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Legal Issues 1 > Test 1 > Flashcards

Test 1 Flashcards

0
Q

What are the 3 types of property?

A

Real Estate
Fixtures
Movable Property

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1
Q

Define Collateral

A

The property that is subject to the lien

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2
Q

COCB

A

Customer in the Ordinary Course of Business

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3
Q

When repossessed property is sold and it sells for less that what the creditor owes what type of judgment is the creditor owed?

A

Deficiency Judgment

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4
Q

When repossessed property is sold, how, in order, are the proceeds of the sale distributed?

A

Expenses from sale paid first

Whoever perfected gets paid second

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5
Q

When a creditor repossesses property on which the creditor has a lien, the debtor can buy the property back under which right?

A

Right of Redemption

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6
Q

4 ways to prefect a security interest?

A

Financing Statement
Attachment
Possession of Collateral
Title

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7
Q

Ways to perfect a security interest by filing?

A

Financing Statement

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8
Q

Ways to perfect a security interest without filing?

A

Attachment
Possession of Collateral
Title

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9
Q

What is cross collateralization?

A

When you put property up for collateral at multiple banks

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10
Q

What is it called when a creditor loans money to a person to buy the property on which the creditor intends to place a lien to secure the loan?

A

Purchase Money Security Interest

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11
Q

What three things must occurs for attachment to take place?

A

Sign security agreement
Transfer of value
Debater has interest in collateral

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12
Q

What is a floating lien?

A

A lien that floats down from inventory sold to product bought

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13
Q

What is the Right to Subrogation?

A

Gives the Surety all the same rights as the creditor

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14
Q

What is the Right to Indemnity?

A

Surety has right to be paid back for any expenses

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15
Q

What is the Right to Exoneration?

A

When the creditor endangers the collateral, the surety could be exonerated from payment

16
Q

What is the Right to Contribution?

A

All sureties have an equal obligation to pay loan

17
Q

What does an Indemnity Contract do?

A

Pays for losses

Is like an insurance contract

18
Q

What is a Mechanic’s/Artisan’s lien?

A

Gives right to person who has supplied labor or materials to put lien on property

19
Q

Where does a Mechanic’s/Artisan’s lien come in the line of creditors? Why?

A

First, because value was added to the property

20
Q

What can the first tier creditor do to circumvent a Mechanic’s/Artisan’s lien?

A

Get a lien waiver

21
Q

What is a secured transaction?

A

A loan where the lender has a security interest in collateral

22
Q

Define perfected security interest.

A

A security interest that gives certain rights to the creditor

23
Q

Define repossession/self-help.

What can self-help not do?

A

The ability to collect the collateral of the lien

Breach the peace

24
Q

Define attachment.

A

When there is an agreement for the creditor to give the debtor valuable property in return for rights in the collateral

25
Q

Define secured transaction

A

Borrowing money where the creditor places a lien on a property to guarantee payment

26
Q

Define perfected secured transaction

A

Where the creditor fulfills one of the 4 ways to perfect in order to make sure they get first priority if debtor defaults

27
Q

What are the 4 ways to perfect?

A

File a financing statement
Attachment
Possession of collateral
Certificate of title

28
Q

How to perfect through attachment?

A

Requires:
PURCHASE MONEY SECURITY AGREEMENT
Transfer of value
Debtor has rights in collateral

29
Q

What is self-help?

A

The creditor can pick up the collateral in case of a default but cannot breach the peach

30
Q

What is the right to redemption?

A

Debtor can take back collateral if he can pay off 100% of loan

31
Q

Define surityship

A

Where someone comes to insure that the debtor will pay loan back

32
Q

What is an indemnity contract?

A

Insurance in case of a loss

33
Q

What is the right of Subrogation?

A

When the loan is 100% paid the surity gets rights of original creditor

34
Q

Define creditor

A

Entity that lends money

35
Q

What is After Acquired Property?

A

Property secured after the loan is made

36
Q

Define floating lien

A

Lien that floats from inventory to inventory

Legal Issues 1 (2 decks)

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