Term
| UCC - acceptance of offer by shipment BUYER'S DUTIES |
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Definition
| BUYER MUST TAKE AFFIRMATEIVE ACTION TO AVOID DEEMED ACCEPTANCE; REJECTION MUST BE MADE WITHIN REASONABLE TIME OF RECEIPT AND REJECTION. ACCEPTANCE WILL BE DEEMED BY A CONSISTANT ACT, SUCH AS RESELLING SOME OF THE GOODS. DEFENSE WAIVERS ARE INVALID. |
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Term
| UCC BUYER BECOMES INSOLVENT |
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Definition
| UPON DISCOVER, SELLER MAY STOP DELIVERY OR DEMAND COD; ALSO MAY RECLAIM GOODS WITHIN 10 DAYS OF DELIVERY; RECLAMATION IS EXCLUSIVE REMEDY; NO OTHER DAMS PERMITTED. |
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Term
| UCC RIGOS TIP ON TESTING OF BUYER V SELLER'S REMEDIES |
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Definition
| BUYERS TESTED MUST MORE OFTEN |
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Term
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Definition
| RRIP - RECISSION; RESELL; INCIDENTAL DAMAGES; PROFIT LOST DAMAGES |
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Term
| UCC EXPRESS WARRANTIES SOL |
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Definition
| 3 YEARS FROM DELIVERY; TORT DISCOVERY OF DEFECT DOES NOT APPLY |
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Term
| NI - RIGOS TIP RE APPROACH |
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Definition
| IDENTIFY EACH PARTIE'S CAPACITY (DRAWER/MAKER; DRAWEE |
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Term
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Definition
| WA art 3 and 4 of UCC controls. Personal defenses are not gooe against an HDC of NI (diagram path of NI) |
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Term
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Definition
| NUTSS - NEGOTIALBLE WORKDS ("PAY TO THE ORDER OF"); UNCONDITIONAL PROMISTE TO PAY*** (no future contingencies-makes it non negotiable); TIME CERTAIN or ON DEMAND; SUM CERTAIN IN MONEY; SIGNED BY MAKER/DRAWER |
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Term
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Definition
| FINNS: FOR VALUE (watch for gift or partial HDC); IN GOOD FAITH (honesty in fact); NO NOTICE constructive of claim or defense (objective test - would a reasonable person be suspicious); NEGOTIATION; SHELTER RULE -- For everyone in chain, do a FINNS to see if HDC. If imposter, dummy vendor or employee, DOES CREATE HDC AS FAR AS NEGOTIATION GOES. |
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Term
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Definition
| MUUFFO - MUTUAL MISTAKE; UNAUTHORIZED COMPLETION; UNCOMPLETION OF CONDITION PRECEDENT; FRAUD IN THE INDUCEMENT; FAILURE OF CONSIDERATION; OTHER CLAIMS (FTC SAYS ANY ASSIGNEE OF CONSUMER CREDIT CONTRACT TAKES SUBJECT TO PERSONAL DEFENSES. |
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Term
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Definition
| FIDDLS FUM: FRAUD IN INDUCEMENT (thought they were signing something else); ILLEGALITY (illegal contract); DISCHARGE IN BKY; DURESS; LACK OF CAPACITY; SOL (6 years); FORGERY; UNAUTHORIZED SIGNATURE (lacked actual or apparent authority); MATERIAL ALTERATION - raising amount (but maker has to pay original amount)--(FUM exceptions where the maker, etc.' NEGLIGENCE SUBSTANTIALLY CONTRIBUTED to defense (leaving checkbook out with signature stamp - COMPARATIVE NEGL APPLIES - be sure to discuss) |
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Term
| NI - certifed check, what is Bank |
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Definition
| assumes role of drawer or maker (remember SOL 6 years) |
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Term
| RIGOS TIP RE NATURE OF NI DEFENSES |
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Definition
| MORE THAN 2/3 ARE PERSONAL DEFENSES - i.e. NOT GOOD against HDC |
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Term
| NI - ISSUE/DELIVERY ISSUE |
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Definition
| NO LIABILITY TO ANYONE IF NO ISSUE; (stole, found, made out check) |
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Term
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Definition
| Holder may sue: maker, drawer of check, drawee bank (if certified) - SOL 6 years; SECONDARY, Endorsers, HDC can go against maker; must make timely presentment |
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Term
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Definition
| NAME -- INDORSEMENT TYPE -- LIABILITY -- ORDER - BEARER PAPER -- HDC? |
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Term
| TYPES OF INDORSEMENTS (will not have to list but probably will have to discuss and know) |
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Definition
UNQUALIFIED, BLANK,-converts to order paper;
SPECIAL - (pay to order of) Converts to Bearer paper;
RESTRICTIVE - only to one person, or for deposit only, which restritcts it to Banks;
QUALIFIED W/O RECOURSE - attempts to releive indorser from liability, but still warrants no knowledge of defect):
PAYMENT GUARANTIED - SIGNER BECOMES LIABLE TO PAY ANY HDC.
COLLECTEN GUARANTIED - Indorser only liable after holder reduces claim to judgment and a bone fide attempt to collect the judgment;
ACCOMODATION INDORSER - gratuitous surety and - has right of indemnification; liable to all subsequent indorsers;
PAYMENT IN FULL - Prominent effects accord and satisfaction (cannot cross out and substitute "all rights reserved" in WA) |
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Term
| NI WARRANTIES (INDORSERS TO TRANSFEREES) |
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Definition
| GANDS: GOOD TITLE; ALERTATION NOT PRESENT; NO NOTICE OF INSOLVENCY; DEFENSES NOT PRESENT; SIGNATURES GUNUINE AND AUTHORIZED |
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Term
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Definition
| GAD: GOOD TITLE; ALTERATION NOT PRESENT; DRAWERS SIGNATURE IS AUTHORIZED |
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Term
| LIABILITY IF HDC TRANSFERS W/O INDORSING |
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Definition
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Term
| NI THEFT OR FORGERY HEAVILY TESTED |
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Definition
| IF A PROPERLY ISSUED NI IS STOLEN AND/OR THE INDORSER'S SIGNATURE IS FORGED,- SUBSEQUENT HDC WILL PREVAIL; |
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Term
| MAKER'S SIGNATURE FORGED (NO NEGLIGENCE) |
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Definition
| MAKERS BANK CANNOT CHARGE CUSTOMER, BUT MAY BE ABLE TO COLLECT FROM PRESENTING PARTY FOR BREACH OF WARRANTY, EVEN HDC LOSE AND MUST GO AGAINST FORGER. |
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Term
| FORGERY OF INDORSEMENT (NO NEGLIGENCE) |
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Definition
| BREAKS CHAIN OF TITLE AND NO SUBSEQUENT TRANSFEREE CAN BECOME HDC BECAUSE A THEIF CANNOT BASS GOOD TITLE AND LEGAL NEGOTIATION REQUIRES PROPER INDORSEMENT.Remember to mention that Forgery is a class C Felony. Tort of conversion - also applies to any subsequent hoder who had knowledge |
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Term
| PAYEE DESIGNATION INCOMPLETE - LATER FILLED IN W/O AUTHORITY BY THIEF |
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Definition
| IF IT HAD NOT BEEN STOLEN, IT WOULD BE BEARER PAPER; BECAUSE FILLED IN, THEORETICALLY MAKER DRAWER NOT LIABLE, BUT DRAWER WILL BE LIABLE TO AN HDC. |
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Term
| Drawee bank liability to Presenter |
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Definition
| No liablity if returns check before midnight next business day. Mention that Art. 4 applies (identify in opener) |
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Term
| Fed Hold Deposit for collection rules |
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Definition
| 2 days local; 5 days non local bank |
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Term
| STOP PAYMENT RULES (frequently tested) |
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Definition
| ORAL ORDER GOOD FOR 14 DAYS; WRITTEN 6 MONTHS; |
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Term
| Time to report to Bank the unauthorized signature or alteration |
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Definition
| Businesses - 60 days; Consumers, one year. |
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Term
| NI - exam approach example |
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Definition
| Review intently in Study Book |
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Term
| NI opener (best where bank involved) |
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Definition
| Negotiable instruments (NI) are covered by WA version of UCC 3; Banks by UCC 4. |
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Term
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Definition
| WA version of UCC 9 governs security interests (SI) in collateral including personal proterty, fixtures, agricultural liens and certain intangibles. |
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Term
| SEC TRANS - Answer approach |
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Definition
| Begin by discussing 4 subjects of collater categories, PMSI, attachment and perfection. Then analyze each creditors SI in their collateral separately (did they attach and perfect?). Conclude with who has priority in each item of collateral. For the C's with priority discuss right of execution and disposition and sale details, Finally analyze any transferee position. |
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Term
| UCC-ST - INVENTORY DEFINITION |
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Definition
| GOODS HELD FOR SALE OR LEASE IN ORDINARY COURSE OF BUSINESS; FARM PRODUCTS ARE EXCLUDED |
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Term
| UCC - ST - EQUIPMENT DEFINITON |
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Definition
| GOODS OTHER THAN FARM PRODUCTS OR CONSUMER GOODS USED OR BOUGHT FOR USE IN PRODUCTIVE CAPACITY OF A BUSINESS, INCLUDES OFFICE EQUIPMENT. |
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Term
| UCC ST collateral catagories |
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Definition
| tangible goods and intangibles AND PROCEEDS THEREFROM - use by debtor controls |
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Term
| UCC-SC SECOND OPENER RE COLLATERAL |
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Definition
| TANGIBLE - INVENTORY, EQUIPMENT, CONSUMER GOODS, FARM PRODUCTS AND MANUFACTURED HOMES AND PROCEEDS THEREFROM, AND (IF APPLICABLE) INTANGIBLES SUCH AS A/R, NI, DOCUMENTS OF TITLE, CHATTLE PAPER AND SOME OTHER. |
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Term
| UCC ST IDENTIFICATION OF COLLATERAL (HEAVILY TESTED) |
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Definition
| REASONABLE IDENTIFICATION REQUIRED, "ALL COLLATERAL" "ALL PERSONAL PROPERTY" TOO VAGUE |
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Term
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Definition
| SALE OF COLLATERAL, LOAN TO ACQUIRE SPECIFIC COLLATERAL, (working capital loan does not qualify) PARTY CLAIMING PMSI HAS BURDEN OF PROOF: PMSI FOR HOUSEHOLD GOODS IS EFFECTIVE (ANY OTHER ST FOR HOUSEHOLD GOODS UNDER FTC REGS NOT EFFECTIVE); MERE ATTACHMENT, 20 DAY GRACE PERIOD TO FILE, RETROACTIVE; SUPER PRIORITY IN INVENTORY SO LONG AS THEY PROVIDE NOTICE TO OTHER CREDITORS BEFORE DELIVERY WITH SI IN SAME COLLATERAL (AFTER ACQUIRED PROPERTY) |
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Term
| UCC - ST - SECURITY AGREEMENT EFFECT |
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Definition
| CREATES SI IN COLLATERAL, MUST BE SIGNED BY DEBTOR WITH DESCRIPTION, CAN INCLUDE PROCEEDS-PMSI CREATES SUPER PRIOITY ON INVENTORY |
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Term
| UCC -ST ARV (REQURIED IN EVERY ANSWER) |
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Definition
| A SECURITY AGREEMENT; RIGHTS IN COLLATERAL; VALUE GIVEN |
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Term
| PCMFT DISCUSSED WITH FIRST CREDITOR |
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Definition
| POSSESSION; CONTROL; MERE ATTACHMENT; FILING; TITLE |
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Term
| FINANCING STATEMENT (FS) FILING |
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Definition
| ALL FILED W/ WA DEPT LICENCING EXCEPT -FIXTURES, MINERALS, OIL GAS, TIMBER AND FARM CROPS WHICH ARE INTERESTS IN LAND AND TO BE FILED IN COUNTY WHERE PROPERTY IS LOCATED - MAY BE MORE GENERIC THAT SA, "ALL PROPERTY" QUALIFIES; SERIOUSLY MISLEADING NAME CHANGE REQUIRES NEW FS TO BE FILED W/IN 4 MONTHS BY CREDITOR. DEBTOR DOES NOT SIGN FS. |
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Term
| FILING FS BEFORE DELIVERY OF GOODS OR MONEY TO DEBTOR |
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Definition
| PERFECTED UPON ATTACHMENT (DELIVERY) |
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Term
| CONSIGNMENT GOODS TREATMENT |
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Definition
| LIKE PMSI - ALSO MUST GIVE PRE-DELIVERY NOTICE TO CREDITORS HOLDING SI IN SIMILAR GOODS. |
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Term
| Sale to consumer of goods covered by PMSI |
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Definition
| takes free and clear if in for value, good faith and for household purposes. |
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Term
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Definition
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Term
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Definition
| PMSI; (EXCEPT CONSUMER PURCHASE-BUT THAT IS NOT EXCEPTION IF CREDITOR FILES.) |
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Term
| UCC ST CREDITORS' RIGHTS TO REPOSSESS |
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Definition
| SELF HELP AND LIMITED REASONABLE PRIVILDGE TO TRESPASS TO RECOVER (DRIVEWAY) PROPERTY, BUT NOT TO ENTER HOME WITHOUT PERMISSION. |
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Term
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Definition
| BKY STAY; DISPOSITION SALE, - DEBTOR MAY REDEEM BY PAYING FULL BALANCE PLUS DISPOSITON SALE EXPENSES. NOTICE TO DEBTOR AND OTHER PERFECTED PARTIES OF SALE; SALE MUST BE REASONABLE, NOT WAIVABLE; PROCEEDS TO OTHER PERFECTED CREDITORS SENIOR, JUNIOR, SURPLUS TO DEBTOR; DEFICIENCY POSSIBLE UNLESS CREDITOR ELECTED TO RETAIN AND DEBTOR AGREED, IF NOT AGREED, DISPOSITON SALE MUST TAKE PLACE. |
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Term
| CONVERSION OF COLLATERAL BY NOT FOLLOWING RULES OR OTHERWISE |
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Definition
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Term
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Definition
| CR MUST HOLD DISP SALE W/IN 90 DAYS OF REP, DEBTOR MAY WAIVE, CRED MUST SUBMIT TO D A RECORD OF THE SURPLUS OR DEFICIENCY CALCULATION |
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Term
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Definition
| FIRST TO ATTACH PREVAILS; BKY TEE BECOMES PERFECTED DAY OF FILING OF PETITION |
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Term
| RETAIL BUYER FROM DEALER OF SIMILAR GOODS AND SIMILAR RIGHTS |
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Definition
RAP RETAIL B TAKES FREE AND CLEAR;
ADDED VALUE-LABOR AND MATERIAL LIENS; PREFERED BKY-CAN GO BACK 90 (1 YEAR FOR INSIDER) DAYS TO LOOK FOR PREFERENTIAL TRANSFER OR SI CREATION. |
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Term
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Definition
| SEE OUTLINE IN STUDY BOOK |
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Term
| MONEY DAMAGES - REQUIREMENTS IN CONTRACT |
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Definition
| FCM - FORSEEABLE BY D; CERTAINTY, ESTABLISHED BY REASONABLE; MITIGATION, NON BREACHING PARTY HAS DUTY |
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Term
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Definition
| PPUNN: PERMISSION PERSONAL; USE OR COME ON TO PROPERTY OF ANOTHER, NON EXCLUSIVE; NON ASSIGNABLE |
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