article 9 generally

Question 1

1. What is the SCOPE of article 9?

Answer 1

a. Applies to consensual security interest in personalty and fixtures
b. Exceptions – article 9 doesn’t apply to transfers of land except for interests in fixtures

Question 2

2. How does a creditor create an enforceable security interest in debtor’s collateral, meaning, how does the creditor ATTACH?

Answer 2

a. VCR—
b. Value, a contract, and right in the collateral
c. “attach” = to enforce
d. typically you need a k to give debtor right to attach

Question 3

3. Oce attached, how does creditor attain perfection?

Answer 3

a. By putting the world on record notice of its existence—typically by filing
b. Perfection is basically publicity. Putting world on notice of collateralization. Allows creditor to protect itself
c. Perfecting happens before the creditor actually attaches, it should happen as soon as debtor and collateral enter into agreement

Question 4

4. When more than one creditor has a stake in the same collateral, what are the rules of PRIORITY?

Answer 4

a. Generally first in time, first in right

b. First to perfect usually takes first

Question 5

5. What if the debtor DEFAULTS on the debt or obligation?

Answer 5

a. Art 9 lender has statutory AND judicial remedies

Question 6

Overarching themes

Answer 6

PMSIs are favored: fuel commerce

consumer goods receive heightened protections