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MEE COPY (use this one!) > Secured Transactions > Flashcards

Secured Transactions Flashcards

1
Q

What are goods?

A

Movable tangible property

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2
Q

What are rights to payment?

A

Instruments, chattel paper, accounts, payment intangibles

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3
Q

Attachment (requirements)

A
  1. value has been given by the secured party
  2. the debtor has rights in the collateral, &
  3. the debtor has authenticated a security agreement that describes the collateral, OR the secured party has possession or control of the collateral pursuant to a security agreement
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4
Q

What is required in a security agreement?

A

Identify collateral, shows inten tof debtor to be bound, and is in a tangible medium

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5
Q

Accessions are?

A

Goods that are united with another good but are identifiable. The security interest continuous in the accession.

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6
Q

Commingled goods are?

A

A good that is united but the identity of the good is lost. The security interest transfers to the larger good.

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7
Q

Proceeds are?

A

Whatever is exchanged for the collateral. The security interest in the collateral attaches to the proceeds automatically.

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8
Q

Perfection can occur by?

A

Filing, possession/control, automatic perfection, or alternate perfection systems (like for car registration)

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9
Q

Filing a financing statement can perfect all interests except those in?

A

Deposit accounts, cars, money, and letters of credit

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10
Q

Where must a financing statement be filed to perfect an interest?

A

For everything except interests in real property, filing is in the central filing office where the DEBTOR is located. This is the state of incorporation for a corporation or the principal residence of individuals.

For real property interests, it is filed in the county where toe property is located.

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11
Q

Financing statements require what information to perfect an interest?

A

The names of the parties, the description of the collateral and if it is for real property, name of the record owner and describe the property.

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12
Q

What information is non essential to perfect but will cause the financing statement to be refused at the office?

A

Addresses of the parties and an indication of whether the debtor is an individual or a corporation.

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13
Q

A mistake in a financing statement will only affect perfection if it is?

A

Seriously misleading.

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14
Q

Financing statements lapse after ___ years but may be continued within ___ months before lapsing.

A

Five, Six.

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15
Q

A security interest in money can only be perfected by?

A

Possession

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16
Q

Interests in deposit accounts and letter of credit rights can only be perfected by?

A

Control

17
Q

A PMSI in ____ will automatically perfect.

A

Consumer goods.

18
Q

Priority between Perfected int v. perfected int? (Non-PMSI)

A

First in time to file OR perfect

19
Q

Priority between perfected v unperfected? (Non-PMSI)

A

Perfected wins

20
Q

Priority between two unperfected? (Non-PMSI)

A

first to attach or become effective

21
Q

Perfected v Lien creditor?

A

Perfected wins

22
Q

Unperfected v lien creditor?

A

Lien creditor wins unless the secured party has already filed a financing statement, the debtor has authenticated the security agreement, and the secured party hasnt given value yet.

23
Q

Sec int v statutory lien

A

Statutory lien wins if the lien 1) is effective based on possession of the goods, and the lien is for payment or performance of an obligation furnished in the ordinary course of business.

24
Q

Sec party v sec party over future advances?

A

First to file or perfect

25
Q

A buyer takes subject to a perfected security interest unless?

A

The secured party authorizes the sale is free and clear, the buyer is in the ordinary course of business, or it is a consumer to consumer buyer.

26
Q

What is a buyer in the ordinary course of business?

A

A buyer who buys goods from a merchant, in the ordinary course of that business, in good faith and without notice of the security interest.

27
Q

What is a consumer to consumer buyer?

A

Buyer buys consumer goods, for their own consumer use, froma consumer seller, without knowledge of the security interest. (This does not apply if there is a financing statement covering the goods).

28
Q

A buyer takes subject to an unperfected interest unless?

A

The buyer gives value, receives the collateral, and doesnt know of the interest.

29
Q

PMSI v lien creditors

A

Same as usual, if perfected PMSI if unperfected lien creditors, but a 20 day grace period to perfect where the interest is considered perfected.

30
Q

PMSI v sec interests

A

PMSI in goods other than inventory take priority over all other interests no matter whne perfected if perfected within 20 days (otherwise its first in time to file or perfect).

31
Q

PMSI in inventory has priority over all other interests in that inventory when?

A

If the PMSI is perfected before delivery and the holder sends an authenticated notification to the other secured parties.

32
Q

PMSI v PMSI

A

Seller beats lender, otherwise apply the first to file or perfect rule.

33
Q

Are leases never governed by UCC art 9?

A

No, only true leases. Look to whether the “lease” is actually a secured transaction.

34
Q

How are proceeds distributed after disposition?

A

1) reasonable expenses for collection/enforcement, 2)pay the debt to the foreclosing party, 3)pay subordinate interest if there is a formal demand, 4) return the surplus to the debtor. Senior security interests survive in the collateral!.

35
Q

Effect of attachment

A

security interest is enforceable against the debtor when it has attached to the collateral

36
Q

effect of perfection

A

generally necessary for the secured party to have rights in the collateral that are superior to any rights claimed by third parties

37
Q

a buyer of collateral subject to a perfected security agreement …

A

generally takes the collateral subject to that interest

38
Q

effect of purchase of collateral subject to perfected security interest on buyer in ordinary course

A

buyer in ordinary course takes free of a security interest created by the buyer’s seller
– even if the SI is perfected & the buyer knows of its existence

39
Q

A buyer in the ordinary course is a person who …

A
  1. buys goods for value
  2. in the ordinary course of business
  3. from a merchant who is in the business of selling goods of that kind
  4. in good faith, &
  5. without knowledge that the sale violates the rights of another in the same goods

**for value: must be new value - can be paying cash for goods OR purchasing goods on credit

MEE COPY (use this one!) (7 decks)

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