Secured Transactions 2
Terms
undefined, object
copy deck
- UCC Article 9
- security interests in personalty (goods) and fixtures
- Art 9 Attachment
- creditor attaches by VCR: value must be given, contract, and rights in the collateral (not the brooklyn bridge)
- perfection
- puts the world on record notice; first to perfect takes first
- contract
-
the security agreement / th e record
unless the secured party takes possession of the collateral
must be authenticated and reasonably identify the collateral - PMSI
-
purchase money security interests
automatic perfection for consumer goods
for equipment, first priority by filing w/in 20 days
for inventory, if filed and notified bank with AACC before store takes possession - BIOC
-
#!) buyer in ordinary course
takes first priority, even over PAC (perfected attached creditor) - PAC
-
#2) perfected attached creditor
but is still going to lose to BIOC or PMSI holder - LC
-
#3) lien creditor
loses to BIOC, PMSI, PAC - NOCie
- #4) non-ordinary course buyer, someone purchases collateral outside of the ordinary stream of commerce - guitar from auto mechanic
- AUPie
-
#5) attached unperfected creditor -
creates, attaches but fails to perfect
defeats subsequent AUPie and GUC - GUC
-
#6) General unsecured creditor -
didn't take any collateral - self-help repossession
-
permitted, as long as creditor doesn't breach the peace;
breach if made over any protest; can't enter home w/o voluntary and contemporaneous consent - writ of replevin
- SP goes to ct to get a judicial writ, ordering sheriff to obtain possesion
- Strict foreclosure
-
SF occurs when SP retains the collateral in full satisfaction; the debt is cancelled
SP must send a written proposal to all parties - 60% rule
- if collateral is consumer goods and 60% has been paid, no strict foreclosure
- draft terms
-
the drawer gives the order
the drawee is ordered to pay (the bank)
the payee is the beneficiary - to qualify as a negotiable instrument
-
WOSSUP
Writing; payable to Order or bearer (NOT "pay to Andy");
Signed; for a Sum certain; Unconditional; Payable on demand or at a definite time; Payable in currency - "Unconditional" (negotiable instruments)
-
if there were conditions, it would be a K
if it merely refers to another writing, that's ok, unless it is "governed by" or "subject to"
no more promises, so not "$5000 plus my rolex" - indorsement + sewage
-
the indorser is liable for a bad check;
UNLESS he signed name + "without recourse" - HDC
- holder in due course takes (1) for value (2) in good faith (3) without notice of problem
- value for HDC
-
unlike consideration, a mere promise is not value ("I promise not to throw a ball at you")
but old value is good value ("for the work last year") - shelter rule
- a transferee can have the rights of an HDC, even if transferee is a donee or otherwise fails to qualify
- HDC benefits
- HDC takes free from claims, free from personal defenses and subject only to real defenses
- real defenses & HDCs
-
HDCs do take subject to real defenses
MADFIFI4 - material alteration; duress; fraud in the factum (real fraud, not personal fraud); incapacity; illegality; infancy; insolvency - personal fraud v. fraud in the factum
-
HDC holds free from personal defenses, like personal fraud (seller tells her it's a 17th century ring, it's not);
but HDC is still subject to real defenses, FinF (lawyer tells him he's signing a card, but it's a promissory note)