Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Bar Exam > Secured Transactions > Flashcards

Secured Transactions Flashcards

You may prefer our related Brainscape-certified flashcards:
MBE flashcards
1
Q

Secured transactions involve ________ transactions.

A

credit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

To ensure payment of a debt, a secured party takes a ________ ___________ in specific personal property, or the ___________.

A

security interest; collateral

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

For the security interest to be effective between the parties, the interest must first __________.

A

attach.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

After attachment, if the debtor defaults, the creditor has a right to do what?

A

Take the collateral to satisfy the obligation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

To maximize its rights against other creditors, the secured party must _________ its interest.

A

perfect.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Article 9 applies to which transactions?

A
  1. Contractual security interests,
  2. Sales of accounts, chattel papers, payment intangibles, and promissory notes,
  3. Commercial assignments of goods of worth a total of $1,000 or more to certain persons (see additional card),
  4. Agricultural liens,
  5. Leases that are intended to serve as security arrangements (but not true leases), and
  6. A seller’s retention of title to delivered goods.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the most notable exception to Article 9 coverage?

A

It does not apply to most transfers of interests in land.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a purchase money security interest?

A

A special type of security interest in goods that gives priority over other security interests if certain requirements are met.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Article 9 applies to Commercial assignments of goods of worth a total of $1,000 or more to certain persons who:

A
  1. deal in goods of that kind under a name other than the consignor’s,
  2. are not auctioneers, and
  3. are not generally known by their creditors to be substantially engaged in selling the goods of others.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How does a PMSI arise?

A
  1. The creditor sells the goods to the debtor on credit, retaining a security interest in the goods for the purchase price, or
  2. The creditor advances the debtor the funds used to buy the goods and the creditor takes a security interest in the goods.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

A security interest in nonconsumer goods does not lose its status as a PMSI if:

A
  1. the security interest also is secured by property that was not purchased with the loan money or credit,
  2. the collateral also secures advances that were not made for the purchase of the collateral, or 3. the PMSI has been refinanced, consolidated, etc.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the three broad categories of collateral?

A
  1. tangible collateral or goods,
  2. intangible or semi-tangible collateral, and
  3. proceeds.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the four types of tangible collateral?

A
  1. Consumer goods,
  2. Inventory,
  3. Farm products, and
  4. Equipment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How do you determine which category tangible collateral is placed into?

A

Depends on the primary use to which the debtor puts the property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are consumer goods?

A

Goods bought or used for personal, family, or household purposes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are inventory?

A

Goods held for sale or lease and goods consumed by a business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are farm products?

A

Goods used or produced in farming that are in the possession of or used by a farmer.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are equipment?

A

Goods that are not consumer goods, inventory, or farm products.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the types of intangible or semi-tangible collateral?

A
  1. Instruments,
  2. Documents
  3. Chattel paper
  4. Accounts,
  5. Deposit accounts
  6. Investment property
  7. Commercial tort claims
  8. General Intangibles
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are instruments?

A

Notes, drafts, and certificates of deposit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are documents?

A

bills of lading and warehouse receipts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is chattel paper?

A

Records evidencing both a monetary obligation and a security interest in or lease of goods, such as a promissory note and written security agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are accounts?

A

Rights to payment for goods, services, etc., such as accounts receivable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are deposit accounts?

A

savings accounts, passbook accounts, etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What are investment properties?

A

Stocks, bonds, mutual funds, brokerage accounts, etc.,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What are commercial tort claims?

A

Tort claims filed by organizations and tort claims filed by individuals that arose out of the individuals’ business and do not involve personal injury

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What are general intangibles?

A

Intangibles not fitting the definitions of other types of intangibles, such as copyrights and goodwill.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What are proceeds?

A

Include whatever is received upon the sale, exchange, collection, or other disposition of collateral or proceeds, including second generation proceeds.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Is insurance a proceed?

A

If payable by reason of loss or damage to the collateral, unless it is payable to someone other than the debtor or secured party.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Are claims arising out of the loss of, defects in, or damage to collateral proceeds?

A

Yes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What are the three requirements for attachment?

A
  1. The parties agree to create a security interest, evidenced by (a) the creditor taking possession of the collateral, (b) the debtor’s authentication of a security agreement describing the collateral (e.g., signing), or (c) the creditor taking control of the collateral,
  2. Value is given by the secured party, and
  3. The debtor must have rights in the collateral.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Is having “rights” in the collateral the same as having “ title” to the collateral for purposes of attachment?

A

No.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Is the description, “all of the debtor’s assets” a sufficient description?

A

No - supergeneric.

May be described by category (“All debtor’s equipment”) or specifically.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Which types of collateral may a creditor obtain control over for attachment?

A
  1. nonconsumer deposit accounts,
  2. electronic chattel paper, and
  3. investment property.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

When a secured party is in possession of the collateral, he must use _____________ _____in storing and preserving the collateral, but is entitled to reimbursement for __________ __________ in caring for the collateral.

A

reasonable care; reasonable expenses.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

When a secured party is in possession of the collateral, the risk of loss for the property is on the _______________.

A

debtor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

May a security agreement create a security interest in property to be acquired in the future?

A

Yes - the security interest will attach to the property as soon as the debtor acquires an interest in the collateral.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

An after-acquired property clause does not apply to which type of collateral?

A

consumer goods, unless the debtor acquires rights in the goods within 10 days after the creditor gives value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

May a security agreement provide that the collateral serve as security not only for the present obligation, but also for advances the creditor makes to the debtor in the future?

A

Yes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

What are the five methods of perfecting a security interest?

A
  1. filing,
  2. taking possession of the collateral,
  3. control,
  4. automatic perfection, and
  5. temporary perfection.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

If all the steps for perfection are taken before the security interest has attached, perfection will occur when?

A

Immediately upon attachment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

A secured party may obtain perfection by filing a __________ ___________.

A

financing statement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

What must be contained in a financing statement?

A
  1. The debtor’s name and mailing address,
  2. the secured party’s name and mailing address,
  3. an indication of the collateral covered, and
  4. If the financing statement covers real property-related collateral, a description of the real property, the name of the record owner, and an indication that it is to be filed in the real property records.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Security interests may be perfected by filing as to all kinds of collateral except which?

A

deposit accounts and money.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

__________ errors in the debtor’s name will not invalidate a financing statement, but _______________ errors will.

A

minor; seriously misleading.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

If a filing statement is accepted by the filing office but does not contain the debtor or secured party’s address, is the financing statement still effective?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Must a financing statement mention after-acquired property to perfect a security interest in such property?

A

No, if the description in the financing statement is broad enough to cover the after-acquired property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Where must a financial statement be filed?

A

Must be done “centrally” in the office of the secretary of state

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Where must a financial statement relating to fixtures, timber to be cut, or minerals be filed?

A

In the county where a mortgage on real estate is filed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

How long is a filing of a financial statement valid?

A

five years.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

When may a continuation of a financial statement (continuation statement) be filed?

A

Within six months before the lapse of the filing statement?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Security interests in motor vehicles are required to be ________.

A

titled.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Where the secured party takes actual possession of the collateral, the security interest is perfected when and lasts how long?

A

at the moment of possession and continues as long as possession is retained.

54
Q

When is a security interest automatically perfected?

A

PMSI in consumer goods.

55
Q

A security interest in proceeds from original collateral is continuously perfected for 20 days for which types of collateral?

A
  1. proceeds from original collateral,
  2. Where new value is given under an authenticated security agreement for instruments, negotiable documents, or certified securities, and
  3. Delivery of collateral to debtor or disposition.
56
Q

When a debtor moves from one state to another and the location of the debtor determines which state law governs perfection, what happens?

A

the security interest will remain temporarily perfected in the new state.

57
Q

The security interest in proceeds will continue to be perfected beyond the 20 day period, if:

A
  1. (a) The security interest in the original collateral was perfected by filing a financial statement, (b) a security interest int he type of collateral constituting the proceeds would be filed in the same place as the financing statement for the original collateral, and (c) the proceeds were not purchased with cash proceeds of the collateral,
  2. proceeds are identifiable cash proceeds, or
  3. security interest in the proceeds is perfected within the 20-day period.
58
Q

Between two unperfected secured parties, who has priority?

A

The first to attach

59
Q

Between an unperfected and perfected secured parties, who has priority?

A

generally, the perfected party will prevail.

60
Q

Between two perfected secured parties, who has priority?

A

Priority is dependent on the time of filing, or time of perfection, whichever is earlier, unless one party perfected by control.

61
Q

A PMSI in inventory has priority over conflicting security interest in the same inventory or proceeds that are chattel paper instruments or cash if:

A
  1. It is perfected at the same time as the debtor gets possession of the inventory, and
  2. Any secured party who has perfected his security interest in the same inventory receives written notification of the PMSI before debtor receives possession of the inventory, and
  3. the notification states the purchase money party has or expects to take PMSI in inventory of the debtor described by kind or type.
62
Q

What kind of security interest does a consignor have in inventory?

A

A PMSI

63
Q

PMSI in consumer goods or equipment have priority over security interest in the same goods or their proceeds if the interest is perfected before or within how long after debtor receives possession of the goods?

A

20 days

64
Q

If there are conflicting PMSIs, a secured party who has a PMSI in collateral as a _________ has priority over a secured party who has a PMSI n the same collateral as a lender.

A

seller.

Otherwise, the first secured party to file or perfect prevails.

65
Q

If a purchaser of chattel paper in good faith gives new value and takes possession of the chattel paper in the ordinary course of business, the purchaser will have priority overy:

A
  1. A security interest in chattel paper that arises merely as proceeds of inventory (as long as the chattel paper does not indicate that it has been assigned to anyone other than the purchaser), and
  2. Any other security interest in the chattel paper, as long as the chattel paper purchaser acquired the interest without knowledge that its puchrase violated the rights of the secured party.
66
Q

A chattel paper purchaser also has priority in the proceeds of the chattel paper if either:

A
  1. he would have had priority under the general priority rules, or
  2. the proceeds are the specific goods covered by the chattel paper or cash proceeds of the specific goods.
67
Q

A purchaser of an instrument has priority over a perfected security interest in the instrument if the purchaser does what?

A
  1. gives value,
  2. takes possession of the instrument
  3. in good faith,
  4. without knowledge that the purchase violates the rights of the secured party.
68
Q

What is filing collateral?

A

Collateral in which a secured party would normally achieve priority by filing a financial statement.

69
Q

What is a non-filing collateral?

A

Collateral in which a secured party would normally achieve priority by possession or control, rather than filing.

70
Q

Generally, a perfected security interest in proceeds will have what date of priority?

A

The same date of priority as the perfected security interests in the original collateral (as long as the perfection of the security interest in the proceeds extends beyond the 20 day temporary perfection period.

71
Q

A secured party has priority in the proceeds of non-filing collateral if what?

A
  1. She has priority in the original collateral,
  2. her security interest in the proceeds is perfected,
  3. the proceeds are cash proceeds or proceeds of the same type as the original collateral.
72
Q

If a security interest in original collateral that non-filing collateral is perfected d by a method other than filing, and the proceeds of the original collateral are filing collateral, which party has priority?

A

the first secured party to file a financing statement covering the proceeds.

73
Q

What are accessions?

A

Goods that are physically united with other goods in such a manner that the identity of the original goods is not left.

74
Q

What are fixtures?

A

Goods that become so attached to real property that an interest in them arises under property law.

75
Q

Who has priority between a holder of a security interest in a fixture and a holder of an interest in real property to which the fixture is attached?

A

The first to file a fixture filing or record its real property interest prevails.

EXCEPTION: PMSI who makes a fixture filing within 20 days after affixation prevails over any real property interest in the same fixture.

76
Q

Who takes priority in accessions?

A

Usually, general rules for priority apply to accessions.

77
Q

If an accession becomes part of a whole that is subject to a security interest perfected by novation on a certificate of title, the security interest in _________ has priority of the security interest in _________.

A

the whole; the accession

78
Q

A perfected security interest in crops has priority over what interest?

A

conflicting interest in the real property on which the crops are growing, regardless of the time of filing or perfection.

79
Q

A person who buys or leases collateral from a debtor generally has an interest in the collateral superior against a person with an unperfected security interest if what?

A

The buyer/lessee gives value and receives delivery of the collateral without knowledge of the security interest.

80
Q

If a security party attaches a PMSI in the debtor’s collateral before the buyer/lessee pays value or receives the collateral, what is the result?

A

The secured party will have priority over the buyer or lessee if she files within 20 days after the debtor receives the collateral.

81
Q

If a secured party __________ to disposition of collateral free of the security interest, a buyer or lessee will take the collateral free of the security interest.

A

consents.

82
Q

A buyer or lessee in the ordinary course of business takes free of a nonpossessory perfected security interest in the goods, unless…

A

buyer knows the sale is in violation of the interest.

83
Q

A consumer purchaser from a consumer has priority over PMSIs in consumer goods, unless…

A

the purchaser knows of the security interest or financing statement has been filed,

84
Q

A buyer or lessee not in the ordinary course of business has priority over future advances or commitments to make future advances by a secured party either:

A
  1. after the secured party learns of the purchase or lease

2. after more than 45 days after the purchase or lease.

85
Q

Does a holder in due course of a negotiable instrument have priority over a security interest in the negotiable instrument?

A

Yes.

86
Q

If a debtor transfers money or deposit funds to a person, does that person take free of any security interest in the money or funds?

A

Yes, unless the transferee acts in collusion with the debtor in violating the rights of the secured party.

87
Q

A judicial lien creditor prevails over the holder of a security interest in collateral if what?

A

If the lien creditor becomes such before 20 days after the debtor receives the collateral.

88
Q

A prior perfected security interest has priority over a _____.

A

lien

89
Q

A judicial lien will have priority over a future advance that was perfected before, but more than 45 days after the lien arose, unless:

A

the future advance was made

  1. without knowledge of the lien, or
  2. pursuant to a commitment made without knowledge of the lien.
90
Q

A possessory lien imposed by other state law in favor of those who supply goods or services has priority over…

A

a security interest as long as

  1. the goods or services were provided in the ordinary course of business and
  2. the collateral remains in the lien holder’s possession.
91
Q

If Article 2 grants a buyer or seller a possessory security interest in goods, the Article 2 claimant has priority over a security interest as long as:

A

the article 2 claimant retains possession of the goods.

92
Q

What is the hierarchy of priorities?

A
  1. Buyer in the ordinary course,
  2. Holder in due course
  3. Transferee of money or funds from deposit accounts,
  4. Purchasers of chattel paper or instruments who have possession or control,
  5. Possessory lien holders
  6. Article 2 claimant with possession of goods
  7. PMSI (except PMSI in consumer goods)
  8. Perfected security interests and judicial liens that have attached.
  9. Purchaser of collateral who buys for value and receives delivery without notice of any unperfected security interest,
  10. Unperfected Security interests (ranked in order by attachment)
  11. Debtor.
93
Q

Does Article 9 define the events that will trigger default?

A

No

94
Q

What defines the events that will trigger default?

A

Usually the security agreement.

95
Q

What defines the event that will trigger default on an agricultural lien?

A

Lien statute.

96
Q

Generally, what rights does a secured party have if a debtor defaults?

A
  1. To sue on the debt itself, or

2. Take possession of the collateral, sell it by public or private sale, and then sue to collect the deficiency.

97
Q

When may a secured party take possession of collateral without judicial process?

A

Only if it can be done without breach of the peace.

98
Q

If a secured party possesses collateral then intends to sell it, the sale must me ________________ _________________.

A

commercially reasonable.

99
Q

The debtor, any sureties on the debt and, in nonconsumer goods cases, other secured parties are generally entitled to ______________ _________ before a sale may take place.

A

reasonable notice (10 days before the sale is deemed reasonable)

100
Q

What do courts consider when determining the reasonableness of the sale of repossessed collateral?

A
  1. The sufficiency of the advertising,
  2. If the collateral had a limited market, whether people in that market were contacted,
  3. Whether the collateral needed cleaning or repair, and
  4. If the sale was by public auction, the convenience of the time and place.
101
Q

Is low price alone enough to make a sale not commercially reasonable?

A

No, but if the price is very low, the courts will give extra scrutiny to other circumstances of the sale.

102
Q

If a debtor has paid 60% of the cash price on a PMSI in consumer goods, or 60% of the loan on a non-PMSI in consumer goods, the secured party must dispose of the collateral within ___ days of repossession, or the debtor may do what?

A

90 days; recover in conversion.

103
Q

For repossessed goods that are not consumer goods, the secured party may propose to retain collateral in ______ __________ ___ _____ _______________.

A

full satisfaction of the obligation.

104
Q

If a secured party proposes to retain collateral in nonconsumer good sin full satisfaction of the obligation what must the debtor and secured party do?

A

The debtor must consent to the retention in an authentication record after default, or where debt is being fully satisfied, not object to retention within 20 days of notice.

The secured party must send written notice of such a proposal to the debtor and other secured parties, and if a person entitled to notice objects in writing within 20 days, the secured party must dispose of the collateral and properly disburse the proceeds.

105
Q

Until the secured party has sold the collateral or has discharged the debt by retention for the collateral, the debtor, surety, or other secured party or lienholder may redeem the collateral by doing what?

A

paying all obligations secured by the collateral plus additional reasonable expenses.

106
Q

Is a secured party liable for actual damages caused by his failure to follow the rules of Article 9?

A

Yes.

107
Q

If a secured party violates a Code default requirement and the collateral is consume goods, what is the minimum a debtor may recover?

A

10% of the cash price, plus an amount equal to all the interest charges to be paid over the life of the loan.

108
Q

A secured party who violates the default rules of Article 9 may lose her right to what?

A

A deficiency judgment

109
Q

In nonconsumer transactions, what rule applies?

A

The Rebuttable Presumption Rule.

110
Q

The Code does not provide a rule for failure to comply with Article 9 for what kind of transactions ?

A

Consumer transactions - determination of a rule is left to the states.

111
Q

What are the three mail approaches courts generally take when determing rules for failure to comply with code requirements in Article 9?

A
  1. Follow the rebuttable presumption rule,
  2. Deny the secured party a deficiency regardless of whether th secured party can prove the collateral is worth less than the debt (absolute bar rule), or
  3. Allow the secured party to recover the deficiency minus any actual damages that the debtor can prove (“setoff rule”)
112
Q

A secured party’s remedies under Article 9 are ___________.

A

cumulative.

only entitled to one satisfaction

113
Q

Generally, which state law governs perfection?

A

The debtor’s location.

114
Q

If the debtor is an individual, where is she located?

A

In the state of her principal residence.

115
Q

If the debtor is a registered organization, where is the debtor located?

A

Under the laws it is organized.

116
Q

If the debtor is an unregistered organization, where is the debtor located?

A

The place of business, if it has one place of business, or at its chief executive office, if it has more than once place of business.

117
Q

Which state law governs the perfection of security interests in possessory security interests and security interests in fixtures and timber to be cut?

A

State law in which the collateral is located

118
Q

Which state law governs the perfection of security interests in goods covered by certificate of title?

A

The state issuing the most recent certificate of title.

119
Q

Which state law governs the perfection of security interests in deposit accounts?

A

The state in which the bank has its chief executive office, unless the debtor’s agreement with the bank provides otherwise.

120
Q

Which state law governs the perfection of security interests in Investment property?

A

If it is a certificated security, the state where the certificated security is located.

121
Q

Which state law governs the perfection of security interests in Investment property if it is an uncertified security?

A

Unless the debtor’s agreement provides otherwise, the law of the state where the issuer was organized.

122
Q

Which state law governs the perfection of security interests in Investment property if it is an uncertified security if it is a securities account?

A

Unless the debtor’s agreement with the securities intermediary provides otherwise, the state where the securities intermediary’s chief executive office is located.

123
Q

Which state law governs the perfection of security interests in agricultural liens?

A

the state in which the farm product covered by the lien is located.

124
Q

If the debtor moves from one state to another, the security interest generally will remain perfected without any further action until how long after how long after the debtor moves?

A

Four months or until perfection in the first state lapses, whichever occurs earlier.

125
Q

If collateral is transferred to a new debtor who is located in a different state, that security interest will remain perfected without any further action for how long?

A

Until one year after the sale of the collateral or until perfection in the first state lapses, whichever occurs erarier.

126
Q

A security interest in collateral a new debtor acquired, before or within four months after becoming bound by an original debtor’s security agreement is temporarily perfected for how long?

A

Four months by a corresponding financing statement filed in the original debtor’s jurisdiction.

127
Q

If a perfected security interest in collateral is a possessory security interest, which is governed by the law of the state in which the collateral is located, and the collateral is moved from one state to another, how long will the security interest remain perfected?

A

As long as the security interest is also perfected by possession under the laws of the new state (no further action is required)

128
Q

If a vehicle is moved from one state to another and is covered by a certificate of title issued in the new state, the security interest in the vehicle was properly perfected in the original state for how long?

A

Lasts as long as it would have if the vehicle had not been covered by the new certificate of title.

129
Q

If a vehicle subject to a perfected security interest in one state is moved to a new state and is covered by a certificate of title issued by the new state, when is the security interest in the original state perfected against a purchaser for value?

A

The earlier of either

  1. the time when the security interst would have become unperfected in the original state if the vehicle had not been covered by the new certificate of title, or
  2. Four months after the vehicle is covered by the new certificate of title.
130
Q

If the certificate of title for a vehicle issued in a new state does not note the secured party’s interest in the vehicle, which parties have priority over the secured party?

A
  1. A buyer of the vehicle who is not in the business of selling vehicles who (a) purchases for value and receives delivery without knowledge of a security interest, and
  2. A secured party who perfects a security interest in the vehicle without knowledge of the other security interest after the clean certificate of title is issued in the new state.
131
Q

If the bank, issuer or securities intermediary moves to a new state, perfection in the deposit accounts, uncertificated security, or securities account continues until when?

A
  1. The time when the security interest would have become unperfected in the original state if the bank, issuer, or securities intermediary had not moved, or
  2. Four months after the bank, issuer, or securities intermediary moves to the new state.

Bar Exam (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions