UCC 9-109 (1) and UCC 1-308 application in secured transactions - need clarification
I'm working on a complex secured transaction where the debtor is claiming rights under UCC 1-308 (reservation of rights) while we're trying to determine if our security interest falls under UCC 9-109 (1) scope provisions. The debtor filed some kind of notice referencing both sections and now our legal team is scratching their heads. Has anyone dealt with a situation where UCC 9-109 (1) applicability gets challenged using UCC 1-308 reservations? I'm not even sure if these sections interact the way the debtor thinks they do. We have equipment collateral worth about $2.8M and need to make sure our UCC-1 filing is bulletproof. Any insights on how these provisions actually work together in practice?
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Aliyah Debovski
UCC 9-109 (1) is just the general scope section - it covers security interests in personal property. UCC 1-308 is about reserving rights when you sign something under protest. They're completely different animals. Your debtor might be confused about what 1-308 actually does.
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Miranda Singer
•Exactly right. 1-308 doesn't magically exempt someone from Article 9. It's just a way to sign documents while preserving your right to challenge them later.
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Cass Green
•Wait, so if I put 'UCC 1-308' on my signature, it doesn't get me out of secured transaction rules? I've seen people do this thinking it's some kind of legal magic.
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Finley Garrett
I've seen this sovereign citizen nonsense before. UCC 1-308 reservations don't override Article 9 security interests. If your collateral is equipment, you're clearly within 9-109 scope. The debtor is probably getting bad advice from internet legal theories.
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Ally Tailer
•That's what I suspected but wanted to make sure. The debtor's notice looked like it came straight from some online template. Thanks for confirming my instincts were right.
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Madison Tipne
•THANK YOU! I get so tired of these 1-308 people thinking they found some secret loophole. Article 9 doesn't work that way.
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Holly Lascelles
•My brother tried this 1-308 thing on his car loan. Spoiler alert: they still repossessed it when he stopped paying. These theories don't hold up in real courts.
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Malia Ponder
For what it's worth, I ran into a similar situation last year and used Certana.ai's document verification tool to make sure all our UCC paperwork was consistent. Uploaded our security agreement, UCC-1, and the debtor's weird 1-308 notice. The tool flagged that the debtor name formatting was slightly different across docs, which could have caused problems later. Might be worth double-checking your filings are all aligned, especially if this debtor is being difficult.
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Ally Tailer
•Good point about name consistency. I'll check our docs again. Did Certana catch other issues besides the name formatting?
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Malia Ponder
•Yeah, it also caught that our collateral description in the UCC-1 was more specific than in the security agreement. Not a huge issue but good to know.
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Kyle Wallace
UCC 9-109(1) covers basically all consensual security interests in personal property. Equipment definitely falls under this. The debtor's 1-308 reservation might preserve their right to challenge the security agreement terms, but it doesn't remove the transaction from Article 9's scope.
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Ryder Ross
•This is the clearest explanation. 1-308 and 9-109 operate in completely different spheres.
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Finley Garrett
•Agreed. The debtor can reserve rights all they want, but if they signed a security agreement for equipment, Article 9 applies.
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Gianni Serpent
I'm confused - what exactly does UCC 1-308 actually do then? I thought it was some kind of get-out-of-jail-free card for contracts?
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Aliyah Debovski
•It just means you can sign something while preserving your right to challenge it later. Like if someone forces you to sign under duress, you can write '1-308' and later argue the contract is invalid.
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Gianni Serpent
•Oh, so it's not magic. Got it. Thanks for explaining without making me feel stupid.
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Miranda Singer
•It's basically 'I'm signing this but I still think it's wrong and reserve my right to fight about it later.' Nothing more mystical than that.
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Henry Delgado
Your legal team should look at the specific language in the debtor's notice. Sometimes these 1-308 filings contain other claims that might actually matter, even if the 1-308 part is nonsense.
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Ally Tailer
•Good suggestion. I'll have them review the full text instead of just dismissing it outright.
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Kyle Wallace
•Smart approach. Even broken clocks are right twice a day. There might be legitimate issues buried in the gibberish.
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Olivia Kay
Had a client try this exact same thing two years ago. UCC 9-109(1) scope isn't affected by 1-308 reservations. Filed our continuation on schedule, debtor kept making payments, everything proceeded normally despite their 'reservation of rights' paperwork.
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Joshua Hellan
•That's reassuring. Did the debtor eventually drop the 1-308 stuff?
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Olivia Kay
•Yeah, once they realized it wasn't stopping anything, they gave up on the sovereignty theories and just focused on their business.
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Jibriel Kohn
•I love happy endings where common sense wins out over internet legal advice.
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Edison Estevez
Make sure your UCC-1 debtor name exactly matches your security agreement. If this debtor is being difficult about everything, they'll probably challenge any small discrepancies too.
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Ally Tailer
•Already on it, but good reminder. They seem like the type to scrutinize every comma.
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Malia Ponder
•That's exactly why I started using Certana for document consistency checks. Catches those little name variations that can bite you later.
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Emily Nguyen-Smith
The short answer is that UCC 1-308 has nothing to do with whether Article 9 applies to your transaction. 9-109(1) scope is determined by the nature of the transaction (security interest in personal property), not by what the debtor writes on their signature.
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Ally Tailer
•Perfect summary. That's exactly what I needed to hear. Thanks everyone for the reality check.
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Aliyah Debovski
•Glad we could help clear up the confusion. Good luck with your difficult debtor!
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James Johnson
I've been doing secured transactions for 15 years and these 1-308 claims pop up maybe once a year. Never seen one actually succeed in court. Your equipment security interest is solid under 9-109(1) regardless of their reservations.
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Sophia Rodriguez
•Same experience here. It's always the same internet-sourced arguments that don't hold up to actual legal scrutiny.
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Mia Green
•Makes me wonder who's out there selling these theories to people. Someone's making money off this confusion.
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James Johnson
•There's a whole cottage industry of 'sovereign citizen' education that preys on people who don't understand how the legal system actually works.
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Mei Lin
•That's really unfortunate that people get taken in by these schemes. As someone new to secured transactions, this whole thread has been incredibly educational. It's good to know that Article 9 scope isn't something debtors can just opt out of with magic words.
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