Secured Transactions Flashcards
1
Q
Secured Transaction
A
transacttion intended to create a security interes in personal proeprty or fixtures.
Look for 1. a credit transaction (sal on credir or a loan) and 2. agreement that creates a lien i nfacor of the creditor in the debror’s personal property to secure the debt
2
Q
Debtor
A
person who owes payment oy performance of the oblidation
3
Q
secured part
A
lender,seller ot other person in hwose faor there is a security interest
4
Q
security agreement
A
agreement beween debtor and secured party
5
Q
security interest
A
interest in personal property ot fixtures which secures payment or performance of an obligation. it is a ocntingent property itnerest in the debtor’s collateral that the debtor grants to the creditoy. When the contingence, whiche is defautl ,ofccurs, the property interest springs to lige and hte creditor has rights in the detbor’s collateral
6
Q
collateral
A
propert subject to a security interest. collateral is property that the secured party can repossess upon default to insure that the debt is paif
7
Q
purchase mont secruty itnerest PMSI
A
- secured party sells debtor collateral o ncredit and retaisn a security interest in the item sold
- an enabling loan: a loan to a debtor that enables the debtor to buy specific collateral and the credirty rakes a security in therest in the sepcific colalteral
NoteL the crediro r loan proceeds must actually be used to acwure collateral.
8
Q
After-acquired property clause
A
secured party often wil lwant to obtain a security interest not only in debtor’s present property, bnut also in property that the debtor will obtain in the future. This is permissible
9
Q
Future advance claise
A
secured party often contemplates making furure loans to the debtor and wants tosecute these future advances in the present security agreement. this is permissible. A new security agreement isn ot needed when a future afcance is made
10
Q
Attachment
A
Deals with htose steps legally required to give the seuted part a security interest in the collateral that is effective as gainst the debtor. Once attacehes, it is effective agaisnt the debtor and the creditor has all the rughts of a secured creditor under Article 9. a credioy is not secured creditor unti lafter attachment
11
Q
Perfection
A
Stepds lefally required to give the sercured party an interest in the colalteral that is effective as against the world. Perfection is the process of giving pibliv notice of the security interest to the workd
12
Q
Financing statement
A
Documen genreally used ot proude public notice of the secutiyy interest and so to perfect the security interest
13
Q
Goods
A
tandible, movable personal property (including uborn young of animals and growing crops
14
Q
Classificaiton of goods (4)
A
Consumer goods: bought do use primarily for hte personal, familty, or household puporses
Equipment: used or bought for use primarily in business (catch all deault category)
Farm productS: crops or livestock or supplies used in farming operaitons or product of crops in their unmanufactured states if they are in the possessio nof a debtor engaged in famring operations
Inventory: Held by a person who holds them for sale or lease to be furnished under service conrtactsl materials used or consumed in business (short period of time)
15
Q
Semir-intangible and intangible property (8)
A
Instruments, documents, chattel paper, investment property, accounts, deposit accounts, commercial tort claims, general intangibled
16
Q
Instruments
A
- instruments - Negotiabel isntruments and any other writing which evidences a right to hte payment og a monetaryy obligaiton, and which are in the ordinarty course of buiness transgerred by delivery with anu necessary indorsement or assignement ie. checks btu does not include invetment property
notes, drafts, and certificates of deposit
17
Q
Documents
A
- Documents: treasted as evidencing that hte eperson in prossesson of it is enttirled to receibe, hold, and dispose of the ocument and the goods it cover (ie. bill of landing. warehouse receipt)
18
Q
Chattel Paper
A
chattel apper -record or records which evednet both a monetarty obligation and a securty interes inir a kease if soeficicgoods. A “record” is informaiton that is stored in either a tanfible medium or an inteandible medium. chattel paper is stored in an elevetonic medium is also called electornic chattle paper ie. promissort noes and security interest
19
Q
Investment Property
A
investment property: Includes items such as stocks, bonds, mutual funds, and brokerage accoutns contianing such items
20
Q
Accounts
A
Accounts: a right to payment [ not evidenced by an instrument or chattel paper] 1. for goods 2. for services etc. AKA accoutns receivable
21
Q
Deposit Accounts
A
account maintained iwht a bank
NoteL Article 9 only applies to noncnsumer deposit accoutns and depost accoutns that ate claimes aproceeds of other collateral
22
Q
Comemrcial tort claims
A
claim arising in rtort with respect to which the claimant is an organication OR where claimany is an inficudual and the claim arose in the climant’s bueinss and profession AND does not include damages for personal injury or the deat of an individual
23
Q
General intangibles
A
accoutn debtor’s prinsipal oblication is a monetary on;ifaction is a payable intangible ie. IP
default intangible category
24
Q
Classification of computer program colaleteral
A
if sold separatelt, general intangible. if embeddedi n computer, follows computer classification
25
True lease v. dissale
relevant wuestion: at time te parties entered int ot he transaciton, was it reaosabnably likelt yhat the "lessor" would get the item back when it still ahd meaningdul economic value?
if yes, it is a true lease. If not, it is a sale with a security interest in substance and therefore governed by Article 9
26
Security agreement
Unless collateral is in the possession or control of the secured party pursuant to an agreement, a written (or electornically stored) sectuity agreement is required. Msot often, debtor wany possession of the collateral so a writingis necessary
27
Latch
if colalterla is in posession of the secured pary pursuant to an oral securoty agreement, this meets the "securtiy agreement" rewuirement and is called a latch.
28
Elements for atachment (3)
1. Security agreement
2. value has been given
3. debtore has rights in the colalteral
attachment as soon as all three elements are met
once attached, all supporting oblifations for that colalteral also attach
29
Form of security agreement (when writtne)
1. agreement mustb e evifrnvrd by a record and must show an intent to create a securtiy interest
2. agreement must be authenticated by the debtor; any symbol coutns as signature
3. Description of colalteral; reaosnably identify
- normal voacabulary or article 9 goods/categories work but "all of assets" os supergeneric and wont work
30
Elements of attachment - value
definition is liberal
- any consideraiton suggicient ot support a simple contract is enough. even past consideratio nis enough. The debtor always gives value because the debtor promisses to pay. SO, the wuestion is whether the secured party gave value
31
Scope of Securty Interest- after acquired proeprty clause
without an explciit after-acquired property claise in the securty agreement, the securted party's security interst only rached collaeteal that the debtor had rights in at the time the debtor signed the security agreement
Exception: even when there is not a nexplicit after-acquired property clause, courts will often imply an after acwuired property clause when the collaterla is of the tpye that is reapudly depleted and replenished (inveentory or acocunts)
Another exception: securit interest does not attach under an after- acquired property clause to CONSUMER GOOD unless the debtor acquires rights in them within 10 fays after the securted party gives value
last exception: after acquired clause ineffective as to commercial tort claism
32
Proceeds
whatever received upon sale, exchange, colelction or other dispoiosnt of colaletal or proceeds. An yclaims arisinh out og loss of, degefts o damage to colalterla are proceeds. Unless otherwise agreed, a securoty interst automtically gives the secured party a right to identifiable proceeds
33
Identifiable proceeds
crediort can prove proceeds came from original proceeds
Problem: co-minging. To determine which part of comingled mass of cash is identifiable (such that the secured party has a security itnerest in ti) apply the lowest intermidiate balance test
34
Lowest interemediate balance test
identifiable proceeds, look at the balancei ncommingled account startinf at time the proceeds are deposited and ending at time you are applying test. The law deems that the loest lbalande during that tiem period is the secured party's identigiable proceeds( btut it cannot exceed the claue of the cas proceeds originally deposited)
35
Perfection Requirements
1. attachemnt
2. one of 5 methods
-perfection deals with rights between secured party and 3Pl tit is not necesaary to create a valid enforceable secirty interest
36
Methods of perfection
1. automatic
2. posession of colalteral by secured party
3. perfection by control
4. notation of lien on certificate of title
5. file financing statement
37
automatic perfeciton
PMSI in CONSUMER GOODS.
38
Psoession of collateral by secured party
perfected fro mmoment of possession without relation back to time of attachment. Continues only so long as posession retained
Impossible whne: when you cnat take phsyical control of posession - deneral intangibles, accounts, deposit accoutns
39
Perfection by control
Security interests in INVESTMENT PROPEORT and ELECTRONIC CHATTEL may be perfected by control. security interests in nonconsumer deposit accoutns can ONLY be perfected by control
40
Perfection by control: investment property
has control when secured party has taken whatever steps are necessart to be able to have the invesntment property sold without further action from the owner
41
Perfection by control: nonconsumer deposit accounts
1. bsnk in ehivh s nonvonsumer deposit account is maintained automaticaly has control over the deposit account
2. if secured party is not suc ha bank, it can obtain control over the deposit accoudn by either 1. putting the deposit accoutn in the secured part's name or 2. afreeing in an authenticated recored with the debtor and the bank in which the deposit account is maintained that hte bank will follow the secured party's orders without further consent byu the debtor
42
Perfection by control: e;lectronic chattel paper
party has control over electronic chattel paper when a system showing the transfer of interests in chattel paper reliably establishes the secured parrt as the asignee.
43
Notation of lien on certificate of title
ONLY way to perfect securti interst in an automobile is for the secured parrt to note its len on the certificate title
Exception: if debtor is holdint the automobile as inventory ie. the debtor is a dealer. Then secured party must perfect by filinf a financing statement agaisnt inventory. Noting its lien on the certificate of title wil not work
44
Financing statement form
form UCC 1
effective gor 5 years from date of filing. Can be extended by filinf a continuation statement which must be filed at least 5 monthsbefore end of first term
45
Notice filinf
notice must indicate that a person MAY have a secirty in terest in the collateral indicated.
46
Contents of financing statemetn
Debtor's name
Description of collateral
Secured party's name
Real property related financing statements
Debtormust authorize filing but signature not needed
authenticated security agreement itself may be filed. if files, must contain elements above
47
Financing statement: debtor's name
individual's name: unexpired driver's livense in state where financing statement is to be filed, then include name as indicated on the license. Igf no license, then may include the debtor's indicidual name or debtor's personal name or surname
trade name will NOT suffice
Statement will still be effecitve if there is an error in anme unless it is seriously misleading.
To determine seriouslt misleafin: search debtor's correct name and see if it would retriebe erroneous financing statement. If it does, name error is not seriously misleading. If it does not return erraneous financing statement then the error is seriously misleading
If debtor changes name so that financint statement becomes seriouslt misleading, effective to perfect before or within 4 months after the change. not effective to perfect security interest in collateral acquired by debtor more than 4 months after change (unless amended financing statement is filed withing 4 months and renders financing statement not seriously misleading)
48
Fiancnsing statement- description of collateral
Same test as security agreement- reasonable ID but broafer in that "all assets" or "all personal peroperty" is valid
49
Financing Statement- Secured party's name
because not indexed under securedp arty's name but under debtor's name, error will not be seriouslt miseleadinf.; no signature needed but msut authroize
50
Financing statements- real proeprrt
when realt intersts are involved, must ID realty and must indicate that it is to be filed in th real properrty tecords
51
Fianncign Statements - signature
debtor must authroize but dont need signature. automaticallt authroises financing statement if she authenticates a securtiy agreement coverign the same colalteral
52
Where to file a financign statemetn
General rule: Secretary of state
if real estate, file where real proeprty is located
Multiple state trannsactions: file where debtor is located. if debtor is individual then she is loacted in principlebusienss. if registered organization, incorporation. if unregistered, located at place of business (if only one) or at chief executive ofice
If debtor moved, secured parrty will become unperfected 4 months after debtor's move unless it files a financing statement before 4 months is up.
if collateral moves, secured party will be come unperfected one year after the colalteralt moves unless it files a financing statement in the new jurisdiction before that one year period is up
When farm products, shoudl be perfected in that state
53
Termination statement
when no outsstanding oblifation and no commitment on part of secured party to make further advances, the secured party upon receivign an authenticated emdaen by debtor, msut within 20 days ptoveide the debtor wit ha termination statement to the effec that the secured party no lonfer claism a security itnerest under the dinancinst statement. If CONSUMER GOODS, then within one month after there is no outstanding oblifation or within 20 dats of receigin an authenticated demand form debtor
Note: financing statement can be filed even before a security agreement is etere into
54
Perfection as to proceeds
if perfected security interest in colalteral, automatically has ap erfected security interst in proceeds debtor reveives in exvhange for that colalteral for 20 days, to remai perfected in those proceeds beyonf 20 fays, the secured party must take new action to perfect irs interests unless:
1. proceeds are cash proceeds OR
2. secrurtiy in the orifinal collaterla was perfectedb y filinf a financing statement, a security interes in the rpte of colalteral consituting proceeds woufl be diled in the same palce as the financing statemtn for the orifinal colalteral and thep roceeds were not putchased with cas proceeds of hte colalteral
55
Perfection - change in use of colalteral
if change use (ie from eqipmaent to ivnentort) the filed financing statement (even with description of "equipment" stays effective to perfect the security interest. The secured credutor has no durt to monitor the colalteral or to amend fianncing statemnet even if it knows that the description is seriously misleafing
56
Priority - Secured v. Secured
General rule: as between two perfected secured crediorts, the first to fiel or perfect, whichever occurs first, has priority.
57
Priority: unperfected secured c. unperfected secured
first to attach has priority
58
Priority: Special Rules:PMSI
PMSI in goods OTHER THAN INVENTORY OR LIVESTOCK: has priority over conflucting security interest in the same goods ot irs priceeds if perfected at the time the febtor receibed possession of the collateral or within 20 days
PMSI in Inventory or Licestock: has priority if, before debtor receieves possessio nfpof hte inventort or livestock, the secured party 1. perfects anf 2 sends an authenticated notification to holders of perciously filed conflicting securiy intersts in the colalteral
59
Priority: PMSI v PMSI -
seller PMSI has priority over financing PMSI
60
PriroityL Investment property
1. secured interst perfected by control has priority over a secured interst perfected by any other method
2. if confluctinf securty interest each were perfected by control, they rank acciudring to the time og obtainign control
3. a securti interst granted to a febtor's intermidiary has pruoruty over a security interest franted by the debtor tp anotjer secured party
4. except for 1,2,3 the first to file or perfect rule governes priority
61
Priority: Depisit accoutns
1. secured interst perfected by control has priority over a secured interst perfected via proceeds
2. if confluctinf securty interest each were perfected by control, they rank acciudring to the time og obtainign control
3. a securedp arty who has obtained control by putting the dpeosit account in tis own name has priritiyy over all other secured partued aiwht control
4. a banc that has control becausei tm aintains the deposit accoutn has priority over all other sercured parties with control excpet a secured party who has ontained control by putting the deposit accounf in his name
62
Priority: Special bank rule
General rule: bank with which a deposit accounf is maintained mat exercuse ay right of recoupment or set off agaisnt a secyredp arty that holds a securty interest in the deposit account. If, however, the secured party has control of the deposit account bey putting the accoutn it its own name, then any ser off exercused by the bank nased on a claim agaisnt hte debtor is ineffectice
63
Priority: secured buyer v. buyer of collateral
uf you buy soemwthign with a security interesti n it, the securty interst stays on it.
Exceptions:
1. auhtorized sales: sale authorized by secured party free of security itnerest, buyer takes free of the security interest.
64
Priority: unauthorized Sales
a buyer in the ordinary course of business (other than a person buying farm products from a person enfaed in farming operations) takes free of a security interst creaed by his seller ebem though the security interest is perfected ane ven though the buyer knows of its existence
65
buyer in ordinart course
buyer who buys good in goof daith, without knowledge that the sale cioaltes the rights of another person i nthe goods and in the ordunart ciyrse frin a oersib un the busieness of sellign goods of that kind
66
Priority: unauthorized sales: buyers no in ordinary cours of business
take subject to perfected security itnersts. take gree from uneprfected security interests unless they know of the security itnerest
67
Priority: consumer to consumer
takes free of security interst even though it is perfected if he buys without knowledge of the sercurity interstm for value, anf got his own persona fanly or household purposeses, unless prior to the purchase the secured party has filed a financing statement converign such goofs
note: the goofs must be consumer goods in the hands of both the buyer and seller
68
Priority: secured party v. judement lien hodlers
unperfected security itnerst is subordinate to rights of aperson who becomes a lien creitor before the security itnerest is perfected. If secutiry interest is perfected before the person becomes a lien creditoy, the security interst has priority.
secured part has priority 1. if perfected before hudgment holder got tis lien OR 2. if SP obtained a security agreement and giled a financing statemnet before the judgement lien hodler got its lien
69
lien credirotya
usnecured credutiy who has obtained a judgment and has levied on that judgmenet is al ien credirot
Key: look at the time of perfecito nof the securty interset and the time of the levy bu the sherigg. If security interest is perfected before the sheriff levies, the securtiy interest hasp riority. If levy precedes perfection og the sercurity itnerst, the judicial lien has priority
70
Priroity: PMSI v. Lien Crediort
if SP files with respect to PMSI interst within 20 days agter debtore receives possessio nof collatera, he takes prirority over rights of a lien vrediroty which arises between the tiem the security itnerst attaches and time of filinf
71
Priority fo future afnvances
priority over lien crediroty if future advance is made 1. iwhtout knowledfe of hte lien OR 2. eithin 45 dasy f the lien arisint OR 3. pursuant to a commitment entered into without knowledge of the lien
72
default
failure to perform or pay ob;igation when it is due
1. look for late or missed payments
2. look for possible waiver by secured party of late or missed patments
73
Self-help reposession
done without "breach of peach"
if SP breaches peace ,loses authorixaiton to repoessess and may be sued for covnersion and liable for actual famages
74
breach of peace
any conduct by the secured party that has potential to leaf to violence is a breach of the peace. generally physical presence by debtore plus verbal objectio nis enough to create breach of peace
unauthorized entry to home = breach of peace
open garage, if attached tha nmore likelt to seen as frweelig nand liekly ot be breach of peace
busienss premises -less liabel to be breach of peace
75
Retention of colalteral (strict foreclosere)
can retain for full pr partial satisfaction of debt
1. must send proposal to any other SP that he hadnotice of and an others who have perfected. if notifiied party obects within 20 days after the secured part sen notice, colalteral must be disposed by sale
2. also debtor's consent by 1. agreeing i nan authentircated record after default 2. full strcict foreclosere, fialign to make authenritcated objection whtin 20 fays after secured party sent notice
76
Resale of Colalteral
sale discharges security interst udner which sale isb eing made and all subrdignate securty itnerests. Prurchaser, however, is stil lsubject to superioir security itnersts
77
Resale: reaosnable notification
authenricatedb yt secured party (canot be oral) given to debtor and any other surertied on debt and (except in consumer foods) to any other SP who have notigited SP of interestes ot those who have prefected. Notice unnecessary when colalreral ispp erishable or threatens to declien rapidle. Debtor may, after default, waive right to notice in authteicated agreemtn
timeliness: within reasonable time before sale. nonconsumer transation: notice is deemed to be sent within a reasonabel time ig it is sent 10 days or more before time of sale
content: depends on type of sale and type of cp;a;tareal
statute provides for "safe harbor" notice forms
puclic sale, time and place
privat sale, noticeo f time after which sale will ovcur
extra info for consumer goods
78
commetrciall resonabel sale
every aspect: incliding method, manne,t time place and terms) must be commercially reasoable
79
SP buying colalteral
may buy at any public sale but pricate sale only if the oclalteral is of a type custimarily sold in a recognicec markey og is a type which tis subject of widely distributed stdd price quotation
80
Compliance iwht resale requirement
secured party has right to deficiency and debtor to surplus
81
failrue to compl with resale req.
faisl to conduct comemrically reasonable sale, rebuttable peresumption that the sale proceeds equal the aount of debt
82
debtor's right ot redeem
anytiem before resale, before K for its dispotion, or obligation has been discharded, debtor may redeemdebtor must tender fullfillment of ALL obligations secured by colalteral.
83
Fixture
goods that have become so related to particular real property that ani nterest in them aruses under property law.
-attached to real estate with intent that it becomes part of peromanent real estate is a fixture.
no securty interest can exxist in ordeinarty building materials incorporated into an imporivement on land (ie. bricks)
84
Perfeciton: Fixture
"fixture filing" where mortgage on treal estate would be filed. fixture filinign financisng statement must reaosnably identify the real estate andm sut show name of owner
85
Prefeciton:Fixture: rights on default
right to immeiately repossess
86
Fizture: priority
Secured party v. subseqyent real sestate interest
- security interest in fixture has priority over real estate itnerest that arises subsequent to perfection of securty interest by fixture filing
secured party v. prior real estate itnerest
- prior real estate itnerest that is propertly recorded has priority over a securty interes that subsequently arises
excpeiton: PMSI takes priority over an earlier in time realy interest if it iseperfected by a fixture filing before the goods become fixtures wor withing 20 days thereafter
note: a construction mortgage takes priority over a subsequent OMST in fixture even if secutty inrerest is perfected by a fixture filinf within 20 days og afication
87
Accessions
physically united with other goods tin a manner that identity og original goofs not loss ( tires on car)
88
Perfection:Accession
when collaterla becomes an accession, securit interest remains perfectedi n colalteral
89
Priority: Accession
precious rules - first to file,, special PMSI rule
Special priroty rule: a security interest in an accession is suybordinate to a security interest in the whoel which is perfected by compliance with the rewuirements of a certificate of title staute
90
Accession: removal
uf securty interst in accession has priority over claims of evert person having itnerest in whole
91
Priority: Depisit accoutns
1. secured interst perfected by control has priority over a secured interst perfected via proceeds
2. if confluctinf securty interest each were perfected by control, they rank acciudring to the time og obtainign control
3. a securedp arty who has obtained control by putting the dpeosit account in tis own name has priritiyy over all other secured partued aiwht control
4. a banc that has control becausei tm aintains the deposit accoutn has priority over all other sercured parties with control excpet a secured party who has ontained control by putting the deposit accounf in his name
92
Priority: Special bank rule
General rule: bank with which a deposit accounf is maintained mat exercuse ay right of recoupment or set off agaisnt a secyredp arty that holds a securty interest in the deposit account. If, however, the secured party has control of the deposit account bey putting the accoutn it its own name, then any ser off exercused by the bank nased on a claim agaisnt hte debtor is ineffectice
93
Priority: secured buyer v. buyer of collateral
uf you buy soemwthign with a security interesti n it, the securty interst stays on it.
Exceptions:
1. auhtorized sales: sale authorized by secured party free of security itnerest, buyer takes free of the security interest.
94
Priority: unauthorized Sales
a buyer in the ordinary course of business (other than a person buying farm products from a person enfaed in farming operations) takes free of a security interst creaed by his seller ebem though the security interest is perfected ane ven though the buyer knows of its existence
95
buyer in ordinart course
buyer who buys good in goof daith, without knowledge that the sale cioaltes the rights of another person i nthe goods and in the ordunart ciyrse frin a oersib un the busieness of sellign goods of that kind
96
Priority: unauthorized sales: buyers no in ordinary cours of business
take subject to perfected security itnersts. take gree from uneprfected security interests unless they know of the security itnerest
97
Priority: consumer to consumer
takes free of security interst even though it is perfected if he buys without knowledge of the sercurity interstm for value, anf got his own persona fanly or household purposeses, unless prior to the purchase the secured party has filed a financing statement converign such goofs
note: the goofs must be consumer goods in the hands of both the buyer and seller
98
Priority: secured party v. judement lien hodlers
unperfected security itnerst is subordinate to rights of aperson who becomes a lien creitor before the security itnerest is perfected. If secutiry interest is perfected before the person becomes a lien creditoy, the security interst has priority.
secured part has priority 1. if perfected before hudgment holder got tis lien OR 2. if SP obtained a security agreement and giled a financing statemnet before the judgement lien hodler got its lien
99
lien credirotya
usnecured credutiy who has obtained a judgment and has levied on that judgmenet is al ien credirot
Key: look at the time of perfecito nof the securty interset and the time of the levy bu the sherigg. If security interest is perfected before the sheriff levies, the securtiy interest hasp riority. If levy precedes perfection og the sercurity itnerst, the judicial lien has priority
100
Priroity: PMSI v. Lien Crediort
if SP files with respect to PMSI interst within 20 days agter debtore receives possessio nof collatera, he takes prirority over rights of a lien vrediroty which arises between the tiem the security itnerst attaches and time of filinf
101
Priority fo future afnvances
priority over lien crediroty if future advance is made 1. iwhtout knowledfe of hte lien OR 2. eithin 45 dasy f the lien arisint OR 3. pursuant to a commitment entered into without knowledge of the lien
102
default
failure to perform or pay ob;igation when it is due
1. look for late or missed payments
2. look for possible waiver by secured party of late or missed patments
103
Self-help reposession
done without "breach of peach"
if SP breaches peace ,loses authorixaiton to repoessess and may be sued for covnersion and liable for actual famages
104
breach of peace
any conduct by the secured party that has potential to leaf to violence is a breach of the peace. generally physical presence by debtore plus verbal objectio nis enough to create breach of peace
unauthorized entry to home = breach of peace
open garage, if attached tha nmore likelt to seen as frweelig nand liekly ot be breach of peace
busienss premises -less liabel to be breach of peace
105
Retention of colalteral (strict foreclosere)
can retain for full pr partial satisfaction of debt
1. must send proposal to any other SP that he hadnotice of and an others who have perfected. if notifiied party obects within 20 days after the secured part sen notice, colalteral must be disposed by sale
2. also debtor's consent by 1. agreeing i nan authentircated record after default 2. full strcict foreclosere, fialign to make authenritcated objection whtin 20 fays after secured party sent notice
106
Resale of Colalteral
sale discharges security interst udner which sale isb eing made and all subrdignate securty itnerests. Prurchaser, however, is stil lsubject to superioir security itnersts
107
Resale: reaosnable notification
authenricatedb yt secured party (canot be oral) given to debtor and any other surertied on debt and (except in consumer foods) to any other SP who have notigited SP of interestes ot those who have prefected. Notice unnecessary when colalreral ispp erishable or threatens to declien rapidle. Debtor may, after default, waive right to notice in authteicated agreemtn
timeliness: within reasonable time before sale. nonconsumer transation: notice is deemed to be sent within a reasonabel time ig it is sent 10 days or more before time of sale
content: depends on type of sale and type of cp;a;tareal
statute provides for "safe harbor" notice forms
puclic sale, time and place
privat sale, noticeo f time after which sale will ovcur
extra info for consumer goods
108
commetrciall resonabel sale
every aspect: incliding method, manne,t time place and terms) must be commercially reasoable
109
SP buying colalteral
may buy at any public sale but pricate sale only if the oclalteral is of a type custimarily sold in a recognicec markey og is a type which tis subject of widely distributed stdd price quotation
110
Compliance iwht resale requirement
secured party has right to deficiency and debtor to surplus
111
failrue to compl with resale req.
faisl to conduct comemrically reasonable sale, rebuttable peresumption that the sale proceeds equal the aount of debt
112
debtor's right ot redeem
anytiem before resale, before K for its dispotion, or obligation has been discharded, debtor may redeemdebtor must tender fullfillment of ALL obligations secured by colalteral.
113
Fixture
goods that have become so related to particular real property that ani nterest in them aruses under property law.
-attached to real estate with intent that it becomes part of peromanent real estate is a fixture.
no securty interest can exxist in ordeinarty building materials incorporated into an imporivement on land (ie. bricks)
114
Perfeciton: Fixture
"fixture filing" where mortgage on treal estate would be filed. fixture filinign financisng statement must reaosnably identify the real estate andm sut show name of owner
115
Prefeciton:Fixture: rights on default
right to immeiately repossess
116
Fizture: priority
Secured party v. subseqyent real sestate interest
- security interest in fixture has priority over real estate itnerest that arises subsequent to perfection of securty interest by fixture filing
secured party v. prior real estate itnerest
- prior real estate itnerest that is propertly recorded has priority over a securty interes that subsequently arises
excpeiton: PMSI takes priority over an earlier in time realy interest if it iseperfected by a fixture filing before the goods become fixtures wor withing 20 days thereafter
note: a construction mortgage takes priority over a subsequent OMST in fixture even if secutty inrerest is perfected by a fixture filinf within 20 days og afication
117
Accessions
physically united with other goods tin a manner that identity og original goofs not loss ( tires on car)
118
Perfection:Accession
when collaterla becomes an accession, securit interest remains perfectedi n colalteral
119
Priority: Accession
precious rules - first to file,, special PMSI rule
Special priroty rule: a security interest in an accession is suybordinate to a security interest in the whoel which is perfected by compliance with the rewuirements of a certificate of title staute
120
Accession: removal
uf securty interst in accession has priority over claims of evert person having itnerest in whole
