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Ohio Revised Code Title XIII. Commercial Transactions § 1309.207

Current as of January 01, 2024 | Updated by FindLaw Staff

(A) Except as otherwise provided in division (D) of this section, a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's 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.

(B) Except as otherwise provided in division (D) of this section, if a secured party has possession of collateral:

(1) Reasonable expenses, including the cost of 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;

(2) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;

(3) The secured party shall keep the collateral identifiable but fungible collateral may be commingled; and

(4) The secured party may use or operate the collateral:

(a) For the purpose of preserving the collateral or its value;

(b) As permitted by an order of a court having competent jurisdiction; or

(c) Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.

(C) Except as otherwise provided in division (D) of this section, a secured party having possession of collateral or control of collateral under section 1307.106, 1309.104, 1309.105, 1309.106, or 1309.107 of the Revised Code:

(1) May hold as additional security any proceeds, except money or funds, received from the collateral;

(2) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and

(3) May create a security interest in the collateral.

(D) If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:

(1) Division (A) of this section does not apply unless the secured party is entitled under an agreement:

(a) To charge back uncollected collateral; or

(b) Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and

(2) Divisions (B) and (C) of this section do not apply.

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Cite this article: FindLaw.com - Ohio Revised Code Title XIII. Commercial Transactions § 1309.207 - last updated January 01, 2024 | https://codes.findlaw.com/oh/title-xiii-commercial-transactions/oh-rev-code-sect-1309-207.html

Read this complete Ohio Revised Code Title XIII. Commercial Transactions § 1309.207 on Westlaw

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.

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