N.D. Cent. Code § 41-09-106
(9-609) Secured party's right to take possession after default
Redline — December 1, 2021 → current.View current text →
Current — January 1, 2022
As of December 1, 2021
(1) After default, a secured party: May take possession of the collateral; and
(1) After default, a secured party: May take possession of the collateral; and
(2) Without removal, may render equipment unusable and dispose of collateral on a debtor’s premises under section 41-09-107.
(2) Without removal, may render equipment unusable and dispose of collateral on a debtor’s premises under section 41-09-107.
(3) A secured party may proceed under subsection 1: Pursuant to judicial process; or
(3) A secured party may proceed under subsection 1: Pursuant to judicial process; or
(4) Without judicial process, if it proceeds without breach of the peace.
(4) Without judicial process, if it proceeds without breach of the peace.
(5) If so agreed, and in any event after default, a secured party 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.
(5) If so agreed, and in any event after default, a secured party 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.
(6) Damages for Breach of Peace. Concerning damages that may be recovered based on a secured party’s breach of the peace in connection with taking possession of collateral, see Section 9-625, Comment 3.
(7) Multiple Secured Parties. More than one secured party may be entitled to take possession of collateral under this section. Conflicting rights to possession among secured parties are resolved by the priority rules of this Article. Thus, a senior secured party is entitled to possession as against a junior claimant. Non-UCC law governs whether a junior secured party in possession of collateral is liable to the senior in conversion. Normally, a junior who refuses to relinquish possession of collateral upon the demand of a secured party having a superior possessory right to the collateral would be liable in conversion.
(8) Secured Party’s Right to Disable and Dispose of Equipment on Debtor’s Premises. In the case of some collateral, such as heavy equipment, the physical removal from the debtor’s plant and the storage of the collateral pending disposition may be impractical or unduly expensive. This section follows former Section 9-503 by providing that, in lieu of removal, the secured party may render equipment unusable or may dispose of collateral on the debtor’s premises. Unlike former Section 9-503, however, this section explicitly conditions these rights on the debtor’s default. Of course, this section does not validate unreasonable action by a secured party. Under Section 9-610, all aspects of a disposition must be commercially reasonable.
(9) Debtor’s Agreement to Assemble Collateral. This section follows former Section 9-503 also by validating a debtor’s agreement to assemble collateral and make it available to a secured party at a place that the secured party designates. Similar to the treatment of agreements to permit collection prior to default under Section 9-607 and former 9-502, however, this section validates these agreements whether or not they are conditioned on the debtor’s default. For example, a debtor might agree to make available to a secured party, from time to time, any instruments or negotiable documents that the debtor receives on account of collateral. A court should not infer from this section’s validation that a debtor’s agreement to assemble and make available collateral would not be enforceable under other applicable law.
(10) Agreed Standards. Subject to the limitation imposed by Section 9-603(b), this section’s provisions concerning agreements to assemble and make available collateral and a secured party’s right to disable equipment and dispose of collateral on a debtor’s premises are likely topics for agreement on standards as contemplated by Section 9-603.
Official source: North Dakota Legislative Branch. Reproduced from public-domain North Dakota statutes; confirm against the official source for the current text. Not legal advice.