California · Commercial Code

COM §9318: (a) A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold.

What this law says, in plain English

A debtor who sells an account, chattel paper, payment intangible, or promissory note loses any legal or equitable interest in that sold collateral.

Read the full statutory text

(a) A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold. (b) For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.

Verify at the official source: California legislative text

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