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Details

Secured Transactions
Va. bar exam, UCC 9, secured transactions
15
Law
Post-Graduate
12/21/2008

Additional Law Flashcards

 


 

Cards

Term
Creation of a security interest
Definition
- Security agreement
- Secured party taking possession of the collateral
Term
What is a security agreement?
Definition
- In writing
- Contain a "granting" clause
- Description of collateral
- Signed by debtor
Term
What must happen for security interest to "attach"?
Definition
- Security agreement or possession of collateral
- Value must be given
- Debtor must have rights in collateral
Term
Types of collateral
Definition
- Goods (consumer, inventory, farm products, equipment)
- Tangible intangibles (instruments, documents, chattel paper)
- Intangible intangibles (accounts, general intangibles)
Term
When repossessing the collateral, the creditor must:
Definition
- Account to debtor for surplus
- Sale must be commercially reasonable (notice if possible)
- Sell collateral if consumer goods, unless debtor agrees creditor can keep
Term
If debtor wishes to redeem, redemption must happen before:
Definition
- collateral has been sold
- contract for sale has been made
- secured party has accepted collateral in satisfaction of obligation
Term
A PMSI (purchase money security interests) is:
Definition
- taken or retained by seller of collateral to secure all of parts of its price
OR
- taken by person who gives value to enable debtor to purchase collateral (if value is in fact so used)
Term
Secured party may perfect by:
Definition
- Taking possession of the collateral
- By filing
- Perfection is automatic when security interest attaches if interest is PMSI in consumer goods
Term
Automatic temporary perfection:
Definition
- For 21 days after security interest attaches for instruments/documents
- For 20 days after debtor receives proceeds if collateral proceeds
- 20-day grace period for PSMIs - perfection reverts back to security interest attachment
Term
Financing statement or security agreement must contain, to perfect:
Definition
- Names and addresses of debtor and creditor
- Description of collateral
- Signature of debtor
Term
Priority rules - secured parties vs. other creditors w/o security interest:
Definition
"First in time, first in right."

- If secured party perfected first, ze prevails.
- If lien attached first, lien creditor prevails.
- If no perfection or attachment, secured party prevails
Term
Priority rules - secured party vs. other secured parties (not PMSI):
Definition
"First in time, first in right."

- Both interests perfected, priority dates from filing/perfection.
- If only one perfected, perfected interest wins.
- When neither perfected, first in time (from attachment).
Term
Priority rules - PMSI vs. other secured parties:
Definition
- PMSI prevails over all other security interests if perfected w/in 20 days of debtor receiving possession
- If collateral is inventory, PMSI prevails over all other security interests, if PMSI person perfects before debtor receives possession and gives notice in writing to all other secured parties.
Term
Priority rules - secured parties vs. collateral transferees:
Definition
- If purchased before interest perfected, purchaser wins.
- Buyer in the ordinary course takes free of all security interests, even if perfected.
- Consumer buyers take free and clear of all unfiled security interests
Term
Definition of "buyer in the ordinary course"
Definition
One who buys, in good faith and without knowledge that sale is in violation of security interest, in the ordinary course of business from a person in the business of selling goods of that kind.
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