Sc Secured Transactions

Front 1

The Cast of Characters
- security interest

Back 1

security interest- an interest in personal property that secures the payment of an obligation

Front 2

security agreement

Back 2

the contract that creates the security agreement

Front 3

security agreement

Back 3

the contract that creates a security interest

Front 4

Security agreement

Back 4

the contract that creates a security interest

Front 5

Debtor

Back 5

owes the obligation

Front 6

Secured party

Back 6

the creditor

Front 7

collateral

Back 7

the personal property subject to the security interest

Front 8

Consignment

Back 8

transaction in which the owner of goods retains title to goods but transfers possession of the goods to a bilee for the purpose of sale.

The consignee never has title but gets commision.

Front 9

Key things excluded

Back 9

- deliveries to an autioneer or merchant generally known by its creditors to be substantially engaged in selling goods for others

Also excludes ytransacitns in which the good swere consumer good immediately prior to the delivery.

Front 10

In Re Georgetown Steel

Back 10

- need to list key things
- with consignment or lease issue you have a scope of Art. 9 question.
- Consignment= normally included
- lease= could be

Front 11

Creation and scope of security interest

Attachment

Back 11

A security interest attaches when it becomes enforceable agains the debtor with respect to the collateral.

3 Requirements must be met:
1. Security agreement satisfies the Statute of Frauds
2. The debtor has rights in the collateral or the power to transfer to a secured party
3. The secured party has given value

Front 12

Statute of frauds req.

Back 12

- No security interest if SOF not satisfied.
- if the secured party is in possession of the collateral or has control over certain types of collateral (inc. deposit accounts) an oral security agreement is enforceable.

- If secured pty. does not have possession/controlof the collateral, the debtor must have authenticated a security agreement that provides description of the collateral.

Front 13

Sufficient security agreement

Back 13

The writing or writing will be sufficient of they establlish that a security interest was, in fact, created. A financing statement standing alone is not a sufficient security agreement.

Front 14

With a written security agreemeent...

Back 14

the debtor will authenticate tha agreement by signing it. Def. of authenticate includesexecuting or encrypting a record with the present intent to adopt the record.

Front 15

Sufficient description of collateral

Back 15

general descriptions are o.k.
(ie. "equipment")(Additionally, this would likely include all after acquired personal property but is subject to contract interpretation)

except:
1. "commercial tort claims" and
2. "consumer goods, a security entitlement, a securities account, or a commodity account" are all not sufficient

Front 16

Super-generic descriptions

Back 16

ie. "all personal property," or "all inventory" etc.

- is not good enough of a description under revised article 9

Thus, "all personal property" description does not create an enforceable security interest.

Front 17

Scope of security interest

Back 17

"floating lien"- a secured party may be able to assert not only the debtors present property but also in property the debtor aquires after theexecurtion of the agreement.

Front 18

Proceeds

Back 18

A security interest automatically attaches to identifiable proceeds.

Proceeds includes whatever is acquired upon the sale, exchange, or other disposition of collateral.

Front 19

tracing

Back 19

Basically, a method of locateing the proceeds of a sale etc of collateral

Front 20

"lowest intermediate balance"

Back 20

1. withdrawls from a comingled acct. are deemed made frst from non-proceeds funds. Only when non-proceeds are exhausted are proceeds invaded.
2. Second, subsequent deposits of non-proceeds funds do not replenish invaded proceeds unless the debtor made the deposti with an intent to make restitution.

Front 21

After acquired property

Back 21

A security agreement must contain such a clause for a security interest to attach to after acquired property.
(some courts have refused to find interest in after aquired property for "all equitment" phrases.

Front 22

Key difference b/t proceeds and after acquired property

Back 22

A security interest attaches automatically to proceeds

A security interest attaches to after acquired propery ofnly if the security agreement so provides.

Front 23

Future advances

Back 23

If drafted the clause can obligate a secured party to make loans subsequent tothe execution of the security agreement. This is a matter of convience for the secured party so they don't have to have a new security agreement with every subsequent loan.

If this arrangement is made it has to be expressly provided that the