REG - 15 Flashcards
What are the 3 elements required for the creation of a security interest under the Secured Transactions Article of the UCC?
- value has been given
- the secured party receives a security agreement describing the collateral authenticated by the debtor
- the debtor has rights in the collateral
To attach, security agreement must:
- be in writing (unless in position)
- signed by debtor
- description of collateral
Name the 3 requirements for an enforceable security agreement.
- In writing
- Signed and authenticated by the debtor
- Includes an adequate description of the collateral
Purchase Money Security Interest (PMSI)
taken by a party who advanced value to the debtor to enable the debtor to acquire the rights in the collateral. A PMSI arises when a creditor extends credit that is used to purchase the collateral as a consumer good. A PMSI is perfected automatically at the time the interest attaches for consumer products that is not inventory.
4 ways to perfect a security interest
- File
- Possession
- Automatic
- ?
Types of collateral
- Consumer goods
- Equipment
- Inventory
- Farm products
- Fixtures
Intangible property
Patents, copyrights, tademarks
Miscellaneous collateral
- Proceeds
- Negotiable Instruments
- Commercial tort claims
- Judicial liens in tort claims
Period of Perfection
- 5 years for filing
- Can renew any time within the last 6 months
- For perfection by possession - as long as possession continues
Perfection
Possession
- Negotiable instruments
- Field warehousing
- Control of accounts
PMSI (Purchase Money Security Interest)
Creditor is either seller financing purchase the goods or Lendor financing funds to purchase the goods
Automatic perfection if collateral can be ID’ed
NOT PMSI in inventory equipment
