Secured Transactions COPY 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

What is attachment?

A

An arrangement linking a debt to collateral, upon attachment interest becomes enforceable.

Requires value given, the debtor to have rights, and either a security agreement or possession/control

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4
Q

What is required in a security agreement?

A

Identify collateral, shows intent of debtor to be bound, and is in a tangible medium (signed writing) by debtor.

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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 the 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 secured parties? (Non-PMSI)

A

First to attach.

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, but the secured party has not yet given value.

23
Q

Unperfected secured interest 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, from a 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 then PMSI wins but if the PMSI is unperfected then lien creditor wins. But note the party that has the PMSI has a 20 day grace period to perfect.

30
Q

PMSI v perfected security interest

A

PMSI in goods other than inventory take priority over all other interests no matter when perfected if the PMSI is 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 secured party 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

PMSI in equipment rule

A

A PMSI in equipment has priority over conflicting security interests if the PMSI is perfected when the debtor receives possession of the goods (or within 20 days thereafter).