Secured Transactions

Question 1

What are the three elements of Attachment?

Answer 1

VCR

1. Value
2. Contract–Security Agreement
3. Rights in the collateral

Question 2

When is a check properly payable?

Answer 2

When it is signed by the customer and is in accordance with the agreement between the customer and the bank.

Question 3

When is payment on a check final?

Answer 3

1. Payment is made in cash
2. The check is settled and there is no right to recover from Roach Bank
3. A provisional settlement was made and the settlement was not revoked in the time permitted
   * *Warranty actions survive final payment on a check.

Question 4

What is the difference between a Novation and a Delegation?

Answer 4

Novation is a substitution that the contracting party knew about and consented to and a delegation is one the contracting party did not know about. Novation transfers the right of action and liability and delegation does not.

Question 5

Define Consumer Goods

Answer 5

Items kept at home are considered to be a consumer good because they’re used for personal, family, or household purposes

Question 6

What is required for a Security Interest to attach?

Answer 6

There are only three requirements for the attachment of a security interest: (i) the parties must have an agreement or contract that the security interest attach; (ii) value must be given by the secured party; and (iii) the debtor must have rights in the collateral.

Question 7

Who has rights to the proceeds of items that a creditor has a security interest in?

Answer 7

Automatically continues with the proceeds for 20 days following the sale. Creditor need not do anything to maintain that security interest.