When more than one party claims an interest in the same collateral, a perfected secured party's interest has priority over the interest of most other parties.

Question

Quizplus · Accepted Answer

This is true under the principle of "first to file" or "first in time, first in right." The first secured party to properly perfect their interest in the collateral generally has priority over subsequent parties. However, there are certain exceptions and nuances to this rule, such as the existence of a purchase money security interest or certain types of statutory liens.

When More Than One Party Claims an Interest in the Same