS 104.3201 Negotiation.
NRS 104.3202 Negotiation subject to rescission.
NRS 104.3203 Transfer of instrument; rights acquired by transfer.
NRS 104.3204 Endorsement.
NRS 104.3205 Special endorsement; blank endorsement; anomalous endorsement.
NRS 104.3206 Restrictive endorsement.
NRS 104.3207 Reacquisition.
PART 3
ENFORCEMENT OF INSTRUMENTS
NRS 104.3301 Person entitled to enforce instrument.
NRS 104.3302 Holder in due course.
NRS 104.3303 Value and consideration.
NRS 104.3304 Overdue instrument.
NRS 104.3305 Defenses and claims in recoupment.
NRS 104.3306 Claims to an instrument.
NRS 104.3307 Notice of breach of fiduciary duty.
NRS 104.3308 Proof of signatures and status as holder in due course.
PART 4
LIABILITY OF PARTIES
NRS 104.3401 Signature.
NRS 104.3402 Signature by representative.
NRS 104.3403 Unauthorized signature.
NRS 104.3404 Impostors; fictitious payees.
NRS 104.3405 Employer’s responsibility for fraudulent endorsement by employee.
NRS 104.3406 Negligence contributing to forged signature or alteration of instrument.
NRS 104.3407 Alteration.
NRS 104.3408 Drawee not liable on unaccepted draft.
NRS 104.3409 Acceptance of draft; certified check.
NRS 104.3410 Acceptance varying draft.
NRS 104.3411 Refusal to pay cashier’s checks, teller’s checks and certified checks.
NRS 104.3412 Obligation of issuer of note or cashier’s check.
NRS 104.3413 Obligation of acceptor.
NRS 104.3414 Obligation of drawer.
NRS 104.3415 Obligation of endorser.
NRS 104.3416 Transfer warranties.
NRS 104.3417 Presentment warranties.
NRS 104.3418 Payment or acceptance by mistake.
NRS 104.3419 Instruments signed for accommodation.
NRS 104.3420 Conversion of instrument.
PART 5
DISHONOR
NRS 104.3501 Presentment.
NRS 104.3502 Dishonor.
NRS 104.3503 Notice of dishonor.
NRS 104.3504 Excused presentment and notice of dishonor.
NRS 104.3505 Evidence of dishonor.
PART 6
DISCHARGE AND PAYMENT
NRS 104.3601 Discharge and effect of discharge.
NRS 104.3602 Payment.
NRS 104.3603 Tender of payment.
NRS 104.3604 Discharge by cancellation or renunciation.
NRS 104.3605 Discharge of endorsers and accommodation parties.
ARTICLE 4
PART 1
GENERAL PROVISIONS AND DEFINITIONS
NRS 104.4101 Short title.
NRS 104.4102 Applicability.
NRS 104.4103 Variation by agreement; measure of damages; action constituting ordinary care.
NRS 104.4104 Definitions and index of definitions.
NRS 104.4105 “Depositary bank”; “payor bank”; “intermediary bank”; “collecting bank”; “presenting bank.”
NRS 104.4106 Payable through or payable at bank.
NRS 104.4107 Separate office of bank.
NRS 104.4108 Time of receipt of items.
NRS 104.4109 Delays.
NRS 104.4110 Electronic presentment.
NRS 104.4111 Statute of limitations.
PART 2
COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS
NRS 104.4201 Status of collecting bank as agent and provisional status of credits; item endorsed “pay any bank.”
NRS 104.4202 Responsibility for collection or return; when action timely.
NRS 104.4203 Effect of instructions.
NRS 104.4204 Methods of sending and presenting; sending directly to payor bank.
NRS 104.4205 Depository bank holder of unendorsed item.
NRS 104.4206 Transfer between banks.
NRS 104.4207 Transfer warranties.
NRS 104.4208 Presentment warranties.
PART 3
COLLECTION OF ITEMS: PAYOR BANKS
NRS 104.4301 Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank.
NRS 104.4302 Payor bank’s responsibility for late return of item.
NRS 104.4303 When items subject to notice, stop-payment order, legal process or setoff; order in which items may be charged
or certified.
PART 4
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER
NRS 104.4401 When bank may charge customer’s account.
NRS 104.4402 Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account.
NRS 104.4403 Customer’s right to stop payment; burden of proof of loss.
NRS 104.4404 Bank not obligated to pay check more than 6 months old.
NRS 104.4405 Death or incompetence of customer.
NRS 104.4406 Customer’s duty to discover or report unauthorized signature or alteration.
NRS 104.4407 Payor bank’s right to subrogation on improper payment.
PART 5
COLLECTION OF DOCUMENTARY DRAFTS
NRS 104.4501 Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor.
NRS 104.4502 Presentment of “on arrival” drafts.
NRS 104.4503 Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of
need.
NRS 104.4504 Privilege of presenting bank to deal with goods; security interest for expenses.
ARTICLE 5
LETTERS OF CREDIT
NRS 104.5101 Short title.
NRS 104.5102 Definitions.
NRS 104.5103 Scope.
NRS 104.5104 Formal requirements.
NRS 104.5105 Consideration.
NRS 104.5106 Issuance, amendment, cancellation and duration.
NRS 104.5107 Confirmer, nominated person and adviser.
NRS 104.5108 Issuer’s rights and obligations.
NRS 104.5109 Fraud and forgery.
NRS 104.5110 Warranties.
NRS 104.5111 Remedies.
NRS 104.5112 Transfer of letter of credit.
NRS 104.5113 Transfer by operation of law.
NRS 104.5114 Assignment of proceeds.
NRS 104.5115 Statute of limitations.
NRS 104.5116 Choice of law and forum.
NRS 104.5117 Subrogation of issuer, applicant and nominated person.
NRS 104.5118 Security interest of issuer or nominated person.
ARTICLE 7
PART 2
PART 3
BILLS OF LADING: SPECIAL PROVISIONS
NRS 104.7301 Liability for nonreceipt or misdescription; “said to contain”; “shipper’s weight, load and count”; improper
handling.
NRS 104.7302 Through bills of lading and similar documents of title.
NRS 104.7303 Diversion; reconsignment; change of instructions.
NRS 104.7304 Tangible bills of lading in set.
NRS 104.7305 Destination bills.
NRS 104.7306 Altered bills of lading.
NRS 104.7307 Lien of carrier.
NRS 104.7308 Enforcement of carrier’s lien.
NRS 104.7309 Duty of care; contractual limitation of carrier’s liability.
PART 4
WAREHOUSE RECEIPTS AND BILLS OF LADING: GENERAL OBLIGATIONS
NRS 104.7401 Irregularities in issue of receipt or bill or conduct of issuer.
NRS 104.7402 Duplicate document of title; overissue.
NRS 104.7403 Obligation of bailee to deliver; excuse.
NRS 104.7404 No liability for good-faith delivery pursuant to document of title.
PART 5
WAREHOUSE RECEIPTS AND BILLS OF LADING: NEGOTIATION AND TRANSFERS
NRS 104.7501 Form of negotiation and requirements of due negotiation.
NRS 104.7502 Rights acquired by due negotiation.
NRS 104.7503 Document of title to goods defeated in certain cases.
NRS 104.7504 Rights acquired in absence of due negotiation; effect of diversion; stoppage of delivery.
NRS 104.7505 Endorser not guarantor for other parties.
NRS 104.7506 Delivery without endorsement; right to compel endorsement.
NRS 104.7507 Warranties on negotiation or delivery of document of title.
NRS 104.7508 Warranties of collecting bank as to documents of title.
NRS 104.7509 Adequate compliance with commercial contract.
PART 6
WAREHOUSE RECEIPTS AND BILLS OF LADING: MISCELLANEOUS PROVISIONS
NRS 104.7601 Lost, stolen or destroyed documents of title.
NRS 104.7602 Judicial process against goods covered by negotiable document of title.
NRS 104.7603 Conflicting claims; interpleader.
ARTICLE 8
INVESTMENT SECURITIES
PART 1
SHORT TITLE AND GENERAL MATTERS
NRS 104.8101 Short title.
NRS 104.8102 Definitions.
NRS 104.8103 Rules for determining whether certain obligations and interests are securities or financial assets.
NRS 104.8104 Acquisition of security or financial asset or interest therein.
NRS 104.8105 Notice of adverse claim.
NRS 104.8106 Control.
NRS 104.8107 Whether endorsement, instruction or entitlement order is effective.
NRS 104.8108 Warranties in direct holding.
NRS 104.8109 Warranties in indirect holding.
NRS 104.8110 Applicability; choice of law.
NRS 104.8111 Rules of clearing corporation.
NRS 104.8112 Creditor’s legal process.
NRS 104.8113 Statute of frauds inapplicable.
NRS 104.8114 Evidentiary rules concerning certificated securities.
NRS 104.8115 Securities intermediary and others not liable to adverse claimant.
PART 2
ISSUE AND ISSUER
NRS 104.8201 “Issuer.”
NRS 104.8202 Issuer’s responsibility and defenses; notice of defect or defense.
NRS 104.8203 Staleness as notice of defect or defense.
NRS 104.8204 Effect of issuer’s restriction on transfer.
NRS 104.8205 Effect of unauthorized signature on security certificate.
NRS 104.8206 Completion or alteration of security certificate.
NRS 104.8207 Rights and duties of issuer with respect to registered owners.
NRS 104.8208 Effect of signature of authenticating trustee, registrar or transfer agent.
NRS 104.8209 Issuer’s lien.
NRS 104.8210 Overissue.
PART 3
TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES
NRS 104.8301 Delivery.
NRS 104.8302 Rights of purchaser.
NRS 104.8303 Protected purchaser.
NRS 104.8304 Endorsement.
NRS 104.8305 Instruction.
NRS 104.8306 Effect of guaranteeing signature, endorsement or instruction.
NRS 104.8307 Purchaser’s right to requisites for registration of transfer.
PART 4
REGISTRATION
NRS 104.8401 Duty of issuer to register transfer.
NRS 104.8402 Assurance that endorsement or instruction is effective.
NRS 104.8403 Demand that issuer not register transfer.
NRS 104.8404 Wrongful registration.
NRS 104.8405 Replacement of lost, destroyed or wrongfully taken security certificate.
NRS 104.8406 Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate.
NRS 104.8407 Authenticating trustee, transfer agent and registrar.
PART 5
SECURITY ENTITLEMENTS
NRS 104.8501 Securities account; acquisition of security entitlement from securities intermediary.
NRS 104.8502 Assertion of adverse claim against entitlement holder.
NRS 104.8503 Property interest of entitlement holder in financial asset held by securities intermediary.
NRS 104.8504 Duty of securities intermediary to maintain financial asset.
NRS 104.8505 Duty of securities intermediary with respect to payments and distributions.
NRS 104.8506 Duty of securities intermediary to exercise rights as directed by entitlement holder.
NRS 104.8507 Duty of securities intermediary to comply with entitlement order.
NRS 104.8508 Duty of securities intermediary to change entitlement holder’s position to other form of security holding.
NRS 104.8509 Specification of duties of securities intermediary by other statute or regulation; manner of performance of duties
of securities intermediary and exercise of rights of entitlement holder.
NRS 104.8510 Rights of purchaser of security entitlement from entitlement holder.
NRS 104.8511 Priority among security interests and entitlement holders.
ARTICLE 9
SECURED TRANSACTIONS
PART 1
GENERAL PROVISIONS
NRS 104.9101 Short title.
NRS 104.9102 Definitions and index of definitions.
NRS 104.9103 Purchase-money security interest: Circumstances of existence; applicability of payments; burden of establishing.
NRS 104.9104 Control of deposit account.
NRS 104.9105 Control of electronic chattel paper.
NRS 104.9106 Control of investment property.
NRS 104.9107 Control of letter-of-credit right.
NRS 104.9108 Sufficiency of descriptions.
NRS 104.9109 Scope of applicability.
NRS 104.9110 Applicability to security interests arising under Article 2 or 2A.
PART 2
EFFECTIVENESS OF SECURITY AGREEMENT; ATTACHMENT OF SECURITY INTEREST; RIGHTS OF PARTIES TO SECURITY
AGREEMENT
PART 3
PERFECTION AND PRIORITY
NRS 104.9301 Determination of law governing perfection and priority of security interests.
NRS 104.9302 Determination of law governing perfection and priority of agricultural liens.
NRS 104.9303 Determination of law governing perfection and priority of security interests in goods covered by certificate of
title.
NRS 104.9304 Determination of law governing perfection and priority of security interests in deposit accounts.
NRS 104.9305 Determination of law governing perfection and priority of security interests in investment property.
NRS 104.9306 Determination of law governing perfection and priority of security interests in letter-of-credit rights.
NRS 104.9307 Location of debtor.
NRS 104.9308 When security interest or agricultural lien is perfected; continuity of perfection.
NRS 104.9309 Security interest perfected upon attachment.
NRS 104.9310 When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to
which filing provisions do not apply.
NRS 104.9311 Perfection of security interests in property subject to certain statutes, regulations and treaties.
NRS 104.9312 Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by documents,
instruments, investment property, letter-of-credit rights and money; perfection by permissive filing;
temporary perfection without filing or transfer of possession.
NRS 104.9313 When possession by or delivery to secured party perfects security interest without filing.
NRS 104.9314 Perfection by control.
NRS 104.9315 Secured party’s rights on disposition of collateral and in proceeds.
NRS 104.9316 Continued perfection of security interest following change in governing law.
NRS 104.9317 Interests that take priority over or take free of unperfected security interest or agricultural lien.
NRS 104.9318 No interest retained in right to payment that is sold; rights and title of seller of account or chattel paper with
respect to creditors and purchasers.
NRS 104.9319 Rights and title of consignee with respect to creditors and purchasers.
NRS 104.9320 Protection of certain buyers of goods.
NRS 104.9321 Protection of licensee of general intangible and lessee of goods in ordinary course of business.
NRS 104.9322 Priorities among conflicting security interests in and agricultural liens on same collateral.
NRS 104.9323 Future advances.
NRS 104.9324 Priority of purchase-money security interests.
NRS 104.9325 Priority of security interests in transferred collateral.
NRS 104.9326 Priority of security interests created by new debtor.
NRS 104.9327 Priority among conflicting security interests in same deposit account.
NRS 104.9328 Priority among conflicting security interests in same investment property.
NRS 104.9329 Priority among conflicting security interests in same letter-of-credit right.
NRS 104.9330 Priority of purchaser of chattel paper or instrument.
NRS 104.9331 Priority of rights of purchasers of instruments, documents and securities under other articles; priority of
interests in financial assets and security entitlements under article 8.
NRS 104.9332 Effect of transfer of money; effect of transfer of funds from deposit account.
NRS 104.9333 Priority of certain possessory liens arising by operation of law.
NRS 104.9334 Priority of security interests in fixtures and crops.
NRS 104.9335 Accessions.
NRS 104.9336 Commingled goods.
NRS 104.9337 Priority of security interests in goods covered by certificate of title.
NRS 104.9338 Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect
information.
NRS 104.9339 Priority subject to subordination by agreement.
NRS 104.9340 Effectiveness of right of recoupment or setoff against deposit account.
NRS 104.9341 Bank’s rights and duties with respect to deposit account.
NRS 104.9342 Bank’s right to refuse to enter into or disclose existence of control agreement.
PART 4
RIGHTS OF THIRD PARTIES
NRS 104.9401 Alienability of debtor’s rights.
NRS 104.9402 Secured party not obligated in contract of debtor or in tort.
NRS 104.9403 Agreement not to assert defenses against assignee.
NRS 104.9404 Rights acquired by assignee; claims and defenses against assignee.
NRS 104.9405 Modification of or substitution for assigned contract.
NRS 104.9406 Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on
assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective.
NRS 104.9407 Restrictions on assignment, transfer, creation or enforcement of security interest in leasehold interest or in
lessor’s residual interest.
NRS 104.9408 Restrictions on assignment or transfer of promissory notes, health-care insurance receivables and certain general
intangibles ineffective.
NRS 104.9409 Restrictions on assignment of letter-of-credit rights ineffective.
PART 5
FILING
NRS 104.9501 Filing office.
NRS 104.9502 Contents of financing statement; record of mortgage as financing statement; time of filing financing statement.
NRS 104.9503 Name of debtor and secured party provided in financing statement.
NRS 104.9504 Indication of collateral in financing statement.
NRS 104.9505 Filing of financing statement in compliance with other statutes and treaties for consignments, leases, other
bailments and other transactions.
NRS 104.9506 Effect of errors or omissions in financing statement.
NRS 104.9507 Effect of certain events on effectiveness of financing statement.
NRS 104.9508 Effectiveness of financing statement if new debtor becomes bound by security agreement.
NRS 104.9509 Persons entitled to file record.
NRS 104.9510 Effectiveness of filed record.
NRS 104.9511 Secured party of record.
NRS 104.9512 Amendment of financing statement.
NRS 104.9513 Termination statement.
NRS 104.9514 Assignment of certain powers of secured party of record.
NRS 104.9515 Duration and effectiveness of financing statement; effect of lapsed financing statement.
NRS 104.9516 What constitutes filing; effectiveness of filing.
NRS 104.9517 Effect of indexing errors.
NRS 104.9518 Claim concerning inaccurate or wrongfully filed record: Filing of correction statement.
NRS 104.9519 Numbering, maintaining and indexing records; communicating information provided in records.
NRS 104.9520 Acceptance and refusal to accept record.
NRS 104.9521 Acceptance of certain written records including initial financing statements by filing office; format of written
records.
NRS 104.9522 Maintenance and destruction of records.
NRS 104.9523 Information from filing office; sale or license of records.
NRS 104.9524 Excused delay by filing office.
NRS 104.9525 Fees.
NRS 104.9526 Filing-office rules.
NRS 104.9527 Duty of Secretary of State to report.
PART 6
DEFAULT
NRS 104.9601 Rights after default; judicial enforcement; effect on consignor or buyer of accounts, chattel paper, payment
intangibles or promissory notes.
NRS 104.9602 Waiver and variance of rights and duties of debtor and obligor.
NRS 104.9603 Agreement on standards concerning rights and duties of parties.
NRS 104.9604 Procedure if security agreement covers real property or fixtures.
NRS 104.9605 Duty to unknown debtor or secondary obligor.
NRS 104.9606 Time of default for agricultural lien.
NRS 104.9607 Collection and enforcement by secured party.
NRS 104.9608 Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.
NRS 104.9609 Secured party’s right to take possession or dispose of collateral after default.
NRS 104.9610 Disposition of collateral after default.
NRS 104.9611 Notification before disposition of collateral.
NRS 104.9612 Timeliness of notification before disposition of collateral.
NRS 104.9613 Contents and form of notification before disposition of collateral: General.
NRS 104.9614 Contents and form of notification before disposition of collateral: Consumer-goods transaction.
NRS 104.9615 Application of proceeds of disposition; liability for deficiency and right to surplus.
NRS 104.9616 Explanation of calculation of surplus or deficiency.
NRS 104.9617 Effect of disposition of collateral by secured party after default; rights of transferee regarding collateral.
NRS 104.9618 Rights and duties of certain secondary obligors.
NRS 104.9619 Transfer of record or legal title.
NRS 104.9620 Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.
NRS 104.9621 Notification of proposal to accept collateral in satisfaction of obligation.
NRS 104.9622 Effect of acceptance of collateral in satisfaction of obligation.
NRS 104.9623 Redemption of collateral.
NRS 104.9624 Waiver of right to notification of disposition of collateral; waiver of right to redeem collateral.
NRS 104.9625 Remedies for secured party’s failure to comply with article.
NRS 104.9626 Action in which deficiency or surplus is in issue.
NRS 104.9627 Determination of whether conduct was commercially reasonable.
NRS 104.9628 Nonliability and limitation on liability of secured party; liability of secondary obligor.
PART 7
TRANSITIONAL PROVISIONS REGARDING 2001 AMENDMENTS
NRS 104.9702 Applicability of amendatory provisions to preexisting transactions, liens, actions, cases and proceedings.
NRS 104.9703 Security interest perfected before July 1, 2001.
NRS 104.9704 Security interest unperfected before July 1, 2001.
NRS 104.9705 Effectiveness of action taken before July 1, 2001.
NRS 104.9706 When initial financing statement suffices to continue effectiveness of financing statement filed before July 1,
2001.
NRS 104.9707 Persons entitled to file initial financing statement or continuation statement.
NRS 104.9708 Determination of priority of conflicting claims to collateral.
NRS 104.9709 Effectiveness, amendment and termination of financing statement filed before July 1, 2001.
_________
ARTICLE 1
GENERAL PROVISIONS
Part 1
Short Titles, Scope, Construction, Severability and Electronic Signatures and Delivery
NRS 104.1102 Scope of Article 1. This Article applies to a transaction to the extent that it is governed by another Article
of the Uniform Commercial Code.
(Added to NRS by 2005, 824)
NRS 104.1103 Construction of Uniform Commercial Code to promote underlying purposes and policies; applicability
of supplemental principles of law.
1. The Uniform Commercial Code must be liberally construed and applied to promote its underlying purposes and policies,
which are:
(a) To simplify, clarify and modernize the law governing commercial transactions;
(b) To permit the continued expansion of commercial practices through custom, usage and agreement of the parties; and
(c) To make uniform the law among the various jurisdictions.
2. Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of law and equity,
including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation,
duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement its provisions.
(Added to NRS by 2005, 824)
NRS 104.1104 Construction against implied repeal. The Uniform Commercial Code being a general act intended as a
unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such
construction can reasonably be avoided.
(Added to NRS by 2005, 825)
NRS 104.1105 Severability. If any provision or clause of the Uniform Commercial Code or its application to any person or
circumstance is held invalid, the invalidity does not affect other provisions or applications of the Uniform Commercial Code
which can be given effect without the invalid provision or application, and to this end the provisions of the Uniform Commercial
Code are severable.
(Added to NRS by 2005, 825)
NRS 104.1106 Use of singular and plural; gender. In the Uniform Commercial Code, unless the statutory context
otherwise requires:
1. Words in the singular number include the plural, and those in the plural include the singular; and
2. Words of any gender also refer to any other gender.
(Added to NRS by 2005, 825)
NRS 104.1108 Relation to Electronic Signatures in Global and National Commerce Act. This Article modifies, limits
and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq., but does not
modify, limit or supersede Section 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices
described in Section 103(b) of that act, 15 U.S.C. § 7003(b).
(Added to NRS by 2005, 825)
Part 2
General Definitions and Principles of Interpretation
business of selling goods of that kind. A person buys goods in the ordinary course if the sale to the person comports with the
usual or customary practices in the kind of business in which the seller is engaged or with the seller’s own usual or customary
practices. A person that sells oil, gas or other minerals at the wellhead or minehead is a person in the business of selling goods
of that kind. A buyer in ordinary course of business may buy for cash, by exchange of other property, or on secured or unsecured
credit, and may acquire goods or documents of title under a preexisting contract for sale. Only a buyer that takes possession of the
goods or has a right to recover the goods from the seller under Article 2 may be a buyer in ordinary course of business. “Buyer in
ordinary course of business” does not include a person that acquires goods in a transfer in bulk or as security for or in total or
partial satisfaction of a money debt.
(j) “Conspicuous,” with reference to a term, means so written, displayed or presented that a reasonable person against which
it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court. Conspicuous terms
include the following:
(1) A heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font or color to the
surrounding text of the same or lesser size; and
(2) Language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font or
color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call
attention to the language.
(k) “Consumer” means a natural person who enters into a transaction primarily for personal, family or household purposes.
(l) “Contract,” as distinguished from “agreement,” means the total legal obligation that results from the parties’ agreement as
determined by the Uniform Commercial Code as supplemented by any other applicable laws.
(m) “Creditor” includes a general creditor, a secured creditor, a lien creditor and any representative of creditors, including
an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity, and an executor or administrator of an
insolvent debtor’s or assignor’s estate.
(n) “Defendant” includes a person in the position of defendant in a counterclaim, cross-claim or third-party claim.
(o) “Delivery,” with respect to an electronic document of title means voluntary transfer of control and with respect to an
instrument, a tangible document of title or chattel paper, means voluntary transfer of possession.
(p) “Document of title” means a record:
(1) That in the regular course of business or financing is treated as adequately evidencing that the person in possession or
control of the record is entitled to receive, control, hold and dispose of the record and the goods the record covers; and
(2) That purports to be issued by or addressed to a bailee and to cover goods in the bailee’s possession which are either
identified or are fungible portions of an identified mass.
Ê The term includes a bill of lading, transport document, dock warrant, dock receipt, warehouse receipt and order for delivery of
goods. An electronic document of title means a document of title evidenced by a record consisting of information stored in an
electronic medium. A tangible document of title means a document of title evidenced by a record consisting of information that is
inscribed on a tangible medium.
(q) “Fault” means a default, breach or wrongful act or omission.
(r) “Fungible goods” means:
(1) Goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit; or
(2) Goods that by agreement are treated as equivalent.
(s) “Genuine” means free of forgery or counterfeiting.
(t) “Good faith,” except as otherwise provided in Article 5, means honesty in fact and the observance of reasonable
commercial standards of fair dealing.
(u) “Holder” means:
(1) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is
the person in possession;
(2) The person in possession of a negotiable tangible document of title if the goods are deliverable either to bearer or to
the order of the person in possession; or
(3) The person in control of a negotiable electronic document of title.
(v) “Insolvency proceeding” includes an assignment for the benefit of creditors or other proceeding intended to liquidate or
rehabilitate the estate of the person involved.
(w) “Insolvent” means:
(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;
(2) Being unable to pay debts as they become due; or
(3) Being insolvent within the meaning of federal bankruptcy law.
(x) “Money” means a medium of exchange currently authorized or adopted by a domestic or foreign government. The term
includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more
countries.
(y) “Organization” means a person other than a natural person.
(z) “Party,” as distinguished from “third party,” means a person that has engaged in a transaction or made an agreement
subject to the Uniform Commercial Code.
(aa) “Person” means a natural person, corporation, business trust, estate, trust, partnership, limited-liability company,
association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation, or any other
legal or commercial entity.
(bb) “Present value” means the amount as of a date certain of one or more sums payable in the future, discounted to the date
certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the
transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the
facts and circumstances at the time the transaction is entered into.
(cc) “Purchase” means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue,
gift or any other voluntary transaction creating an interest in property.
(dd) “Purchaser” means a person that takes by purchase.
(ee) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.
(ff) “Remedy” means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.
(gg) “Representative” means a person empowered to act for another, including an agent, an officer of a corporation or
association, and a trustee, executor or administrator of an estate.
(hh) “Right” includes remedy.
(ii) “Security interest” means an interest in personal property or fixtures which secures payment or performance of an
obligation. “Security interest” includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible or
a promissory note in a transaction that is subject to Article 9. “Security interest” does not include the special property interest of
a buyer of goods on identification of those goods to a contract for sale under NRS 104.2401, but a buyer may also acquire a
“security interest” by complying with Article 9. Except as otherwise provided in NRS 104.2505, the right of a seller or lessor of
goods under Article 2 or 2A to retain or acquire possession of the goods is not a “security interest,” but a seller or lessor may
also acquire a “security interest” by complying with Article 9. The retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer under NRS 104.2401 is limited in effect to a reservation of a “security
interest.” Whether a transaction in the form of a lease creates a “security interest” is determined pursuant to NRS 104.1203.
(jj) “Send” in connection with a writing, record or notice means:
(1) To deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of
transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise
agreed, or if there be none to any address reasonable under the circumstances; or
(2) In any other way to cause to be received any record or notice within the time it would have arrived if properly sent.
(kk) “Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing.
(ll) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the United States.
(mm) “Surety” includes a guarantor or other secondary obligor.
(nn) “Term” means a portion of an agreement that relates to a particular matter.
(oo) “Unauthorized signature” means a signature made without actual, implied or apparent authority. The term includes a
forgery.
(pp) “Warehouse receipt” means a document of title issued by a person engaged in the business of storing goods for hire.
(qq) “Writing” includes printing, typewriting or any other intentional reduction to tangible form. “Written” has a
corresponding meaning.
(Added to NRS by 2005, 825)
5. The “remaining economic life of the goods” and “reasonably predictable” fair market rent, fair market value or cost of
performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction
is entered into.
(Added to NRS by 2005, 829)
NRS 104.1204 Value. Except as otherwise provided in Articles 3, 4, and 5, a person gives value for rights if the person
acquires them:
1. In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not
drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection;
2. As security for, or in total or partial satisfaction of, a preexisting claim;
3. By accepting delivery under a preexisting contract for purchase; or
4. In return for any consideration sufficient to support a simple contract.
(Added to NRS by 2005, 830)
NRS 104.1206 Presumptions. Whenever the Uniform Commercial Code creates a “presumption” with respect to a fact, or
provides that a fact is “presumed,” the trier of fact must find the existence of the fact unless and until evidence is introduced that
supports a finding of its nonexistence.
(Added to NRS by 2005, 830)
Part 3
performance, course of dealing or usage of trade must be construed whenever reasonable as consistent with each other. If such a
construction is unreasonable:
(a) Express terms prevail over course of performance, course of dealing and usage of trade;
(b) Course of performance prevails over course of dealing and usage of trade; and
(c) Course of dealing prevails over usage of trade.
6. Subject to NRS 104.2209, a course of performance is relevant to show a waiver or modification of any term inconsistent
with the course of performance.
7. Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party
notice that the court finds sufficient to prevent unfair surprise to the other party.
(Added to NRS by 2005, 831)
NRS 104.1304 Obligation of good faith. Every contract or duty within the Uniform Commercial Code imposes an
obligation of good faith in its performance and enforcement.
(Added to NRS by 2005, 832)
NRS 104.1306 Waiver or renunciation of claim or right after breach. A claim or right arising out of an alleged breach
may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record.
(Added to NRS by 2005, 832)
NRS 104.1307 Prima facie evidence by third-party documents. A document in due form purporting to be a bill of lading,
policy or certificate of insurance, official weigher’s or inspector’s certificate, consular invoice, or any other document
authorized or required by the contract to be issued by a third party is prima facie evidence of its own authenticity and genuineness
and of the facts stated in the document by the third party.
(Added to NRS by 2005, 832)
NRS 104.1309 Option to accelerate at will. A term providing that one party or that party’s successor in interest may
accelerate payment or performance or require collateral or additional collateral “at will” or when the party “deems itself
insecure,” or words of similar import, means that the party has power to do so only if that party in good faith believes that the
prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the
power has been exercised.
(Added to NRS by 2005, 832)
NRS 104.1310 Subordinated obligations. An obligation may be issued as subordinated to performance of another
obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with
either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against
either the common debtor or a subordinated creditor.
(Added to NRS by 2005, 833)
ARTICLE 2
SALES
Part 1
NRS 104.2102 Scope; certain security and other transactions excluded from this article. Unless the context otherwise
requires, this article applies to transactions in goods; it does not apply to any transaction which although in the form of an
unconditional contract to sell or present sales is intended to operate only as a security transaction nor does this article impair or
repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.
(Added to NRS by 1965, 784)
3. “Control” as provided in NRS 104.7106 and the following definitions in other Articles apply to this Article:
4. In addition Article 1 contains general definitions and principles of construction and interpretation applicable throughout
this Article.
(Added to NRS by 1965, 784; A 1999, 372; 2005, 847)
NRS 104.2105 Definitions: Transferability; “goods”; “future” goods; “lot”; “commercial unit.”
1. “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the
contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action.
“Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described
in the section on goods to be severed from realty (NRS 104.2107).
2. Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and
identified are “future” goods. A purported present sale of future goods or of any interest therein operates as a contract to sell.
3. There may be a sale of a part interest in existing identified goods.
4. An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quantity of the
bulk is not determined. Any agreed proportion of such a bulk or any quantity thereof agreed upon by number, weight or other
measure may to the extent of the seller’s interest in the bulk be sold to the buyer who then becomes an owner in common.
5. “Lot” means a parcel or a single Article which is the subject matter of a separate sale or delivery, whether or not it is
sufficient to perform the contract.
6. “Commercial unit” means such a unit of goods as by commercial usage is a single whole for purposes of sale and division
of which materially impairs its character or value on the market or in use. A commercial unit may be a single Article (as a
machine) or a set of Articles (as a suite of furniture or an assortment of sizes) or a quantity (as a bale, gross or carload) or any
other unit treated in use or in the relevant market as a single whole.
(Added to NRS by 1965, 785)
NRS 104.2106 Definitions: “Contract”; “agreement”; “contract for sale”; “sale”; “present sale”; “conforming” to
contract; “termination”; “cancellation.”
1. In this article unless the context otherwise requires “contract” and “agreement” are limited to those relating to the present
or future sale of goods. “Contract for sale” includes both a present sale of goods and a contract to sell goods at a future time. A
“sale” consists in the passing of title from the seller to the buyer for a price (NRS 104.2401). A “present sale” means a sale
which is accomplished by the making of the contract.
2. Goods or conduct including any part of a performance are “conforming” or conform to the contract when they are in
accordance with the obligations under the contract.
3. “Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the contract
otherwise than for its breach. On “termination” all obligations which are still executory on both sides are discharged but any right
based on prior breach or performance survives.
4. “Cancellation” occurs when either party puts an end to the contract for breach by the other and its effect is the same as that
of “termination” except that the cancelling party also retains any remedy for breach of the whole contract or any unperformed
balance.
(Added to NRS by 1965, 786)
Part 2
NRS 104.2202 Final written expression: Parol or extrinsic evidence. Terms with respect to which the confirmatory
memoranda of the parties agree or which are otherwise set forth in writing intended by the parties as a final expression of their
agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement but may be explained or supplemented:
1. By course of performance, course of dealing or usage of trade (NRS 104.1303); and
2. By evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and
exclusive statement of the terms of the agreement.
(Added to NRS by 1965, 787; A 2005, 849)
NRS 104.2203 Seals inoperative. The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell
goods does not constitute the writing a sealed instrument and the law with respect to sealed instruments does not apply to such
contract or offer.
(Added to NRS by 1965, 787)
NRS 104.2205 Firm offers. An offer by a merchant to buy or sell goods in a signed writing which by its terms gives
assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a
reasonable time, but in no event may such period of irrevocability exceed 3 months; but any such term of assurance on a form
Part 3
NRS 104.2301 General obligations of parties. The obligation of the seller is to transfer and deliver and that of the buyer is
to accept and pay in accordance with the contract.
(Added to NRS by 1965, 790)
2. When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall
be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in
making the determination.
(Added to NRS by 1965, 790)
NRS 104.2303 Allocation or division of risks. Where this article allocates a risk or a burden as between the parties “unless
otherwise agreed,” the agreement may not only shift the allocation but may also divide the risk or burden.
(Added to NRS by 1965, 790)
NRS 104.2307 Delivery in single lot or several lots. Unless otherwise agreed all goods called for by a contract for sale
must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the
right to make or demand delivery in lots the price if it can be apportioned may be demanded for each lot.
(Added to NRS by 1965, 791)
NRS 104.2308 Absence of specified place for delivery. Unless otherwise agreed:
1. The place for delivery of goods is the seller’s place of business or if the seller has none, his or her residence;
2. In a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other
place, that place is the place for their delivery; and
3. Documents of title may be delivered through customary banking channels.
(Added to NRS by 1965, 791)
NRS 104.2309 Absence of specific time for action or duration of contract; notice of termination.
1. The time for shipment or delivery or any other action under a contract if not provided in this Article or agreed upon shall
be a reasonable time.
2. Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but
unless otherwise agreed may be terminated at any time by either party.
3. Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be
received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.
(Added to NRS by 1965, 791)
NRS 104.2310 Open time for payment or running of credit; authority to ship under reservation. Unless otherwise
agreed:
1. Payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the
place of delivery; and
2. If the seller is authorized to send the goods the seller may ship them under reservation, and may tender the documents of
title, but the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the
terms of the contract (NRS 104.2513); and
3. If delivery is authorized and made by way of documents of title otherwise than by subsection 2 then payment is due
regardless of where the goods are to be received:
(a) At the time and place at which the buyer is to receive delivery of the tangible documents; or
(b) At the time the buyer is to receive delivery of the electronic documents and at the seller’s place of business or if none, the
seller’s residence; and
4. Where the seller is required or authorized to ship the goods on credit the credit period runs from the time of shipment but
postdating the invoice or delaying its dispatch will correspondingly delay the starting of the credit period.
NRS 104.2312 Warranty of title and against infringement; buyer’s obligation against infringement.
1. Subject to subsection 2 there is in a contract for sale a warranty by the seller that:
(a) The title conveyed shall be good, and its transfer rightful; and
(b) The goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of
contracting has no knowledge.
2. A warranty under subsection 1 will be excluded or modified only by specific language or by circumstances which give the
buyer reason to know that the person selling does not claim title in himself or herself or that he or she is purporting to sell only
such right or title as he or she or a third person may have.
3. Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be
delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications
to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.
(Added to NRS by 1965, 792)
NRS 104.2315 Implied warranty: Fitness for particular purpose. Where the seller at the time of contracting has reason to
know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to
select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods
shall be fit for such purpose.
(Added to NRS by 1965, 793)
NRS 104.2317 Cumulation and conflict of warranties express or implied. Warranties whether express or implied shall be
construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties
shall determine which warranty is dominant. In ascertaining that intention the following rules apply:
1. Exact or technical specifications displace an inconsistent sample or model or general language of description.
2. A sample from an existing bulk displaces inconsistent general language of description.
3. Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular
purpose.
(Added to NRS by 1965, 794)
NRS 104.2318 Third-party beneficiaries of warranties express or implied. A seller’s warranty whether express or
implied extends to any natural person who is in the family or household of the seller’s buyer or who is a guest in his or her home
if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach
of the warranty. A seller may not exclude or limit the operation of this section.
(Added to NRS by 1965, 794)
NRS 104.2321 C.I.F. or C. & F.: “Net landed weights”; “payment on arrival”; warranty of condition on arrival. Under
a contract containing a term C.I.F. or C. & F.:
1. Where the price is based on or is to be adjusted according to “net landed weights,” “delivered weights,” “out turn”
quantity or quality or the like, unless otherwise agreed the seller must reasonably estimate the price. The payment due on tender
of the documents called for by the contract is the amount so estimated, but after final adjustment of the price a settlement must be
NRS 104.2324 “No arrival, no sale” term. Under a term “no arrival, no sale” or terms of like meaning, unless otherwise
agreed:
1. The seller must properly ship conforming goods and if they arrive by any means the seller must tender them on arrival but
the seller assumes no obligation that the goods will arrive unless the seller has caused the nonarrival; and
2. Where without fault of the seller the goods are in part lost or have so deteriorated as no longer to conform to the contract
or arrive after the contract time, the buyer may proceed as if there had been casualty to identified goods (NRS 104.2613).
(Added to NRS by 1965, 797)
Part 4
NRS 104.2401 Passing of title; reservation for security; limited application of this section. Each provision of this
Article with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies
irrespective of title to the goods except where the provision refers to such title. Insofar as situations are not covered by the other
provisions of this Article and matters concerning title become material the following rules apply:
1. Title to goods cannot pass under a contract for sale prior to their identification to the contract (NRS 104.2501), and unless
otherwise explicitly agreed the buyer acquires by their identification a special property as limited by this chapter. Any retention
or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of
a security interest. Subject to these provisions and to the provisions of the Article on secured transactions (Article 9), title to
goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.
2. Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his or her
performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a
document of title is to be delivered at a different time or place; and in particular and despite any reservation of a security interest
by the bill of lading:
(a) If the contract requires or authorizes the seller to send the goods to the buyer but does not require the seller to deliver
them at destination, title passes to the buyer at the time and place of shipment; but
(b) If the contract requires delivery at destination, title passes on tender there.
3. Unless otherwise explicitly agreed where delivery is to be made without moving the goods:
(a) If the seller is to deliver a tangible document of title, title passes at the time when and the place where the seller delivers
such documents and if the seller is to deliver an electronic document of title, title passes when the seller delivers the document;
or
(b) If the goods are at the time of contracting already identified and no documents of title are to be delivered, title passes at
the time and place of contracting.
4. A rejection or other refusal by the buyer to receive or retain the goods, whether or not justified, or a justified revocation
of acceptance revests title to the goods in the seller. Such revesting occurs by operation of law and is not a “sale.”
(Added to NRS by 1965, 798; A 2005, 850)
4. The rights of other purchasers of goods and of lien creditors are governed by the articles on secured transactions (article
9) and documents of title (article 7).
(Added to NRS by 1965, 800; A 1991, 412)
Part 5
Performance
NRS 104.2502 Buyer’s right to goods on seller’s repudiation, failure to deliver or insolvency.
1. Subject to subsections 2 and 3, and even though the goods have not been shipped, a buyer who has paid a part or all of the
price of goods in which the buyer has a special property under the provisions of the immediately preceding section may on
making and keeping good a tender of any unpaid portion of their price recover them from the seller if:
(a) In the case of goods bought for personal, family or household purposes, the seller repudiates or fails to deliver as
required by the contract; or
(b) In all cases, the seller becomes insolvent within 10 days after receipt of the first installment on their price.
2. The right of the buyer to recover the goods under subsection 1 vests upon acquisition of a special property even if the
seller has not then repudiated or failed to deliver.
3. If the identification creating his or her special property has been made by the buyer, the buyer acquires the right to recover
the goods only if they conform to the contract for sale.
(Added to NRS by 1965, 801; A 1999, 374; 2001, 709)
NRS 104.2504 Shipment by seller. Where the seller is required or authorized to send the goods to the buyer and the
contract does not require the seller to deliver them at a particular destination, then unless otherwise agreed the seller must:
1. Put the goods in the possession of such a carrier and make such a contract for their transportation as may be reasonable
having regard to the nature of the goods and other circumstances of the case; and
2. Obtain and promptly deliver or tender in due form any document necessary to enable the buyer to obtain possession of the
goods or otherwise required by the agreement or by usage of trade; and
3. Promptly notify the buyer of the shipment.
Ê Failure to notify the buyer under subsection 3 or to make a proper contract under subsection 1 is a ground for rejection only if
material delay or loss ensues.
(Added to NRS by 1965, 802)
1. Where the seller has identified goods to the contract by or before shipment:
(a) The seller’s procurement of a negotiable bill of lading to his or her own order or otherwise reserves in him or her a
security interest in the goods. The seller’s procurement of the bill to the order of a financing agency or of the buyer indicates in
addition only the seller’s expectation of transferring that interest to the person named.
(b) A nonnegotiable bill of lading to himself or herself or his or her nominee reserves possession of the goods as security but
except in a case of conditional delivery (subsection 2 of NRS 104.2507) a nonnegotiable bill of lading naming the buyer as
consignee reserves no security interest even though the seller retains possession or control of the bill of lading.
2. When shipment by the seller with reservation of a security interest is in violation of the contract for sale it constitutes an
improper contract for transportation within the preceding section but impairs neither the rights given to the buyer by shipment and
identification of the goods to the contract nor the seller’s powers as a holder of a negotiable document of title.
(Added to NRS by 1965, 802; A 2005, 851)
(b) Despite tender of the required documents the circumstances would justify injunction against honor under the provisions of
this chapter.
2. Payment pursuant to subsection 1 does not constitute an acceptance of goods or impair the buyer’s right to inspect or any
of the buyer’s remedies.
(Added to NRS by 1965, 804; A 1997, 374)
NRS 104.2514 When documents deliverable on acceptance; when on payment. Unless otherwise agreed documents
against which a draft is drawn are to be delivered to the drawee on acceptance of the draft if it is payable more than 3 days after
presentment; otherwise, only on payment.
(Added to NRS by 1965, 804)
NRS 104.2515 Preserving evidence of goods in dispute. In furtherance of the adjustment of any claim or dispute:
1. Either party on reasonable notification to the other and for the purpose of ascertaining the facts and preserving evidence
has the right to inspect, test and sample the goods, including such of them as may be in the possession or control of the other; and
2. The parties may agree to a third party inspection or survey to determine the conformity or condition of the goods and may
agree that the findings shall be binding upon them in any subsequent litigation or adjustment.
(Added to NRS by 1965, 804)
Part 6
NRS 104.2601 Buyer’s rights on improper delivery. Subject to the provisions of this article on breach in installment
contracts (NRS 104.2612) and unless otherwise agreed under the sections on contractual limitations of remedy (NRS 104.2718
and 104.2719), if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may:
1. Reject the whole; or
2. Accept the whole; or
3. Accept any commercial unit or units and reject the rest.
(Added to NRS by 1965, 805)
NRS 104.2604 Buyer’s options as to salvage of rightfully rejected goods. Subject to the provisions of the immediately
preceding section on perishables if the seller gives no instructions within a reasonable time after notification of rejection the
buyer may store the rejected goods for the seller’s account or reship them to the seller or resell them for the seller’s account with
reimbursement as provided in the preceding section. Such action is not acceptance or conversion.
(Added to NRS by 1965, 806)
NRS 104.2607 Effect of acceptance; notice of breach; burden of establishing breach after acceptance; notice of claim
or litigation to person answerable over.
1. The buyer must pay at the contract rate for any goods accepted.
2. Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a
nonconformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity
would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article for nonconformity.
3. Where a tender has been accepted:
(a) The buyer must within a reasonable time after the buyer discovers or should have discovered any breach notify the seller
of breach or be barred from any remedy; and
(b) If the claim is one for infringement or the like (subsection 3 of NRS 104.2312) and the buyer is sued as a result of such a
breach the buyer must so notify the seller within a reasonable time after he or she receives notice of the litigation or be barred
from any remedy over for liability established by the litigation.
4. The burden is on the buyer to establish any breach with respect to the goods accepted.
5. Where the buyer is sued for breach of a warranty or other obligation for which the buyer’s seller is answerable over:
(a) The buyer may give the seller written notice of the litigation. If the notice states that the seller may come in and defend and
that if the seller does not do so the seller will be bound in any action against the seller by his or her buyer by any determination of
fact common to the two litigations, then unless the seller after seasonable receipt of the notice does come in and defend the seller
is so bound.
(b) If the claim is one for infringement or the like (subsection 3 of NRS 104.2312) the original seller may demand in writing
that the seller’s buyer turn over to him or her control of the litigation including settlement or else be barred from any remedy over
and if the seller also agrees to bear all expense and to satisfy any adverse judgment, then unless the buyer after seasonable receipt
of the demand does turn over control the buyer is so barred.
6. The provisions of subsections 3, 4 and 5 apply to any obligation of a buyer to hold the seller harmless against infringement
or the like (subsection 3 of NRS 104.2312).
(Added to NRS by 1965, 806)
NRS 104.2610 Anticipatory repudiation. When either party repudiates the contract with respect to a performance not yet
due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may:
1. For a commercially reasonable time await performance by the repudiating party; or
2. Resort to any remedy for breach (NRS 104.2703 or 104.2711), even though he or she has notified the repudiating party
that he or she would await the latter’s performance and has urged retraction; and
3. In either case suspend his or her own performance or proceeding in accordance with the provisions of this Article on the
seller’s right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (NRS 104.2704).
(Added to NRS by 1965, 808)
NRS 104.2613 Casualty to identified goods. Where the contract requires for its performance goods identified when the
contract is made, and the goods suffer casualty without fault of either party before the risk of loss passes to the buyer, or in a
proper case under a “no arrival, no sale” term (NRS 104.2324) then:
1. If the loss is total the contract is avoided; and
2. If the loss is partial or the goods have so deteriorated as no longer to conform to the contract the buyer may nevertheless
demand inspection and at his or her option either treat the contract as avoided or accept the goods with due allowance from the
contract price for the deterioration or the deficiency in quantity but without further right against the seller.
(Added to NRS by 1965, 808)
NRS 104.2615 Excuse by failure of presupposed conditions. Except so far as a seller may have assumed a greater
obligation and subject to the preceding section on substituted performance:
1. Delay in delivery or nondelivery in whole or in part by a seller who complies with subsections 2 and 3 is not a breach of
the seller’s duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a
contingency the nonoccurrence of which was a basic assumption on which the contract was made or by compliance in good faith
with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.
2. Where the causes mentioned in subsection 1 affect only a part of the seller’s capacity to perform, the seller must allocate
production and deliveries among his or her customers but may at his or her option include regular customers not then under
contract as well as his or her own requirements for further manufacture. The seller may so allocate in any manner which is fair
and reasonable.
3. The seller must notify the buyer seasonably that there will be delay or nondelivery and, when allocation is required under
subsection 2, of the estimated quota thus made available for the buyer.
(Added to NRS by 1965, 809)
Part 7
Remedies
NRS 104.2701 Remedies for breach of collateral contracts not impaired. Remedies for breach of any obligation or
promise collateral or ancillary to a contract for sale are not impaired by the provisions of this article.
(Added to NRS by 1965, 810)
NRS 104.2703 Seller’s remedies in general. Where the buyer wrongfully rejects or revokes acceptance of goods or fails to
make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods
directly affected and, if the breach is of the whole contract (NRS 104.2612), then also with respect to the whole undelivered
balance, the aggrieved seller may:
1. Withhold delivery of such goods.
2. Stop delivery by any bailee as hereafter provided (NRS 104.2705).
3. Proceed under the next section respecting goods still unidentified to the contract.
4. Resell and recover damages as hereafter provided (NRS 104.2706).
5. Recover damages for nonacceptance (NRS 104.2708) or in a proper case the price (NRS 104.2709).
6. Cancel.
(Added to NRS by 1965, 810)
NRS 104.2704 Seller’s right to identify goods to contract notwithstanding breach or to salvage unfinished goods.
1. An aggrieved seller under the preceding section may:
(a) Identify to the contract conforming goods not already identified if at the time he or she learned of the breach they are in the
seller’s possession or control.
(b) Treat as the subject of resale goods which have demonstrably been intended for the particular contract even though those
goods are unfinished.
2. Where the goods are unfinished an aggrieved seller may in the exercise of reasonable commercial judgment for the
purposes of avoiding loss and of effective realization either complete the manufacture and wholly identify the goods to the
contract or cease manufacture and resell for scrap or salvage value or proceed in any other reasonable manner.
(Added to NRS by 1965, 810)
NRS 104.2710 Seller’s incidental damages. Incidental damages to an aggrieved seller include any commercially
reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after
the buyer’s breach, in connection with return or resale of the goods or otherwise resulting from the breach.
(Added to NRS by 1965, 813)
NRS 104.2711 Buyer’s remedies in general; buyer’s security interest in rejected goods.
1. Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then
with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (NRS 104.2612), the
buyer may cancel and whether or not the buyer has done so may in addition to recovering so much of the price as has been paid:
(a) “Cover” and have damages under the next section as to all the goods affected whether or not they have been identified to
the contract; or
(b) Recover damages for nondelivery as provided in this Article (NRS 104.2713).
2. Where the seller fails to deliver or repudiates the buyer may also:
(a) If the goods have been identified recover them as provided in this Article (NRS 104.2502); or
(b) In a proper case obtain specific performance or replevy the goods as provided in this Article (NRS 104.2716).
3. On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in his or her
possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt,
transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (NRS 104.2706).
(Added to NRS by 1965, 813)
1. Subject to the provisions of this Article with respect to proof of market price (NRS 104.2723), the measure of damages
for nondelivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the
breach and the contract price together with any incidental and consequential damages provided in this Article (NRS 104.2715),
but less expenses saved in consequence of the seller’s breach.
2. Market price is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of
acceptance, as of the place of arrival.
(Added to NRS by 1965, 813)
NRS 104.2717 Deduction of damages from the price. The buyer on notifying the seller of his or her intention to do so may
deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same
contract.
(Added to NRS by 1965, 814)
NRS 104.2720 Effect of “cancellation” or “rescission” on claims for antecedent breach. Unless the contrary intention
clearly appears, expressions of “cancellation” or “rescission” of the contract or the like shall not be construed as a renunciation
or discharge of any claim in damages for an antecedent breach.
(Added to NRS by 1965, 815)
NRS 104.2721 Remedies for fraud. Remedies for material misrepresentation or fraud include all remedies available under
this article for nonfraudulent breach. Neither rescission or a claim for rescission of the contract for sale nor rejection or return of
the goods shall bar or be deemed inconsistent with a claim for damages or other remedy.
(Added to NRS by 1965, 815)
NRS 104.2722 Who can sue third parties for injury to goods. Where a third party so deals with goods which have been
identified to a contract for sale as to cause actionable injury to a party to that contract:
1. A right of action against the third party is in either party to the contract for sale who has title to or a security interest or a
special property or an insurable interest in the goods; and if the goods have been destroyed or converted a right of action is also
in the party who either bore the risk of loss under the contract for sale or has since the injury assumed that risk as against the
other.
2. If at the time of the injury the party plaintiff did not bear the risk of loss as against the other party to the contract for sale
and there is no arrangement between them for disposition of the recovery, his or her suit or settlement is, subject to his or her
own interest, as a fiduciary for the other party to the contract.
3. Either party may with the consent of the other sue for the benefit of whom it may concern.
(Added to NRS by 1965, 816)
NRS 104.2724 Admissibility of market quotations. Whenever the prevailing price or value of any goods regularly bought
and sold in any established commodity market is in issue, reports in official publications or trade journals or in newspapers or
periodicals of general circulation published as the reports of such market shall be admissible in evidence. The circumstances of
the preparation of such a report may be shown to affect its weight but not its admissibility.
(Added to NRS by 1965, 816)
ARTICLE 3
NEGOTIABLE INSTRUMENTS
Part 1
(Added to NRS by 1965, 818; A 1993, 1257)—(Substituted in revision for NRS 104.3103)
4. In addition Article 1 contains general definitions and principles of construction and interpretation applicable throughout
this Article.
(Added to NRS by 1965, 817; A 1993, 1255; 2005, 853, 1995)
NRS 104.3107 Instrument payable in foreign money. Unless the instrument otherwise provides, an instrument that states
the amount payable in foreign money may be paid in the foreign money or in an equivalent amount in dollars calculated by using
the current bank-offered spot rate at the place of payment for the purchase of dollars on the day on which the instrument is paid.
(Added to NRS by 1965, 819; A 1993, 1261)
NRS 104.3111 Place of payment. Except as otherwise provided for items in article 4, an instrument is payable at the place
of payment stated in the instrument. If no place of payment is stated, an instrument is payable at the address of the drawee or
maker stated in the instrument. If no address is stated, the place of payment is the place of business of the drawee or maker. If a
drawee or maker has more than one place of business, the place of payment is any place of business of the drawee or maker
chosen by the person entitled to enforce the instrument. If the drawee or maker has no place of business, the place of payment is
the residence of the drawee or maker.
(Added to NRS by 1965, 820; A 1993, 1263)
cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the
instrument and at the time interest first accrues.
(Added to NRS by 1965, 820; A 1993, 1263)
NRS 104.3114 Contradictory terms of instrument. If an instrument contains contradictory terms, typewritten terms prevail
over printed terms, handwritten terms prevail over both, and words prevail over numbers.
(Added to NRS by 1965, 821; A 1993, 1264)—(Substituted in revision for NRS 104.3113)
NRS 104.3117 Other agreements affecting instrument. Subject to applicable law regarding exclusion of proof of
contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified,
supplemented or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument
is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement.
To the extent an obligation is modified, supplemented or nullified by an agreement under this section, the agreement is a defense
to the obligation.
(Added to NRS by 1965, 822; A 1993, 1267)—(Substituted in revision for NRS 104.3119)
NRS 104.3119 Notice of right to defend action. In an action for breach of an obligation for which a third person is
answerable over pursuant to this Article or Article 4, the defendant may give the third person notice of the litigation in a record,
and the person notified may then give similar notice to any other person who is answerable over. If the notice states that the
person notified may come in and defend and that failure to do so will bind the person notified in an action later brought by the
person giving the notice as to any determination of fact common to the two litigations, the person notified is so bound unless after
seasonable receipt of the notice the person notified does come in and defend.
(Added to NRS by 1965, 821; A 1993, 1266; 2005, 1998)
Part 2
rights and liabilities of that person are not affected by whether the condition has been fulfilled.
3. If an instrument bears an endorsement described in subsection 2 of NRS 104.4201 or in blank or to a particular bank using
the words “for deposit,” “for collection,” or other words indicating a purpose of having the instrument collected by a bank for the
endorser or for a particular account, the following rules apply:
(a) A person, other than a bank, who purchases the instrument when so endorsed converts the instrument unless the amount
paid for the instrument is received by the endorser or applied consistently with the endorsement.
(b) A depositary bank that purchases the instrument or takes it for collection when so endorsed converts the instrument unless
the amount paid by the bank with respect to the instrument is received by the endorser or applied consistently with the
endorsement.
(c) A payor bank that is also the depositary bank or that takes the instrument for immediate payment over the counter from a
person other than a collecting bank converts the instrument unless the proceeds of the instrument are received by the endorser or
applied consistently with the endorsement.
(d) Except as otherwise provided in paragraph (c), a payor bank or intermediary bank may disregard the endorsement and is
not liable if the proceeds of the instrument are not received by the endorser or applied consistently with the endorsement.
4. Except for an endorsement covered by subsection 3, if an instrument bears an endorsement using words to the effect that
payment is to be made to the endorsee as agent, trustee or other fiduciary for the benefit of the endorser or another person, the
following rules apply:
(a) Unless there is notice of breach of fiduciary duty as provided in NRS 104.3307, a person who purchases the instrument
from the endorsee or takes the instrument from the endorsee for collection or payment may pay the proceeds of payment or the
value given for the instrument to the endorsee without regard to whether the endorsee violates a fiduciary duty to the endorser.
(b) A subsequent transferee of the instrument or person who pays the instrument is neither given notice nor otherwise affected
by the restriction in the endorsement unless the transferee or payor knows that the fiduciary dealt with the instrument or its
proceeds in breach of fiduciary duty.
5. The presence of an instrument of an endorsement to which this section applies does not prevent a purchaser of the
instrument from becoming a holder in due course of the instrument unless the purchaser is a converter under subsection 3 or has
notice or knowledge of breach of fiduciary duty as stated in subsection 4.
6. In an action to enforce the obligation of a party to pay the instrument, the obligor has a defense if payment would violate an
endorsement to which this section applies and the payment is not permitted by this section.
(Added to NRS by 1965, 823; A 1993, 1269)—(Substituted in revision for NRS 104.3205)
NRS 104.3207 Reacquisition. Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or
otherwise. A former holder who reacquires the instrument may cancel endorsements made after the reacquirer first became a
holder of the instrument. If the cancellation causes the instrument to be payable to the reacquirer or to bearer, the reacquirer may
negotiate the instrument. An endorser whose endorsement is cancelled is discharged, and the discharge is effective against any
subsequent holder.
(Added to NRS by 1965, 824; A 1993, 1270)—(Substituted in revision for NRS 104.3206)
Part 3
Enforcement of Instruments
NRS 104.3301 Person entitled to enforce instrument.
1. “Person entitled to enforce” an instrument means:
(a) The holder of the instrument;
(b) A nonholder in possession of the instrument who has the rights of a holder; or
(c) A person not in possession of the instrument who is entitled to enforce the instrument pursuant to NRS 104.3309 or
subsection 4 of NRS 104.3418.
2. A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is
in wrongful possession of the instrument.
(Added to NRS by 1965, 825; A 1993, 1272)
5. If the person entitled to enforce an instrument has only a security interest in the instrument and the person obliged to pay
the instrument has a defense, claim in recoupment or claim to the instrument that may be asserted against the person who granted
the security interest, the person entitled to enforce the instrument may assert rights as a holder in due course only to an amount
payable under the instrument which, at the time of enforcement of the instrument, does not exceed the amount of the unpaid
obligation secured.
6. To be effective, notice must be received at a time and in a manner that gives a reasonable opportunity to act on it.
7. This section is subject to any law limiting status as a holder in due course in particular classes of transactions.
(Added to NRS by 1965, 825; A 1993, 1272)
NRS 104.3306 Claims to an instrument. A person taking an instrument, other than a person having rights of a holder in due
course, is subject to a claim of a property or possessory right in the instrument or its proceeds, including a claim to rescind a
negotiation and to recover the instrument or its proceeds. A person having rights of a holder in due course takes free of the claim
to the instrument.
(Added to NRS by 1965, 826; A 1993, 1276)
instrument.
3. If an instrument other than one described in subsection 1 or 2 is taken for an obligation, the effect is:
(a) That stated in subsection 1 if the instrument is one on which a bank is liable as maker or acceptor; or
(b) That stated in subsection 2 in any other case.
(Added to NRS by 1993, 1245)
NRS 104.3312 Lost, destroyed or stolen cashier’s check, teller’s check or certified check.
1. In this section:
(a) “Check” means a cashier’s check, teller’s check or certified check.
(b) “Claimant” means a person who claims the right to receive the amount of a cashier’s check, teller’s check or certified
check that was lost, destroyed or stolen.
(c) “Declaration of loss” means a statement, made in a record under penalty of perjury, to the effect that:
(1) The declarer lost possession of a check;
(2) The declarer is the drawer or payee of the check, in the case of a certified check, or the remitter or payee of the check,
in the case of a cashier’s check or teller’s check;
(3) The loss of possession was not the result of a transfer by the declarer or a lawful seizure; and
(4) The declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts
cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not
amenable to service of process.
(d) “Obligated bank” means the issuer of a cashier’s check or teller’s check or the acceptor of a certified check.
2. A claimant may assert a claim to the amount of a check by a communication to the obligated bank describing the check
with reasonable certainty and requesting payment of the amount of the check, if:
(a) The claimant is the drawer or payee of a certified check or the remitter or payee of a cashier’s check or teller’s check;
(b) The communication contains or is accompanied by a declaration of loss of the claimant with respect to the check;
(c) The communication is received at a time and in a manner affording the bank a reasonable time to act on it before the check
is paid; and
(d) The claimant provides reasonable identification if requested by the obligated bank.
3. Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration. If a claim is asserted
in compliance with this subsection, the following rules apply:
(a) The claim becomes enforceable at the later of:
(1) The time the claim is asserted; or
(2) The 90th day following the date of the check, in the case of a cashier’s check or teller’s check, or the 90th day
following the date of the acceptance, in the case of a certified check.
(b) Until the claim becomes enforceable, it has no legal effect and the obligated bank may pay the check or, in the case of a
teller’s check, may permit the drawee to pay the check. Payment to a person entitled to enforce the check discharges all liability
of the obligated bank with respect to the check.
(c) If the claim becomes enforceable before the check is presented for payment, the obligated bank is not obliged to pay the
check.
(d) When the claim becomes enforceable, the obligated bank becomes obliged to pay the amount of the check to the claimant
if payment of the check has not been made to a person entitled to enforce the check. Subject to paragraph (a) of subsection 1 of
NRS 104.4302, payment to the claimant discharges all liability of the obligated bank with respect to the check.
4. If the obligated bank pays the amount of a check to a claimant under paragraph (d) of subsection 2 and the check is
presented for payment by a person having rights of a holder in due course, the claimant is obliged to refund the payment to the
obligated bank if the check is paid, or pay the amount of the check to the person having rights of a holder in due course if the
check is dishonored.
5. If a claimant has the right to assert a claim under subsection 2 and is also a person entitled to enforce a cashier’s check,
teller’s check or certified check which is lost, destroyed or stolen, the claimant may assert rights with respect to the check either
under this section or NRS 104.3309.
(Added to NRS by 1993, 1247; A 2005, 1999)
Part 4
Liability of Parties
incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.
2. For the purpose of determining the rights and liabilities of a person who, in good faith, pays an instrument or takes it for
value or for collection, if an employer entrusted an employee with responsibility with respect to the instrument and the employee
or a person acting in concert with the employee makes a fraudulent endorsement of the instrument, the endorsement is effective as
the endorsement of the person to whom the instrument is payable if it is made in the name of that person. If the person paying the
instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure
substantially contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to
exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.
3. Under subsection 2, an endorsement is made in the name of the person to whom an instrument is payable if:
(a) It is made in a name substantially similar to the name of that person; or
(b) The instrument, whether or not endorsed, is deposited in a depositary bank to an account in a name substantially similar to
the name of that person.
(Added to NRS by 1965, 827; A 1993, 1277)—(Substituted in revision for NRS 104.3402)
NRS 104.3408 Drawee not liable on unaccepted draft. A check or other draft does not of itself operate as an assignment
of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee
accepts it.
(Added to NRS by 1965, 829; A 1993, 1282)—(Substituted in revision for NRS 104.3409)
NRS 104.3411 Refusal to pay cashier’s checks, teller’s checks and certified checks.
1. In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier’s check or teller’s check
bought from the issuer.
2. If the obligated bank wrongfully refuses to pay a cashier’s check or certified check, stops payment of a teller’s check, or
refuses to pay a dishonored teller’s check, the person asserting the right to enforce the check is entitled to compensation for
expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses
to pay after receiving notice of particular circumstances giving rise to the damages.
3. Expenses or consequential damages under subsection 2 are not recoverable if the refusal of the obligated bank to pay
occurs because:
(a) The bank suspends payments;
(b) The obligated bank asserts a claim or defense of the bank that it has reasonable grounds to believe is available against the
accommodation.”
2. An accommodation party may sign the instrument as maker, drawer, acceptor or endorser and, subject to subsection 4, is
obliged to pay the instrument in the capacity in which the accommodation party signs. The obligation of an accommodation party
may be enforced notwithstanding any statute of frauds and whether or not the accommodation party receives consideration for the
accommodation.
3. A person signing an instrument is presumed to be an accommodation party and there is notice that the instrument is signed
for accommodation if the signature is an anomalous endorsement or is accompanied by words indicating that the signer is acting
as surety or guarantor with respect to the obligation of another party to the instrument. Except as otherwise provided in NRS
104.3605, the obligation of an accommodation party to pay the instrument is not affected by the fact that the person enforcing the
obligation had notice when the instrument was taken by that person that the accommodation party signed the instrument for
accommodation.
4. If the signature of a party to an instrument is accompanied by words indicating unambiguously that the party is guaranteeing
collection rather than payment of the obligation of another party to the instrument, the signer is obliged to pay the amount due on
the instrument to a person entitled to enforce the instrument only if:
(a) Execution of judgment against the other party has been returned unsatisfied;
(b) The other party is insolvent or in an insolvency proceeding;
(c) The other party cannot be served with process; or
(d) It is otherwise apparent that payment cannot be obtained from the other party.
5. If the signature of a party to an instrument is accompanied by words indicating that the party guarantees payment or the
signer signs the instrument as an accommodation party in some other manner that does not unambiguously indicate an intention to
guarantee collection rather than payment, the signer is obliged to pay the amount due on the instrument to a person entitled to
enforce the instrument in the same circumstances as the accommodated party would be obliged, without prior resort to the
accommodated party by the person entitled to enforce the instrument.
6. An accommodation party that pays the instrument is entitled to reimbursement from the accommodated party and is entitled
to enforce the instrument against the accommodated party. In proper circumstances, an accommodation party may obtain relief
that requires the accommodated party to perform its obligations on the instrument. An accommodated party that pays the
instrument has no right of recourse against, and is not entitled to contribution from, an accommodation party.
(Added to NRS by 1965, 830; A 1993, 1285; 2005, 2002)
Part 5
Dishonor
(b) If the note is not payable on demand and is payable at or through a bank or the terms of the note require presentment, the
note is dishonored if presentment is duly made and the note is not paid on the day it becomes payable or the day of presentment,
whichever is later.
(c) If the note is not payable on demand and paragraph (b) does not apply, the note is dishonored if it is not paid on the day it
becomes payable.
2. Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules:
(a) If a check is duly presented for payment to the payor bank otherwise than for immediate payment over the counter, the
check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under
NRS 104.4301 or 104.4302, or becomes accountable for the amount of the check under NRS 104.4302.
(b) If a draft is payable on demand and paragraph (a) does not apply, the draft is dishonored if presentment for payment is
duly made to the drawee and the draft is not paid on the day of presentment.
(c) If a draft is payable on a date stated in the draft, the draft is dishonored if:
(1) Presentment for payment is duly made to the drawee and payment is not made on the day the draft becomes payable or
the day of presentment, whichever is later; or
(2) Presentment for acceptance is duly made before the day the draft becomes payable and the draft is not accepted on the
day of presentment.
(d) If a draft is payable on elapse of a period of time after sight or acceptance, the draft is dishonored if presentment for
acceptance is duly made and the draft is not accepted on the day of presentment.
3. Dishonor of an unaccepted documentary draft occurs according to the rules stated in paragraphs (b), (c) and (d) of
subsection 2, except that payment or acceptance may be delayed without dishonor until no later than the close of the third
business day of the drawee following the day on which payment or acceptance is required by those paragraphs.
4. Dishonor of an accepted draft is governed by the following rules:
(a) If the draft is payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and the
draft is not paid on the day of presentment.
(b) If the draft is not payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and
payment is not made on the day it becomes payable or the day of presentment, whichever is later.
5. In any case in which presentment is otherwise required for dishonor under this section and presentment is excused under
NRS 104.3504, dishonor occurs without presentment if the instrument is not duly accepted or paid.
6. If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance
consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored.
(Added to NRS by 1965, 834; A 1993, 1291)—(Substituted in revision for NRS 104.3507)
him or her. The protest must identify the instrument and certify either that presentment has been made or, if not made, the reason
why it was not made, and that the instrument has been dishonored by nonacceptance or nonpayment. The protest may also certify
that notice of dishonor has been given to some or all parties.
(Added to NRS by 1965, 835; A 1993, 1293)—(Substituted in revision for NRS 104.3510)
Part 6
2. Discharge, under NRS 104.3604, of the obligation of a party to pay an instrument does not discharge the obligation of an
endorser or accommodation party having a right of recourse against the discharged party.
3. If a person entitled to enforce an instrument agrees, with or without consideration, to an extension of the due date of the
obligation of a party to pay the instrument, the extension discharges an endorser or accommodation party having a right of
recourse against the party whose obligation is extended to the extent the endorser or accommodation party proves that the
extension caused loss to him or her with respect to the right of recourse.
4. If a person entitled to enforce an instrument agrees, with or without consideration, to a material modification of the
obligation of a party other than an extension of the due date, the modification discharges the obligation of an endorser or
accommodation party having a right of recourse against the person whose obligation is modified to the extent the modification
causes loss to the endorser or accommodation party with respect to the right of recourse. The loss suffered by the endorser or
accommodation party as a result of the modification is equal to the amount of the right of recourse unless the person enforcing the
instrument proves that no loss was caused by the modification or that the loss caused by the modification was an amount less than
the amount of the right of recourse.
5. If the obligation of a party to pay an instrument is secured by an interest in collateral and a person entitled to enforce the
instrument impairs the value of the interest in collateral, the obligation of an endorser or accommodation party having a right of
recourse against the obligor is discharged to the extent of the impairment. The value of an interest in collateral is impaired to the
extent the value of the interest is reduced to an amount less than the amount of the right of recourse of the party asserting
discharge, or the reduction in value of the interest causes an increase in the amount by which the amount of the right of recourse
exceeds the value of the interest. The burden of proving impairment is on the party asserting discharge.
6. If the obligation of a party is secured by an interest in collateral not provided by an accommodation party and a person
entitled to enforce the instrument impairs the value of the interest in collateral, the obligation of any party who is jointly and
severally liable with respect to the secured obligation is discharged to the extent the impairment causes the party asserting
discharge to pay more than he or she would have been obliged to pay, taking into account rights of contribution, if impairment had
not occurred. If the party asserting discharge is an accommodation party not entitled to discharge under subsection 5, he or she is
deemed to have a right to contribution based on joint and several liability rather than a right to reimbursement. The burden of
proving impairment is on the party asserting discharge.
7. Under subsection 5 or 6, impairing value of an interest in collateral includes:
(a) Failure to obtain or maintain perfection or recordation of the interest in collateral;
(b) Release of collateral without substitution of collateral of equal value;
(c) Failure to perform a duty to preserve the value of collateral owed under Article 9 or other law to a debtor or surety or
other person secondarily liable; or
(d) Failure to comply with applicable law in disposing of collateral.
8. An accommodation party is not discharged under subsection 3, 4 or 5 unless the person entitled to enforce the instrument
knows of the accommodation or has notice under subsection 3 of NRS 104.3419 that the instrument was signed for
accommodation.
9. A party is not discharged under this section if:
(a) The party asserting discharge consents to the event or conduct that is the basis of the discharge; or
(b) The instrument or a separate agreement of the party provides for waiver of discharge under this section either specifically
or by general language indicating that parties waive defenses based on suretyship or impairment of collateral.
(Added to NRS by 1965, 837; A 1993, 1295)—(Substituted in revision for NRS 104.3602)
ARTICLE 4
Part 1
General Provisions and Definitions
NRS 104.4101 Short title. This article may be cited as Uniform Commercial Code—Bank Deposits and Collections.
(Added to NRS by 1965, 840; A 1993, 1298)
NRS 104.4103 Variation by agreement; measure of damages; action constituting ordinary care.
1. The effect of the provisions of this article may be varied by agreement, but the parties to the agreement cannot disclaim a
bank’s responsibility for its own lack of good faith or failure to exercise ordinary care or limit the measure of damages for the
lack or failure. However, the parties may determine by agreement the standards by which the bank’s responsibility is to be
measured if those standards are not manifestly unreasonable.
2. Federal Reserve regulations and operating circulars, clearinghouse rules, and the like have the effect of agreements under
subsection 1, whether or not specifically assented to by all parties interested in items handled.
3. Action or nonaction approved by this article or pursuant to Federal Reserve regulations or operating circulars is the
exercise of ordinary care and, in the absence of special instructions, action or nonaction consistent with clearinghouse rules and
the like or with a general banking usage not disapproved by this article, is prima facie the exercise of ordinary care.
4. The specification or approval of certain procedures by this article is not disapproval of other procedures that may be
reasonable under the circumstances.
5. The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an
amount that could not have been realized by the exercise of ordinary care. If there is also bad faith, it includes other damages the
party suffered as a proximate consequence.
(Added to NRS by 1965, 840; A 1993, 1299)
3. “Control” as provided in NRS 104.7106 and the following definitions in other Articles apply to this Article:
“Acceptance.” NRS 104.3409.
“Alteration.” NRS 104.3407.
“Cashier’s check.” NRS 104.3104.
“Certificate of deposit.” NRS 104.3104.
“Certified check.” NRS 104.3409.
“Check.” NRS 104.3104.
“Holder in due course.” NRS 104.3302.
“Instrument.” NRS 104.3104.
“Notice of dishonor.” NRS 104.3503.
“Order.” NRS 104.3103.
“Ordinary care.” NRS 104.3103.
“Person entitled to enforce.” NRS 104.3301.
“Presentment.” NRS 104.3501.
“Promise.” NRS 104.3103.
“Prove.” NRS 104.3103.
“Record.” NRS 104.3103.
“Remotely-created item.” NRS 104.3103.
“Teller’s check.” NRS 104.3104.
“Unauthorized signature.” NRS 104.3403.
4. In addition, Article 1 contains general definitions and principles of construction and interpretation applicable throughout
this Article.
(Added to NRS by 1965, 841; A 1993, 1299; 1997, 374; 2005, 855, 2004)
NRS 104.4105 “Depositary bank”; “payor bank”; “intermediary bank”; “collecting bank”; “presenting bank.” In this
Article:
1. “Depositary bank” means the first bank to take an item even though it is also the payor bank, unless the item is presented
for immediate payment over the counter.
2. “Payor bank” means a bank that is the drawee of a draft.
3. “Intermediary bank” means any bank to which an item is transferred in course of collection except the depositary or payor
bank.
4. “Collecting bank” means any bank handling the item for collection except the payor bank.
5. “Presenting bank” means any bank presenting an item except a payor bank.
(Added to NRS by 1965, 842; A 1993, 1301)
NRS 104.4107 Separate office of bank. A branch or separate office of a bank is a separate bank for the purpose of
computing the time within which and determining the place at or to which action may be taken or notices or orders must be given
under this article and under article 3.
(Added to NRS by 1965, 842; A 1993, 1301)—(Substituted in revision for NRS 104.4106)
NRS 104.4111 Statute of limitations. An action to enforce an obligation, duty or right arising under this article must be
commenced within three years after the cause of action accrues.
(Added to NRS by 1993, 1248)
Part 2
NRS 104.4201 Status of collecting bank as agent and provisional status of credits; item endorsed “pay any bank.”
1. Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or
becomes final, the bank, with respect to the item, is an agent or subagent of the owner of the item and any settlement given for the
item is provisional. This provision applies regardless of the form of endorsement or lack of endorsement and even though credit
given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an
item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank such as those
resulting from outstanding advances on the item and rights of recoupment or setoff. If an item is handled by banks for purposes of
presentment, payment, collection or return, the relevant provisions of this article apply even though action of the parties clearly
establishes that a particular bank has purchased the item and is the owner of it.
2. After an item has been endorsed with the words “pay any bank” or the like, only a bank may acquire the rights of a holder
until the item has been:
(a) Returned to the customer initiating collection; or
(b) Specially endorsed by a bank to a person who is not a bank.
(Added to NRS by 1965, 843; A 1993, 1302)
NRS 104.4203 Effect of instructions. Subject to the provisions of article 3 concerning conversion of instruments (NRS
104.3420) and restrictive endorsements (NRS 104.3206), only a collecting bank’s transferor can give instructions that affect the
bank or constitute notice to it, and a collecting bank is not liable to prior parties for any action taken pursuant to the instructions
NRS 104.4204 Methods of sending and presenting; sending directly to payor bank.
1. A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the
nature of the item, the number of such items on hand, the cost of collection involved, and the method generally used by it or others
to present such items.
2. A collecting bank may send:
(a) An item directly to the payor bank;
(b) An item to a nonbank payor if authorized by its transferor; and
(c) An item other than documentary drafts to a nonbank payor, if authorized by Federal Reserve regulation or operating
circular, clearinghouse rule or the like.
3. Presentment may be made by a presenting bank at a place where the payor bank or other payor has requested that
presentment be made.
(Added to NRS by 1965, 844; A 1993, 1303)
NRS 104.4205 Depository bank holder of unendorsed item. If a customer delivers an item to a depositary bank for
collection:
1. The depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time
of delivery was a holder of the item, whether or not the customer endorses the item, and, if the bank satisfies the other
requirements of NRS 104.3302, it is a holder in due course; and
2. The depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the
item was paid to the customer or deposited to the customer’s account.
(Added to NRS by 1965, 844; A 1993, 1303)
NRS 104.4206 Transfer between banks. Any agreed method which identifies the transferor bank is sufficient for the item’s
further transfer to another bank.
(Added to NRS by 1965, 844)
NRS 104.4210 Security interest of collecting bank in items, accompanying documents and proceeds.
1. A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either:
(a) In case of an item deposited in an account to the extent to which credit given for the item has been withdrawn or applied;
(b) In case of an item for which it has given credit available for withdrawal as of right, to the extent of the credit given,
whether or not the credit is drawn upon or there is a right of charge-back; or
(c) If it makes an advance on or against the item.
2. If credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part the
security interest remains upon all the items, any accompanying documents or the proceeds of either. For the purpose of this
section, credits first given are first withdrawn.
3. Receipt by a collecting bank of a final settlement for an item is a realization on its security interest in the item,
accompanying documents, and proceeds. To the extent and so long as the bank does not receive final settlement for the item or
give up possession of the item or possession or control of the accompanying documents for purposes other than collection, the
security interest continues and is subject to the provisions of Article 9 except that:
(a) No security agreement is necessary to make the security interest enforceable (subparagraph (1) of paragraph (c) of
subsection 2 of NRS 104.9203);
(b) No filing is required to perfect the security interest; and
(c) The security interest has priority over conflicting perfected security interests in the item, accompanying documents, or
proceeds.
(Added to NRS by 1965, 845; A 1993, 1305; 1999, 375; 2005, 856)
NRS 104.4211 When bank gives value for purposes of holder in due course. For purposes of determining its status as a
holder in due course, a bank has given value to the extent that it has a security interest in an item if the bank otherwise complies
with the requirements of NRS 104.3302 on what constitutes a holder in due course.
(Added to NRS by 1965, 846; A 1993, 1306)—(Substituted in revision for NRS 104.4209)
NRS 104.4212 Presentment by notice of item not payable by, through or at bank; liability of drawer or endorser.
1. Unless otherwise instructed, a collecting bank may present an item not payable by, through or at a bank by sending to the
party to accept or pay a record providing notice that the bank holds the item for acceptance or payment. The notice must be sent in
time to be received on or before the day when presentment is due and the bank must meet any requirement of the party to accept
or pay under NRS 104.3501 by the close of the bank’s next banking day after it knows of the requirement.
2. If presentment is made by notice and payment, acceptance or request for compliance with a requirement under NRS
104.3501 is not received by the close of business on the day after maturity or in the case of demand items by the close of business
on the third banking day after notice was sent, the presenting bank may treat the item as dishonored and charge any drawer or
endorser by sending him or her notice of the facts.
(Added to NRS by 1965, 846; A 1993, 1306; 2005, 2007)
(2) With respect to tender of settlement by credit in an account in a Federal Reserve bank, when the credit is made;
(3) With respect to tender of settlement by a credit or debit to an account in a bank, when the credit or debit is made or, in
the case of tender of settlement by authority to charge an account, when the authority is sent or delivered; or
(4) With respect to tender of settlement by a funds transfer, when payment is made pursuant to subsection 1 of NRS
104A.4406, to the person receiving settlement.
2. If the tender of settlement is not by a medium authorized by subsection 1 or the time of settlement is not fixed by subsection
1, no settlement occurs until the tender of settlement is accepted by the person receiving settlement.
3. If settlement for an item is made by cashier’s check or teller’s check and the person receiving settlement, before its
midnight deadline:
(a) Presents or forwards the check for collection, settlement is final when the check is finally paid; or
(b) Fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving
settlement.
4. If settlement for an item is made by giving authority to charge the account of the bank giving settlement in the bank
receiving settlement, settlement is final when the charge is made by the bank receiving settlement if there are funds available in
the account for the amount of the item.
(Added to NRS by 1965, 846; A 1991, 412; 1993, 1306)—(Substituted in revision for NRS 104.4211)
NRS 104.4214 Right of charge-back or refund; liability of collecting bank; return of item.
1. If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor,
suspension of payments by a bank, or otherwise to receive a settlement for the item which is or becomes final, the bank may
revoke the settlement given by it, charge back the amount of any credit given for the item to its customer’s account, or obtain
refund from its customer, whether or not it is able to return the item, if by its midnight deadline or within a longer reasonable time
after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank’s
midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit,
or obtain refund from its customer, but it is liable for any loss resulting from the delay. These rights to revoke, charge back and
obtain refund terminate if and when a settlement for the item received by the bank is or becomes final.
2. A collecting bank returns an item when it is sent or delivered to the bank’s customer or transferor or pursuant to its
instructions.
3. A depositary bank that is also the payor may charge back the amount of an item to its customer’s account or obtain refund
in accordance with the section governing return of an item received by a payor bank for credit on its books (NRS 104.4301).
4. The right to charge back is not affected by:
(a) Previous use of the credit given for the item; or
(b) Failure by any bank to exercise ordinary care with respect to the item but a bank so failing remains liable.
5. A failure to charge back or claim refund does not affect other rights of the bank against the customer or any other party.
6. If credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any
charge back or refund must be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day
when the person entitled to the charge back or refund learns that it will not receive payment in ordinary course. If the return or
notice is delayed beyond the bank’s midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke
the settlement, charge back the credit, or obtain refund from its customer, but it is liable for any loss resulting from the delay.
(Added to NRS by 1965, 847; A 1967, 117; 1985, 18; 1993, 1308)—(Substituted in revision for NRS 104.4212)
NRS 104.4215 Final payment of item by payor bank; when provisional debits and credits become final; when certain
credits become available for withdrawal.
1. Except as otherwise provided in NRS 104.3418, an item is finally paid by a payor bank when the bank has first done any
of the following:
(a) Paid the item in cash;
(b) Settled for the item without having a right to revoke settlement under statute, clearinghouse rule, or agreement; or
(c) Made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute,
clearinghouse rule, or agreement.
2. If provisional settlement for an item does not become final, the item is not finally paid.
3. If provisional settlement for an item between the presenting and payor banks is made through a clearing house or by debits
or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts
between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become
final upon final payment of the item by the payor bank.
4. If a collecting bank receives a settlement for an item which is or becomes final, the bank is accountable to its customer for
the amount of the item and any provisional credit given for the item in an account with its customer becomes final.
5. Subject to applicable law stating a time for availability of funds and any right of the bank to apply the credit to an
obligation of the customer, credit given by a bank for an item in an account with its customer becomes available for withdrawal
as of right:
(a) If the bank has received a provisional settlement for the item, when the settlement becomes final and the bank has had a
reasonable time to receive return of the item and the item has not been received within that time;
(b) If the bank is both a depositary bank and a payor bank and the item is finally paid, at the opening of the bank’s second
banking day following receipt of the item.
6. Subject to applicable law stating a time for availability of funds and any right of the bank to apply the deposit to an
obligation of the customer, the deposit becomes available for withdrawal as of right at the opening of the bank’s next banking day
after receipt of the deposit.
(Added to NRS by 1965, 848; A 1993, 1309)—(Substituted in revision for NRS 104.4213)
Part 3
NRS 104.4301 Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor
bank.
1. If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment
over the counter before midnight of the banking day of receipt the payor bank may revoke the settlement and recover the
settlement if, before it has made final payment and before its midnight deadline, it:
(a) Returns the item;
(b) Returns an image of the item, if the party to which the return is made has entered into an agreement to accept an image as a
return of the item and the image is returned in accordance with that agreement; or
(c) Sends a record providing notice of dishonor or nonpayment if the item is unavailable for return.
2. If a demand item is received by a payor bank for credit on its books it may return the item or send notice of dishonor and
may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the
manner specified in subsection 1.
3. Unless previous notice of dishonor has been sent an item is dishonored at the time when for purposes of dishonor it is
returned or notice sent in accordance with this section.
4. An item is returned:
(a) As to an item presented through a clearinghouse, when it is delivered to the presenting or last collecting bank or to the
clearinghouse or is sent or delivered in accordance with clearinghouse rules; or
(b) In all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to his or her instructions.
(Added to NRS by 1965, 849; A 1993, 1310; 2005, 2008)
NRS 104.4303 When items subject to notice, stop-payment order, legal process or setoff; order in which items may be
charged or certified.
1. Any knowledge, notice or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank
comes too late to terminate, suspend or modify the bank’s right or duty to pay an item or to charge its customer’s account for the
item if the knowledge, notice, stop-payment order or legal process is received or served and a reasonable time for the bank to act
thereon expires or the setoff is exercised after the earliest of the following:
(a) The bank accepts or certifies the item;
(b) The bank pays the item in cash;
(c) The bank settles for the item without having a right to revoke the settlement under statute, clearinghouse rule, or
agreement;
(d) The bank becomes accountable for the amount of the item under NRS 104.4302 dealing with the payor bank’s
responsibility for late return of items; or
(e) With respect to checks, a cutoff hour no earlier than 1 hour after the opening of the next banking day after the banking day
on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of
the next banking day after the banking day on which the bank received the check.
2. Subject to the provisions of subsection 1 items may be accepted, paid, certified or charged to the indicated account of its
customer in any order.
(Added to NRS by 1965, 850; A 1993, 1311)
Part 4
of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from
its act. The loss may include damages for dishonor of subsequent items under NRS 104.4402.
4. A bank which in good faith makes payment to a holder may charge the indicated account of its customer according to:
(a) The original terms of the customer’s altered item; or
(b) The terms of the customer’s completed item, even though the bank knows the item has been completed unless the bank has
notice that the completion was improper.
(Added to NRS by 1965, 850; A 1993, 1312)
NRS 104.4402 Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account.
1. Except as otherwise provided in this article, a payor bank wrongfully dishonors an item if it dishonors an item that is
properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.
2. A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is
limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential
damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be
determined in each case.
3. A payor bank’s determination of the customer’s account balance on which a decision to dishonor for insufficiency of
available funds is based may be made at any time between the time the item is received by the payor bank and the time that the
payor bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election
of the payor bank, a subsequent determination is made for the purpose of reevaluating the bank’s decision to dishonor the item,
the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.
(Added to NRS by 1965, 851; A 1993, 1312)
NRS 104.4404 Bank not obligated to pay check more than 6 months old. A bank is under no obligation to a customer
having a checking account to pay a check, other than a certified check, which is presented more than 6 months after its date, but it
may charge its customer’s account for a payment made thereafter.
(Added to NRS by 1965, 851)
exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the
preclusion under subsection 4 does not apply.
6. Without regard to care or lack of care of either the customer or the bank a customer who does not within 1 year after the
statement or items are made available to him or her (subsection 1) discover and report his or her unauthorized signature or any
alteration on the item, is precluded from asserting against the bank the unauthorized signature or the alteration. If there is a
preclusion under this subsection, the payor bank may not recover for breach of warranty under NRS 104.4208 with respect to the
unauthorized signature or alteration to which the preclusion applies.
(Added to NRS by 1965, 852; A 1971, 550; 1993, 1314)
NRS 104.4407 Payor bank’s right to subrogation on improper payment. If a payor bank has paid an item over the order
of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for
objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by
reason of its payment of the item, the payor bank is subrogated to the rights:
1. Of any holder in due course on the item against the drawer or maker;
2. Of the payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of
which the item arose; and
3. Of the drawer or maker against the payee or any other holder of the item with respect to the transaction out of which the
item arose.
(Added to NRS by 1965, 852; A 1993, 1316)
Part 5
NRS 104.4501 Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor. A
bank which takes a documentary draft for collection must present or send the draft and accompanying documents for presentment
and upon learning that the draft has not been paid or accepted in due course must seasonably notify its customer of such fact even
though it may have discounted or bought the draft or extended credit available for withdrawal as of right.
(Added to NRS by 1965, 853)
NRS 104.4502 Presentment of “on arrival” drafts. When a draft or the relevant instructions require presentment “on
arrival,” “when goods arrive” or the like, the collecting bank need not present until in its judgment a reasonable time for arrival
of the goods has expired. Refusal to pay or accept because the goods have not arrived is not dishonor; the bank must notify its
transferor of such refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods.
(Added to NRS by 1965, 853)
NRS 104.4503 Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in
case of need. Unless otherwise instructed and except as provided in article 5 a bank presenting a documentary draft:
1. Must deliver the documents to the drawee on acceptance of the draft if it is payable more than 3 days after presentment;
otherwise, only on payment; and
2. Upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow
instructions from any referee in case of need designated in the draft or if the presenting bank does not choose to utilize the
referee’s services it must use diligence and good faith to ascertain the reason for dishonor, must notify its transferor of the
dishonor and of the results of its effort to ascertain the reasons therefor and must request instructions.
Ê But the presenting bank is under no obligation with respect to goods represented by the documents except to follow any
reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions
and to prepayment of or indemnity for such expenses.
(Added to NRS by 1965, 853)
NRS 104.4504 Privilege of presenting bank to deal with goods; security interest for expenses.
1. A presenting bank which, following the dishonor of a documentary draft, has seasonably requested instructions but does
not receive them within a reasonable time may store, sell or otherwise deal with the goods in any reasonable manner.
2. For its reasonable expenses incurred by action under subsection 1 the presenting bank has a lien upon the goods or their
proceeds, which may be foreclosed in the same manner as an unpaid seller’s lien.
(Added to NRS by 1965, 853)
ARTICLE 5
LETTERS OF CREDIT
NRS 104.5101 Short title. This article may be cited as Uniform Commercial Code—Letters of Credit.
(Added to NRS by 1965, 854; A 1997, 376)
(f) “Document” means a draft or other demand, document of title, investment security, certificate, invoice or other record,
statement or representation of fact, law, right or opinion which is presented in a written or other medium permitted by a letter of
credit or, unless prohibited by the letter of credit, by the standard practice referred to in subsection 5 of NRS 104.5108, and
which is capable of being examined for compliance with the terms and conditions of the letter of credit. A document may not be
oral.
(g) “Good faith” means honesty in fact in the conduct or transaction concerned.
(h) “Honor” of a letter of credit means performance of the issuer’s undertaking in the letter of credit to pay or deliver an item
of value. Unless the letter of credit otherwise provides, “honor” occurs:
(1) Upon payment;
(2) If the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment; or
(3) If the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity, its
performance.
(i) “Issuer” means a bank or other person that issues a letter of credit. The term does not include a natural person who makes
an engagement for personal, family or household purposes.
(j) “Letter of credit” means a definite undertaking that satisfies the requirements of NRS 104.5104 by an issuer to a
beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own
account, to honor a documentary presentation by payment or delivery of an item of value.
(k) “Nominated person” means a person whom the issuer designates or authorizes to pay, accept, negotiate or otherwise give
value under a letter of credit and undertakes by agreement or custom and practice to reimburse.
(l) “Presentation” means delivery of a document to an issuer or nominated person for honor or giving of value under a letter
of credit.
(m) “Presenter” means a person making a presentation as or on behalf of a beneficiary or nominated person.
(n) “Record” means information which is inscribed on a tangible medium, or which is stored in an electronic or other
medium and is retrievable in perceivable form.
(o) “Successor of a beneficiary” means a person who succeeds to substantially all of the rights of a beneficiary by operation
of law, including a corporation with or into which the beneficiary has been merged or consolidated, an administrator, executor,
personal representative, trustee in bankruptcy, debtor in possession, liquidator and receiver.
2. Definitions in other articles applying to this article and the sections in which they appear are:
“Accept” or “acceptance.” NRS 104.3409.
“Value.” NRS 104.3303 and 104.4211.
3. Article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.
(Added to NRS by 1965, 854; A 1997, 377)
NRS 104.5104 Formal requirements. A letter of credit, confirmation, advice, transfer, amendment or cancellation may be
issued in any form that is a record and is authenticated by a signature or in accordance with the agreement of the parties or the
standard practice referred to in subsection 5 of NRS 104.5108.
(Added to NRS by 1965, 855; A 1997, 379)
NRS 104.5105 Consideration. Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or
confirmation.
(Added to NRS by 1965, 855; A 1997, 379)
3. A person requested to advise may decline to act as an adviser. An adviser that is not a confirmer is not obligated to honor
or give value for a presentation. An adviser undertakes to the issuer and to the beneficiary accurately to advise the terms of the
letter of credit, confirmation, amendment or advice received by the adviser and undertakes to the beneficiary to check the
apparent authenticity of the request to advise. Even if the advice is inaccurate, the letter of credit, confirmation or amendment is
enforceable as issued.
4. A person who notifies a transferee beneficiary of the terms of a letter of credit, confirmation, amendment or advice has the
rights and obligations of an adviser under subsection 3. The terms in the notice to the transferee beneficiary may differ from the
terms in any notice to the transferor beneficiary to the extent permitted by the letter of credit, confirmation, amendment or advice
received by the person who so notifies.
(Added to NRS by 1965, 855; A 1997, 380)
(b) To the applicant that the drawing does not violate any agreement between the applicant and beneficiary or any other
agreement intended by them to be augmented by the letter of credit.
2. The warranties in subsection 1 are in addition to warranties arising under articles 3, 4, 7 and 8 because of the presentation
or transfer of documents covered by any of those articles.
(Added to NRS by 1965, 857; A 1997, 382)
6. The rights recognized by this section between an assignee and an issuer, transferee beneficiary or nominated person and
the issuer’s or nominated person’s payment of proceeds to an assignee or a third person do not affect the rights between the
assignee and any person other than the issuer, transferee beneficiary or nominated person. The mode of creating and perfecting a
security interest in or granting an assignment of a beneficiary’s rights to proceeds is governed by article 9 or other law. Against
persons other than the issuer, transferee beneficiary or nominated person, the rights and obligations arising upon the creation of a
security interest or other assignment of a beneficiary’s right to proceeds and its perfection are governed by article 9 or other law.
(Added to NRS by 1997, 357)
NRS 104.5115 Statute of limitations. An action to enforce a right or obligation arising under this article must be
commenced within 1 year after the expiration date of the relevant letter of credit or 1 year after the claim for relief accrues,
whichever occurs later. A claim for relief accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge
of the breach.
(Added to NRS by 1997, 358)
ARTICLE 7
General
NRS 104.7101 Short title. This Article may be cited as the Uniform Commercial Code—Documents of Title.
(Added to NRS by 2005, 833)
(a) The person entitled under the tangible document surrenders possession of the document to the issuer; and
(b) The electronic document when issued contains a statement that it is issued in substitution for the tangible document.
4. Upon issuance of an electronic document of title in substitution for a tangible document of title in accordance with
subsection 3:
(a) The tangible document ceases to have any effect or validity; and
(b) The person that procured issuance of the electronic document warrants to all subsequent persons entitled under the
electronic document that the warrantor was a person entitled under the tangible document when the warrantor surrendered
possession of the tangible document to the issuer.
(Added to NRS by 2005, 834)
Part 2
NRS 104.7201 Person that may issue warehouse receipt; storage under bond.
1. A warehouse receipt may be issued by any warehouse.
2. If goods, including distilled spirits and agricultural commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt issued for the goods is deemed
to be a warehouse receipt even if issued by a person that is the owner of the goods and is not a warehouse.
(Added to NRS by 2005, 835)
NRS 104.7203 Liability for nonreceipt or misdescription. A party to or purchaser for value in good faith of a document of
title, other than a bill of lading, that relies upon the description of the goods in the document may recover from the issuer damages
caused by the nonreceipt or misdescription of the goods, except to the extent that:
1. The document conspicuously indicates that the issuer does not know whether all or part of the goods in fact were received
or conform to the description, such as a case in which the description is in terms of marks or labels or kind, quantity or condition,
or the receipt or description is qualified by “contents, condition and quality unknown,” “said to contain,” or words of similar
import, if the indication is true; or
2. The party or purchaser otherwise has notice of the nonreceipt or misdescription.
(Added to NRS by 2005, 836)
is not liable for damages that could not have been avoided by the exercise of that care.
2. Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of
loss or damage beyond which the warehouse is not liable. Such a limitation is not effective with respect to the warehouse’s
liability for conversion to its own use. On request of the bailor in a record at the time of signing the storage agreement or within a
reasonable time after receipt of the warehouse receipt, the warehouse’s liability may be increased on part or all of the goods
covered by the storage agreement or the warehouse receipt. In this event, increased rates may be charged based on an increased
valuation of the goods.
3. Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the bailment may
be included in the warehouse receipt or storage agreement.
(Added to NRS by 2005, 836)
NRS 104.7205 Title under warehouse receipt defeated in certain cases. A buyer in the ordinary course of business of
fungible goods sold and delivered by a warehouse that is also in the business of buying and selling such goods takes the goods
free of any claim under a warehouse receipt even if the receipt is negotiable and has been duly negotiated.
(Added to NRS by 2005, 836)
NRS 104.7208 Altered warehouse receipts. If a blank in a negotiable tangible warehouse receipt has been filled in
without authority, a good-faith purchaser for value and without notice of the lack of authority may treat the insertion as authorized.
Any other unauthorized alteration leaves any tangible or electronic warehouse receipt enforceable against the issuer according to
its original tenor.
(Added to NRS by 2005, 837)
Part 3
Bills of Lading: Special Provisions
NRS 104.7301 Liability for nonreceipt or misdescription; “said to contain”; “shipper’s weight, load and count”;
improper handling.
1. A consignee of a nonnegotiable bill of lading which has given value in good faith, or a holder to whom a negotiable bill
has been duly negotiated, relying upon the description of the goods in the bill or upon the date shown in the bill, may recover
from the issuer damages caused by the misdating of the bill or the nonreceipt or misdescription of the goods, except to the extent
that the bill indicates that the issuer does not know whether any part or all of the goods in fact were received or conform to the
description, such as in a case in which the description is in terms of marks or labels or kind, quantity or condition, or the receipt
or description is qualified by “contents or condition of contents of packages unknown,” “said to contain,” “shipper’s weight, load
and count,” or words of similar import, if that indication is true.
2. If goods are loaded by the issuer of a bill of lading:
(a) The issuer shall count the packages of goods if shipped in packages and ascertain the kind and quantity if shipped in bulk;
and
(b) Words such as “shipper’s weight, load and count,” or words of similar import indicating that the description was made by
the shipper are ineffective except as to goods concealed in packages.
3. If bulk goods are loaded by a shipper that makes available to the issuer of a bill of lading adequate facilities for weighing
those goods, the issuer shall ascertain the kind and quantity within a reasonable time after receiving the shipper’s request in a
record to do so. In that case, “shipper’s weight” or words of similar import are ineffective.
4. The issuer of a bill of lading, by including in the bill the words “shipper’s weight, load and count,” or words of similar
import, may indicate that the goods were loaded by the shipper, and, if that statement is true, the issuer is not liable for damages
caused by the improper loading. However, omission of such words does not imply liability for damages caused by improper
loading.
5. A shipper guarantees to an issuer the accuracy at the time of shipment of the description, marks, labels, number, kind,
quantity, condition and weight, as furnished by the shipper, and the shipper shall indemnify the issuer against damage caused by
inaccuracies in those particulars. This right of indemnity does not limit the issuer’s responsibility or liability under the contract
NRS 104.7306 Altered bills of lading. An unauthorized alteration or filling in of a blank in a bill of lading leaves the bill
enforceable according to its original tenor.
(Added to NRS by 2005, 842)
Part 4
NRS 104.7401 Irregularities in issue of receipt or bill or conduct of issuer. The obligations imposed by this Article on an
issuer apply to a document of title even if:
1. The document does not comply with the requirements of this Article or of any other statute, rule or regulation regarding its
issuance, form or content;
2. The issuer violated laws regulating the conduct of its business;
3. The goods covered by the document were owned by the bailee when the document was issued; or
4. The person issuing the document is not a warehouse but the document purports to be a warehouse receipt.
(Added to NRS by 2005, 843)
NRS 104.7402 Duplicate document of title; overissue. A duplicate or any other document of title purporting to cover
goods already represented by an outstanding document of the same issuer does not confer any right in the goods, except as
provided in the case of tangible bills of lading in a set of parts, overissue of documents for fungible goods, substitutes for lost,
stolen or destroyed documents, or substitute documents issued pursuant to NRS 104.7105. The issuer is liable for damages
caused by its overissue or failure to identify a duplicate document by a conspicuous notation.
(Added to NRS by 2005, 843)
NRS 104.7404 No liability for good-faith delivery pursuant to document of title. A bailee that in good faith has received
goods and delivered or otherwise disposed of the goods according to the terms of a document of title or pursuant to this Article is
not liable for the goods even if:
1. The person from whom the bailee received the goods did not have authority to procure the document or to dispose of the
goods; or
2. The person to whom the bailee delivered the goods did not have authority to receive the goods.
(Added to NRS by 2005, 844)
Part 5
104.7404, inclusive, pursuant to its own bill of lading discharges the carrier’s obligation to deliver.
(Added to NRS by 2005, 845)
NRS 104.7504 Rights acquired in absence of due negotiation; effect of diversion; stoppage of delivery.
1. A transferee of a document of title, whether negotiable or nonnegotiable, to whom the document has been delivered but not
duly negotiated, acquires the title and rights that its transferor had or had actual authority to convey.
2. In the case of a transfer of a nonnegotiable document of title, until but not after the bailee receives notice of the transfer,
the rights of the transferee may be defeated:
(a) By those creditors of the transferor which could treat the transfer as void under NRS 104.2402 or 104A.2308;
(b) By a buyer from the transferor in ordinary course of business if the bailee has delivered the goods to the buyer or
received notification of the buyer’s rights;
(c) By a lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee or
received notification of the lessee’s rights; or
(d) As against the bailee, by good-faith dealings of the bailee with the transferor.
3. A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the
bailee not to deliver the goods to the consignee defeats the consignee’s title to the goods if the goods have been delivered to a
buyer in ordinary course of business or a lessee in ordinary course of business and, in any event, defeats the consignee’s rights
against the bailee.
4. Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under NRS 104.2705 or a
lessor under NRS 104A.2526, subject to the requirements of due notification in those sections. A bailee that honors the seller’s
or lessor’s instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense.
(Added to NRS by 2005, 846)
NRS 104.7505 Endorser not guarantor for other parties. The endorsement of a tangible document of title issued by a
bailee does not make the endorser liable for any default by the bailee or previous endorsers.
(Added to NRS by 2005, 846)
NRS 104.7506 Delivery without endorsement; right to compel endorsement. The transferee of a negotiable tangible
document of title has a specifically enforceable right to have its transferor supply any necessary endorsement, but the transfer
becomes a negotiation only as of the time the endorsement is supplied.
(Added to NRS by 2005, 846)
NRS 104.7507 Warranties on negotiation or delivery of document of title. If a person negotiates or delivers a document
of title for value, otherwise than as a mere intermediary under NRS 104.7508, unless otherwise agreed, the transferor, in addition
to any warranty made in selling or leasing the goods, warrants to its immediate purchaser only that:
1. The document is genuine;
2. The transferor does not have knowledge of any fact that would impair the document’s validity or worth; and
3. The negotiation or delivery is rightful and fully effective with respect to the title to the document and the goods it
represents.
(Added to NRS by 2005, 846)
NRS 104.7508 Warranties of collecting bank as to documents of title. A collecting bank or other intermediary known to
be entrusted with documents of title on behalf of another or with collection of a draft or other claim against delivery of documents
warrants by the delivery of the documents only its own good faith and authority even if the collecting bank or other intermediary
has purchased or made advances against the claim or draft to be collected.
(Added to NRS by 2005, 847)
NRS 104.7509 Adequate compliance with commercial contract. Whether a document of title is adequate to fulfill the
obligations of a contract for sale, a contract for lease, or the conditions of a letter of credit is determined by Article 2, 5 or 2A.
(Added to NRS by 2005, 847)
Part 6
NRS 104.7602 Judicial process against goods covered by negotiable document of title. Unless a document of title was
originally issued upon delivery of the goods by a person that did not have power to dispose of them, a lien does not attach by
virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless
possession or control of the document is first surrendered to the bailee or the document’s negotiation is enjoined. The bailee may
not be compelled to deliver the goods pursuant to process until possession or control of the document is surrendered to the bailee
or to the court. A purchaser of the document for value without notice of the process or injunction takes free of the lien imposed by
judicial process.
(Added to NRS by 2005, 847)
NRS 104.7603 Conflicting claims; interpleader. If more than one person claims title to or possession of the goods, the
bailee is excused from delivery until the bailee has a reasonable time to ascertain the validity of the adverse claims or to
commence an action for interpleader. The bailee may assert an interpleader either in defending an action for nondelivery of the
goods or by original action.
(Added to NRS by 2005, 847)
ARTICLE 8
INVESTMENT SECURITIES
Part 1
2. Other definitions applying to this Article and the sections in which they appear are:
“Appropriate person.” NRS 104.8107.
“Control.” NRS 104.8106.
“Delivery.” NRS 104.8301.
“Investment company security.” NRS 104.8103.
“Issuer.” NRS 104.8201.
“Overissue.” NRS 104.8210.
“Protected purchaser.” NRS 104.8303.
“Securities account.” NRS 104.8501.
3. In addition, Article 1 contains general definitions and principles of construction and interpretation applicable throughout
this Article.
4. The characterization of a person, business or transaction for purposes of this Article does not determine the
characterization of the person, business or transaction for purposes of any other law, regulation or rule.
(Added to NRS by 1965, 876; A 1973, 912; 1985, 85; 1995, 1074; 1997, 385; 2005, 857)
NRS 104.8103 Rules for determining whether certain obligations and interests are securities or financial assets.
1. A share or similar equity interest issued by a corporation, business trust, joint stock company or similar entity is a
security.
2. An investment company security is a security. “Investment company security” means a share or similar equity interest
issued by an entity that is registered as an investment company under the federal investment company laws, an interest in a unit
investment trust that is so registered or a face-amount certificate issued by a face-amount certificate company that is so
registered. The term does not include an insurance policy or endowment policy or annuity contract issued by an insurance
company.
3. An interest in a partnership or limited-liability company is not a security unless it is dealt in or traded on securities
exchanges or in securities markets, its terms expressly provide that it is a security governed by this Article, or it is an investment
company security. However, an interest in a partnership or limited-liability company is a financial asset if it is held in a
securities account.
4. A writing that is a security certificate is governed by this Article and not by Article 3, even though it also meets the
requirements of that Article. However, a negotiable instrument governed by Article 3 is a financial asset if it is held in a
securities account.
5. An option or similar obligation issued by a clearing corporation to its participants is not a security, but is a financial asset.
6. A commodity contract, as defined in paragraph (o) of subsection 1 of NRS 104.9102, is not a security or a financial asset.
7. A document of title is not a financial asset unless subparagraph 3 of paragraph (j) of subsection 1 of NRS 104.8102
applies.
(Added to NRS by 1997, 359; A 1999, 376; 2005, 859)
entitlement holder governing the securities account expressly provides that the securities account is maintained at an office in a
particular jurisdiction, that jurisdiction is the securities intermediary’s jurisdiction.
(d) If neither paragraph (a) nor paragraph (b) nor paragraph (c) applies, the securities intermediary’s jurisdiction is the
jurisdiction in which the office identified in an account statement as the office serving the entitlement holder’s account is located.
(e) If none of the preceding paragraphs applies, the securities intermediary’s jurisdiction is the jurisdiction in which its chief
executive office is located.
6. A securities intermediary’s jurisdiction is not determined by the physical location of certificates representing financial
assets, or by the jurisdiction in which is organized the issuer of the financial asset with respect to which an entitlement holder has
a security entitlement or by the location of facilities for data processing or other recordkeeping concerning the account.
(Added to NRS by 1965, 878; A 1985, 89; 1997, 390; 1999, 377)
NRS 104.8111 Rules of clearing corporation. A rule adopted by a clearing corporation governing rights and obligations
among the clearing corporation and its participants in the clearing corporation is effective even if the rule conflicts with the
Uniform Commercial Code and affects another party who does not consent to the rule.
(Added to NRS by 1997, 364)
NRS 104.8113 Statute of frauds inapplicable. A contract or modification of a contract for the sale or purchase of a
security is enforceable whether or not there is a writing signed or record authenticated by a party against whom enforcement is
sought, even if the contract or modification is not capable of performance within 1 year after its making.
(Added to NRS by 1965, 885; A 1985, 107; 1997, 399)
NRS 104.8114 Evidentiary rules concerning certificated securities. The following rules apply in an action on a
certificated security against an issuer:
1. Unless specifically denied in the pleadings, each signature on a security certificate or in a necessary endorsement is
admitted.
2. If the effectiveness of a signature is put in issue, the burden of establishing effectiveness is on the party claiming under the
signature, but the signature is presumed to be genuine or authorized.
3. If signatures on a security certificate are admitted or established, production of the certificate entitles a holder to recover
on it unless the defendant establishes a defense or a defect going to the validity of the security.
4. If it is shown that a defense or defect exists, the plaintiff has the burden of establishing that he or she or some person under
whom he or she claims is a person against whom the defense or defect cannot be asserted.
(Added to NRS by 1965, 877; A 1985, 88; 1997, 389)
NRS 104.8115 Securities intermediary and others not liable to adverse claimant. A securities intermediary that has
transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that has dealt with a
financial asset at the direction of his or her customer or principal, is not liable to a person having an adverse claim to the
financial asset, unless he or she:
1. Took the action after he or she had been served with an injunction, restraining order or other legal process enjoining him
or her from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction,
restraining order or other legal process;
2. Acted in collusion with the wrongdoer in violating the rights of the adverse claimant; or
3. In the case of a security certificate that had been stolen, acted with notice of the adverse claim.
(Added to NRS by 1965, 885; A 1985, 106; 1997, 398)
NRS 104.8116 Securities intermediary as purchaser for value. A securities intermediary that receives a financial asset
and establishes a security entitlement to the financial asset in favor of an entitlement holder is a purchaser for value of the
financial asset. A securities intermediary that acquires a security entitlement to a financial asset from another securities
intermediary acquires the security entitlement for value if the securities intermediary acquiring the security entitlement
establishes a security entitlement to the financial asset in favor of an entitlement holder.
(Added to NRS by 1997, 364)
Part 2
transfer agent or the like, to evidence a share, participation or other interest in his or her property or in an enterprise, or to
evidence his or her duty to perform an obligation represented by the certificate;
(b) Creates a share, participation or other interest in his or her property or in an enterprise, or undertakes an obligation, that
is an uncertificated security;
(c) Directly or indirectly creates a fractional interest in his or her rights or property, if the fractional interest is represented
by a security certificate; or
(d) Becomes responsible for, or in place of, any other person described as an issuer in this section.
2. With respect to an obligation on or defense to a security, a guarantor is an issuer to the extent of his or her guaranty,
whether or not the guarantor’s obligation is noted on a security certificate.
3. With respect to registration of transfer, “issuer” means a person on whose behalf transfer books are maintained.
(Added to NRS by 1965, 878; A 1985, 90; 1997, 391)
NRS 104.8203 Staleness as notice of defect or defense. After an act or event, other than a call that has been revoked,
creating a right to immediate performance of the principal obligation represented by a certificated security or setting a date on or
after which the security is to be presented or surrendered for redemption or exchange, a purchaser is charged with notice of any
defect in its issue or defense of the issuer if the act or event:
1. Requires the payment of money, the delivery of a certificated security, the registration of transfer of an uncertificated
security, or any of them on presentation or surrender of the security certificate, the money or security is available on the date set
for payment or exchange, and the purchaser takes the security more than 1 year after that date; or
2. Is not covered by subsection 1 and the purchaser takes the security more than 2 years after the date set for surrender or
presentation or the date on which performance became due.
(Added to NRS by 1965, 879; A 1985, 92; 1997, 393)
NRS 104.8204 Effect of issuer’s restriction on transfer. A restriction on transfer of a security imposed by the issuer,
even if otherwise lawful, is ineffective against any person without actual knowledge of the restriction unless:
1. The security is certificated and the restriction is noted conspicuously on the security certificate; or
2. The security is uncertificated and the registered owner has been notified of the restriction.
(Added to NRS by 1965, 880; A 1985, 92; 1997, 393)
NRS 104.8205 Effect of unauthorized signature on security certificate. An unauthorized signature placed on a security
certificate before or in the course of issue is ineffective, but the signature is effective in favor of a purchaser for value of the
certificated security if the purchaser is without notice of the lack of authority and the signing has been done by:
1. An authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security
certificate or of similar security certificates, or the immediate preparation for signing of any of them; or
2. An employee of the issuer, or of any of the persons listed in subsection 1, entrusted with responsible handling of the
security certificate.
(Added to NRS by 1965, 880; A 1985, 92; 1997, 393)
NRS 104.8207 Rights and duties of issuer with respect to registered owners.
1. Before the presentment for registration of transfer of a certificated security in registered form or of an instruction
requesting transfer of an uncertificated security, the issuer or indenture trustee may treat the registered owner as the person
exclusively entitled to vote, receive notifications and otherwise exercise all the rights and powers of an owner.
2. This article does not affect the liability of the registered owner of a security for calls, assessments or the like.
(Added to NRS by 1965, 880; A 1985, 93; 1997, 394)
NRS 104.8209 Issuer’s lien. A lien in favor of an issuer upon a certificated security is valid against a purchaser only if the
right of the issuer to the lien is noted conspicuously on the security certificate.
(Added to NRS by 1965, 877; A 1985, 88; 1997, 388)
Part 3
appears or, if the endorsement is on a separate document, until delivery of both the document and the certificate.
4. If a security certificate in registered form has been delivered to a purchaser without a necessary endorsement, the
purchaser may become a protected purchaser only when the endorsement is supplied. However, against a transferor, a transfer is
complete upon delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.
5. An endorsement of a security certificate in bearer form may give notice of an adverse claim to the certificate, but it does
not otherwise affect a right to registration that the holder possesses.
6. Unless otherwise agreed, a person making an endorsement assumes only the obligations provided in NRS 104.8108 and
not an obligation that the security will be honored by the issuer.
(Added to NRS by 1997, 365)
NRS 104.8307 Purchaser’s right to requisites for registration of transfer. Unless otherwise agreed, the transferor of a
security on due demand shall supply the purchaser with proof of authority to transfer or with any other requisite necessary to
obtain registration of the transfer of the security, but if the transfer is not for value, a transferor need not comply unless the
purchaser pays the necessary expenses. If the transferor fails within a reasonable time to comply with the demand, the purchaser
may reject or rescind the transfer.
(Added to NRS by 1965, 885; A 1985, 105; 1997, 397)
Part 4
Registration
security or an instruction for registration or his or her principal for loss resulting from unreasonable delay in registration or
failure or refusal to register the transfer.
(Added to NRS by 1965, 886; A 1985, 108; 1997, 399)
destroyed or wrongfully taken, the issuer shall issue a new certificate if the owner:
(a) So requests before the issuer has notice that the security has been acquired by a protected purchaser;
(b) Files with the issuer a sufficient indemnity bond; and
(c) Satisfies other reasonable requirements imposed by the issuer.
2. If, after the issue of a new security certificate, a protected purchaser of the original certificate presents it for registration
of transfer, the issuer shall register the transfer unless an overissue would result. In that case, the issuer’s liability is governed by
NRS 104.8210. In addition to any rights on the indemnity bond, the issuer may recover the new certificate from the person to
whom it was issued or any person taking under him or her except a protected purchaser.
(Added to NRS by 1965, 889; A 1985, 112; 1997, 405)
NRS 104.8406 Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate. If a security
certificate has been lost, apparently destroyed or wrongfully taken and the owner fails to notify the issuer of that fact within a
reasonable time after the owner has notice of it and the issuer registers a transfer of the security before receiving notification, the
owner may not assert against the issuer a claim for registering the transfer under NRS 104.8404 or a claim to a new security
certificate under NRS 104.8405.
(Added to NRS by 1997, 366)
NRS 104.8407 Authenticating trustee, transfer agent and registrar. A person acting as authenticating trustee, transfer
agent, registrar or other agent for an issuer in the registration of a transfer of its securities, in the issue of new security certificates
or uncertificated securities or in the cancellation of surrendered security certificates has the same obligation to the holder or
owner of a certificated or uncertificated security with regard to the particular functions performed as the issuer has in regard to
those functions.
(Added to NRS by 1965, 889; A 1985, 113; 1997, 406)
Part 5
Security Entitlements
NRS 104.8501 Securities account; acquisition of security entitlement from securities intermediary.
1. “Securities account” means an account to which a financial asset is or may be credited in accordance with an agreement
under which the person maintaining the account undertakes to treat the person for whom the account is maintained as entitled to
exercise the rights that comprise the financial asset.
2. Except as otherwise provided in subsections 4 and 5, a person acquires a security entitlement if a securities intermediary:
(a) Indicates by book entry that a financial asset has been credited to his or her securities account;
(b) Receives a financial asset from the person or acquires a financial asset for him or her and, in either case, accepts it for
credit to his or her securities account; or
(c) Becomes obligated under other law, regulation or rule to credit a financial asset to his or her securities account.
3. If a condition of subsection 2 has been met, a person has a security entitlement even though the securities intermediary
does not itself hold the financial asset.
4. If a securities intermediary holds a financial asset for another person and the financial asset is registered in the name of,
payable to the order of or specially endorsed to the other person and has not been endorsed to the securities intermediary or in
blank, the other person is treated as holding the financial asset directly rather than as having a security entitlement with respect to
the financial asset.
5. Issuance of a security is not establishment of a security entitlement.
(Added to NRS by 1997, 366)
NRS 104.8502 Assertion of adverse claim against entitlement holder. An action based on an adverse claim to a financial
asset, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may not be asserted against a
person who acquires a security entitlement under NRS 104.8501 for value and without notice of the adverse claim.
(Added to NRS by 1997, 367)
NRS 104.8503 Property interest of entitlement holder in financial asset held by securities intermediary.
1. To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular
financial asset, all interests in that financial asset held by the securities intermediary are held by the securities intermediary for
the entitlement holders, are not the property of the securities intermediary and are not subject to claims of creditors of the
securities intermediary, except as otherwise provided in NRS 104.8511.
2. An entitlement holder’s property interest with respect to a particular financial asset under subsection 1 is a pro rata
property interest in all interests in that financial asset held by the securities intermediary, without regard to the time the
entitlement holder acquired the security entitlement or the time the securities intermediary acquired the interest in that financial
asset.
3. An entitlement holder’s property interest with respect to a particular financial asset under subsection 1 may be enforced
against the securities intermediary only by exercise of the entitlement holder’s rights under NRS 104.8505 to 104.8508,
inclusive.
4. An entitlement holder’s property interest with respect to a particular financial asset under subsection 1 may be enforced
against a purchaser of the financial asset or interest therein only if:
(a) Insolvency proceedings have been initiated by or against the securities intermediary;
(b) The securities intermediary does not have sufficient interests in the financial asset to satisfy the security entitlements of all
of its entitlement holders to that financial asset;
(c) The securities intermediary violated its obligations under NRS 104.8504 by transferring the financial asset or interest
therein to the purchaser; and
(d) The purchaser is not protected under subsection 5.
Ê The trustee or other liquidator, acting on behalf of all entitlement holders having security entitlements with respect to a
particular financial asset, may recover the financial asset, or interest therein, from the purchaser. If the trustee or other liquidator
elects not to pursue that right, an entitlement holder whose security entitlement remains unsatisfied has the right to recover its
interest in the financial asset from the purchaser.
5. An action based on the entitlement holder’s property interest with respect to a particular financial asset under subsection
1, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may not be asserted against any
purchaser of a financial asset or interest therein who gives value, obtains control and does not act in collusion with the securities
intermediary in violating the securities intermediary’s obligations under NRS 104.8504.
(Added to NRS by 1997, 367)
NRS 104.8505 Duty of securities intermediary with respect to payments and distributions.
1. A securities intermediary shall take action to obtain a payment or distribution made by the issuer of a financial asset. A
securities intermediary satisfies the duty if:
(a) It acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or
(b) In the absence of agreement, it exercises due care in accordance with reasonable commercial standards to attempt to
obtain the payment or distribution.
2. A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a
financial asset if the payment or distribution is received by the securities intermediary.
(Added to NRS by 1997, 368)
NRS 104.8506 Duty of securities intermediary to exercise rights as directed by entitlement holder. A securities
intermediary shall exercise rights with respect to a financial asset if directed to do so by an entitlement holder. A securities
intermediary satisfies the duty if:
1. It acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or
2. In the absence of agreement, it either places the entitlement holder in a position to exercise the rights directly or exercises
due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.
(Added to NRS by 1997, 368)
NRS 104.8508 Duty of securities intermediary to change entitlement holder’s position to other form of security
holding. A securities intermediary shall act at the direction of an entitlement holder to change a security entitlement into another
available form of holding for which the entitlement holder is eligible or to cause the financial asset to be transferred to a
securities account of the entitlement holder with another securities intermediary. A securities intermediary satisfies the duty if:
1. It acts as agreed upon by the entitlement holder and the securities intermediary; or
2. In the absence of agreement, it exercises due care in accordance with reasonable commercial standards to follow the
direction of the entitlement holder.
(Added to NRS by 1997, 369)
NRS 104.8509 Specification of duties of securities intermediary by other statute or regulation; manner of
performance of duties of securities intermediary and exercise of rights of entitlement holder.
1. If the substance of a duty imposed upon a securities intermediary by NRS 104.8504 to 104.8508, inclusive, is the subject
of other statute, regulation or rule, compliance with that statute, regulation or rule satisfies the duty.
2. To the extent that specific standards for the performance of the duties of a securities intermediary or the exercise of the
rights of an entitlement holder are not specified by other statute, regulation or rule or by agreement between the securities
intermediary and entitlement holder, the securities intermediary shall perform its duties and the entitlement holder shall exercise
its rights in a commercially reasonable manner.
3. The obligation of a securities intermediary to perform the duties imposed by NRS 104.8504 to 104.8508, inclusive, is
subject to:
(a) Rights of the securities intermediary arising out of a security interest under a security agreement with the entitlement
holder or otherwise; and
(b) Rights of the securities intermediary under other law, regulation, rule or agreement to withhold performance of its duties
as a result of unfulfilled obligations of the entitlement holder to the securities intermediary.
4. NRS 104.8504 to 104.8508, inclusive, do not require a securities intermediary to take any action that is prohibited by
other statute, regulation or rule.
ARTICLE 9
SECURED TRANSACTIONS
Part 1
General Provisions
NRS 104.9101 Short title. This article may be cited as Uniform Commercial Code—Secured Transactions.
(Added to NRS by 1999, 281)
(3) Whose effectiveness does not depend on the person’s possession of the personal property.
(f) “As-extracted collateral” means:
(1) Oil, gas or other minerals that are subject to a security interest that:
(I) Is created by a debtor having an interest in the minerals before extraction; and
(II) Attaches to the minerals as extracted; or
(2) Accounts arising out of the sale at the wellhead or minehead of oil, gas or other minerals in which the debtor had an
interest before extraction.
(g) “Authenticate” means:
(1) To sign; or
(2) To execute or otherwise adopt a symbol, or encrypt or similarly process a record in whole or in part, with the present
intent of the authenticating person to identify himself or herself and adopt or accept a record.
(h) “Bank” means an organization that is engaged in the business of banking. The term includes savings banks, savings and
loan associations, credit unions and trust companies.
(i) “Cash proceeds” means proceeds that are money, checks, deposit accounts or the like.
(j) “Certificate of title” means a certificate of title with respect to which a statute provides for the security interest in question
to be indicated on the certificate as a condition or result of the security interest’s obtaining priority over the rights of a lien
creditor with respect to the collateral.
(k) “Chattel paper” means a record or records that evidence both a monetary obligation and a security interest in or a lease of
specific goods or of specific goods and software used in the goods, or a security interest in or a lease of specific goods and a
license of software used in the goods. The term does not include charters or other contracts involving the use or hire of a vessel,
or records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use
with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records
taken together constitutes chattel paper. As used in this paragraph, “monetary obligation” means a monetary obligation secured by
the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods.
(l) “Collateral” means the property subject to a security interest or agricultural lien. The term includes:
(1) Proceeds to which a security interest attaches;
(2) Accounts, chattel paper, payment intangibles and promissory notes that have been sold; and
(3) Goods that are the subject of a consignment.
(m) “Commercial tort claim” means a claim arising in tort with respect to which:
(1) The claimant is an organization; or
(2) The claimant is a natural person and the claim:
(I) Arose in the course of the claimant’s business or profession; and
(II) Does not include damages arising out of personal injury to or the death of a natural person.
(n) “Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is
carried for a commodity customer.
(o) “Commodity contract” means a commodity futures contract, an option on a commodity futures contract, a commodity
option or another contract if the contract or option is:
(1) Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract
pursuant to federal commodities laws; or
(2) Traded on a foreign commodity board of trade, exchange or market, and is carried on the books of a commodity
intermediary for a commodity customer.
(p) “Commodity customer” means a person for which a commodity intermediary carries a commodity contract on its books.
(q) “Commodity intermediary” means a person that:
(1) Is registered as a futures commission merchant under federal commodities law; or
(2) In the ordinary course of its business provides clearance or settlement services for a board of trade that has been
designated as a contract market pursuant to federal commodities law.
(r) “Communicate” means:
(1) To send a written or other tangible record;
(2) To transmit a record by any means agreed upon by the persons sending and receiving the record; or
(3) In the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-
office rule.
(s) “Consignee” means a merchant to which goods are delivered in a consignment.
(t) “Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose
of sale and:
(1) The merchant:
(I) Deals in goods of that kind under a name other than the name of the person making delivery;
(II) Is not an auctioneer; and
(III) Is not generally known by its creditors to be substantially engaged in selling the goods of others;
(2) With respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery;
(3) The goods are not consumer goods immediately before delivery; and
(4) The transaction does not create a security interest that secures an obligation.
(u) “Consignor” means a person that delivers goods to a consignee in a consignment.
(v) “Consumer debtor” means a debtor in a consumer transaction.
(w) “Consumer goods” means goods that are used or bought for use primarily for personal, family or household purposes.
(x) “Consumer-goods transaction” means a consumer transaction to the extent that:
(1) A natural person incurs an obligation primarily for personal, family or household purposes; and
(2) A security interest in consumer goods or in consumer goods and software that is held or acquired primarily for
personal, family or household purposes secures the obligation.
(y) “Consumer obligor” means an obligor who is a natural person and who incurred the obligation as part of a transaction
entered into primarily for personal, family or household purposes.
(z) “Consumer transaction” means a transaction to the extent that a natural person incurs an obligation primarily for personal,
family or household purposes; a security interest secures the obligation; and the collateral is held or acquired primarily for
personal, family or household purposes. The term includes consumer-goods transactions.
(aa) “Continuation statement” means a change of a financing statement which:
(1) Identifies, by its file number, the initial financing statement to which it relates; and
(2) Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified
financing statement.
(bb) “Debtor” means:
(1) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is
an obligor;
(2) A seller of accounts, chattel paper, payment intangibles or promissory notes; or
(3) A consignee.
(cc) “Deposit account” means a demand, time, savings, passbook or similar account maintained with a bank. The term does
not include investment property or accounts evidenced by an instrument.
(dd) “Document” means a document of title or a receipt of the type described in subsection 2 of NRS 104.7201.
(ee) “Electronic chattel paper” means chattel paper evidenced by a record or records consisting of information stored in an
electronic medium.
(ff) “Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other
liens on real property.
(gg) “Equipment” means goods other than inventory, farm products or consumer goods.
(hh) “Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming
operation and which are:
(1) Crops grown, growing or to be grown, including:
(I) Crops produced on trees, vines and bushes; and
(II) Aquatic goods produced in aquacultural operations;
(2) Livestock, born or unborn, including aquatic goods produced in aquacultural operations;
(3) Supplies used or produced in a farming operation; or
(4) Products of crops or livestock in their unmanufactured states.
(ii) “Farming operation” means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or
aquacultural operation.
(jj) “File number” means the number assigned to an initial financing statement pursuant to subsection 1 of NRS 104.9519.
(kk) “Filing office” means an office designated in NRS 104.9501 as the place to file a financing statement.
(ll) “Filing-office rule” means a rule adopted pursuant to NRS 104.9526.
(mm) “Financing statement” means a record or records composed of an initial financing statement and any filed record
relating to the initial financing statement.
(nn) “Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying
subsections 1 and 2 of NRS 104.9502. The term includes the filing of a financing statement covering goods of a transmitting
utility which are or are to become fixtures.
(oo) “Fixtures” means goods that have become so related to particular real property that an interest in them arises under real
property law.
(pp) “General intangible” means any personal property, including things in action, other than accounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of
credit, money, and oil, gas or other minerals before extraction. The term includes payment intangibles and software.
(qq) “Goods” means all things that are movable when a security interest attaches. The term includes fixtures; standing timber
that is to be cut and removed under a conveyance or contract for sale; the unborn young of animals; crops grown, growing, or to
be grown, even if the crops are produced on trees, vines, or bushes; and manufactured homes. The term also includes a computer
program embedded in goods and any supporting information provided in connection with a transaction relating to the program if
the program is associated with the goods in such a manner that it customarily is considered part of the goods, or by becoming the
owner of the goods, a person acquires a right to use the program in connection with the goods. The term does not include a
computer program embedded in goods that consist solely of the medium in which the program is embedded. The term also does
not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments,
investment property, letter-of-credit rights, letters of credit, money, or oil, gas or other minerals before extraction.
(rr) “Governmental unit” means a subdivision, agency, department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country. The term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the
United States.
(ss) “Health-care-insurance receivable” means an interest in or claim under a policy of insurance which is a right to payment
of a monetary obligation for health-care goods or services provided.
(tt) “Instrument” means a negotiable instrument or any other writing that evidences a right to the payment of a monetary
obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by
delivery with any necessary endorsement or assignment. The term does not include investment property, letters of credit or
writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use
with the card.
(uu) “Inventory” means goods, other than farm products, which:
(1) Are leased by a person as lessor;
(2) Are held by a person for sale or lease or to be furnished under a contract of service;
(3) Are furnished by a person under a contract of service; or
(4) Consist of raw materials, work in process, or materials used or consumed in a business.
(vv) “Investment property” means a security, whether certificated or uncertificated, security entitlement, securities account,
commodity contract, or commodity account.
(ww) “Jurisdiction of organization,” with respect to a registered organization, means the jurisdiction under whose law the
organization is organized.
(xx) “Letter-of-credit right” means a right to payment or performance under a letter of credit, whether or not the beneficiary
has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to
demand payment or performance under a letter of credit.
(yy) “Lien creditor” means:
(1) A creditor that has acquired a lien on the property involved by attachment, levy or the like;
(2) An assignee for benefit of creditors from the time of assignment;
(3) A trustee in bankruptcy from the date of the filing of the petition; or
(4) A receiver in equity from the time of appointment.
(zz) “Manufactured home” means a structure, transportable in one or more sections, which in the traveling mode, is 8 feet or
more in body width or 40 feet or more in body length, or, when erected on-site, is 320 or more square feet, and which is built on
a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the
required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein. The term includes
any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the
manufacturer voluntarily files a certification required by the United States Secretary of Housing and Urban Development and
complies with the standards established under Title 42 of the United States Code.
(aaa) “Manufactured-home transaction” means a secured transaction:
(1) That creates a purchase-money security interest in a manufactured home, other than a manufactured home held as
inventory; or
(2) In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.
(bbb) “Mortgage” means a consensual interest in real property, including fixtures, which is created by a mortgage, deed of
trust, or similar transaction.
(ccc) “New debtor” means a person that becomes bound as debtor under subsection 4 of NRS 104.9203 by a security
agreement previously entered into by another person.
(ddd) “New value” means money; money’s worth in property, services or new credit; or release by a transferee of an interest
in property previously transferred to the transferee. The term does not include an obligation substituted for another obligation.
(eee) “Noncash proceeds” means proceeds other than cash proceeds.
(fff) “Obligor” means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on
the collateral, owes payment or other performance of the obligation, has provided property other than the collateral to secure
payment or other performance of the obligation, or is otherwise accountable in whole or in part for payment or other performance
of the obligation. The term does not include an issuer or a nominated person under a letter of credit.
(ggg) “Original debtor” means, except as used in subsection 3 of NRS 104.9310, a person that, as debtor, entered into a
security agreement to which a new debtor has become bound under subsection 4 of NRS 104.9203.
(hhh) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary
obligation.
(iii) “Person related to,” with respect to a natural person, means:
(1) The person’s spouse;
(2) The person’s brother, brother-in-law, sister or sister-in-law;
(3) The person’s or the person’s spouse’s ancestor or lineal descendant; or
(4) Any other relative, by blood or marriage, of the person or the person’s spouse who shares the same home with him or
her.
(jjj) “Person related to,” with respect to an organization, means:
(1) A person directly or indirectly controlling, controlled by or under common control with the organization;
(2) An officer or director of, or a person performing similar functions with respect to, the organization;
(3) An officer or director of, or a person performing similar functions with respect to, a person described in
subparagraph (1);
(4) The spouse of a natural person described in subparagraph (1), (2) or (3); or
(5) A person who is related by blood or marriage to a person described in subparagraph (1), (2), (3) or (4) and shares the
same home with that person.
(kkk) “Proceeds” means, except as used in subsection 2 of NRS 104.9609, the following property:
(1) Whatever is acquired upon the sale, lease, license, exchange or other disposition of collateral;
(2) Whatever is collected on, or distributed on account of, collateral;
(3) Rights arising out of collateral;
(4) To the extent of the value of collateral, claims arising out of the loss, nonconformity, or interference with the use of,
defects or infringement of rights in, or damage to, the collateral; and
(5) To the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable
by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the collateral.
(lll) “Promissory note” means an instrument that evidences a promise to pay a monetary obligation, does not evidence an
order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.
(mmm) “Proposal” means a record authenticated by a secured party which includes the terms on which the secured party is
willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to NRS 104.9620, 104.9621 and
104.9622.
(nnn) “Public-finance transaction” means a secured transaction in connection with which:
(1) Debt securities are issued;
(2) All or a portion of the securities issued have an initial stated maturity of at least 20 years; and
(3) The debtor, the obligor, the secured party, the account debtor or other person obligated on collateral, the assignor or
assignee of a secured obligation, or the assignor or assignee of a security interest is a state or a governmental unit of a state.
(ooo) “Pursuant to commitment,” with respect to an advance made or other value given by a secured party, means pursuant to
the secured party’s obligation, whether or not a subsequent event of default or other event not within the secured party’s control
has relieved or may relieve the secured party from its obligation.
(ppp) “Record,” except as used in “for record,” “of record,” “record or legal title,” and “record owner,” means information
that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.
(qqq) “Registered organization” means an organization organized solely under the law of a single state or the United States
and as to which the state or the United States must maintain a public record showing the organization to have been organized.
(rrr) “Secondary obligor” means an obligor to the extent that:
(1) The obligor’s obligation is secondary; or
(2) The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another
obligor or property of either.
(sss) “Secured party” means:
(1) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any
obligation to be secured is outstanding;
(2) A person that holds an agricultural lien;
(3) A consignor;
(4) A person to which accounts, chattel paper, payment intangibles or promissory notes have been sold;
(5) A trustee, indenture trustee, agent, collateral agent or other representative in whose favor a security interest or
agricultural lien is created or provided for; or
(6) A person that holds a security interest arising under NRS 104.2401, 104.2505, subsection 3 of NRS 104.2711, NRS
3. Article 1 contains general definitions and principles of construction and interpretation applicable throughout this Article.
(Added to NRS by 1999, 281; A 2001, 710; 2005, 860)
NRS 104.9103 Purchase-money security interest: Circumstances of existence; applicability of payments; burden of
establishing.
1. In this section:
(a) “Purchase-money collateral” means goods or software that secures a purchase-money obligation incurred with respect to
that collateral; and
(b) “Purchase-money obligation” means an obligation of an obligor incurred as all or part of the price of the collateral or for
value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.
2. A security interest in goods is a purchase-money security interest:
(a) To the extent that the goods are purchase-money collateral with respect to that security interest;
(b) If the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest
secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a
purchase-money security interest; and
(c) Also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in
which the secured party holds or held a purchase-money security interest.
3. A security interest in software is a purchase-money security interest to the extent that the security interest also secures a
purchase-money obligation incurred with respect to goods in which the secured party holds or held a purchase-money security
interest if:
(a) The debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods;
and
(b) The debtor acquired its interest in the software for the principal purpose of using the software in the goods.
4. The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in
inventory.
5. In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchase-money
security interest depends on the application of a payment to a particular obligation, the payment must be applied:
(a) In accordance with any reasonable method of application to which the parties agree;
(b) In the absence of the parties’ agreement to a reasonable method, in accordance with any intention of the obligor
manifested at or before the time of payment; or
(c) In the absence of an agreement to a reasonable method and a timely manifestation of the obligor’s intention, in the
following order:
(1) To obligations that are not secured; and
(2) If more than one obligation is secured, to obligations secured by purchase-money security interests in the order in
which those obligations were incurred.
6. In a transaction other than a consumer-goods transaction, a purchase-money security interest does not lose its status as
such, even if:
(a) The purchase-money collateral also secures an obligation that is not a purchase-money obligation;
(b) Collateral that is not purchase-money collateral also secures the purchase-money obligation; or
(c) The purchase-money obligation has been renewed, refinanced, consolidated or restructured.
7. In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has
the burden of establishing the extent to which the security interest is a purchase-money security interest.
8. The limitation of the rules in subsections 5, 6 and 7 to transactions other than consumer-goods transactions leaves to the
court the determination of the proper rules in consumer-goods transactions. The court may not infer from that limitation the nature
of the proper rule in consumer-goods transactions and may continue to apply established approaches.
(Added to NRS by 1999, 291)
NRS 104.9105 Control of electronic chattel paper. A secured party has control of electronic chattel paper if the record or
records comprising the chattel paper are created, stored and assigned in such a manner that:
1. A single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided
in subsections 4, 5 and 6, unalterable;
2. The authoritative copy identifies the secured party as the assignee of the record or records;
3. The authoritative copy is communicated to and maintained by the secured party or its designated custodian;
4. Copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the
participation of the secured party;
5. Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative
copy; and
6. Any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.
(Added to NRS by 1999, 292)
NRS 104.9107 Control of letter-of-credit right. A secured party has control of a letter-of-credit right to the extent of any
right to payment or performance by the issuer or any nominated person if the issuer or nominated person has consented to an
assignment of proceeds of the letter of credit under subsection 3 of NRS 104.5114 or otherwise applicable law or practice.
(Added to NRS by 1999, 293)
1. Except as otherwise provided in subsections 3, 4 and 5, a description of personal or real property is sufficient, whether or
not it is specific, if it reasonably identifies what is described.
2. Except as otherwise provided in subsection 4, a description of collateral reasonably identifies the collateral if it identifies
the collateral by:
(a) Specific listing;
(b) Category;
(c) Except as otherwise provided in subsection 5, a type of collateral defined in the Uniform Commercial Code;
(d) Quantity;
(e) Computational or allocational formula or procedure; or
(f) Except as otherwise provided in subsection 3, any other method, if the identity of the collateral is objectively
determinable.
3. A description of collateral as “all the debtor’s assets” or “all the debtor’s personal property” or using words of similar
import does not reasonably identify the collateral.
4. Except as otherwise provided in subsection 5, a description of a security entitlement, securities account, or commodity
account is sufficient if it describes:
(a) The collateral by those terms or as investment property; or
(b) The underlying financial asset or commodity contract.
5. A description only by type of collateral defined in the Uniform Commercial Code is an insufficient description of:
(a) A commercial tort claim; or
(b) In a consumer transaction, consumer goods, a security entitlement, a securities account or a commodity account.
(Added to NRS by 1999, 293)
NRS 104.9110 Applicability to security interests arising under Article 2 or 2A. A security interest arising under NRS
104.2401, 104.2505, subsection 3 of 104.2711, or subsection 5 of NRS 104A.2508 is subject to this Article. However, until the
debtor obtains possession of the goods:
1. The security interest is enforceable, even if paragraph (c) of subsection 2 of NRS 104.9203 has not been satisfied;
2. Filing is not required to perfect the security interest;
3. The rights of the secured party after default by the debtor are governed by Article 2 or 2A; and
4. The security interest has priority over a conflicting security interest created by the debtor.
Part 2
Effectiveness of Security Agreement; Attachment of Security Interest; Rights of Parties to Security Agreement
NRS 104.9202 Title to collateral immaterial. Except as otherwise provided with respect to consignments or sales of
accounts, chattel paper, payment intangibles or promissory notes, the provisions of this article with regard to rights and
obligations apply whether or not title to collateral is in the secured party or the debtor.
(Added to NRS by 1999, 296)
NRS 104.9203 Attachment and enforceability of security interest; proceeds; formal requisites; supporting obligations.
1. A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral,
unless an agreement expressly postpones the time of attachment.
2. Except as otherwise provided in subsections 3 to 9, inclusive, a security interest is enforceable against the debtor and
third parties with respect to the collateral only if:
(a) Value has been given;
(b) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and
(c) One of the following conditions is met:
(1) The debtor has authenticated a security agreement that provides a description of the collateral and, if the security
interest covers timber to be cut, a description of the land concerned;
(2) The collateral is not a certificated security and is in the possession of the secured party under NRS 104.9313 pursuant
to the debtor’s security agreement;
(3) The collateral is a certificated security in registered form and the security certificate has been delivered to the
secured party under NRS 104.8301 pursuant to the debtor’s security agreement; or
(4) The collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights or electronic
documents, and the secured party has control under NRS 104.7106, 104.9104, 104.9105, 104.9106 or 104.9107 pursuant to the
debtor’s security agreement.
3. Subsection 2 is subject to NRS 104.4210 on the security interest of a collecting bank, NRS 104.5118 on the security
interest of a letter-of-credit issuer or nominated person, NRS 104.9110 on a security interest arising under Article 2 or 2A, and
NRS 104.9206 on security interests in investment property.
4. A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other
than this Article or by contract:
(a) The security agreement becomes effective to create a security interest in his or her property; or
(b) He or she becomes generally obligated for the obligations of the other person, including the obligation secured under the
security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.
5. If a new debtor becomes bound as debtor by a security agreement entered into by another person:
(a) The agreement satisfies paragraph (c) of subsection 2 with respect to existing or after-acquired property of the new debtor
to the extent the property is described in the agreement; and
(b) Another agreement is not necessary to make a security interest in the property enforceable.
6. The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by NRS
104.9315 and is also attachment of a security interest in a supporting obligation for the collateral.
7. The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on
personal or real property is also attachment of a security interest in the security interest, mortgage or other lien.
8. The attachment of a security interest in a securities account is also attachment of a security interest in the security
entitlements carried in the securities account.
9. The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity
contracts carried in the commodity account.
(Added to NRS by 1999, 296; A 2005, 869)
NRS 104.9207 Rights and duties of secured party having possession or control of collateral.
1. Except as otherwise provided in subsection 4, a secured party shall use reasonable care in the custody and preservation of
collateral in the secured party’s possession. In the case of chattel paper or an instrument, reasonable care includes taking
necessary steps to preserve rights against prior parties unless otherwise agreed.
2. Except as otherwise provided in subsection 4, if a secured party has possession of collateral:
(a) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody,
preservation, use or operation of the collateral are chargeable to the debtor and are secured by the collateral;
(b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;
(c) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and
(d) The secured party may use or operate the collateral:
(1) For the purpose of preserving the collateral or its value;
(2) As permitted by an order of a court having competent jurisdiction; or
(3) Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.
3. Except as otherwise provided in subsection 4, a secured party having possession of collateral or control of collateral
under NRS 104.7106, 104.9104, 104.9105, 104.9106 or 104.9107:
(a) May hold as additional security any proceeds, except money or funds, received from the collateral;
(b) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor;
and
(c) May create a security interest in the collateral.
4. If the secured party is a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor:
(a) Subsection 1 does not apply unless the secured party is entitled under an agreement:
(1) To charge back uncollected collateral; or
(2) Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other
default of an account debtor or other obligor on the collateral; and
(b) Subsections 2 and 3 do not apply.
(Added to NRS by 1999, 298; A 2005, 870)
NRS 104.9208 Additional duties of secured party having control of collateral. If there is no outstanding secured
obligation and the secured party is not committed to make advances, incur obligations or otherwise give value, within 10 days
after receiving an authenticated demand by the debtor:
1. A secured party having control of a deposit account under paragraph (b) of subsection 1 of NRS 104.9104 shall send to
the bank with which the deposit account is maintained an authenticated statement that releases the bank from any further
obligation to comply with instructions originated by the secured party;
2. A secured party having control of a deposit account under paragraph (c) of subsection 1 of NRS 104.9104 shall:
(a) Pay the debtor the balance on deposit in the deposit account; or
(b) Transfer the balance on deposit into a deposit account in the debtor’s name;
3. A secured party, other than a buyer, having control of electronic chattel paper under NRS 104.9105 shall:
(a) Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;
(b) If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic
chattel paper is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated
custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to
comply with instructions originated by the debtor; and
(c) Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative
copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;
4. A secured party having control of investment property under paragraph (b) of subsection 4 of NRS 104.8106 or under
subsection 2 of NRS 104.9106 shall send to the securities intermediary or commodity intermediary with which the security
entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity
intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party;
5. A secured party having control of a letter-of-credit right under NRS 104.9107 shall send to each person having an
unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any
further obligation to pay or deliver proceeds of the letter of credit to the secured party; and
6. A secured party having control of an electronic document shall:
(a) Give control of the electronic document to the debtor or its designated custodian;
(b) If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic
document is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated
custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to
comply with instructions originated by the debtor; and
(c) Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative
copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.
(Added to NRS by 1999, 299; A 2005, 871)
NRS 104.9209 Duties of secured party if account debtor has been notified of assignment.
1. Except as otherwise provided in subsection 3, this section applies if:
(a) There is no outstanding secured obligation; and
(b) The secured party is not committed to make advances, incur obligations or otherwise give value.
2. Within 10 days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that
has received notification of an assignment to the secured party as assignee under subsection 1 of NRS 104.9406 an authenticated
record that releases the account debtor from any further obligation to the secured party.
3. This section does not apply to an assignment constituting the sale of an account, chattel paper or payment intangible.
(Added to NRS by 1999, 300)
NRS 104.9210 Request for accounting; request regarding list of collateral or statement of account.
1. In this section:
(a) “Request” means a record of a type described in paragraph (b), (c) or (d).
(b) “Request for an accounting” means a record authenticated by a debtor requesting that the recipient provide an accounting
of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the
request.
(c) “Request regarding a list of collateral” means a record authenticated by a debtor requesting that the recipient approve or
correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or
relationship that is the subject of the request.
(d) “Request regarding a statement of account” means a record authenticated by a debtor requesting that the recipient approve
or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral
as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.
2. Subject to subsections 3 to 6, inclusive, a secured party, other than a buyer of accounts, chattel paper, payment intangibles,
or promissory notes or a consignor, shall comply with a request within 14 days after receipt:
(a) In the case of a request for an accounting, by authenticating and sending to the debtor an accounting; and
(b) In the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and
sending to the debtor an approval or correction.
3. A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply
with a request regarding a list of collateral by sending to the debtor an authenticated record including a statement to that effect
within 14 days after receipt.
4. A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the
request, and claimed an interest in the collateral at an earlier time shall comply with the request within 14 days after receipt by
sending to the debtor an authenticated record:
(a) Disclaiming any interest in the collateral; and
(b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s
interest in the collateral.
5. A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the
obligations when it receives the request, and claimed an interest in the obligations at an earlier time shall comply with the request
within 14 days after receipt by sending to the debtor an authenticated record:
(a) Disclaiming any interest in the obligations; and
(b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s
interest in the obligations.
6. A debtor is entitled without charge to one response to a request under this section during any 6-month period. The secured
party may require payment of a charge not exceeding $25 for each additional response.
(Added to NRS by 1999, 300; A 2001, 720)
Part 3
Perfection and Priority
NRS 104.9301 Determination of law governing perfection and priority of security interests. Except as otherwise
provided in NRS 104.9303 to 104.9306, inclusive, the following rules determine the law governing perfection, the effect of
perfection or nonperfection, and the priority of a security interest in collateral:
1. Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the law of that jurisdiction
governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.
2. While collateral is located in a jurisdiction, the law of that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a possessory security interest in that collateral.
3. Except as otherwise provided in subsections 4, 5 and 6, while tangible negotiable documents, goods, instruments, money
or tangible chattel paper is located in a jurisdiction, the law of that jurisdiction governs the effect of perfection or nonperfection,
and the priority of a nonpossessory security interest.
4. While goods are located in a jurisdiction, the law of that jurisdiction governs perfection of a security interest in the goods
by a fixture filing.
5. The law of the jurisdiction in which timber to be cut is located governs perfection of a security interest in the timber.
6. The law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in as-extracted collateral.
(Added to NRS by 1999, 301; A 2005, 872)
NRS 104.9302 Determination of law governing perfection and priority of agricultural liens. While farm products are
located in a jurisdiction, the law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority
of an agricultural lien on the farm products.
(Added to NRS by 1999, 301)
NRS 104.9303 Determination of law governing perfection and priority of security interests in goods covered by
certificate of title.
1. This section applies to goods covered by a certificate of title, even if there is no other relationship between the
jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.
2. Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee
are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the
certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered
subsequently by a certificate of title issued by another jurisdiction.
3. The law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods
become covered by the certificate of title until the goods cease to be covered by the certificate of title.
(Added to NRS by 1999, 301)
NRS 104.9304 Determination of law governing perfection and priority of security interests in deposit accounts.
1. The law of a bank’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security
interest in a deposit account maintained with that bank.
2. The following rules determine a bank’s jurisdiction for purposes of this part:
(a) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular
jurisdiction is the bank’s jurisdiction for purposes of this part, this article or the Uniform Commercial Code, that jurisdiction is
the bank’s jurisdiction.
(b) If paragraph (a) does not apply and an agreement between the bank and its customer governing the deposit account
expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s
jurisdiction.
(c) If neither paragraph (a) nor paragraph (b) applies and an agreement between the bank and its customer governing the
deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction
is the bank’s jurisdiction.
(d) If neither paragraph (a) nor paragraph (b) nor paragraph (c) applies, the bank’s jurisdiction is the jurisdiction in which
the office identified in an account statement as the office serving the customer’s account is located.
(e) If none of the preceding paragraphs applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office
of the bank is located.
(Added to NRS by 1999, 302)
NRS 104.9305 Determination of law governing perfection and priority of security interests in investment property.
1. Except as otherwise provided in subsection 3, the following rules apply:
(a) While a security certificate is located in a jurisdiction, the law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.
(b) The law of the issuer’s jurisdiction as specified in subsection 4 of NRS 104.8110 governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in an uncertificated security.
(c) The law of the securities intermediary’s jurisdiction as specified in subsection 5 of NRS 104.8110 governs perfection, the
effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.
(d) The law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a commodity contract or commodity account.
2. The following rules determine a commodity intermediary’s jurisdiction for purposes of this part:
(a) If an agreement between the commodity intermediary and commodity customer governing the commodity account
expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of this part, this article
or the Uniform Commercial Code, that jurisdiction is the commodity intermediary’s jurisdiction.
(b) If paragraph (a) does not apply and an agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that
jurisdiction is the commodity intermediary’s jurisdiction.
(c) If neither paragraph (a) nor paragraph (b) applies and an agreement between the commodity intermediary and commodity
customer governing the commodity account expressly provides that the commodity account is maintained at an office in a
particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.
(d) If neither paragraph (a) nor paragraph (b) nor paragraph (c) applies, the commodity intermediary’s jurisdiction is the
jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is
located.
(e) If none of the preceding paragraphs applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the
chief executive office of the commodity intermediary is located.
3. The law of the jurisdiction in which the debtor is located governs:
(a) Perfection of a security interest in investment property by filing;
(b) Automatic perfection of a security interest in investment property granted by a broker or securities intermediary; and
(c) Automatic perfection of a security interest in a commodity contract or commodity account granted by a commodity
intermediary.
(Added to NRS by 1999, 302)
NRS 104.9306 Determination of law governing perfection and priority of security interests in letter-of-credit rights.
1. Subject to subsection 3, the law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the
effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or
nominated person’s jurisdiction is a state.
2. For purposes of this part, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs
the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in NRS 104.5116.
3. This section does not apply to a security interest that is perfected only under subsection 4 of NRS 104.9308.
(Added to NRS by 1999, 303)
NRS 104.9308 When security interest or agricultural lien is perfected; continuity of perfection.
1. Except as otherwise provided in this section and NRS 104.9309, a security interest is perfected if it has attached and all
of the applicable requirements for perfection in NRS 104.9310 to 104.9316, inclusive, have been satisfied. A security interest is
perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.
2. An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in NRS
104.9310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are
satisfied before the agricultural lien becomes effective.
3. A security interest or agricultural lien is perfected continuously if it is originally perfected in one manner under this article
and is later perfected in another manner under this article, without an intermediate period when it was unperfected.
4. Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral.
5. Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest,
mortgage, or other lien on personal or real property securing the right.
6. Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried
in the securities account.
7. Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried
in the commodity account.
(Added to NRS by 1999, 304)
NRS 104.9309 Security interest perfected upon attachment. The following security interests are perfected when they
attach:
1. A purchase-money security interest in consumer goods, except as otherwise provided in subsection 2 of NRS 104.9311
with respect to consumer goods that are subject to a statute or treaty described in subsection 1 of that section;
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 NRS 104.2401, 104.2505, subsection 3 of NRS 104.2711, or subsection 5 of NRS
104A.2508, until the debtor obtains possession of the collateral;
7. A security interest of a collecting bank arising under NRS 104.4210;
8. A security interest of an issuer or nominated person arising under NRS 104.5118;
9. A security interest arising in the purchase or delivery of a financial asset under NRS 104.9206;
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; and
NRS 104.9310 When filing required to perfect security interest or agricultural lien; security interests and agricultural
liens to which filing provisions do not apply.
1. Except as otherwise provided in subsection 2 or subsection 2 of NRS 104.9312, a financing statement must be filed to
perfect all security interests and agricultural liens.
2. The filing of a financing statement is not necessary to perfect a security interest:
(a) That is perfected under subsection 4, 5, 6 or 7 of NRS 104.9308;
(b) That is perfected under NRS 104.9309 when it attaches;
(c) In property subject to a statute, regulation or treaty described in subsection 1 of NRS 104.9311;
(d) In goods in possession of a bailee which is perfected under paragraph (a) or (b) of subsection 4 of NRS 104.9312;
(e) In certificated securities, documents, goods or instruments which is perfected without filing, control or possession under
subsection 5, 6 or 7 of NRS 104.9312;
(f) In collateral in the secured party’s possession under NRS 104.9313;
(g) In a certificated security which is perfected by delivery of the security certificate to the secured party under NRS
104.9313;
(h) In deposit accounts, electronic chattel paper, electronic documents, investment property or letter-of-credit rights which is
perfected by control under NRS 104.9314;
(i) In proceeds which is perfected under NRS 104.9315; or
(j) That is perfected under NRS 104.9316.
3. If a secured party assigns a perfected security interest or agricultural lien, a filing under this Article is not required to
reconfirm the perfected status of the security interest against creditors of and transferees from the original debtor.
(Added to NRS by 1999, 306; A 2005, 872)
NRS 104.9311 Perfection of security interests in property subject to certain statutes, regulations and treaties.
1. Except as otherwise provided in subsection 4, the filing of a financing statement is not necessary or effective to perfect a
security interest in property subject to:
(a) A statute, regulation or treaty of the United States whose requirements for a security interest’s obtaining priority over the
rights of a lien creditor with respect to the property preempt subsection 1 of NRS 104.9310;
(b) Chapter 105 of NRS, NRS 482.423 to 482.431, inclusive, 488.1793 to 488.1827, inclusive, and 489.501 to 489.581,
inclusive; or
(c) A certificate-of-title statute of another jurisdiction which provides for a security interest to be indicated on the certificate
as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property.
2. Compliance with the requirements of a statute, regulation or treaty described in subsection 1 for obtaining priority over the
rights of a lien creditor is equivalent to the filing of a financing statement under this article. Except as otherwise provided in
subsection 4, NRS 104.9313 and subsections 4 and 5 of NRS 104.9316 for goods covered by a certificate of title, a security
interest in property subject to a statute, regulation or treaty described in subsection 1 may be perfected only by compliance with
those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of
possession of the collateral.
3. Except as otherwise provided in subsection 4 and subsections 4 and 5 of NRS 104.9316, duration and renewal of
perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation or treaty
described in subsection 1 are governed by the statute, regulation or treaty. In other respects, the security interest is subject to this
article.
4. During any period in which collateral subject to a statute specified in paragraph (b) of subsection 1 is inventory held for
sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this
section does not apply to a security interest in that collateral created by that person.
(Added to NRS by 1999, 306; A 2001, 721)
NRS 104.9312 Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by
documents, instruments, investment property, letter-of-credit rights and money; perfection by permissive filing;
temporary perfection without filing or transfer of possession.
1. A security interest in chattel paper, negotiable documents, instruments or investment property may be perfected by filing.
2. Except as otherwise provided in subsections 3 and 4 of NRS 104.9315 for proceeds:
(a) A security interest in a deposit account may be perfected only by control under NRS 104.9314;
(b) A security interest in a letter-of-credit right may be perfected only by control under NRS 104.9314, except as otherwise
provided in subsection 4 of NRS 104.9308; and
(c) A security interest in money may be perfected only by the secured party’s taking possession under NRS 104.9313.
3. While goods are in the possession of a bailee that has issued a negotiable document covering the goods:
(a) A security interest in the goods may be perfected by perfecting a security interest in the document; and
(b) A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by
another method during that time.
4. While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security
interest in the goods may be perfected by:
(a) Issuance of a document in the name of the secured party;
(b) The bailee’s receipt of notification of the secured party’s interest; or
(c) Filing as to the goods.
5. A security interest in certificated securities, negotiable documents or instruments is perfected without filing or the taking
of possession or control for a period of 20 days after the time it attaches to the extent that it arises for new value given under an
authenticated security agreement.
6. A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a
negotiable document for the goods, remains perfected for 20 days without filing if the secured party makes available to the debtor
the goods or documents representing the goods for the purpose of:
(a) Ultimate sale or exchange; or
(b) Loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with them in a
manner preliminary to their sale or exchange.
7. A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the
secured party delivers the security certificate or instrument to the debtor for the purpose of:
(a) Ultimate sale or exchange; or
(b) Presentation, collection, enforcement, renewal or registration of transfer.
8. After the 20-day period specified in subsection 5, 6 or 7 expires, perfection depends upon compliance with this Article.
(Added to NRS by 1999, 307; A 2005, 873)
NRS 104.9313 When possession by or delivery to secured party perfects security interest without filing.
1. Except as otherwise provided in subsection 2, a secured party may perfect a security interest in tangible negotiable
documents, goods, instruments, money or tangible chattel paper by taking possession of the collateral. A secured party may
perfect a security interest in certificated securities by taking delivery of the certificated securities under NRS 104.8301.
2. With respect to goods covered by a certificate of title issued by this State, a secured party may perfect a security interest
in the goods by taking possession of the goods only in the circumstances described in subsection 5 of NRS 104.9316.
3. With respect to collateral other than certificated securities and goods covered by a document, a secured party takes
possession of collateral in the possession of a person other than the debtor, the secured party or a lessee of the collateral from the
debtor in the ordinary course of the debtor’s business, when:
(a) The person in possession authenticates a record acknowledging that it holds possession of the collateral for the secured
party’s benefit; or
(b) The person takes possession of the collateral after having authenticated a record acknowledging that it will hold
possession of collateral for the secured party’s benefit.
4. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no
earlier than the time the secured party takes possession and continues only while the secured party retains possession.
5. A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated
security occurs under NRS 104.8301 and remains perfected by delivery until the debtor obtains possession of the security
certificate.
6. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party’s benefit.
7. If a person acknowledges that it holds possession for the secured party’s benefit:
(a) The acknowledgment is effective under subsection 3 or subsection 1 of NRS 104.8301, even if the acknowledgment
violates the rights of a debtor; and
(b) Unless the person otherwise agrees or law other than this Article otherwise provides, the person does not owe any duty to
the secured party and is not required to confirm the acknowledgment to another person.
8. A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person
other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business if he or she was
instructed before the delivery or is instructed contemporaneously with the delivery:
(a) To hold possession of the collateral for the secured party’s benefit; or
(b) To redeliver the collateral to the secured party.
9. A secured party does not relinquish possession, even if a delivery under subsection 8 violates the rights of a debtor. A
person to which collateral is delivered under subsection 8 does not owe any duty to the secured party and is not required to
confirm the delivery to another person unless he or she otherwise agrees or law other than this Article otherwise provides.
(Added to NRS by 1999, 308; A 2005, 873)
NRS 104.9316 Continued perfection of security interest following change in governing law.
1. A security interest perfected pursuant to the law of the jurisdiction designated in subsection 1 of NRS 104.9301 or
subsection 3 of NRS 104.9305 remains perfected until the earliest of:
(a) The time perfection would have ceased under the law of that jurisdiction;
(b) The expiration of 4 months after a change of the debtor’s location to another jurisdiction; or
(c) The expiration of 1 year after a transfer of collateral to a person that thereby becomes a debtor and is located in another
jurisdiction.
2. If a security interest described in subsection 1 becomes perfected under the law of the other jurisdiction before the earliest
time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under
the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been
perfected as against a purchaser of the collateral for value.
3. A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral
consisting of goods, remains continuously perfected if:
(a) The collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction;
(b) Thereafter the collateral is brought into another jurisdiction; and
(c) Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.
4. Except as otherwise provided in subsection 5, a security interest in goods covered by a certificate of title which is
perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this
State remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the
goods not become so covered.
5. A security interest described in subsection 4 becomes unperfected as against a purchaser of the goods for value and is
deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection
under subsection 2 of NRS 104.9311 or under NRS 104.9313 are not satisfied before the earlier of:
(a) The time the security interest would have become unperfected under the law of the other jurisdiction had the goods not
become covered by a certificate of title from this State; or
(b) The expiration of 4 months after the goods had become so covered.
6. A security interest in deposit accounts, letter-of-credit rights or investment property which is perfected under the law of
the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, the securities intermediary’s jurisdiction or
the commodity intermediary’s jurisdiction, as applicable, remains perfected until the earlier of:
(a) The time the security interest would have become unperfected under the law of that jurisdiction; or
(b) The expiration of 4 months after a change of the applicable jurisdiction to another jurisdiction.
7. If a security interest described in subsection 6 becomes perfected under the law of the other jurisdiction before the earlier
of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not
become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes
unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
(Added to NRS by 1999, 310)
NRS 104.9317 Interests that take priority over or take free of unperfected security interest or agricultural lien.
1. A security interest or agricultural lien is subordinate to the rights of:
(a) A person entitled to priority under NRS 104.9322; and
(b) A person that becomes a lien creditor before the earlier of the time:
(1) The security interest or agricultural lien is perfected; or
(2) One of the conditions specified in paragraph (c) of subsection 2 of NRS 104.9203 is met and a financing statement
covering the collateral is filed.
2. Except as otherwise provided in subsection 5, a buyer, other than a secured party, of tangible chattel paper, tangible
documents, goods, instruments, or a security certificate takes free of a security interest or agricultural lien if the buyer gives value
and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.
3. Except as otherwise provided in subsection 5, a lessee of goods takes free of a security interest or agricultural lien if the
lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and
before it is perfected.
4. A licensee of a general intangible or a buyer, other than a secured party, of accounts, electronic chattel paper, electronic
documents, general intangibles or investment property other than a certificated security takes free of a security interest if the
licensee gives value without knowledge of the security interest and before it is perfected.
5. Except as otherwise provided in NRS 104.9320 and 104.9321, if a person files a financing statement with respect to a
purchase-money security interest before or within 20 days after the debtor receives delivery of the collateral, the security interest
takes priority over the rights of a buyer, lessee or lien creditor which arise between the time the security interest attaches and the
time of filing.
(Added to NRS by 1999, 311; A 2001, 722; 2005, 875)
NRS 104.9318 No interest retained in right to payment that is sold; rights and title of seller of account or chattel
paper with respect to creditors and purchasers.
1. 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.
2. 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 has rights and title
to the account or chattel paper identical to those the debtor sold.
NRS 104.9319 Rights and title of consignee with respect to creditors and purchasers.
1. Except as otherwise provided in subsection 2, for purposes of determining the rights of creditors of, and purchasers for
value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights
and title to the goods identical to those the consignor had or had power to transfer.
2. For purposes of determining the rights of a creditor of a consignee, law other than this article determines the rights and
title of a consignee while goods are in the consignee’s possession if, under this part, a perfected security interest held by the
consignor would have priority over the rights of the creditor.
(Added to NRS by 1999, 312)
NRS 104.9321 Protection of licensee of general intangible and lessee of goods in ordinary course of business.
1. In this section, “licensee in ordinary course of business” means a person that becomes a licensee of a general intangible in
good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary
course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary
course if the license to him or her comports with the usual or customary practices in the kind of business in which the licensor is
engaged or with the licensor’s own usual or customary practices.
2. A licensee in the ordinary course of business takes his or her rights under a nonexclusive license free of a security interest
in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.
3. A lessee in the ordinary course of business takes his or her leasehold interest free of a security interest in the goods
created by the lessor, even if the security interest is perfected and the lessee knows of its existence.
(Added to NRS by 1999, 312)
NRS 104.9322 Priorities among conflicting security interests in and agricultural liens on same collateral.
1. Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the
same collateral is determined according to the following rules:
(a) Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection.
Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien
is first perfected, if there is no period thereafter when there is neither filing nor perfection.
(b) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural
lien.
(c) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and
agricultural liens are unperfected.
2. For the purposes of paragraph (a) of subsection 1:
(a) The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security
interest in proceeds; and
(b) The time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time
of filing or perfection as to a security interest in the supporting obligation.
3. Except as otherwise provided in subsection 6, a security interest in collateral which qualifies for priority over a
conflicting security interest under NRS 104.9327, 104.9328, 104.9329, 104.9330 or 104.9331 also has priority over a conflicting
security interest in:
(a) Any supporting obligation for the collateral; and
(b) Proceeds of the collateral if:
(1) The security interest in proceeds is perfected;
(2) The proceeds are cash proceeds or of the same type as the collateral; and
(3) In the case of proceeds that are proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the
same type as the collateral, or an account relating to the collateral.
4. Subject to subsection 5 and except as otherwise provided in subsection 6, if a security interest in chattel paper, deposit
accounts, negotiable documents, instruments, investment property or letter-of-credit rights is perfected by a method other than
filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing.
5. Subsection 4 applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents,
instruments, investment property or letter-of-credit rights.
6. Subsections 1 to 5, inclusive, are subject to:
(a) Subsection 7 and the other provisions of this part;
(b) NRS 104.4210 with respect to a security interest of a collecting bank;
(c) NRS 104.5118 with respect to a security interest of an issuer or nominated person; and
(d) NRS 104.9110 with respect to a security interest arising under article 2 or 2A.
7. A perfected agricultural lien on collateral has priority over a conflicting security interest in or agricultural lien on the
(b) In all other cases, subsection 1 of NRS 104.9322 applies to the qualifying security interests.
(Added to NRS by 1999, 315)
NRS 104.9327 Priority among conflicting security interests in same deposit account. The following rules govern
priority among conflicting security interests in the same deposit account:
1. A security interest held by a secured party having control of the deposit account under NRS 104.9104 has priority over a
conflicting security interest held by a secured party that does not have control.
2. Except as otherwise provided in subsections 3 and 4, security interests perfected by control under NRS 104.9314 rank
according to priority in time of obtaining control.
3. Except as otherwise provided in subsection 4, a security interest held by the bank with which the deposit account is
maintained has priority over a conflicting security interest held by another secured party.
4. A security interest perfected by control under paragraph (c) of subsection 1 of NRS 104.9104 has priority over a security
interest held by the bank with which the deposit account is maintained.
(Added to NRS by 1999, 317)
NRS 104.9328 Priority among conflicting security interests in same investment property. The following rules govern
priority among conflicting security interests in the same investment property:
1. A security interest held by a secured party having control of investment property under NRS 104.9106 has priority over a
security interest held by a secured party that does not have control of the investment property.
2. A security interest in a certificated security in registered form which is perfected by taking delivery under subsection 1 of
NRS 104.9313 and not by control under NRS 104.9314 has priority over a conflicting security interest perfected by a method
other than control.
3. Except as otherwise provided in subsections 4 and 5, conflicting security interests held by secured parties each of which
has control under NRS 104.9106 rank according to priority in time of:
(a) If the collateral is a security, obtaining control;
(b) If the collateral is a security entitlement carried in a securities account:
(1) The secured party’s becoming the person for which the securities account is maintained, if the secured party obtained
control under paragraph (a) of subsection 4 of NRS 104.8106;
(2) The securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security
entitlements carried or to be carried in the securities account, if the secured party obtained control under paragraph (b) of that
subsection; or
(3) If the secured party obtained control through another person under paragraph (c) of that subsection, the time on which
priority would be based under this paragraph if the other person were the secured party; or
(c) If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for
control specified in paragraph (b) of subsection 2 of NRS 104.9106 with respect to commodity contracts carried or to be carried
with the commodity intermediary.
4. A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the
securities intermediary has priority over a conflicting security interest held by another secured party.
5. A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the
commodity intermediary has priority over a conflicting security interest held by another secured party.
6. Conflicting security interests granted by a broker, securities intermediary or commodity intermediary which are perfected
without control under NRS 104.9106 rank equally.
7. In all other cases, priority among conflicting security interests in investment property is governed by NRS 104.9322 and
104.9323.
(Added to NRS by 1999, 317)
NRS 104.9329 Priority among conflicting security interests in same letter-of-credit right. The following rules govern
priority among conflicting security interests in the same letter-of-credit right:
1. A security interest held by a secured party having control of the letter-of-credit right under NRS 104.9107 has priority to
the extent of its control over a conflicting security interest held by a secured party that does not have control.
2. Security interests perfected by control under NRS 104.9314 rank according to priority in time of obtaining control.
(Added to NRS by 1999, 318)
1. A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds
of inventory subject to a security interest if:
(a) In good faith and in the ordinary course of the purchaser’s business, the purchaser gives new value and takes possession
of the chattel paper or obtains control of the chattel paper under NRS 104.9105; and
(b) The chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.
2. A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as
proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or
obtains control of the chattel paper under NRS 104.9105 in good faith, in the ordinary course of the purchaser’s business, and
without knowledge that the purchase violates the rights of the secured party.
3. Except as otherwise provided in NRS 104.9327, a purchaser having priority in chattel paper under subsection 1 or 2 also
has priority in proceeds of the chattel paper to the extent that:
(a) NRS 104.9322 provides for priority in the proceeds; or
(b) The proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if
the purchaser’s security interest in the proceeds is unperfected.
4. Except as otherwise provided in subsection 1 of NRS 104.9331, a purchaser of an instrument has priority over a security
interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the
instrument in good faith and without knowledge that the purchase violates the rights of the secured party.
5. For purposes of subsections 1 and 2, the holder of a purchase-money security interest in inventory gives new value for
chattel paper constituting proceeds of the inventory.
6. For purposes of subsections 2 and 4, if chattel paper or an instrument indicates that it has been assigned to an identified
secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the
rights of the secured party.
(Added to NRS by 1999, 318)
NRS 104.9331 Priority of rights of purchasers of instruments, documents and securities under other articles; priority
of interests in financial assets and security entitlements under article 8.
1. This article does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable
document of title has been duly negotiated, or a protected purchaser of a security. These holders or purchasers take priority over
an earlier security interest, even if perfected, to the extent provided in articles 3, 7 and 8.
2. This article does not limit the rights of or impose liability on a person to the extent that the person is protected against the
assertion of a claim under article 8.
3. Filing under this article does not constitute notice of a claim or defense to the holders, or purchasers, or persons described
in subsections 1 and 2.
(Added to NRS by 1999, 319; A 2001, 723)
NRS 104.9332 Effect of transfer of money; effect of transfer of funds from deposit account.
1. A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in
violating the rights of the secured party.
2. A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the
transferee acts in collusion with the debtor in violating the rights of the secured party.
(Added to NRS by 1999, 319)
NRS 104.9337 Priority of security interests in goods covered by certificate of title. If, while a security interest in goods
is perfected by any method under the law of another jurisdiction, this State issues a certificate of title that does not show that the
goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the
certificate:
1. A buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if
the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security
interest; and
2. The security interest is subordinate to a conflicting security interest in the goods that attaches, and is perfected under
subsection 2 of NRS 104.9311, after issuance of the certificate and without the conflicting secured party’s knowledge of the
security interest.
(Added to NRS by 1999, 322)
NRS 104.9338 Priority of security interest or agricultural lien perfected by filed financing statement providing certain
incorrect information. If a security interest or agricultural lien is perfected by a filed financing statement providing information
described in paragraph (e) of subsection 2 of NRS 104.9516 which is incorrect at the time the financing statement is filed:
1. The security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the
extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and
2. A purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent
that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper,
tangible documents, goods, instruments or a security certificate, receives delivery of the collateral.
NRS 104.9339 Priority subject to subordination by agreement. This article does not preclude subordination by
agreement by a person entitled to priority.
(Added to NRS by 1999, 322)
NRS 104.9341 Bank’s rights and duties with respect to deposit account. Except as otherwise provided in subsection 3 of
NRS 104.9340, and unless the bank otherwise agrees in an authenticated record, a bank’s rights and duties with respect to a
deposit account maintained with the bank are not terminated, suspended or modified by:
1. The creation, attachment or perfection of a security interest in the deposit account;
2. The bank’s knowledge of the security interest; or
3. The bank’s receipt of instructions from the secured party.
(Added to NRS by 1999, 322)
NRS 104.9342 Bank’s right to refuse to enter into or disclose existence of control agreement. This article does not
require a bank to enter into an agreement of the kind described in paragraph (b) of subsection 1 of NRS 104.9104, even if its
customer so requests or directs. A bank that has entered into such an agreement is not required to confirm the existence of the
agreement to another person unless requested to do so by its customer.
(Added to NRS by 1999, 323)
Part 4
NRS 104.9402 Secured party not obligated in contract of debtor or in tort. The existence of a security interest,
agricultural lien, or authority given to a debtor to dispose of or use collateral, without more, does not impose upon a secured
party liability in contract or tort for the debtor’s acts or omissions.
(Added to NRS by 1999, 323)
NRS 104.9404 Rights acquired by assignee; claims and defenses against assignee.
1. Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections 2
to 5, inclusive, the rights of an assignee are subject to:
(a) All terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from
the transaction that gave rise to the contract; and
(b) Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a
NRS 104.9406 Discharge of account debtor; notification of assignment; identification and proof of assignment;
restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective.
1. Subject to subsections 2 to 8, inclusive, an account debtor on an account, chattel paper or a payment intangible may
discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the
assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee.
After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the
obligation by paying the assignor.
2. Subject to subsection 8, notification is ineffective under subsection 1:
(a) If it does not reasonably identify the rights assigned;
(b) To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s
duty to pay a person other than the seller and the limitation is effective under law other than this article; or
(c) At the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any
installment or other periodic payment to the assignee, even if:
(1) Only a portion of the account, chattel paper or payment intangible has been assigned to that assignee;
(2) A portion has been assigned to another assignee; or
(3) The account debtor knows that the assignment to that assignee is limited.
3. Subject to subsection 8, if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the
assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor,
even if the account debtor has received a notification under subsection 1.
4. Except as otherwise provided in subsection 5 and NRS 104.9407 and 104A.2303, and subject to subsection 8, a term in an
agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:
(a) Prohibits, restricts or requires the consent of the account debtor or person obligated on the promissory note to the
assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the account, chattel
paper, payment intangible or promissory note; or
(b) Provides that the assignment or transfer, or the creation, attachment, perfection or enforcement of the security interest may
give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account,
chattel paper, payment intangible or promissory note.
5. Subsection 4 does not apply to the sale of a payment intangible or promissory note.
6. Subject to subsections 7 and 8, a rule of law, statute, or regulation, that prohibits, restricts, or requires the consent of a
government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in,
an account or chattel paper is ineffective to the extent that the rule of law, statute or regulation:
(a) Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the
assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account or chattel
paper; or
(b) Provides that the assignment or transfer, or the creation, attachment, perfection, or enforcement of the security interest may
give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account
or chattel paper.
7. Subject to subsection 8, an account debtor may not waive or vary its option under paragraph (c) of subsection 2.
8. This section is subject to law other than this article which establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal, family or household purposes.
9. This section does not apply to an assignment of a health-care-insurance receivable or to a transfer of a right to receive
payments pursuant to NRS 42.030.
(Added to NRS by 1999, 325; A 2001, 725; 2003, 1667)
NRS 104.9407 Restrictions on assignment, transfer, creation or enforcement of security interest in leasehold interest
or in lessor’s residual interest.
1. Except as otherwise provided in subsection 2, a term in a lease agreement is ineffective to the extent that it:
(a) Prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer, or the creation, attachment,
perfection, or enforcement of a security interest in an interest of a party under the lease contract or in the lessor’s residual interest
in the goods; or
(b) Provides that the assignment or transfer, or the creation, attachment, perfection, or enforcement of the security interest may
give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the lease.
2. Except as otherwise provided in subsection 7 of NRS 104A.2303, a term described in paragraph (b) of subsection 1 is
effective to the extent that there is:
(a) A transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or
(b) A delegation of a material performance of either party to the lease contract in violation of the term.
3. The creation, attachment, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract
or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return
performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the
purview of subsection 4 of NRS 104A.2303 unless, and then only to the extent that, enforcement results in a delegation of a
material performance of the lessor. Even in that event, the creation, attachment, perfection and enforcement of the security interest
remain effective.
(Added to NRS by 1999, 326; A 2001, 726)
NRS 104.9408 Restrictions on assignment or transfer of promissory notes, health-care insurance receivables and
certain general intangibles ineffective.
1. Except as otherwise provided in subsection 2, a term in a promissory note or in an agreement between an account debtor
and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license or
franchise, and prohibits, restricts or requires the consent of the person obligated on the promissory note or the account debtor to,
the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-
care-insurance receivable or general intangible, is ineffective to the extent that the term:
(a) Would impair the creation, attachment or perfection of a security interest; or
(b) Provides that the assignment or transfer, or the creation, attachment or perfection of the security interest may give rise to a
default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the promissory note,
health-care-insurance receivable or general intangible.
2. Subsection 1 applies to a security interest in a payment intangible or promissory note only if the security interest arises out
of a sale of the payment intangible or promissory note.
3. A rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or
official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security
interest in, a promissory note, health-care-insurance receivable or general intangible, including a contract, permit, license or
franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute or regulation:
(a) Would impair the creation, attachment or perfection of a security interest; or
(b) Provides that the assignment or transfer, or the creation, attachment or perfection of the security interest may give rise to a
default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the promissory note,
health-care-insurance receivable or general intangible.
4. To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to
a health-care-insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection 3 would
be effective under law other than this article but is ineffective under subsection 1 or 3, the creation, attachment or perfection of a
security interest in the promissory note, health-care-insurance receivable or general intangible:
(a) Is not enforceable against the person obligated on the promissory note or the account debtor;
(b) Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;
(c) Does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay
or render performance to the secured party or accept payment or performance from the secured party;
(d) Does not entitle the secured party to use or assign the debtor’s rights under the promissory note, health-care-insurance
receivable or general intangible, including any related information or materials furnished to the debtor in the transaction giving
rise to the promissory note, health-care-insurance receivable or general intangible;
(e) Does not entitle the secured party to use, assign, possess or have access to any trade secrets or confidential information of
the person obligated on the promissory note or the account debtor; and
(f) Does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable
or general intangible.
(Added to NRS by 1999, 327; A 2001, 727)
Part 5
Filing
NRS 104.9501 Filing office.
1. Except as otherwise provided in subsection 2, if the law of this State governs perfection of a security interest or
agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is:
(a) The office designated for the filing or recording of a mortgage on the real property, if:
(1) The collateral is as-extracted collateral or timber to be cut; or
(2) The financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or
(b) The Office of the Secretary of State in all other cases, including a case in which the collateral is goods that are or are to
become fixtures and the financing statement is not filed as a fixture filing.
2. The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a
transmitting utility is the Office of the Secretary of State. The financing statement also constitutes a fixture filing as to the
collateral indicated in the financing statement which is or is to become fixtures.
(Added to NRS by 1999, 328; A 2007, 2447)
NRS 104.9502 Contents of financing statement; record of mortgage as financing statement; time of filing financing
statement.
1. Subject to subsection 2, a financing statement is sufficient only if it:
(a) Provides the name of the debtor;
(b) Provides the name of the secured party or a representative of the secured party; and
(c) Indicates the collateral covered by the financing statement.
2. Except as otherwise provided in subsection 2 of NRS 104.9501, to be sufficient, a financing statement that covers
as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures,
must satisfy subsection 1 and also:
(a) Indicate that it covers this type of collateral;
(b) Indicate that it is to be filed for record in the real property records;
(c) Provide a description of the real property to which the collateral is related sufficient to give constructive notice of the
mortgage under the law of this State if the description were contained in a mortgage of the real property; and
(d) If the debtor does not have an interest of record in the real property, provide the name of a record owner.
3. A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a
financing statement covering as-extracted collateral or timber to be cut only if:
(a) The record indicates the goods or accounts that it covers;
(b) The goods are or are to become fixtures related to the real property described in the mortgage or the collateral is related
to the real property described in the mortgage and is as-extracted collateral or timber to be cut;
(c) The record satisfies the requirements for a financing statement in this section other than an indication that it is to be filed
in the real property records; and
(d) The mortgage is recorded.
4. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.
(Added to NRS by 1999, 329)
NRS 104.9503 Name of debtor and secured party provided in financing statement.
1. A financing statement sufficiently provides the name of the debtor:
(a) If the debtor is a registered organization, only if the financing statement provides the name of the debtor indicated on the
public record of the debtor’s jurisdiction of organization which shows the debtor to have been organized;
(b) If the debtor is a decedent’s estate, only if the financing statement provides the name of the decedent and indicates that the
debtor is an estate;
(c) If the debtor is a trust or a trustee acting with respect to property held in trust, only if the financing statement:
(1) Provides the name specified for the trust in its organic documents or, if no name is specified, provides the name of the
settlor and additional information sufficient to distinguish the debtor from other trusts having one or more of the same settlors;
and
(2) Indicates, in the debtor’s name or otherwise, that the debtor is a trust or is a trustee acting with respect to property
held in trust; and
(d) In other cases:
(1) If the debtor has a name, only if it provides the name of the debtor as a natural person or an organization; and
(2) If the debtor does not have a name, only if it provides the names of the partners, members, associates or other persons
comprising the debtor.
2. A financing statement that provides the name of the debtor in accordance with subsection 1 is not rendered ineffective by
the absence of:
(a) A trade name or other name of the debtor; or
(b) Unless required under subparagraph (2) of paragraph (d) of subsection 1, names of partners, members, associates or other
persons comprising the debtor.
3. A financing statement that provides only the debtor’s trade name does not sufficiently provide the name of the debtor.
4. Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the
sufficiency of a financing statement.
5. A financing statement may provide the name of more than one debtor and the name of more than one secured party.
(Added to NRS by 1999, 329)
NRS 104.9504 Indication of collateral in financing statement. A financing statement sufficiently indicates the collateral
that it covers if the financing statement provides:
1. A description of the collateral pursuant to NRS 104.9108; or
2. An indication that the financing statement covers all assets or all personal property.
(Added to NRS by 1999, 330; A 2001, 729)
NRS 104.9505 Filing of financing statement in compliance with other statutes and treaties for consignments, leases,
other bailments and other transactions.
1. A consignor, lessor, or other bailor of goods, a licensor, or a buyer of a payment intangible or promissory note may file a
financing statement, or may comply with a statute or treaty described in subsection 1 of NRS 104.9311, using the terms
“consignor,” “consignee,” “lessor,” “lessee,” “bailor,” “bailee,” “licensor,” “licensee,” “owner,” “registered owner,” “buyer,”
“seller” or words of similar import, instead of the terms “secured party” and “debtor.”
2. This part applies to the filing of a financing statement under subsection 1 and, as appropriate, to compliance that is
equivalent to filing a financing statement under subsection 2 of NRS 104.9311, but the filing or compliance is not of itself a factor
in determining whether the collateral secures an obligation. If it is determined for another reason that the collateral secures an
obligation, a security interest held by the consignor, lessor, bailor, licensor, owner or buyer which attaches to the collateral is
perfected by the filing or compliance.
(Added to NRS by 1999, 330)
NRS 104.9508 Effectiveness of financing statement if new debtor becomes bound by security agreement.
1. Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a
security interest in collateral in which a new debtor has or acquires rights to the extent that the financing statement would have
been effective had the original debtor acquired rights in the collateral.
2. If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that
is effective under subsection 1 to be seriously misleading under NRS 104.9506:
(a) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and
within 4 months after, the new debtor becomes bound under subsection 4 of NRS 104.9203; and
(b) The financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than 4
months after the new debtor becomes bound under subsection 4 of NRS 104.9203 unless an initial financing statement providing
the name of the new debtor is filed before the expiration of that time.
3. This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor
under subsection 1 of NRS 104.9507.
(Added to NRS by 1999, 331)
authorized it to be filed.
4. A continuation statement that is not filed within the 6-month period prescribed by subsection 4 of NRS 104.9515 is
ineffective.
(Added to NRS by 1999, 332)
NRS 104.9515 Duration and effectiveness of financing statement; effect of lapsed financing statement.
1. Except as otherwise provided in subsections 2, 5, 6 and 7, a filed financing statement is effective for a period of 5 years
after the date of filing.
2. Except as otherwise provided in subsections 5, 6 and 7, an initial financing statement filed in connection with a public-
finance transaction or manufactured-home transaction is effective for a period of 30 years after the date of filing if it indicates
that it is filed in connection with a public-finance transaction or manufactured-home transaction.
3. The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the
lapse a continuation statement is filed pursuant to subsection 4. Upon lapse, a financing statement ceases to be effective and any
security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security
interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to
have been perfected as against a purchaser of the collateral for value.
4. A continuation statement may be filed only within 6 months before the expiration of the 5-year period specified in
subsection 1 or the 30-year period specified in subsection 2, whichever is applicable.
5. Except as otherwise provided in NRS 104.9510, upon timely filing of a continuation statement, the effectiveness of the
initial financing statement continues for a period of 5 years commencing on the day on which the financing statement would have
become ineffective in the absence of the filing. Upon the expiration of the 5-year period, the financing statement lapses in the
same manner as provided in subsection 3, unless, before the lapse, another continuation statement is filed pursuant to subsection
4. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing
statement.
6. If a debtor is a transmitting utility and a filed financing statement so indicates, the financing statement is effective until a
termination statement is filed.
7. A real property mortgage that is effective as a fixture filing under subsection 3 of NRS 104.9502 remains effective as a
fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.
(Added to NRS by 1999, 334)
NRS 104.9517 Effect of indexing errors. The failure of the filing office to index a record correctly does not affect the
effectiveness of the filed record.
(Added to NRS by 1999, 336)
NRS 104.9518 Claim concerning inaccurate or wrongfully filed record: Filing of correction statement.
1. A person may file in the filing office a correction statement with respect to a record indexed there under his or her name if
the person believes that the record is inaccurate or was wrongfully filed.
2. A correction statement must:
(a) Identify the record to which it relates by:
(1) The file number assigned to the initial financing statement to which the record relates; and
(2) If the correction statement relates to a record filed or recorded in a filing office described in paragraph (a) of
subsection 1 of NRS 104.9501, the date that the initial financing statement was filed or recorded and the information specified in
subsection 2 of NRS 104.9502;
(b) Indicate that it is a correction statement; and
(c) Provide the basis for the person’s belief that the record is inaccurate and indicate the manner in which the person believes
the record should be amended to cure any inaccuracy or provide the basis for his or her belief that the record was wrongfully
filed.
3. The filing of a correction statement does not affect the effectiveness of an initial financing statement or other filed record.
(Added to NRS by 1999, 336)
NRS 104.9519 Numbering, maintaining and indexing records; communicating information provided in records.
1. For each record filed in a filing office, the filing office shall:
(a) Assign a unique number to the filed record;
(b) Create a record that bears the number assigned to the filed record and the date and time of filing;
(c) Maintain the filed record for public inspection; and
(d) Index the filed record in accordance with subsections 3, 4 and 5.
2. Except as otherwise provided in subsection 9, a file number assigned after January 1, 2002, may include a digit that:
(a) Is mathematically derived from or related to the other digits of the file number; and
(b) Enables the filing office to detect whether a number communicated as the file number includes a single-digit or
transpositional error.
3. Except as otherwise provided in subsections 4 and 5, the filing office shall:
(a) Index an initial financing statement according to the name of the debtor and index all filed records relating to the initial
financing statement in a manner that associates with one another an initial financing statement and all filed records relating to the
initial financing statement; and
(b) Index a record that provides a name of a debtor which was not previously provided in the financing statement to which the
record relates also according to the name that was not previously provided.
4. If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, it must be filed for
record and the filing office shall index it:
(a) Under the names of the debtor and of each owner of record shown on the financing statement as if they were the
mortgagors under a mortgage of the real property described; and
(b) To the extent that the law of this State provides for indexing of mortgages under the name of the mortgagee, under the name
of the secured party as if the secured party were the mortgagee thereunder.
5. If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, the filing office
shall index an assignment filed under subsection 1 of NRS 104.9514 or an amendment filed under subsection 2 of that section:
(a) Under the name of the assignor as grantor; and
(b) To the extent that the law of this State provides for indexing the assignment of a mortgage of real property under the name
of the assignee, under the name of the assignee.
6. The filing office shall maintain a capability:
(a) To retrieve a record by the name of the debtor and:
(1) If the filing office is described in paragraph (a) of subsection 1 of NRS 104.9501, by the file number assigned to the
initial financing statement to which the record relates and the date and time that the record was filed or recorded; or
(2) If the filing office is described in paragraph (b) of subsection 1 of NRS 104.9501, by the file number assigned to the
initial financing statement to which the record relates; and
(b) To associate and retrieve with one another an initial financing statement and each filed record relating to the initial
financing statement.
7. The filing office may not remove a debtor’s name from the index until 1 year after the effectiveness of a financing
statement naming the debtor lapses under NRS 104.9515 with respect to all secured parties of record.
8. The filing office shall perform the acts required by subsections 1 to 5, inclusive, within a reasonable time and in the
manner prescribed by filing-office rule.
9. Subsections 2 and 8 do not apply to a filing office described in paragraph (a) of subsection 1 of NRS 104.9501.
(Added to NRS by 1999, 337; A 2001, 730)
NRS 104.9521 Acceptance of certain written records including initial financing statements by filing office; format of
written records.
1. A filing office that accepts written records may not refuse to accept a written initial financing statement submitted on a
form prescribed and made available by the Secretary of State, except for a reason set forth in subsection 2 of NRS 104.9516.
2. A filing office that accepts written records may not refuse to accept a written record submitted on a form prescribed and
made available by the Secretary of State, except for a reason set forth in subsection 2 of NRS 104.9516.
3. A form that a filing office may not refuse to accept under subsection 1 or 2 must conform to the format prescribed for the
form by the National Conference of Commissioners on Uniform State Laws.
4. A filing officer may add optional blocks for the address of the secured party or the address of the debtor to any form or
record.
NRS 104.9524 Excused delay by filing office. Delay by the filing office beyond a time limit prescribed by this part is
excused if:
1. The delay is caused by interruption of communication or computer facilities, war, emergency conditions, failure of
equipment or other circumstances beyond control of the filing office; and
2. The filing office exercises reasonable diligence under the circumstances.
(Added to NRS by 1999, 344)
NRS 104.9527 Duty of Secretary of State to report. The Secretary of State shall report biennially on or before the first
Monday of February in each odd-numbered year to the Governor and Legislature on the operation of the filing office. The report
must contain a statement of the extent to which:
1. The filing-office rules are not in harmony with the rules of filing offices in other jurisdictions that enact substantially this
part and the reasons for these variations; and
2. The filing-office rules are not in harmony with the most recent version of the Model Rules promulgated by the
International Association of Corporation Administrators, or any successor organization, and the reasons for these variations.
(Added to NRS by 1999, 345)
Part 6
Default
NRS 104.9601 Rights after default; judicial enforcement; effect on consignor or buyer of accounts, chattel paper,
payment intangibles or promissory notes.
1. After default, a secured party has the rights provided in this part and, except as otherwise provided in NRS 104.9602,
those provided by agreement of the parties. A secured party:
(a) May reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any
available judicial procedure; and
(b) If the collateral is documents, may proceed either as to the documents or as to the goods they cover.
2. A secured party in possession of collateral or control of collateral under NRS 104.7106, 104.9104, 104.9105, 104.9106
or 104.9107 has the rights and duties provided in NRS 104.9207.
3. The rights under subsections 1 and 2 are cumulative and may be exercised simultaneously.
4. Except as otherwise provided in subsection 7 and NRS 104.9605, after default, a debtor and an obligor have the rights
provided in this part and by agreement of the parties.
5. If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of
an execution based upon the judgment relates back to the earliest of:
(a) The date of perfection of the security interest or agricultural lien in the collateral;
(b) The date of filing a financing statement covering the collateral; or
(c) Any date specified in a statute under which the agricultural lien was created.
6. A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the
meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements
of this Article.
7. Except as otherwise provided in subsection 3 of NRS 104.9607, this part imposes no duties upon a secured party that is a
consignor or is a buyer of accounts, chattel paper, payment intangibles or promissory notes.
(Added to NRS by 1999, 345; A 2005, 876)
NRS 104.9602 Waiver and variance of rights and duties of debtor and obligor. Except as otherwise provided in NRS
104.9624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may
not waive or vary the rules stated in the following listed sections:
1. Subparagraph (3) of paragraph (d) of subsection 2 of NRS 104.9207, which deals with use and operation of the collateral
by the secured party;
2. NRS 104.9210, which deals with requests for an accounting and requests concerning a list of collateral and statement of
account;
3. Subsection 3 of NRS 104.9607, which deals with collection and enforcement of collateral;
4. Subsection 1 of NRS 104.9608 and subsection 3 of NRS 104.9615 to the extent that they deal with application or payment
of noncash proceeds of collection, enforcement or disposition;
5. Subsection 1 of NRS 104.9608 and subsection 4 of NRS 104.9615 to the extent that they require accounting for or payment
of surplus proceeds of collateral;
6. NRS 104.9609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial
process the duty to do so without breach of the peace;
7. Subsection 2 of NRS 104.9610 and NRS 104.9611, 104.9613 and 104.9614, which deal with disposition of collateral;
8. Subsection 6 of NRS 104.9615, which deals with calculation of a deficiency or surplus when a disposition is made to the
secured party, a person related to the secured party or a secondary obligor;
9. NRS 104.9616, which deals with explanation of the calculation of a surplus or deficiency;
10. NRS 104.9620, 104.9621 and 104.9622, which deal with acceptance of collateral in satisfaction of obligation;
11. NRS 104.9623, which deals with redemption of collateral;
12. NRS 104.9624, which deals with permissible waivers; and
13. NRS 104.9625 and 104.9626, which deal with the secured party’s liability for failure to comply with this article.
(Added to NRS by 1999, 346)
NRS 104.9605 Duty to unknown debtor or secondary obligor. A secured party does not owe a duty based on its status as
secured party:
1. To a person that is a debtor or obligor, unless the secured party knows:
(a) That he or she is a debtor or obligor;
(b) His or her identity; and
(c) How to communicate with him or her; or
2. To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
(a) That the person is a debtor; and
(b) His or her identity.
(Added to NRS by 1999, 347)
NRS 104.9606 Time of default for agricultural lien. For purposes of this part, a default occurs in connection with an
agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it
was created.
(Added to NRS by 1999, 347)
NRS 104.9608 Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.
1. If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:
(a) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under NRS
104.9607 in the following order to:
(1) The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not
prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured party;
(2) The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or
NRS 104.9609 Secured party’s right to take possession or dispose of collateral after default.
1. After default, a secured party:
(a) May take possession of the collateral;
(b) If a debtor so agrees, may require the debtor to assemble the collateral and make it available to the secured party at a
place to be designated by the secured party which is reasonably convenient to both parties; and
(c) Without removal may render equipment unusable and dispose of collateral on a debtor’s premises under NRS 104.9610.
2. A secured party may proceed under subsection 1:
(a) Pursuant to judicial process; or
(b) Without judicial process, if it proceeds without breach of the peace.
(Added to NRS by 1999, 349)
(2) Received a response to the request for information and sent an authenticated notification of disposition to each
secured party named in that response whose financing statement covered the collateral.
(Added to NRS by 1999, 350)
NRS 104.9613 Contents and form of notification before disposition of collateral: General. Except in a consumer-goods
transaction, the following rules apply:
1. The contents of a notification of disposition are sufficient if the notification:
(a) Describes the debtor and the secured party;
(b) Describes the collateral that is the subject of the intended disposition;
(c) States the method of intended disposition;
(d) States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an
accounting; and
(e) States the time and place of a public disposition or the time after which any other disposition is to be made.
2. Whether the contents of a notification that lacks any of the information specified in subsection 1 are nevertheless sufficient
is a question of fact.
3. The contents of a notification providing substantially the information specified in subsection 1 are sufficient, even if the
notification includes:
(a) Information not specified by that subsection; or
(b) Minor errors that are not seriously misleading.
4. A particular phrasing of the notification is not required.
5. The following form of notification and the form appearing in subsection 3 of NRS 104.9614, when completed, each
provides sufficient information:
You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell [or lease or
license, as applicable] [for a charge of $……….]. You may request an accounting by calling us at [telephone number].
NRS 104.9614 Contents and form of notification before disposition of collateral: Consumer-goods transaction. In a
consumer-goods transaction, the following rules apply:
1. A notification of disposition must provide the following information:
(a) The information specified in subsection 1 of NRS 104.9613;
(b) A description of any liability for a deficiency of the person to which the notification is sent;
(c) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under NRS
104.9623 is available; and
(d) A telephone number or mailing address from which additional information concerning the disposition and the obligation
secured is available.
2. A particular phrasing of the notification is not required.
3. The following form of notification, when completed, provides sufficient information:
We have your [describe collateral], because you broke promises in our agreement.
[For a public disposition:]
We will sell [describe collateral] at public sale. A sale could include a lease or license. The sale will be held as follows:
Date: ...................................
Time: ...................................
Place: ...................................
You may attend the sale and bring bidders if you want.
The money that we get from the sale (after paying our costs) will reduce the amount you owe. If we get less money than you
owe, you [will or will not, as applicable] still owe us the difference. If we get more money than you owe, you will get the extra
money, unless we must pay it to someone else.
You can get the property back at any time before we sell it by paying us the full amount you owe (not just the past due
payments), including our expenses. To learn the exact amount you must pay, call us at [telephone number].
If you want us to explain to you in writing how we have figured the amount that you owe us, you may call us at [telephone
number] [or write us at [secured party’s address]] and request a written explanation. [We will charge you $………. for the
explanation if we sent you another written explanation of the amount you owe us within the last 6 months.]
If you need more information about the sale call us at [telephone number] [or write us at [secured party’s address]].
We are sending this notice to the following other people who have an interest in [describe collateral] or who owe money
under your agreement:
[Names of all other debtors and obligors, if any]
4. A notification in the form of subsection 3 is sufficient, even if additional information appears at the end of the form.
5. A notification in the form of subsection 3 is sufficient, even if it includes errors in information not required by subsection
1, unless the error is misleading with respect to rights arising under this article.
6. If a notification under this section is not in the form of subsection 3, law other than this article determines the effect of
including information not required by subsection 1.
(Added to NRS by 1999, 352)
NRS 104.9615 Application of proceeds of disposition; liability for deficiency and right to surplus.
1. A secured party shall apply or pay over for application the cash proceeds of disposition under NRS 104.9610 in the
following order to:
(a) The reasonable expenses of retaking, holding, preparing for disposition, processing and disposing, and, to the extent
provided for by agreement and not prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured
party;
(b) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;
(c) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:
(1) The secured party receives from the holder of the subordinate security interest or other lien an authenticated demand
for proceeds before distribution of the proceeds is completed; and
(2) In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior
to the interest of the consignor; and
(d) A secured party that is a consignor of the collateral if the secured party receives from the consignor an authenticated
demand for proceeds before distribution of the proceeds is completed.
2. If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of
the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder’s
demand under paragraph (c) of subsection 1.
3. A secured party need not apply or pay over for application noncash proceeds of disposition under NRS 104.9610 unless
the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash
proceeds shall do so in a commercially reasonable manner.
4. If the security interest under which a disposition is made secures payment or performance of an obligation, after making
the payments and applications required by subsection 1 and permitted by subsection 3:
(a) Unless paragraph (d) of subsection 1 requires the secured party to apply or pay over cash proceeds to a consignor, the
secured party shall account to and pay a debtor for any surplus; and
(b) The obligor is liable for any deficiency.
5. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles or promissory notes:
(a) The debtor is not entitled to any surplus; and
(b) The obligor is not liable for any deficiency.
6. The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been
realized in a disposition complying with this part to a transferee other than the secured party, a person related to the secured party
or a secondary obligor if:
(a) The transferee in the disposition is the secured party, a person related to the secured party or a secondary obligor; and
(b) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a
person other than the secured party, a person related to the secured party or a secondary obligor would have brought.
7. A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates
the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under
which the disposition is made:
(a) Takes the cash proceeds free of the security interest or other lien;
(b) Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest
or other lien; and
(c) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.
NRS 104.9617 Effect of disposition of collateral by secured party after default; rights of transferee regarding
collateral.
1. A secured party’s disposition of collateral after default:
(a) Transfers to a transferee for value all of the debtor’s rights in the collateral;
(b) Discharges the security interest under which the disposition is made; and
(c) Discharges any subordinate security interest or other subordinate lien.
2. A transferee that acts in good faith takes free of the rights and interests described in subsection 1, even if the secured party
fails to comply with this article or the requirements of any judicial proceeding.
3. If a transferee does not take free of the rights and interests described in subsection 1, the transferee takes the collateral
subject to:
(a) The debtor’s rights in the collateral;
(b) The security interest or agricultural lien under which the disposition is made; and
(c) Any other security interest or other lien.
(Added to NRS by 1999, 355)
(a) That the debtor has defaulted in connection with an obligation secured by specified collateral;
(b) That the secured party has exercised its postdefault remedies with respect to the collateral;
(c) That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and
(d) The name and mailing address of the secured party, debtor and transferee.
2. A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in
the statement in any official filing, recording, registration or certificate-of-title system covering the collateral. If a transfer
statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the
official or office shall:
(a) Accept the transfer statement;
(b) Promptly amend its records to reflect the transfer; and
(c) If applicable, issue a new appropriate certificate of title in the name of the transferee.
3. A transfer of the record or legal title to collateral to a secured party under subsection 2 or otherwise is not of itself a
disposition of collateral under this article and does not of itself relieve the secured party of its duties under this article.
(Added to NRS by 1999, 356)
NRS 104.9620 Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.
1. Except as otherwise provided in subsection 7, a secured party may accept collateral in full or partial satisfaction of the
obligation it secures only if:
(a) The debtor consents to the acceptance under subsection 3;
(b) The secured party does not receive, within the time set forth in subsection 4, a notification of objection to the proposal
authenticated by:
(1) A person to which the secured party was required to send a proposal under NRS 104.9621; or
(2) Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is
the subject of the proposal;
(c) If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the
acceptance; and
(d) Subsection 5 does not require the secured party to dispose of the collateral.
2. A purported or apparent acceptance of collateral under this section is ineffective unless:
(a) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and
(b) The conditions of subsection 1 are met.
3. For purposes of this section:
(a) A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated after default; and
(b) A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to
the terms of the acceptance in a record authenticated after default or the secured party:
(1) Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the
possession of the secured party be preserved or maintained;
(2) In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and
(3) Does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.
4. To be effective under paragraph (b) of subsection 1, a notification of objection must be received by the secured party:
(a) In the case of a person to which the proposal was sent pursuant to NRS 104.9621, within 20 days after notification was
sent to the person; and
(b) In other cases:
(1) Within 20 days after the last notification was sent pursuant to NRS 104.9621; or
(2) If a notification was not sent, before the debtor consents to the acceptance under subsection 3.
5. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to NRS 104.9610 within the
time specified in subsection 6 if:
(a) Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or
(b) Sixty percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security
interest in consumer goods.
6. To comply with subsection 5, the secured party shall dispose of the collateral:
(a) Within 90 days after taking possession; or
(b) Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered
into and authenticated after default.
7. In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
(Added to NRS by 1999, 357; A 2009, 1728)
NRS 104.9624 Waiver of right to notification of disposition of collateral; waiver of right to redeem collateral.
1. A debtor or secondary obligor may waive the right to notification of disposition of collateral under NRS 104.9611 only by
an agreement to that effect entered into and authenticated after default.
2. Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under
NRS 104.9623 only by an agreement to that effect entered into and authenticated after default.
(Added to NRS by 1999, 359)
NRS 104.9625 Remedies for secured party’s failure to comply with article.
1. If it is established that a secured party is not proceeding in accordance with this article, a court may order or restrain
collection, enforcement or disposition of collateral on appropriate terms and conditions.
2. Subject to subsections 3, 4 and 6, a person is liable for damages in the amount of any loss caused by a failure to comply
with this article. Loss caused by a failure to comply may include loss resulting from the debtor’s inability to obtain, or increased
costs of, alternative financing.
3. Except as otherwise provided in NRS 104.9628:
(a) A person that, at the time of the failure, was a debtor, was an obligor or held a security interest in or other lien on the
collateral may recover damages under subsection 2 for its loss; and
(b) If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to
comply with this part may recover for that failure in any event an amount not less than the credit service charge plus 10 percent of
the principal amount of the obligation or the time-price differential plus 10 percent of the cash price.
4. A debtor whose deficiency is eliminated under NRS 104.9626 may recover damages for the loss of any surplus. However,
a debtor or secondary obligor whose deficiency is eliminated or reduced under that section may not otherwise recover under
subsection 2 for noncompliance with the provisions of this part relating to collection, enforcement, disposition or acceptance.
5. In addition to any damages recoverable under subsection 2, the debtor, consumer obligor or person named as a debtor in a
filed record, as applicable, may recover $500 in each case from a person that:
(a) Fails to comply with NRS 104.9208;
(b) Fails to comply with NRS 104.9209;
(c) Files a record that he or she is not entitled to file under subsection 1 of NRS 104.9509;
(d) Fails to cause the secured party of record to file or send a termination statement as required by subsection 1 or 3 of NRS
104.9513;
(e) Fails to comply with paragraph (a) of subsection 2 of NRS 104.9616 and whose failure is part of a pattern, or consistent
with a practice, of noncompliance; or
(f) Fails to comply with paragraph (b) of subsection 2 of NRS 104.9616.
6. A debtor or consumer obligor may recover damages under subsection 2 and, in addition, $500 in each case from a person
that, without reasonable cause, fails to comply with a request under NRS 104.9210. A recipient of a request under that section
which never claimed an interest in the collateral or obligations that are the subject of a request under that section has a
reasonable excuse for failure to comply with the request within the meaning of this subsection.
7. If a secured party fails to comply with a request regarding a list of collateral or a statement of account under NRS
104.9210, the secured party may claim a security interest only as shown in the list or statement included in the request as against
a person that is reasonably misled by the failure.
(Added to NRS by 1999, 359; A 2001, 734)
sum of the secured obligation, expenses and attorney’s fees unless the secured party proves that the amount is less than that sum.
(e) If a deficiency or surplus is calculated under subsection 6 of NRS 104.9615, the debtor or obligor has the burden of
establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition
to a person other than the secured party, a person related to the secured party or a secondary obligor would have brought.
2. The limitation of the rules in subsection 1 to transactions other than consumer transactions leaves to the court the
determination of the proper rules in consumer transactions. The court may not infer from that limitation the nature of the proper
rule in consumer transactions and may continue to apply established approaches.
(Added to NRS by 1999, 360)
NRS 104.9628 Nonliability and limitation on liability of secured party; liability of secondary obligor.
1. Unless a secured party knows that a person is a debtor or obligor, knows his or her identity, and knows how to
communicate with him or her:
(a) The secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against
him or her, for failure to comply with this article; and
(b) The secured party’s failure to comply with this article does not affect the liability of the person for a deficiency.
2. A secured party is not liable because of its status as a secured party:
(a) To a person that is a debtor or obligor, unless the secured party knows:
(1) That he or she is a debtor or obligor;
(2) His or her identity; and
(3) How to communicate with him or her; or
(b) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
(1) That he or she is a debtor; and
(2) His or her identity.
3. A secured party is not liable to any person, and a person’s liability for a deficiency is not affected, because of any act or
omission arising out of the secured party’s reasonable belief that a transaction is not a consumer-goods transaction or a consumer
transaction or that goods are not consumer goods, if the secured party’s belief is based on its reasonable reliance on:
(a) A debtor’s representation concerning the purpose for which collateral was to be used, acquired or held; or
(b) An obligor’s representation concerning the purpose for which a secured obligation was incurred.
4. A secured party is not liable to any person under paragraph (b) of subsection 3 of NRS 104.9625 for its failure to comply
with NRS 104.9616.
5. A secured party is not liable under paragraph (b) of subsection 3 of NRS 104.9625 more than once with respect to any one
secured obligation.
(Added to NRS by 1999, 361)
Part 7
NRS 104.9702 Applicability of amendatory provisions to preexisting transactions, liens, actions, cases and
proceedings.
1. Except as otherwise provided in NRS 104.9702 to 104.9709, inclusive, this article as amended applies to a transaction or
lien within its scope, even if the transaction or lien was entered into or created before the amendments to this article take effect.
2. Except as otherwise provided in subsection 3 and NRS 104.9703 to 104.9709, inclusive:
(a) Transactions and liens that were not governed by this article before July 1, 2001, were validly entered into or created
before that date, and would be subject to this article if they had been entered into or created after that date, and the rights, duties
and interests flowing from those transactions and liens remain valid on and after that date; and
(b) The transactions and liens may be terminated, completed, consummated or enforced as required or permitted by this
article or by the law that otherwise would apply if this article had not taken effect.
3. This article as amended does not affect an action, case or proceeding commenced before July 1, 2001.
(Added to NRS by 1999, 362)
would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for
enforceability or perfection under this article as amended are not satisfied on July 1, 2001, the security interest:
(a) Is a perfected security interest for 1 year after July 1, 2001;
(b) Remains enforceable thereafter only if the security interest becomes enforceable under NRS 104.9203 before the year
expires; and
(c) Remains perfected thereafter only if the applicable requirements for perfection under this article as amended are satisfied
before the year expires.
(Added to NRS by 1999, 362)
NRS 104.9704 Security interest unperfected before July 1, 2001. A security interest that is enforceable immediately
before July 1, 2001, but which would be subordinate to the rights of a person that becomes a lien creditor at that time:
1. Remains an enforceable security interest for 1 year after July 1, 2001;
2. Remains enforceable thereafter if the security interest becomes enforceable under NRS 104.9203 when this article as
amended takes effect or within 1 year thereafter; and
3. Becomes perfected:
(a) Without further action, on July 1, 2001, if the applicable requirements for perfection under this article as amended are
satisfied before or at that time; or
(b) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.
(Added to NRS by 1999, 362)
NRS 104.9706 When initial financing statement suffices to continue effectiveness of financing statement filed before
July 1, 2001.
1. The filing of an initial financing statement in the office specified in NRS 104.9501 continues the effectiveness of a
financing statement filed before July 1, 2001, if:
(a) The filing of an initial financing statement in that office would be effective to perfect a security interest under this article
as amended;
(b) The pre-effective-date financing statement was filed in an office in another state or another office in this State; and
(c) The initial financing statement satisfies subsection 3.
2. The filing of an initial financing statement under subsection 1 continues the effectiveness of the pre-effective-date
financing statement:
(a) If the initial financing statement is filed before July 1, 2001, for the period provided in NRS 104.9403 before that date
with respect to a financing statement; and
(b) If the initial financing statement is filed on or after July 1, 2001, for the period provided in NRS 104.9515 with respect to
an initial financing statement.
3. To be effective for purposes of subsection 1, an initial financing statement must:
(a) Satisfy the requirements of part 5 for an initial financing statement;
(b) Identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and
providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed
with respect to the financing statement; and
(c) Indicate that the pre-effective-date financing statement remains effective.
(Added to NRS by 1999, 364)
NRS 104.9707 Persons entitled to file initial financing statement or continuation statement. A person may file an initial
financing statement or a continuation statement under NRS 104.9702 to 104.9709, inclusive, if:
1. The secured party of record authorizes the filing; and
2. The filing is necessary under those sections:
(a) To continue the effectiveness of a financing statement filed before July 1, 2001; or
(b) To perfect or continue the perfection of a security interest.
NRS 104.9709 Effectiveness, amendment and termination of financing statement filed before July 1, 2001.
1. In this section, “pre-effective-date financing statement” means a financing statement filed before July 1, 2001.
2. A person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the
information provided in, a pre-effective-date financing statement pursuant to the law of the jurisdiction governing perfection as
provided in part 3. The effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the
law of the jurisdiction in which the financing statement is filed.
3. Except as otherwise provided in subsection 4, if the law of this State governs perfection of a security interest, the
information in a pre-effective-date financing statement may be amended on or after July 1, 2001, if:
(a) The pre-effective-date financing statement and an amendment are filed in the office specified in NRS 104.9501;
(b) An amendment is filed in the office specified in NRS 104.9501 concurrently with, or after the filing in that office of, an
initial financing statement that satisfies the requirements of subsection 3 of NRS 104.9706; or
(c) An initial financing statement that provides the information as amended and satisfies the requirements of subsection 3 of
NRS 104.9706 is filed in the office specified in NRS 104.9501.
4. If the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing
statement may be continued only under subsections 4 and 6 of NRS 104.9705 or NRS 104.9706.
5. Whether or not the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date
financing statement filed in this State may be terminated on or after July 1, 2001, by filing a termination statement in the office in
which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies the requirements of
subsection 3 of NRS 104.9706 has been filed in the office specified by the law of the jurisdiction governing perfection as
provided in part 3.
(Added to NRS by 2001, 708)