Secured T/Os

Question 1

Buyer in the Ordinary Course: If the buyer has knowledge of the SI, is the exception defeated?

Answer 1

No, as long as the buyer purchased the goods in good faith, the knowledge will not disqualify the buyer

Question 2

Can the right to redeem collateral be waived?

Answer 2

The right to redeem is a mandatory right that may not be waived unless done by agreement to that effect entered into and authenticated after default

Question 3

Can a creditor who violates Article 9 still collect a deficiency?

Answer 3

Yes, if they sell the collateral at a commercially reasonable sale
Otherwise, there is a rebuttable presumption that the sale would have gotten enough to cover the debt and fully discharge

Question 4

Are lien creditors subordinate to future advances under perfected security interests?

Answer 4

Only if the advances were made before the lien rose, within 45 days of the lien, without knowledge of the lien, or pursuant to a commitment entered into without knowledge of the lien (for the 45 days, it applies even if the creditor knew of the lien)

Question 5

Repossession

Answer 5

A secured party may use self-help regardless of whether they are perfected or not, and no notice is required prior

Question 6

When collateral is consumer goods, what damages is the debtor guaranteed after an insufficient sale?

Answer 6

A minimum recovery of statutory damages not less than the credit service charge (interest payable on the loan) plus 10% of the principal (recoverable even if there are no actual damages)

Question 7

In consumer cases, can a debtor have a deficiency denies AND recover statutory damages?

Answer 7

This is an unsettled issue, but courts have sometimes allowed (absolutely forbidden in non-consumer cases)

Question 8

Consignment

Answer 8

Goods are delivered to a merchant for the purpose of a sale, the merchant deals in those goods under a name other than that of the cosignor, the goods are not consumer goods immediately before delivery to the merchant, the value of the goods exceeds $1000, and the transaction does not otherwise create a security interest

Question 9

If the debtor is a registered organization, what name must be used on the financing statement?

Answer 9

Must use the official registered corporate name; Merely using the trade name is insufficient