Idaho State Statutes - Idaho Attorney Directory

PURCHASE-MONEY SECURITY INTEREST -- APPLICATION OF PAYMENTS --
BURDEN OF ESTABLISHING. (a) In this section:
(1) "Purchase-money collateral" means goods or software that secures a
purchase-money obligation incurred with respect to that collateral; and
(2) "Purchase-money obligation" means an obligation of an obligor
incurred as all or part of the price of the collateral or for value given
to enable the debtor to acquire rights in or the use of the collateral if
the value is in fact so used.
(b) A security interest in goods is a purchase-money security interest:
(1) To the extent that the goods are purchase-money collateral with
respect to that security interest;
(2) If the security interest is in inventory that is or was
purchase-money collateral, also to the extent that the security interest
secures a purchase-money obligation incurred with respect to other
inventory in which the secured party holds or held a purchase-money
security interest; and
(3) Also to the extent that the security interest secures a
purchase-money obligation incurred with respect to software in which the
secured party holds or held a purchase-money security interest.
(c) A security interest in software is a purchase-money security interest
to the extent that the security interest also secures a purchase-money
obligation incurred with respect to goods in which the secured party holds or
held a purchase-money security interest if:
(1) The debtor acquired its interest in the software in an integrated
transaction in which it acquired an interest in the goods; and
(2) The debtor acquired its interest in the software for the principal
purpose of using the software in the goods.
(d) The security interest of a consignor in goods that are the subject of
a consignment is a purchase-money security interest in inventory.
(e) If the extent to which a security interest is a purchase-money
security interest depends on the application of a payment to a particular
obligation, the payment must be applied:
(1) In accordance with any reasonable method of application to which the
parties agree;
(2) In the absence of the parties' agreement to a reasonable method, in
accordance with any intention of the obligor manifested at or before the
time of payment; or
(3) In the absence of an agreement to a reasonable method and a timely
manifestation of the obligor's intention, in the following order:
(A) to obligations that are not secured; and
(B) if more than one (1) obligation is secured, to obligations
secured by purchase-money security interests in the order in which
those obligations were incurred.
(f) A purchase-money security interest does not lose its status as such,
even if:
(1) The purchase-money collateral also secures an obligation that is not
a purchase-money obligation;
(2) Collateral that is not purchase-money collateral also secures the
purchase-money obligation; or
(3) The purchase-money obligation has been renewed, refinanced,
consolidated or restructured.
(g) A secured party claiming a purchase-money security interest has the
burden of establishing the extent to which the security interest is a
purchase-money security interest.

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