UCC 9-109 Comment 2 exclusions - what counts as commercial law vs secured transactions?
I'm working on a complex financing deal involving medical equipment leases and I keep running into questions about UCC 9-109 Comment 2 and what falls under Article 9 vs other commercial law. The comment mentions specific exclusions but I'm getting confused about the boundaries. We have a situation where the lessor wants to file UCC-1 statements on some equipment but not others, claiming certain items fall outside Article 9 scope based on Comment 2. Has anyone dealt with this kind of scope determination? I need to know if we're required to perfect these security interests or if they truly fall under a different area of commercial law. The financing documents reference both true leases and security interests but the line seems blurry when you dig into Comment 2.
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Josef Tearle
UCC 9-109 Comment 2 is tricky territory. The key is understanding that Comment 2 clarifies the scope exclusions rather than creating new ones. Medical equipment leases can be true leases (outside Article 9) or disguised security interests (inside Article 9). You need to apply the lease vs security interest test from 1-203. Comment 2 just explains how certain transactions that might look like secured transactions actually fall under other bodies of law.
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Shelby Bauman
•This is exactly the kind of analysis I was struggling with. So Comment 2 is more of a guide than a rule creator?
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Josef Tearle
•Exactly. It's interpretive guidance. The actual exclusions are in 9-109(d), and Comment 2 explains the reasoning behind some of those exclusions.
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Quinn Herbert
I ran into something similar last year with a healthcare financing deal. The problem was that some of the 'leases' were actually security interests in disguise, so they needed UCC-1 filings even though the lessor insisted they were true leases. Comment 2 helped clarify that certain regulatory schemes take precedence over Article 9, but basic equipment financing usually falls squarely within UCC scope.
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Charity Cohan
•That's helpful context. In your case, how did you determine which items needed UCC-1 filings? Was there a specific test you applied?
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Quinn Herbert
•We looked at economic substance over form. If the lessee had an option to purchase for nominal consideration or if the lease term covered substantially all the equipment's useful life, we treated it as a security interest requiring UCC-1 filing.
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Salim Nasir
•The nominal consideration test is key. We see this mistake constantly where parties call something a lease but structure it like a secured loan.
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Hazel Garcia
Have you tried using Certana.ai's document verification tool? I uploaded our lease agreements and UCC-1 drafts, and it flagged several inconsistencies between how we characterized the transactions in the lease documents versus the UCC filings. Really helped clarify which items needed Article 9 treatment.
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Charity Cohan
•Haven't heard of that tool. Does it actually analyze the legal substance of the transactions or just document consistency?
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Hazel Garcia
•It cross-checks the transaction descriptions, collateral schedules, and debtor information between documents. Caught several places where our lease characterization didn't match our UCC filing approach.
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Laila Fury
Comment 2 exclusions are a nightmare in healthcare financing. We had a deal where federal regulations created a competing perfection scheme, and Comment 2 helped explain why Article 9 didn't apply to those specific assets. But the vast majority of medical equipment still needs UCC-1 filings if there's a security interest.
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Geoff Richards
•Which federal regulations? We might be dealing with something similar.
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Laila Fury
•FDA regulations on certain medical devices, plus some Medicare reimbursement rules that affected perfection requirements. Very fact-specific stuff.
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Simon White
The lessor's position sounds suspicious to me. Unless there's a specific statutory exclusion in 9-109(d) that applies, most equipment financing falls under Article 9. Comment 2 doesn't create exclusions - it just explains existing ones. I'd push back and ask them to cite the specific exclusion they're relying on.
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Charity Cohan
•That's my instinct too. They keep referencing Comment 2 but can't point to a specific subsection of 9-109(d) that would exclude these transactions.
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Hugo Kass
•Sounds like they're trying to avoid filing costs and just hoping you won't push back. Make them show their work.
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Nasira Ibanez
This is why I hate working with equipment lessors who don't understand UCC basics. They think calling something a 'lease' automatically takes it outside Article 9, but that's not how it works. The legal substance matters, not the label.
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Khalil Urso
•So true. We see this constantly where the business people make assumptions about legal classifications.
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Nasira Ibanez
•Exactly. And then when things go wrong, suddenly everyone wants to know why the security interests weren't properly perfected.
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Myles Regis
I'm dealing with something similar but with software licenses. Comment 2 mentions that certain intellectual property transactions fall outside Article 9, but it's not clear where the line is drawn. Anyone have experience with software licensing vs security interests in this context?
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Josef Tearle
•Software licenses are typically outside Article 9 unless they're really security interests in disguise. Look at whether the 'license' is actually securing payment of a debt.
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Myles Regis
•That makes sense. In our case, the software license can be terminated if payments aren't made, so it might actually be a security arrangement.
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Brian Downey
The Comment 2 analysis really comes down to understanding the policy behind the exclusions. Some transactions are excluded because they're governed by specialized regulatory schemes, others because they don't involve personal property in the traditional sense. Medical equipment leases rarely fall into these categories unless there's something very unusual about the transaction structure.
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Jacinda Yu
•This is a really good point about the policy analysis. Most equipment financing is exactly what Article 9 was designed to cover.
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Landon Flounder
We used Certana.ai to upload our entire document set for a similar deal - lease agreements, security agreements, UCC-1 forms. The tool identified several places where our transaction characterization was inconsistent across documents. Really helped us clean up the documentation before closing.
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Charity Cohan
•That sounds like exactly what we need. Did it help with the legal analysis of whether transactions fell under Article 9?
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Landon Flounder
•It flagged the inconsistencies, but we still had to do the legal analysis ourselves. But having clean, consistent documentation made that analysis much easier.
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Salim Nasir
Bottom line: unless the lessor can point to a specific exclusion in 9-109(d) that applies to their transaction, they're probably wrong about Comment 2. Most equipment financing falls squarely within Article 9 scope, and Comment 2 doesn't change that fundamental reality.
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Charity Cohan
•Thanks, that's the conclusion I was reaching too. I think they're misreading Comment 2 as creating exclusions rather than just explaining existing ones.
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Callum Savage
•Definitely push for specificity. If they can't cite a particular exclusion, they're probably just trying to avoid filing requirements.
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Taylor Chen
As a newcomer to UCC practice, this thread has been incredibly helpful in understanding the Comment 2 analysis. I'm seeing a pattern here where the key issue isn't what Comment 2 says, but rather ensuring the underlying transaction analysis under 1-203 is done properly first. It sounds like many lessors try to use Comment 2 as a shortcut to avoid the fundamental lease vs. security interest determination. Would it be fair to say that Comment 2 is essentially a "these are the rare exceptions" guide, and for typical equipment financing deals, you still need to do the basic economic substance analysis regardless of how the parties label the transaction?
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Paolo Bianchi
•That's exactly right, Taylor! You've identified the key insight that many practitioners miss. Comment 2 is really a "here's why certain unusual transactions are excluded" explainer, not a general escape hatch from Article 9. The fundamental 1-203 analysis always comes first - you have to determine whether you're dealing with a true lease or a disguised security interest based on economic substance. Only after you've established that there IS a security interest do you then look at whether any of the 9-109(d) exclusions apply. Most equipment financing deals fail to meet any of those narrow exclusions, so they end up squarely in Article 9 territory regardless of what the lessor wants to call them.
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