CLD - Module 5 Third Party Docs

Question 1

Three key factors identify fixtures:

Answer 1

1) the physical attachment of the items to the property
2) the intention of the parties involved in attaching the items
3) whether or not the property can function without the items attached.

Some examples of fixtures would be dairy equipment, irrigation pumps, and the fixed machinery of a coal washing plant. Some examples of items not considered to be fixtures would be restaurant equipment, laundry machinery, and cable TV wiring.

Question 2

When to get a processor’s lien waiver

Answer 2

While the goods are in the possession of the processor, the law may grant the processor a lien for the value it has added.

Question 3

Intercreditor agreements

Answer 3

used when two secured creditors have perfected security interests in the collateral of a borrowe

Question 4

Warehouseman’s letter

Answer 4

• used in situations where the borrower has goods in storage and the warehouseman has a claim for unpaid storage charges.
• gives the bank priority in the case of default and instructs the warehouseman to follow the directions of the bank in releasing the collateral in storage.