MEE - Bar Exam Drills Flashcards
Secured Transactions are governed by:
Article 9 of the UCC
Enforceable Interests in Collateral:
To obtain an enforceable interest in a piece of collateral, a secured party must attach.
Proper Attachment:
To properly attach, a secured party must have (1) valid security agreement between the parties, (2) given value to the debtor, and (3) the debtor must have rights in the collateral.
Installment Contracts:
When an installment contract is actually a security agreement, then it is governed under Article 9 as if it was a contract for a security interest.
PMSI:
A purchase money security interest is one where the lender gives the buyer credit to purchase the item that is secured.
Collateral:
Collateral can be defined as either consumer goods, inventory, farm products, or equipment, which is the catch all category for anything that does not fall into the first three categories.
Retaining Title:
Retaining title does not matter if the debtor is in possession of the collateral, so therefore he has possessory rightist the machine.
Super Generic Destruction:
The collateral secured by the agreement must not have a super generic description such as all personal property.
Super generic descriptions are those that give too broad and unspecific identification of the collateral.
Phrases like all of the debtor’s personal property are too vague under Article 9.
Collateral can be identified by its Article 9 collateral classification.
After-Acquired Property Clauses:
Financing statements can contain after acquired property clauses under Article 9.
Priority Determination:
Priority is determined by the order of perfection. However, a perfected PSMI has priority over a perfected security interest that is not a PMSI.
Perfection is typically done by filing a financing statement in the proper filing officer.
PMSIs in consumer goods are automatically perfect, but PMSIs in other goods must be perfected by filing a filing statement.
Filings must contain the name of the parties and the identity of the secured collateral.
In financing statements, super generic identifications are generally okay.
A valid security agreement requires that:
(1) the agreement be
authenticated
(2) the parties intended to enter into a security agreement
(3) the collateral be sufficiently described in the agreement
A security interest that has attached can be perfected by:
(1) filing a financing statement with the appropriate office
(2) taking possession of the collateral
(3) acquiring control over the collateral
(4) by title
The appropriate office in which to file the financing statement is:
where the debtor is domiciled
Consumer Goods:
personal property mainly for personal or household use
Equipment:
used for business purposes
