Basic Rules Flashcards
Requirements before a surety performs
Surety can seek payment directly from principal or proceed against collateral of the debt: can issue a demand for this.
Obligation must be due and payable;
Demand must be in writing;
The surety must notify co-sureties and co-guarantors in writing;
Co-sureties have 10 days to join the notice of file a similar notice against the creditor;
Don’t Wait or Neglect Themis
Framework for approaching suretyship problem
What is the relationship?
Do I have to pay?
- exoneration (debtor or co-sureties)
- modification
- K defenses
- impairment of collateral
If I do have to pay, what next?
-subrogation
Effect of a K modification of sureties
Uncompensated surety: can be discharged from the K if principal and debtor modify the K, unless it is only for the surety’s benefit.
Compensated surety: can only be discharged if the modification harms the surety.
Liens w/ priority over other security interests (whether perfected or not)
STIRS liens: storage, towing, repair, & service of personal property.
Must be in possession of property.
Lesser of: reasonable charges for services; K price; or $100 if possessor of property is not the legal owner.
Animal boarding
Motor Vehicle (special rules)
Textile
Molds
Liens w/ priority below perfected security interests
Hotel/boarding house liens
Commercial landlord liens
Timing for the sale of personal property
Most property 30 days
Motor vehicles 10 days (special rules for hearing; usually DMV handles)
Must give notice and presale hearing if requested (10 days to notify lienholder if they want a hearing).
Public or private sale
Failure to comply with sale procedures
$100, attorney’s fees, & actual damages suffered to property owner.
Liens on real property
Real property claimed under the homestead exemption is exempt from material liens, but can be subject to mechanic’s liens and liens from people who work on the property.
A spouse who is not acting as the other spouse’s agent can’t encumber a tenancy by the entirety.
Lien takes effect from the first furnishing
Lien extends to improvement on the property and owner’s interest in the real property that its situated on
To perfect: must file in county where real property lies and serve record owner and contractor (if subrogation)
Must file claim w/in 120 days of last furnishing and action to enforce w/in 180 days of last furnishing.
Doctrine of instantaneous seizen
When a deed of trust is executed, delivered, and recorded as part of the same tx, the deed relates back to the instant the buyer acquires title to the property and constitutes a lien w/ highest priority.
Judgment liens on real property
Attach to real property when it is docketed (indexing and recording) in appropriate county.
Effective for 10 years after the date of judgment and attaches to any after acquired property in the county
Must enforce the lien and sell w/in 10 years
Essay Rule Statement Judgment Liens
Judgment liens are liens on real property of the defendant in the county where the judgment is docketed.
Judgment liens may be claimed by anyone who received a judgment directing payment of money, and last for 10 years after the date of judgment.
A lien arises when the judgment is docketed, so the creditor must ensure the judgment is docketed in the county where the real property lies. Judgment liens apply to all property the judgment debtor holds.
Thus, property acquired after the judgment is docketed is subject to the lien. The lien attaches automatically once title vests in the debtor.
Priority Rule Statement for judgment liens
Generally, priority between competing judgment liens is determined by the date of docketing. When the judgment liens are docketed before the debtor acquires the property, the judgment liens have priority on a pro rata basis.
Concurrent Estate Rule Statement
A concurrent estate is the ownership or possession of real property by two or more persons simultaneously.
Any tenancy with two or more grantees creates a tenancy in common. A joint tenancy exists when two or more individuals own property with the right of survivorship.
To create a joint tenancy, there must be a clear expression of intent along with survivorship language.
Tenancy by the entirety is a joint tenancy between married persons with a right of survivorship. The same rules for joint tenancy apply to tenancy by the entirety, plus the joint tenants must be married when a deed is executed or the conveyance occurs.
When a tenancy by the entirety is created, neither party can encumber the property without the consent of the other.
In North Carolina, a spouse who owns a real property interest can convey that interest to herself and the other spouse without the need to first transfer the property to a third person. Such a direct conveyance creates a rebuttable presumption that a tenancy by the entirety was created.
Duty of performance
Once a duty to perform exists, nonperformance is a breach of contract unless the duty is discharged.
Under the common law, a material breach of contract allows the non-breaching party to withhold any promised performance and to pursue remedies for the breach, including damages.
If the breach is minor, the non-breaching party is entitled to any remedies that would apply to the non-material breach but is still required to perform.
However, if a minor breach is accompanied by an anticipatory repudiation, the non-breaching party may treat the breach as a material breach.
A material breach of contract is when the non-breaching party does not receive the substantial benefit of its bargain
Anticipatory Repudiation
The doctrine of anticipatory repudiation is applicable when a promisor repudiates a promise before the time for performance arises. The repudiation must be clear and unequivocal, and may be by acts or words.
