Priority Security Interest
/ˈpraɪɒrɪti sɪˈkjʊərɪti ˈɪntrɪst/
Definitions
- (n.) A legal claim granted to a secured party that ranks above other claims on the same collateral, ensuring payment preference in case of debtor default.
The lender obtained a priority security interest in the firm's inventory, guaranteeing repayment before other creditors.
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Commentary
Priority security interests determine the order of creditor claims and are critical in drafting to specify collateral scope and perfection methods to secure priority.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.