2006 Ohio Revised Code - 1309.602. (UCC 9-602) Waiver and variance of rights and duties.

§ 1309.602. (UCC 9-602) Waiver and variance of rights and duties.
 

Except as otherwise provided in section 1309.624 of the Revised Code, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the following provisions of the Revised Code; 

(A) Division (B)(4)(c) of section 1309.207 of the Revised Code, which relates to the use and operation of the collateral by the secured party; 

(B) Section 1309.210 of the Revised Code, which relates to requests for an accounting and requests concerning a list of collateral and statement of account; 

(C) Division (C) of section 1309.607 of the Revised Code, which relates to the collection and enforcement of collateral; 

(D) Division (A) of section 1309.608 and division (C) of section 1309.615 of the Revised Code to the extent that they relate to the application or payment of noncash proceeds of collection, enforcement, or disposition; 

(E) Division (A) of section 1309.608 and division (D) of section 1309.615 of the Revised Code to the extent that they require accounting for or payment of surplus proceeds of collateral; 

(F) Section 1309.609 of the Revised Code to the extent that it imposes upon a secured party who takes possession of collateral without judicial process the duty to do so without breach of the peace; 

(G) Division (B) of section 1309.610 and sections 1309.611, 1309.613, and 1309.614 of the Revised Code, which relate to the disposition of collateral; 

(H) Division (F) of section 1309.615, which relates to the calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor; 

(I) Section 1309.616 of the Revised Code, which relates to the explanation of the calculation of a surplus or deficiency; 

(J) Sections 1309.620, 1309.621, and 1309.622 of the Revised Code, which relate to the acceptance of collateral in satisfaction of obligation; 

(K) Section 1309.623 of the Revised Code, which relates to redemption of collateral; 

(L) Section 1309.624 of the Revised Code, which relates to permissible waivers; and 

(M) Sections 1309.625 and 1309.626 of the Revised Code, which relate to the secured party's liability for failure to comply with this chapter. 
 

HISTORY: 149 v S 74. Eff 7-1-2001.
 

The effective date is set by section 4 of SB 74. 

 

Official Comment

1. Source. Former section 9-501(3). 

2. Waiver: In General. Section 1-102(3) addresses which provisions of the UCC are mandatory and which may be varied by agreement. With exceptions relating to good faith, diligence, reasonableness, and care, immediate parties, as between themselves, may vary its provisions by agreement. However, in the context of rights and duties after default, our legal system traditionally has looked with suspicion on agreements that limit the debtor's rights and free the secured party of its duties. As stated in former section 9-501, comment 4, "no mortgage clause has ever been allowed to clog the equity of redemption." The context of default offers great opportunity for overreaching. The suspicious attitudes of the courts have been grounded in common sense. This section, like former section 9-501(3), codifies this long-standing and deeply rooted attitude. The specified rights of the debtor and duties of the secured party may not be waived or varied except as stated. Provisions that are not specified in this section are subject to the general rules in section 1-102(3). 

3. Nonwaivable Rights and Duties. This section revises former section 9-501(3) by restricting the ability to waive or modify additional specified rights and duties: (i) Duties under section 9-207(b)(4)(C), which deals with the use and operation of consumer goods; (ii) the right to a response to a request for an accounting, concerning a list of collateral, or concerning a statement of account (section 9-210); (iii) the duty to collect collateral in a commercially reasonable manner (section 9-607); (iv) the implicit duty to refrain from a breach of the peace in taking possession of collateral under section 9-609; (v) the duty to apply noncash proceeds of collection or disposition in a commercially reasonable manner (sections 9-608 and 9-615); (vi) the right to a special method of calculating a surplus or deficiency in certain dispositions to a secured party, a person related to secured party, or a secondary obligor (section 9-615); (vii) the duty to give an explanation of the calculation of a surplus or deficiency (section 9-616); (viii) the right to limitations on the effectiveness of certain waivers (section 9-624); and (ix) the right to hold a secured party liable for failure to comply with this article (sections 9-625 and 9-626). For clarity and consistency, this article uses the term "waive or vary" instead of "renounc:e] or modify: ]" which appeared in former section 9-504(3). 

This section provides generally that the specified rights and duties "may not be waived or varied." However, it does not restrict the ability of parties to agree to settle, compromise, or renounce claims for past conduct that may have constituted a violation or breach of those rights and duties, even if the settlement involves an express "waiver." 

4. Waiver by Debtors and Obligors. The restrictions on waiver contained in this section apply to obligors as well as debtors. This resolves a question under former article 9 as to whether secondary obligors, assuming that they were "debtors" for purposes of former part 5, were permitted to waive, under the law of suretyship, rights and duties under that part. 

5. Certain Post-Default Waivers. Section 9-624 permits post-default waivers in limited circumstances. These waivers must be made in agreements that are authenticated. Under section 1-201, an " 'agreement' means the bargain of the parties in fact." In considering waivers under section 9-624 and analogous agreements in other contexts, courts should carefully scrutinize putative agreements that appear in records that also address many additional or unrelated matters.