Page:United States Statutes at Large Volume 77.djvu/785

 77 STAT. ]

PUBLIC LAW 88-243-DEC. 30, 1963

ment under the article on commercial paper (article 3). A buyer MIIO as p a i t of one transaction signs both a negotiable instrument and a security agreement makes such an agreement. (2) When a seller retains a purchase money security interest in goods the article on sales (article 2) governs the sale and any disclaimer, limitation or modification of the seller's warranties. § 28:9—^207. Rights and duties when collateral is in secured party's possession (1) A secured party must use reasonable care in the custody and preservation of collateral in his possession. In the case of an instrument or chattel paper reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed. (2) Unless otherwise agreed, when collateral is in the secured party's possession (a) reasonable expenses (including the cost of any insurance and payment of taxes or other charges) incurred in the custody, preservation, use or operation of the collateral are chargeable to the debtor and are secured by the collateral; (b) the risk of accidental loss or damage is on the debtor to the extent of any deficiency in any effective insurance coverage; (c) the secured party may hold as additional security any increase or profits (except money) received from the collateral, but money so received, unless remitted to the debtor, shall be applied in reduction of the secured obligation; (d) the secured party must keep the collateral identifiable but fungible collateral may he commingled; (e) the secured party may repledge the collateral upon t-enns which do not impair the debtor's right to redeem it. (3) A secured party is liable for any loss caused by his failure to meet any obligation imposed by the preceding subsections but does not lose his security interest. (4) A secured party may use or operate the collateral for the purpose of preserving the collateral or its value or pursuant to the order of a court of appropriate jurisdiction or, except in the case of consumer goods, in the manner and to the extent provided in the security agreement. § 28:9—^208. Request for statement of account or list of collateral (1) A debtor may sign a statement indicating what he believes t-o be the aggregate amount of unpaid indebtedness as of a specified date and may send it to the secured party with a request that the statement be approved or corrected and returned to the debtor. Allien the se<urity agreement or any other record kept by the secured party identifies the collateral a debtor may similarly re(j[uest the secured party to approve or correct a list of the collateral. (2) The secured party must comply with such a request within two weeks after receipt by sending a written correction or approval. If the secured party clanns a security interest in all of a particular type of collateral owned by the debtor he may indicate that fact in his reply, and need not approve or correct an itemized list of such collateral. If the secured party without reasonable excuse fails to comply he is liable for any loss caused to the debtor thereby; and if the debtor has properly included in his request a good faith statement of the obligation or a list of the collateral or both the secured party may claim a security interest only as shown in the statement agamst persons misled by his failure to comply. If he no longer has an interest in the obligation or collateral at the time the request is received he must disclose the name and address of any successor in interest known to him and he is liable for any loss caused to the debtor as a result of failure to dis93-025 O - 6 4 - 5 0

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