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Ohio > Secured Transactions > Flashcards

Secured Transactions Flashcards

1
Q

Explain the effect of a completely ineffective financing statement.

A

It will not perfect a security interest.

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2
Q

Explain the effect of financing statement with minor errors.

A

It will perfect security interest unless the minor errors make the statement seriously misleading.

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3
Q

When is PMSI perfected?

A

It is automatically perfected after attachment.

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4
Q

To what PMSI does automatic perfection not apply?

A

Property subject to certificate of title law
Fixtures
Automobiles

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5
Q

What does SI survive?

A

Sale of collateral

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6
Q

“Buyer in ordinary course of business”

A

Someone who (1) buys in good faith; (2) buys without knowledge that the sale violates rights of another; (3) buys in ordinary course of business from a person in business of selling goods of that kind.

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7
Q

List the four types of collateral:

A

goods
tangible intangibles
intangible intangibles
investment property

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8
Q

When is a description of collateral sufficient?

A

If it makes it reasonably clear what the collateral is.

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9
Q

What is a lien creditor?

A

A person or entity that:

  • acquires interest in property;
  • is the assignee for benefit of creditors;
  • is a bankruptcy trustee; OR
  • receives equity
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10
Q

What is a possessory lien?

A

An interest other than SI that permits provider of service to retain property until customer provides payment for services rendered.

Can be statute or common law.

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11
Q

Explain when PMSI has priority over lien creditors.

A

If PMSI is perfected in 20 days after debtor gets possession of collateral, PMSI has priority over lien creditors whose rights arise b/w attachment of PMSI and perfection.

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12
Q

Describe debtor’s right of redemption.

A

Debtor has right to redeem collateral by paying off debt, plus reasonable expenses and attorney fees caused by default.

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13
Q

When must debtor effect redemption?

A

Before collateral is disposed of.

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14
Q

When is a sale “commercially reasonable”?

A

If it is conducted according to:

  • Usual manner in any recognized market;
  • At price current in any market at time of sale;
  • Otherwise in conformity with reasonable commercial practices in dealers of that kind.
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15
Q

What must creditor do before disposing of collateral?

A

Must give notice to debtor of disposition.

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16
Q

What is general priority rule under UCC, Article 9?

A

First in time, first in right.

17
Q

Who has priority if no SI is perfected?

A

The one that attached first.

18
Q

Who has priority if there are 2 perfected SI?

A

the one that perfected first prevails, as long as it continued without interruption.

19
Q

What is a SI?

A

Means by which consumer has secured or guaranteed payment of obligation by giving creditor a right to possess property in the event of default.

20
Q

How is SI created?

A

By: (1) agreement or (2) secured party taking possession, delivery, or control with intent to secure a debt.

21
Q

SI must be in a writing that contains:

A

(1) granting clause; (2) description of collateral; and (3) authentication by debtor.

22
Q

List the 4 categories of goods:

A

Equipment
Consumer goods
Inventory
Farm products

23
Q

What are intangible intangibles?

A

Accounts
Commercial tort claim
Etc

24
Q

When is a SI a PMSI?

A

If creditor provides financing to consumer for the transaction.

If it is other than direct financing, like providing cash, the cash must actually be used to obtain the collateral.

25
Q

What law governs perfection?

A

The law where the debtor is located.

26
Q

What is most common means of perfection?

A

Filing financing statement in public office, such as secretary of state’s office.

27
Q

What is financing statement NOT means of perfection for?

A

Deposit account
Letter of credit
Money

28
Q

What MUST you perfect via possession?

A 
Negotiable documents
Goods
Instruments
Money
Tangible chattel paper
29
Q

What can you NOT use possession to perfect?

A

Deposit account
Letter of credit
Claim
Investment property

30
Q

What can you perfect via control?

A

Deposit account
Letter of credit
Electronic chattel paper

31
Q

What must a financing statement include?

A

(1) Name of debtor
(2) Name of secured party or rep
(3) description of collateral

32
Q

How long is financing statement effective?

A

5 years

33
Q

When must you file continuation statement?

A

Within 6 months before the financing statement will expire.

34
Q

How to calculate deficiency amount?

A

Amount debtor must pay minus proceeds from the sale.

35
Q

When does attachment occur?

A

(1) secured party gives value;
(2) debtor has rights in collateral; AND
(3) debtor authenticated security agreement describing collateral

36
Q

PMSI securing price of collateral vs. PMSI securing loan

A

The PMSI for price of collateral prevails.

37
Q

What are tangible intangibles?

A

Chattel paper
Documents
Instruments

Ohio (14 decks)

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