{"data":{"id":"us-ky/krs-355.9-103","jurisdiction":"us-ky","citation":"KRS 355.9-103","heading":"Purchase -money security interest -- Application of payments -- Burden","body":"of establishing.\n(1) In this section:\n(a) \"Purchase-money collateral\" means goods or software that secures a purchase-\nmoney obligation incurred with respect to that collateral; and\n(b) \"Purchase-money obligation\" means an obligation of an obligor incurred as all\nor part of the price of the collateral or for value given to enable the debtor to\nacquire rights in or the use of the collateral if the value is in fact so used.\n(2) A security interest in goods is a purchase-money security interest:\n(a) To the extent that the goods are purchase-money collateral with respect to that\nsecurity interest;\n(b) If the security interest is in inventory that is or was purchase-money collateral,\nalso to the extent that the security interest secures a purchase -money\nobligation incurred with respect to other inventory in which the secured party\nholds or held a purchase-money security interest; and\n(c) Also to the extent that the security interest secure s a purchase -money\nobligation incurred with respect to software in which the secured party holds\nor held a purchase-money security interest.\n(3) A security interest in software is a purchase -money security interest to the extent\nthat the security interest also secures a purchase -money obligation incurred with\nrespect to goods in which the secured party holds or held a purchase-money security\ninterest if:\n(a) The debtor acquired its interest in the software in an integrated transaction in\nwhich it acquired an interest in the goods; and\n(b) The debtor acquired its interest in the software for the principal purpose of\nusing the software in the goods.\n(4) The security interest of a consignor in goods that are the subject of a consignment is\na purchase-money security interest in inventory.\n(5) In a transaction other than a consumer -goods transaction, if the extent to which a\nsecurity interest is a purchase-money security interest depends on the application of\na payment to a particular obligation, the payment must be applied:\n(a) In accordance with any reasonable method of application to which the parties\nagree;\n(b) In the absence of the parties' agreement to a reasonable method, in accordance\nwith any intention of the obligor manifested at or before the time of pay ment;\nor\n(c) In the absence of an agreement to a reasonable method and a timely\nmanifestation of the obligor's intention, in the following order:\n1. To obligations that are not secured; and\n2. If more than one (1) obligation is secured, to obligations secured by\npurchase-money security interests in the order in which those obligations\nwere incurred.\n(6) In a transaction other than a consumer-goods transaction, a purchase-money security\ninterest does not lose its status as such, even if:\n(a) The purchase -money collateral also secures an obligation that is not a\npurchase-money obligation;\n(b) Collateral that is not purchase -money collateral also secures the purchase -\nmoney obligation; or\n(c) The pur chase-money obligation has been renewed, refinanced, consolidated,\nor restructured.\n(7) In a transaction other than a consumer-goods transaction, a secured party claiming a\npurchase-money security interest has the burden of establishing the extent to which\nthe security interest is a purchase-money security interest.\n(8) The limitation of the rules in subsections (5), (6), and (7) of this section to\ntransactions other than consumer-goods transactions is intended to leave to the court\nthe determination of the  proper rules in consumer -goods transactions. The court\nmay not infer from that limitation the nature of the proper rule in consumer -goods\ntransactions and may continue to apply established approaches.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33730","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:47Z","sha256":"5cc4d1aa1c9e12788e1145a7d2d7cad256088f0f6500b9d717b01d40576f15cb","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.9-102","next":"us-ky/krs-355.9-104"},"notice":"GroundRules: Original legal text. Not legal advice."}