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46 Cards in this Set

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What are the requirements for attachment of an enforceable security interest under Art. 9?
VCR
Value given by creditor
Contract (security agreement a.k.a. record) UNLESS creditor is in possession of collateral
Rights in the collateral
What the ways to PERFECT a security interest under Art. 9?
(1) secured party takes possession of the collateral
(2) purchase money secured interests - automatic
(3) *Secured party files NOTICE of security interest in public records
What can be filed publicly to satisfy notice requirements to perfect a security interest under Art. 9?
(a) security agreement
(b) financing statement (usual)
What is required to be in a filing statement to perfect under Art. 9?
"simple and sparse"
(1) debtor's name & address
(2) creditor's name & address
(3) description of collateral
Where is notice filed to perfect under Art. 9 where debtor is individual?
Secretary of State of debtor's principal residence
Where is notice filed to perfect under Art. 9 where debtor is a corporation?
Secretary of State where the corporation is incorporated
Where is notice filed to perfect under Art. 9 where we're dealing with timber, minerals, and fixtures?
Locality - county where the stuff is located
What is the priority of creditors of security interests under Art. 9?
BIOC
PAC
LC
NOCie
AUPie
GUC
Under Art. 9, how does a PMSI acquire priority over a PAC in equipment?
(a) file properly
(b) within 20 days of debtor's taking possession
Under Art. 9, how does a PMSI acquire priority over a PAC in inventory?
(a) file properly AND
(b) notify the PAC (after-acquired collateral financier)
BOTH BEFORE debtor takes possession
Is self-help available to an Art. 9 creditor?
You betcha, as long as there is no breach of the peace...
Repossession over ANY protest = breach of peace
Can an Art. 9 creditor repossess collateral in debtor's home?
Yes, but only with voluntary and contemporaneous consent
Can an Art. 9 creditor repossess collateral outside debtor's home?
Yes, as long as there is no objection
What is strict foreclosure?
When an Art. 9 creditor retains the collateral in full satisfaction of a debt
What is required if an Art. 9 creditor wants to strictly foreclose?
(a) send written proposal
(b) lack of objection from appropriate parties
Who does an Art. 9 creditor have to notify in order to strictly forclose on or sell CONSUMER GOODS?
(1) debtor
(2) secondary obligor
Who does an Art. 9 creditor have to notify in order to strictly forclose on or sell non-consumer goods?
(1) debtor
(2) secondary obligor
(3) perfected creditors
(4) other secured parties that told the foreclosing party of interest
When is Art. 9 creditor prohibited from strictly foreclosing?
(a) if ANY party requiring notification objects
(b) when a debtor has paid 60% of owed on CONSUMER GOODS
What is required for a sale of collateral by Art. 9 creditors?
(a) commercial reasonableness
(b) reasonable notice to appropriate parties
Can an Art. 9 creditor purchase collateral offered for sale through foreclosure?
Public sale - YES
Private sale - NO (unless market check)
When an Art. 9 creditor sells collateral publicly to satisfy a debt, what notice must be given?
Time & place of sale
When an Art. 9 creditor sells collateral privately to satisfy a debt, what notice must be given?
Time after which sale will be made
How much notice must an Art. 9 creditor give to a sale of collateral?
Commercial reaosnableness
Non-consumer goods: 10 days is ok
Is there a right of redemption against Art. 9 creditors who have foreclosed?
YES - debtor must pay:
amount owed + interest + creditor's expenses (including attorney's fees)
NO right after sale or strict foreclosure
May an Art. 9 creditor obtain a deficiency judgment after sale of collateral?
YES
*unless the sale was suspicious
Requirements for a NEGOTIABLE INSTRUMENT under Art. 3 of UCC:
WOSSUP
Writing
Order or bearer, payable to
Signed by maker or drawer
Sum certain
Unconditional and SOLE promise
Payable on demand or definite time
Payable in currency
Is "payable 1 Jan., but due immediately if England wins the World Cup" ok?
YEP - acceleration clauses are fine
Is "payable to Thingy" ok?
AWW, HELL NAW - you need "pay to order of Thingy," or "pay to bearer," or "pat to Thiny or order," or "pay to Thingy or bearer," or "pay to assings of Thingy"
Does the maker or drawer need to SIGN?
Not really, any mark will do
Who is liable under a K or "signature" theory of liabilty for failure to pay?
(1) maker in promissory note
(2) indorser of note or draft
(3) drawer (signs check)
NO SIGNATURE, NO LIABLE
Drawee (bank) - no liability
Is a bank liable for a forged check?
YES - must honor a check "as drawn"
- but if the check was just altered, the bank is not liable for the amount actually drawn
Who can be sued under warranty or transfer liability of a negotiable instrument?
The SELLER of the negotiable instrument (not donor) AND anyone who indorsed the instrument
Who may sue for breach of warranty if the D indorsed a negotiable instrument?
ANY P in possession of the instrument
If indorsed, warranty runs with the instrument
Who may sue for breach of warranty if the D did not indorse the instrument?
ONLY the immediate transferee
What warranties are made by the seller of a negotiable instrument under Art. 3?
(1) transferee has good title to the instrument
(2) all signatures are genuine and authorized
(3) instrument has not been materially altered
(4) there is no defense or claim against transferor (the instrument is enforceable)
(5) transferor has no knowledge of insolvency or bankruptcy against the maker or drawer
How is an instrument payable "to the order of Thingy" duly negotiated under Art. 3?
Delivery to the SPECIFIC PAYEE
How is an instrument payable "to bearer" duly negotiated under Art. 3?
Possession alone - so a person in possession is a holder
How does a specific payee of a negotiable instrument further negotiate it?
Must indorse it... and then if specific indorsement, deliver it to the specific person
How do you negotiate a blank indorsement? e.g. a check that is indorsed by the person to whom it's made out
POSSESSION
- if you possess a check that's been indorsed, you're a holder
How do you negotiate a specific indorsement? e.g. a check that is indorsed "payable to Thingy" by the person to whom it's made out
Delivery to Thingy
What are the requirements for being a holder in due course of a negotiable instrument under Art. 3?
(1) Must be a HOLDER - the instrument must have been properly negotiated
(2) For VALUE
(3) In good faith (subjective)
(4) Without notice (objective) that it's overdue, has been dishonored, or is subject to defense
A HDC must be on notice that a negotiable instrument is not WHAT?
(1) overdue
(2) dishonored
(3) subject to any defense or claim
How does the shelter rule apply to transfers under Art. 3?
If a transferor of a negotiable instrument is a HDC, the transferee is a HDC even if would not otherwise qualify
What's the status of a holder in due course of a negotiable instrument under Art. 3?
(a) free from claims
(b) free from personal defenses
(c) subject to real defenses
What are the personal defenses that a HDC is NOT subject to?
K stuff - lack of consideration, unconscionability, waiver, estoppel, fraud in the inducement, etc.
What are the REAL defenses that a HDC takes a negotiable instrument subject to?
MADFIFI4
Material Alteration
Duress
Fraud In the Factum
Infancy
Incapacity
Illegality
Insolvency