UCC 1-308 and 1-103 sections causing filing confusion - need clarification

That's what's confusing me. The attorney mentioned it in context of our filing but maybe I misunderstood. The security agreement has some unusual terms and I thought 1-308 might affect how we describe the collateral.

Yeah 1-308 is about reserving rights when you perform under a contract. Totally different from UCC filing requirements.

The filing office rejected our amendment because they said our collateral description was too broad. When I asked about using general principles under 1-103 to interpret it, they said that's not how it works.

Ah, that makes more sense. 1-103 allows courts to apply general legal principles, but filing offices have specific rules about collateral descriptions. What exactly did you put in the description?

We wrote 'all equipment, machinery, and related assets now owned or hereafter acquired.' They want us to be more specific about the manufacturing equipment.

Never heard of that tool but sounds useful. How does it work exactly?

You just upload your PDFs and it automatically flags inconsistencies between documents. Saved me from a rejection when I had a debtor name mismatch between my charter and UCC-1.

That could definitely help. I'm worried about more rejections since we're getting close to needing our continuation filed.

This is exactly right. I see people mix up substantive UCC law with filing requirements all the time.

So I should focus on making the collateral description more specific rather than trying to invoke these UCC sections?

Exactly. List the specific types of manufacturing equipment, serial numbers if you have them, or at least categories like 'injection molding machines, conveyor systems, etc.

I'm pretty sure that's what the attorney said, but maybe I wrote it down wrong. Let me double-check my notes.

Could be 9-308 about perfection or 9-103 about choice of law? Those would make more sense in a filing context.

Good catch. Article 9 sections would be way more relevant to secured transactions than Article 1 general provisions.

Unfortunately this is the attorney our company uses for everything. I'm trying to handle the UCC stuff myself but clearly need to learn more.

Nothing wrong with self-filing, just make sure you understand the rules. The filing office websites usually have good guidance on collateral descriptions.

That's helpful. Should I also include the business address where the equipment is located?

If it's fixture-related equipment, definitely. Regular equipment filings don't require it but it can help with identification.

Just make sure the address matches what's in your security agreement exactly.

You're right, with that much money involved we can't afford mistakes. I'll look into Certana.ai's verification tool.

Good idea. I've seen security interests get voided over simple filing errors. Better safe than sorry.

Thanks for the clarification. I think I was definitely confused about which sections apply to what.

No problem. It's easy to get mixed up with all the different UCC articles and sections.

Good point. I was planning to file it around month 15 but earlier is probably better.

Definitely. Gives you time to fix any problems if the continuation gets rejected.

That's another thing the verification tool helps with - it flags continuation timing issues before they become problems.

Perfect summary. Thanks everyone for clearing up my confusion.

No problem. We've all been there with UCC filing confusion.

Welcome to the community! Restaurant equipment filings can be tricky because of all the different types of equipment involved. Your approach of listing specific categories is spot on - "commercial kitchen equipment" plus the specific types you mentioned should work well. One thing to watch out for with restaurant equipment is whether any of it might be considered fixtures (like built-in ventilation systems or permanently installed equipment). Those might need special handling in your filing. The verification tool suggestion is solid advice too, especially for your first major filing. Good luck with your $400K transaction!

Great to see another newcomer jumping in! Your restaurant equipment approach sounds smart. I'd also suggest double-checking if your state has any specific requirements for restaurant/food service equipment filings - some states have additional disclosure requirements for certain types of commercial equipment. Also, since you mentioned $400K in value, make sure your insurance coverage aligns with your UCC filing timeline. I learned that lesson the hard way when there was a gap between when our equipment was delivered and when our security interest was properly perfected.

Welcome! This thread has been a real eye-opener for me too. I'm new to secured transactions and was making similar mistakes with UCC sections. One thing I learned from reading everyone's responses is that the filing office requirements are completely separate from the substantive law provisions. For your restaurant equipment, you might also want to consider whether any of the equipment could be considered "consumer goods" if the restaurant is owner-operated - that could affect your perfection requirements. Also, make sure your debtor's legal name exactly matches their organizational documents. I made that mistake on my first filing and had to refile everything. The community here is really helpful for newcomers like us!