UCC filing rejected - nonconforming goods description causing lien issues

That makes sense - so instead of just saying nonconforming goods, I should describe them as 'packaging materials not meeting original specifications' or something similar?

Exactly! Think about what someone would actually see if they walked into the facility. Describe the tangible items rather than the legal classification.

I feel your pain! Sometimes it seems like they reject filings just to make us jump through more hoops.

Actually, the clerks are usually right about this stuff. Vague descriptions can void your security interest if challenged later. Better to get it right now than lose in court.

That's super helpful! So you basically listed the actual product categories rather than just calling them nonconforming goods?

Right, and we added 'held for rework or disposal' to clarify their status. The filing office wants to know what they're looking at if they have to identify the collateral.

This is why I always tell clients to be as specific as possible in collateral descriptions. Generic terms like 'nonconforming goods' can bite you later.

Good point! These are packaging materials that don't meet the original customer specs - wrong colors, sizes slightly off, etc. They're not defective per se, just not what the customer ordered.

Okay, so maybe describe them as 'packaging materials not conforming to customer specifications' or 'off-specification packaging inventory.' That's clearer than just 'nonconforming goods.

That sounds really useful! I wonder if that would have caught our vague description issue before we filed.

It definitely would have! The tool specifically looks for vague or overly broad collateral descriptions that might get rejected. Worth checking out if you're doing a lot of UCC filings.

Interesting - I hadn't heard of that service before. Might be worth looking into for our office too.

Our attorney insisted we include them because they're still business assets that could be sold to pay down the loan if needed. Even if they're not the primary collateral, they have value.

The attorney is right - you want to cast a wide net with collateral descriptions. Better to include too much than too little, as long as you're specific about what you're including.

Honestly, I was just using it as a general term for products that don't meet specs. I didn't realize there was a specific UCC Article 2 definition.

Yeah, Article 2 has specific rules about nonconforming goods in sales contracts. For UCC-1 purposes, you probably just want to describe the actual physical items rather than using legal terminology.

This is a good point - sometimes legal terms in collateral descriptions can create more confusion than clarity.

That's much clearer! I like how it specifically mentions 'off-specification packaging products' instead of nonconforming goods.

Exactly - it tells anyone reading the filing exactly what they're looking at. Much better than vague legal terminology.

THREE rejections? That must have been so stressful! I'm definitely going to be more specific in our refiling.

It was awful! Each rejection delayed our closing by a week. Learned my lesson about being specific in collateral descriptions.

This is why I always run my UCC descriptions past an experienced paralegal before filing. They catch these issues early.

I mentioned it earlier - it's really helpful for catching inconsistencies between your loan docs and UCC filings before you submit. The document verification feature is pretty slick.

Good to know! I'll check it out. Better than getting rejections after the fact.

I was skeptical at first but it actually saved us from a major debtor name mismatch that would have voided our security interest. Just upload your PDFs and it does the cross-checking automatically.

That's such good advice! I'm going to rewrite our description with that approach.

Perfect! And don't forget to check that your new description matches what's in your security agreement. Consistency is crucial.

This is the best advice in the thread. Clear, specific descriptions prevent so many problems down the road.

Will do! I'm feeling much more confident about the refiling now. Thanks everyone for the help!

Yes, please update! These real-world examples are so much more helpful than just reading the statutes.