Priorities Flashcards
What prevails over a general creditor?
an SI will always prevail
what is a general creditor
has a claim, including a judgment, but no lien on or SI in collateral
What is a judicial lien creditor
acquires lien through judicial process
Does a judicial lien creditor take over a perfected or unperfected SI?
Does not take over a perfected SI
Does take over unperfected SI
What is a Statutory or Common-law lien creditor?
has a possessory lien on the collateral by statute or common-law rule
If a right is transferred, what does the transferee obtain?
full title to collateral as a result of a transfer from the debtor
What is a buyer in the ordinary course of business (BCOB)
Think about both parties to transaction!
1) buys goods (not farm products)
2) by giving new value
3) in the ordinary course
4) from a seller in the business of selling goods of that kind
5) in good faith, and
6) without actual knowledge that the sale violates another’s rights in the goods
What does a BCOB get when making a purchase?
takes free and clear of any SI in the goods
What is a consumer buyer?
1) buys consumer goods for value
2) for his own personal, family, or household use,
3) from a consumer seller, and
4) without knowledge of the security interest
What is the result of being a consumer buyer?
takes free and clear of an SI in consumer goods unless a secured party filed a financing statement covering the goods
“garage sale” rule
WHO HAS PRIORITY
Perfected SI v. Perfected SI
the first to file or perfect has priority, a lapse in filing or perfection restarts the clock
WHO HAS PRIORITY
Perfected SI v unperfected SI
Perfected SI
WHO HAS PRIORITY
Unperfected v. Unperfected
the first to attach has priority (“First in time, first in right”)
WHO HAS PRIORITY
PMSI v. non PMSI
PMSI
