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26 Cards in this Set

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  • Back
Types of collateral under article 9?
con goods, farm pro, inventory, equipment, intruments, documents of title, accounts, deposit accounts, health care insurance receivables, chattel paper, electronic chattel paper, letter of credit right, commercial tort claims, general intangibles, investment property, proceeds
if something is used for mixed uses how is it catagorized?
primary use test
what's a security interest?
the right to keep or sell the collateral if debtor defaults
what's pmsi?
purchase money security interest, is 1st priority, when creditor or 3rd party advances funds.
what are steps to establishing creditors rights against debtor to security?
1. Creation- possession or security agreement.
2. attachment- secured party must give value, debtor must have rights in collateral
whats a security agreement?
a security agreement is an authenticated record, signed by debtor, describing collateral, and must be control.
what are the elements of attachment?
must give value, not gift (but pre-existing debt can have value.
debtor must have present interest in collateral, except 10 day for additional security, commercial tort claims.
what does creditor need to have rights against people other than debtor?
There must be perfection. (gives notice)
what is perfection?
5 ways. File, possession, control, automatic, or temporary
how do you perfect by filing?
you have to file financing statement with names, addresses, and description of collateral (search logic). In location of debtor.
what's control for perfection?
for deposit accounts bank agrees to act on instructions of secured. securities you need possession if certificate, registered with company if not, or get intermediary to agree to your control
how is there automatic perfection?
pmsi in consumer goods, assignments of accounts, healthcir, or payment intangibles, sale of payment intangibles or promissory notes.
how do you get temporary perfection?
grace period 4 months after goods and debtor move to different state or organization changes name. Twenty days for proceeds unless original was filed in same place, proceeds are identifiable cash proceeds, or you perfected security interest during the grace period. 20 days for instruments.
who gets priority between secured party and lien creditor?
Key is perfection. (20 day grace period for PMSI).
who wins when perfected secured party against a purchaser?
-consumer to consumer then take free unless there was a filing. no automatic perfection.
-business purchaser- secured party prevails
-purchaser from business- purchaser takes free even if filing
HDC rule applies
Secured party v. Secured party?
first to file or perfect wins. except super priorities
what are super priorities in battle of too secured parties?
if PMSI in inventory gives notice to earlier creditor and files before debtor takes pocession, then they have priority. PMSI in equipment gets the grace period to perfect and doesn't have to give notice.
what are priorities in proceeds between too secured parties?
you get the same date as the original perfection as long as you re-perfect within 20 day grace.
fixtures and accessions for secured v. secured?
fixures work with first to perfect or file with pmsi superpriority, accessions become part of whole and subject to title law.
who does secured party have rights against in default?
the debtor and any guarantor, and if it is non-good, such as account, the secured party can notify account debtor to start paying him.
how does secured party get possession?
self-help- unless it will breach the peace

replevin- court action
how can secured party sell (disposes) the stuff it repossesses?
public or private sale- it must use commercial reasonableness, and it must give notice in reasonable time unless parishable.
what are the notice requirements to disposses?
non-consumer goods- describe parties and collateral, method of sale, time and place of sale.
consumer goods- also need description of liability, telephonebumber to find cost of redeeming, and phone or address to get additional information.
what if you don't comply with disposition requirments?
liability for damages for loss caused by failure tro comply plus $500. If consumer goods- 10% of purchase price, and all interest charges to be paid over the life of the loan.
acceptance of collateral in full or part satisfaction?
in non-consumer goods cases secured party and debtor can agree to turn over collateral as credit against debt. in consumer goods cases parties can agree to voluntary turnover only for full satisfaction.
How are proceeds of dispostion allocated?
1. expenses of retaking, holding , preparing, and disposing of collateral 2. satisfaction of obligation secured by security interest, 3. satisfaction of obligation by subordinate security interest if secured party received demand, and 4. debtor or trustee.