Default

Question 1

Default

Answer 1

security interest affords the secured party specific remedies after default; does not depend on perfection as perfection affects priority; priority does not affect the secured creditor’s basic entitlement to remedies on default; secured party’s default remedies are cumulative, meaning that the secured party may exercise whatever remedies it desires in whatever order best fits the situation assuming the secured parties selected its remedies in good faith.

Question 2

Article 9 lacks any provisions that define default…

Answer 2

Instead, the parties themselves may agree on what constitutes default, limited only by the UCC’s good-faith requirement and the general rules of contract law

Question 3

Multiple Actions

Answer 3

Under the Uniform Commercial Code, a secured party may bring multiple actions against a third party to exhaust her remedies in the event of the debtor’s default.

Question 4

Repossession and Resale

Answer 4

repossession is the right to exercise self-help and take possession of tangible collateral, provided the secured party is able to do so without a breach of the peace.

Question 5

In general, courts have defined a breach of the peace as conduct that does or is likely to create imminent:

Answer 5

Violence or

Public disturbance, unrest, or disorder (even without violence)

Question 6

Regarding breach of the peace, the secured party is responsible for

Answer 6

the actions of others taken on the secured party’s behalf, including independent contractors engaged by the secured party to take possession of collateral.

Question 7

Determining breach of peace is highly fact intensive. Most important factors (from quimbee):

Answer 7

Nature of the premises

Potential for immediate violence

Whether debtor is present

Whether the debtor consents to the repossession

Question 8

Strict Foreclosure

Answer 8

a secured creditor may simply accept the collateral as full or partial satisfaction of the secured obligation

Transfers to secured party all the debtor’s rights in the collateral; extinguished the foreclosed security interest along with any subordinate security interest, lien, or other interest in the collateral

Question 9

Redemption

Answer 9

the debtor, a secondary obligor, or secured party or lienholder other than the one foreclosing may redeem the collateral.

Question 10

Redemption must occur

Answer 10

(1) after default and repossession and (2) before the secured party collects amounts owing on intangible collateral, disposes of tangible collateral or accepts the collateral in full or partial satisfaction of the secured obligation