Secured Transactions Flashcards
What are the four main topics when discussing secured transactions?
Generally, be thinking about (1) attachment, (2) perfection, (3) priority, and (4) distribution of proceeds.
What are the four classes of goods:
(1) Consumer Goods; (2) Farm Products; (3) Inventory; and (4) Equipment.
What are the requirements of an enforceable security interest?
An enforceable security interest requires three conditions: (1) value given by secured party; (2) debtor has rights in the collateral; and (3) debtor authenticated a security agreement describing the collateral, or the secured party has possession or control of the collateral.
Security Agreement Requirements:
Security agreement must be in a written or typed document, describe the collateral, and authenticated / signed by the debtor.
How is a security interest perfected?
A security interest is perfected upon attachment and compliance with one of the following methods: (1) Filing of finance statement, (2) Possession of collateral, (3) Control of collateral, (4) Automatic perfection, or (5) Statute.
What must a finance statement include?
Finance statement must include: Name of Debtor, Name of secured party, and collateral covered by the financing statement.
What is a buyer in the ordinary course of business?
A BOCB is a person who (1) buys goods, (2) in the ordinary course of business, (3) from a merchant in the business of selling goods of that kind, (4) in good faith, and (5) without knowledge that the sale violates the rights of another in the same goods. (Takes goods free of security interest regardless of whether the interest is perfected and buyer knows of its existence)
What is the garage sale exception?
A consumer buyer: (1) buys consumer goods for value, (2) for his personal, family or household use, (3) from a consumer seller, and (4) without knowledge of the security interest.
