ST

Question 1

Collecting debts Judicially?

Answer 1

1. Obtain court judgment
2. Execute judgment (finding assets through depositions / interrogatories)
3. Judicial Liens (Judgement lien, Execution lien)
4. Levy (PP only)
5. Execution sale

Question 2

After judgment in court, how to find assets?

Answer 2

1. Interrogatories
2. Depositions

Question 3

Judgement lien for RP or PP?

Answer 3

RP

Question 4

Execution lien for PP or RP?

Answer 4

PP

Question 5

Levy for PP or RP?

Answer 5

PP

Question 6

______: When judgment creditor procures writ of execution form clerk of court and provides to sheriff…. who then seizes control of debtor’s property.

Answer 6

Levy

Question 7

Which article of UCC for ST?

Answer 7

Article 9 (mostly deals with use of PP as collateral for an obligation)

Question 8

Example of consensual lien?

Answer 8

Mortgage, security interest in PP.

Question 9

First step in ST problem?

Answer 9

Determine if article 9 applies.

Question 10

Which section of Art. 9 governs ST with security int. in PP & fixtures by K?

Answer 10

Art. 9-109 (a)(1)

Question 11

Rule 9-109 (a)(1)?

Answer 11

Provides that article 9 governs transactions that create security int. in PP or fixtures by K.

Question 12

Step 2 in ST problem?

Answer 12

Identify collateral.

Question 13

Step 3 in ST problem?

Answer 13

Classify collateral as to the debtor. (Determine what type of collateral it is by connecting to app. def. in Article 9).

Question 14

Step 4 in ST problem?

Answer 14

Determine if and when “attachment” occurred.

Question 15

What code for attachment?

Answer 15

9-203(b)

Question 16

3 requirements for valid attachment? (the moment when a security interest becomes legally enforceable against the debtor with respect to the collateral.)

Answer 16

1. Valid Security agreement
2. Value given 4 the Collateral
3. Debtor must have rights in the collateral or power to transfer to secured party

/ 9-203 (b)

Question 17

______ _______ : “contract where a borrower (grantor) pledges personal property or assets as collateral to a lender (secured party) to guarantee a loan or other obligation”

Two principle requirements for this agreeement.
1. Debtor has signed a SA
2. SA provides a description of collateral.

Answer 17

Security agreement (9-203(b)(3)(A))

Question 18

What does “signed” mean?

Answer 18

Present intent to authenticate / adopt a record, execute or attach tangible symbol, or to attach or logically associate with electronic symbol.

Question 19

What is a “record”?

Answer 19

Info inscribed on tangible medium or electronic format but retrievalbe in percievable form. (IE: No oral agreements)

Question 20

_______: A person having an interest, other than security / lien, in the collateral. (They put it up)
*Seller of accounts, chattel paper, promissory notes, consignee.

Answer 20

Debtor

Question 21

__________: With respect to an obligation secured by Security Interest in collateral:
*Owes payment or performance on obligation

Answer 21

Obligor

Question 22

_______ party: Person in whose favor a security interest is created.

Answer 22

Secured party

Question 23

A person who puts up collateral for security is the _______.

Answer 23

Debtor

Question 24

Person who borrows money is the _________.

Answer 24

Obligor

Question 25

Person that guranties an obligation...

Answer 25

Guarantor (2nd Obligor)

Question 26

Person who has interest in collateral item...

Answer 26

Secured party

Question 27

__________: Info inscribed on tangible medium, or electronic format, retrievable in perceivable form.

Answer 27

Record (Cannot be oral!!!)

Question 28

Define Record.

Answer 28

Info inscribed on tangible medium; or electronic format; retrievable in perceivable form.

Question 29

Define Record.

Answer 29

1. Information inscribed on tangible medium; or 2. electronic format 3. Retrievable in perceivable form.

Question 30

__________: Present intent to authenticate, adopt a record, execute or attach a symbol, or attach electronic symbol.

Answer 30

Signed

Question 31

Define signed.

Answer 31

1. Present intent to authenticate; 2. adopt a record; 3. execute / attach symbol.

Question 32

Define signed.

Answer 32

Present intent to authenticate, adopt, or attach a symbol to a record.

Question 33

"______________ is the point when a creditor's security interest becomes enforceable against the debtor, meaning the creditor gains a legal right to the collateral if the debtor defaults." 1. Valid SA 2. Value given to collateral 3. Debtor has rights in the collateral

Answer 33

Attachment / 9-203 (b) / Attachment occurs on the later date of those 3 line items.

Question 34

Signed?

Answer 34

P.I. to authenticate, adopt record, execute / attach symbol.

Question 35

Record?

Answer 35

Information inscribed on tangible form, or electronic medium, retrievable in perceivable form.

Question 36

___ __________: "A person or entity who is secondarily liable for a debt or obligation that is secured by collateral."

Answer 36

2nd Obligor (Guarantor, co-signer, Surety)

Question 37

Examples of 2nd obligors?

Answer 37

1. Co-signer 2. Surety 3. Guarantor

Question 38

Collateral definitions pursuant to 9-102 (a) (23); (34); (48); (33).

Answer 38

23 = Consumer goods 34 = Farm products 48 = Inventory 33 = Equipment

Question 39

9-102 (a) (33)?

Answer 39

Equipment

Question 40

9-102(a) (48)

Answer 40

Inventory

Question 41

9-102 (a) (23)

Answer 41

Consumer Goods

Question 42

9-102 (a) (34)

Answer 42

Farm products

Question 43

9-102 (a) (23) "Goods that are used or bought for use in (primarily) personal, family, or home purposes.

Answer 43

Consumer goods

Question 44

9-102 (a) (34) "Goods (other than standing timber) to which debtor is engaged in a farming operation and which are: 1. Crops 2. Livestock 3. Supplies used / produced in farming ops 4. Products of crops/livestock in unmanufactured states

Answer 44

Farm products

Question 45

What is a "farming operation?"

Answer 45

Raising, cultivating, propogating, fattening, grazing, or any other farming op.

Question 46

9-102 (a) (48): Goods other than farm products which: 1. Are leased by person 2. Held by person for sale / lease 3. To be furnished under K of service 4. Furnished by person under K of service 5. Consist of RM, work in progress, or materials used / consumed in business.

Answer 46

Inventory

Question 47

9-102 (a) (33) what is equipment?

Answer 47

Goods other than inventory, farm products, or consumer goods.

Question 48

T/F) Item of property must be classified using definitions of UCC, does not matter what the parties agreement says about particular item of collateral.

Answer 48

True

Question 49

T/F) The UCC authorizes parties to describe collateral by its classification, but does NOT require it.

Answer 49

True. So, don't assume that term in SA auto. carries definition under Art 9.

Question 50

Farming operation?

Answer 50

1. Raising 2. Cultivating 3. Propogating 4. Fattening 5. Grazing "or any other farming operation"

Question 51

Classify: Mobile home in hands of manuf. or retailer.

Answer 51

Inventory

Question 52

Classify: Mobile home in hands of construction manager at construction site.

Answer 52

Equipment

Question 53

Classify: Mobile home in hand of individual for personal, family, or HH use.

Answer 53

Consumer good

Question 54

Classify: Laptop computer used by college professor for work.

Answer 54

Equipment

Question 55

T/F) Corporations and other business entities cannot own consumer goods.

Answer 55

True!

Question 56

________ paper: (a) means a right of payment, of a monetary obligation, secured by specific goods; or (b) right to payment, of a monetary obligation, owed by a lessee under lease agreement for specific goods.

Answer 56

Chattel paper

Question 57

Define chattel paper.

Answer 57

A right to to payment, of a monetary obligation, secured by specific goods or lease.

Question 58

Define chattel paper.

Answer 58

Right to payment; of a monetary obligation; secured by a good. (If right to payment and security agreement evidenced by record)

Question 59

What's the key to chattel paper?

Answer 59

Right to payment must be evidenced in the record.

Question 60

__________: Means a negotiable instrument (or any other writing device) that evidences a right to payment of monetary obligation.

Answer 60

Instrument (promissory note, check, etc.)

Question 61

Examples of chattel paper?

Answer 61

1. Car installments contract 2. Equipment lease w/ payment terms. 3. Furniture financing agreement

Question 62

Define instrument:

Answer 62

A negotiable instrument (or any other writing) that evidences a right to payment of monetary obligation.

Question 63

Rule 9-109 (a) (1) provides that Article 9 governs...

Answer 63

Transactions that create security interest in PP.... or fixtures by contract.

Question 64

Art. 9-109(a) (1) governs PP and what?

Answer 64

Fixtures by contract

Question 65

______ by K: refers to items explicitly identified in a real estate purchase agreement that have become legally attached to the property and will be included with the sale.

Answer 65

Fixtures by K (Governed by Art. 9 (alongside PP) -- Such as your washing machine.

Question 66

When does "attachment" occur?

Answer 66

1. Valid SA 2. Value given to collateral 3. Debtor has right to collateral (power to transfer) / 9-203 (b)

Question 67

Valid attachment requires a S.A., what is that?

Answer 67

Whereas borrower grants S.I. in asset (collateral). 2 Requirements: 1. Signed by debtor (person putting up collateral) 2. Collateral is reasonably described in S.A.

Question 68

(Full) signed definition?

Answer 68

P.I. to adopt or authenticate a record, to execute or attach tangible symbol or to logically associate w/ electronic symbol.

Question 69

Can a "record" be oral?

Answer 69

Nope.

Question 70

Define consumer goods.

Answer 70

Goods that are used or bought for use primarily in personal, family, or HH purposes.

Question 71

Define farm products.

Answer 71

Goods (other than standing timber) with respect to which debtor is engaged in a FARMING OPERATION: 1. Crops growing / grown 2. Livestock born / unborn (including aquatic goods) 3. Supplies used / produced in farming ops 4. Products of crops / livestock

Question 72

T/F) Farm products can include aquatic goods produced in acgricultural ops.

Answer 72

True!

Question 73

What is unmanufactured livestock product?

Answer 73

1. Bones and milk 2. Unprocessed milk or eggs 3. Manure

Question 74

What is a "farming operation?"

Answer 74

Raising, cultivating, propogating, fattening, grazing, or any other operation.

Question 75

Define inventory.

Answer 75

Goods (other than farm products) leased by a person, held out for sale, furnished under K, or raw materials consumed in a business.

Question 76

T/F) Raw materials used or consumed quickly in a business is inventory.

Answer 76

True!

Question 77

Define equipment.

Answer 77

Goods other than inventory, farm product, or consumer goods.

Question 78

_____ _____: means non-physical, non-tangible personal property that doesn't fit into other specific categories of collateral. This "catch-all" definition includes assets like intellectual property (patents, trademarks, copyrights), goodwill, licenses, software, customer lists, and rights to tax refunds or litigation.

Answer 78

General intangibles

Question 79

T/F) General intangible is analogous to equipement.

Answer 79

True, catch all for PP intangibles.

Question 80

Define chattel paper.

Answer 80

Right to payment, of a monetary amount, secured by specific goods, if that right to payment is evidenced by record. or Right to payment, of a monetary amount, owed by a lessee under lease agreement. (if that right is evidenced by record)

Question 81

Chattel paper: For part (b), what are the requirements?

Answer 81

1. Evidenced by record 2. Predominant purpose of transaction giving rise to lease was to give lessee right to possession of goods.

Question 82

T/F) Chattel paper can also refer to right to payment arising out of a charter or out of credit charge.

Answer 82

False!!

Question 83

Define instrument.

Answer 83

Means a negotiable instrument (or any other writing) which evidences right to payment of the monetary obligation. (such as a promissory note)

Question 84

T/F) For Instruments, this can include the S.A. or the lease.

Answer 84

False!

Question 85

Does instrument include investment property, letters of credit?

Answer 85

No!

Question 86

_______: Means a right to payment, of a monetary obligation, whether or not earned by performance.

Answer 86

Account. Does not require fancy writing in the record.

Question 87

What does "account" also include which you might not consider?

Answer 87

Health-care insurance receivables.

Question 88

Does "account" include chattel paper or right to payment evidenced by an instrument?

Answer 88

Nope.

Question 89

Chattel paper, instrument, and account all have one thing in common.

Answer 89

Right to payment...

Question 90

1. You mow someone’s lawn. They say, “I’ll pay you next week.” or A business ships 1,000 shirts to a store. The store hasn’t paid yet. That’s an account receivable. 2. You lend your friend $500, and they sign a promissory note saying, “I promise to pay you back in 30 days.” 3. A car dealership sells a car on credit and keeps a lien on the car until paid off. The loan agreement and lien together

Answer 90

1. Account / account receivable 2. Instrument 3. Chattel paper

Question 91

Which collateral type is least risk?

Answer 91

Chattel paper, can repossess the good directly.

Question 92

Order of operations: If the collateral is some kind of receivable.... 1. 2. 3. 4. If no.. it's...

Answer 92

1. Chattel paper? 2. Promissory note? (Instrument) 3. Account? If no, general intangible.

Question 93

____ _____ means a security, whether certified or not, security entitlement, securities account, commodity K, or commodity account.

Answer 93

Investment property

Question 94

S.A.: In addition to: 1. Debtor signature; and 2. Description of collateral. Also requires that...

Answer 94

Agreement creates / provides an interest in PP that secures obligation. (Construed broadly by courts, no magic language) / 9-203 (b) (3) (A)

Question 95

A description of collateral is sufficient if.....

Answer 95

..... it reasonably identifies what is described. / 9-108

Question 96

What is the composite document rule?

Answer 96

The "composite document rule" is a legal principle that allows a court to consider (multiple signed documents together) to determine if a debtor and creditor intended to create a security interest in a collateral.

Question 97

T/F) In order for (after-acquired) property to be covered by a security agreement, that collateral description MUST refer to the after-acquired property.

Answer 97

True!

Question 98

T/F) Proceeds need not be described in the security agreement.

Answer 98

True

Question 99

T/F) A creditior with a security interest is automatically given a security interest in proceeds even if the S.A. is silent on this front.

Answer 99

True!

Question 100

What type of after-acquired property must be described in the S.A.? Recall, proceeds is after acquired.

Answer 100

Any kind that is NOT proceeds, which is auto included.

Question 101

What are "proceeds" stemming from the Collateral?

Answer 101

Collateral > Sold, leased, exchanged, claims arising out of, insurance payable from losss. (Also any rights or distribution attached to it)

Question 102

____________ are anything a debtor receives from the sale, lease, license, exchange, or other disposition of the collateral. Under the Uniform Commercial Code (UCC), a secured party's security interest in the original collateral typically extends to these identifiable __________, ensuring the secured party can still claim payment from new assets.

Answer 102

Proceeds (AI answer)

Question 103

Collateral descriptions generally means things the debtor owned (before/after) S.A. was signed.

Answer 103

Before

Question 104

After-acquired property generally means things the debtor acquired (before/after) the S.A. was signed.

Answer 104

After (if not proceeds, the S.A. must directly reference.)

Question 105

Proceeds or no? "A charcoal sketch that a Museum receives from trading one of its paintings to the Louvre."

Answer 105

Proceeds! It was given in exchange.

Question 106

Proceeds or no? "Funds a museum receives from leasing a painting to another museum."

Answer 106

Proceeds, it was a lease.

Question 107

Proceeds or no? "Funds a museum receives from allowing poster company to produce / sell reproductions of museum's paintings."

Answer 107

May be proceeds under "license." Depends on who owns paintings.

Question 108

Proceeds or no? "Funds the museum receives from exhibiting paintings to the public."

Answer 108

Probably no. They are licensees of museum not the paintings.

Question 109

Proceeds or no? "Funds the museum receives from selling memberships."

Answer 109

Def. no. Little connection to the exhibits.

Question 110

What is "attachment?"

Answer 110

The moment when S.I. in a collateral attaches or becomes enforcable. / 9-203 (b) which depends also on a valid SA in the first place. / 9-203 (b) (3) (A)

Question 111

T/F) A security interest will auto attach to identifiable proceeds of the original collateral.

Answer 111

True

Question 112

Define the lowest intermediate balance rule.

Answer 112

The lesser of: 1. Amount of proceeds; 2. Lowest daily balance (between when proceeds deposited & time creditor seeks to enforce)

Question 113

LIB rule is the best rule for which party?

Answer 113

The Secured party.

Question 114

Bank has security interest in all of developer's bulldozers to secure a loan. Developer sells dozer and buys dump truck. What happened to security interest?

Answer 114

No applies to dump truck.

Question 115

What are commingled goods?

Answer 115

Occurs when goods combined in a way that creates a new product or mass. IE: Eggs + flour = cake

Question 116

T/F) Any S.I. attached to goods b4 commingled, then auto attaches to the new mass that results.

Answer 116

True!

Question 117

_________: Is defined as a good affixed to another good in such a way that the identity of both goods is not lost. IE: Chevy truck which gets a new engine.

Answer 117

Accession. Unlike commingled goods, S.I. does not auto attach here.)

Question 118

Is there an auto attachment of a security interest to accession?

Answer 118

Nope. Each remain separately identifiable after the installation process. Note: There is auto attachment of S.I. to commingled goods, which together become a new thing.

Question 119

Regarding attachments, what is "value?" (which must be given to the collateral)

Answer 119

(Any consideration given in exchange for rights (S.I.) in the collateral.) Examples: Extensions of credit Commitments to lend Any consideration which supports a K

Question 120

Define "value" given according to Prof. Jones.

Answer 120

The consideration given in exchange for the grant of security interest)

Question 121

_________ : Any new loan or extension of credit after debtor signs the security agreement.

Answer 121

Future advances

Question 122

Can "future advances" be secured? IE: Sufficient to establish a security agreement?

Answer 122

Yes. However, courts have held that the SA itself MUST have a future advances clause.

Question 123

"Collateral secures all obligations now owed or hereafter owed by debtor to lender." Evidence of what?

Answer 123

Future advance

Question 124

___ ____: This is the combo of future advances clause AND after-acquired property clause.

Answer 124

Cross collateralization

Question 125

_______ _______ is when one asset serves as collateral for multiple loans from the same lender, such as a credit union using a car to secure both a car loan and a personal loan. For example, if you take out a personal loan from your credit union, and your car loan is also with that credit union, your car may be used to secure the personal loan. If you default on either loan, the lender can seize the collateral to recover its losses.

Answer 125

Cross collaterization

Question 126

_____ _____ "in secured transactions is a practice where a single asset serves as collateral for multiple loans or debts from the same lender, linking them together. This strategy allows borrowers to access more financing by using their existing assets to secure additional loans, but it increases the risk of asset loss, as a default on any one loan can result in the lender seizing the collateral"

Answer 126

Cross-collateralization

Question 127

______ _______ in secured transactions refer to additional funds disbursed to a borrower after the initial loan, secured by the same collateral.

Answer 127

Future advances

Question 128

SI attachment analysis. Which date? 1. Valid SA 2. Value given 3. Debtor rights in collateral Code? Valid SA code?

Answer 128

Whichever is the later date for those 3. 9-203 (b) and 9-203(b) (3) (A)

Question 129

Rule code for Article 9 applying to a fact pattern?

Answer 129

UPC 9-109 (a) (1)

Question 130

Rule code for classifying definition stuff (collateral) in a essay?

Answer 130

UPC 9-102 (a), then 23, 33, 34, or 48 depending on the collateral.

Question 131

For value given analysis, is the date the date of the initial agreement or the date that payment actually made.

Answer 131

Date of initial agreement.

Question 132

UPC Code for equipment? Inventory? Consumer goods? Farming products?

Answer 132

9-102 (a) 33 48 23 34

Question 133

9-109 (a) (1) Provides....

Answer 133

..... that Article 9 governs transactions that create SI in PP or fixtures by K.

Question 134

Which rule section states that SI attaches to latest date of.... 1. Valid SA 2. Value given 3. Debtor has rights in collateral Bonus, what rule section is Valid SA?

Answer 134

9-203 (b) 9-203 (b) (3) (A)

Question 135

UPC Codes: 1. Art 9 governs transactions that create SI in PP and Fixtures by K. 2. Later date... Attachment 3. Valid SA 4. Collateral definitions 5. Reasonably identify collateral 6. Insecure lender requirements

Answer 135

1. 9-109 (a) (1) 2. 9-203 (b) 3. 9-203 (b) (3) (a) 4. 9 -102 (a) (23) (33) (34) (4) 5. 9-108 6. 1-309

Question 136

Example of transactions forms?

Answer 136

Lease

Question 137

___________: Transactions involving the temp. transfer of possession of goods in return of periodic payment of money.

Answer 137

Leases

Question 138

How to know if lease or sale where lessor has just retained title for security?

Answer 138

Determine if a chance that lessor will get the goods back when still worth something. If so, its a lease. If not, probably treated as a sale.

Question 139

T/F) A "lease" written on paper may actually be a sale. If true, when does this occur?

Answer 139

True. Occurs when lessor will never get the goods back / or goods will be valueless when he does. Therefore, it's a sale with retained security interest.

Question 140

Other times when "lease" might be treated as sale?

Answer 140

1. Significant up front payment (forefeited when terminated) 2. Have to pay significant fee 2 terminate 3. Cost of returning goods more than performing lease 4. Goods are essential / unique to lesse's business or difficult to replace.

Question 141

The purpose of becoming a secured creditor is not to take collateral, it is...

Answer 141

To get paid. They actually loath repo.

Question 142

________ : Is the concept of a secured party using collateral to satisfy the obligation of the debtor (who has defaulted) in a secured transaction.

Answer 142

Enforcement

Question 143

________: The debtor's failure to satisfy one of its K obligations to the secured party.

Answer 143

Default

Question 144

Most SA condition the secured party's ability to enforce the SI on the debtors ________.

Answer 144

Default

Question 145

Does article 9 actually define "default?" If no, then what is it / how governed?

Answer 145

No. Default is governed by the parties SA or loan agreement.

Question 146

T/F) Default is governed not by Art 9, but by the parties SA or loan agreement.

Answer 146

True!

Question 147

__________ clause : Essentially in every installment loan agreement. This clause provides that in the event of default, the entire loan balance becomes due.

Answer 147

Acceleration

Question 148

T/F) Instead of waiting for default, a loan agreement may allow for the lender to accelerate the loan any time lender deems itself "insecure." If true, any limits?

Answer 148

True! but limited by 1-309 which says that lender must in GF believe that prospect of payment / performance is impaired.

Question 149

UCC 1-309 has what to say about lenders declaring themselves "insecure?"

Answer 149

They must believe in GF that payment/performance is impaired.

Question 150

When lender believes in GF that payment / performance hindered pursuant to UCC 1-309, the burden shifts to who?

Answer 150

The burden of establishing lack of GF is on the party against which this power has been excercised.

Question 151

What can happen after attachment?

Answer 151

Enforcement

Question 152

T/F) Regarding cure, Art 9 requires that a creditor notify debtor that default has occurred or that right to accelerate has been exercised.

Answer 152

False. State law may, but not Art 9.

Question 153

T/F) Article 9 does not require a creditor to accept a cure of default. Exceptions if true?

Answer 153

True, state law may provide protections to cure for matters related to (1) consumer credit or when collateral is a (2) motor vehicle.

Question 154

Rights of secured party on default?

Answer 154

1. Art 9 part 6 (rights after default) 2. Take advantage of remedies provided for in SA 3. Utilize process for collecting debt under other law

Question 155

Which Article provides the rights after default?

Answer 155

Art 9 part 6. Specifically: 9-609 = reposession 9-611 & 612 = General disposition 613 = NCG 614 = CG

Question 156

Art 9 expressly authorizes secured party to take property w/o judicial process so long as can do so without causing....

Answer 156

Breach of the peace.

Question 157

Is breach of the peace, as related to repossession, defined by Art 9?

Answer 157

No.

Question 158

Does actual violence need to occur to = breach of peace?

Answer 158

No. Mere threat of it is enough

Question 159

Can a creditor avoid breach of peace scenarios in repossession matters simply by calling LE?

Answer 159

No.

Question 160

If a secured party breaches the peace in a repossession effort, what may they be liable for?

Answer 160

1. Conversion 2. Trespass to chattels

Question 161

Can use of independent contractors, such as a repo agency, insulate the secured party?

Answer 161

Nope.

Question 162

Rule # for repossession?

Answer 162

9-609

Question 163

What does 9-609 allow?

Answer 163

For repossession so long as no breach of peace.

Question 164

________: The most common way for a SP to access value of the collateral

Answer 164

Dispostion

Question 165

Manners of disposition?

Answer 165

1. Sell 2. Lease 3. License out

Question 166

2 main disposition requirements under article 9?

Answer 166

1. Provide advance notice of disposition 2. Disposition must be commercially reasonable

Question 167

Which UCC code for repossession?

Answer 167

9-609

Question 168

Code for repossession?

Answer 168

9-609

Question 169

Code for creditor declaring himself "insecure"

Answer 169

1-309

Question 170

9-609 allows a secured party, when repossessing, to take property without judicial process. (T/F) If true, they may do so, so long as....

Answer 170

So long as it can be done w/o causing breach of the peace.

Question 171

Is "breach of the peace" defined in article 9?

Answer 171

No.

Question 172

Does actual violence need to occur for a breach of the peace to take place?

Answer 172

No. The mere threat of violence is enough. / 9-609

Question 173

2 main requirements for "disposition?"

Answer 173

1. Advance notice of disposition sent in "reasonable timeframe" + signed. 2. Disposition must be "commercially reasonable"

Question 174

Can the disposition notification rules be waived, say in the SA?

Answer 174

No.

Question 175

Which UCC code for disposition requirements?

Answer 175

9-611 and 612

Question 176

T/F) Regarding dispositions, no notice is required if the collateral is perishable or threatens to decline speedily in value.

Answer 176

True / UCC 9-611

Question 177

Regarding the advance notice requirement of 9-611, whether the notification was sent within a "reasonable time" is a question of....

Answer 177

Question of fact / 9-612

Question 178

Per UCC 9-612, in a transaction other than a _______ transaction, notifications of disposition sent after default and ___ days or before b4 earliest disposition is reasonable.

Answer 178

1. Other than consumer transactions 2. 10 days b4 disposition

Question 179

Under 9-613, NCG, notification of disposition is sufficient if: 1. 2. 3. 4.

Answer 179

Other than consumer goods: 1. Describes all parties (Debtor + SP) 2. Describes collateral 3. States how to be disposed + time and place public disposition 4. States debtor entitled to accounting of unpaid indebtedness

Question 180

Under UCC 9-613, NCG, if a notification lacks the required info.... its still a question of fact if reasonable. (T/F) If true, how reasonable still?

Answer 180

1. Additional info not specified by that rule 2. Minor errors that are NOT "seriously misleading."

Question 181

1. 1-309 2. 9-609 3. 9-611 & 612 4. 9-613 5. 9-614 6. 9-615

Answer 181

1. Insecure creditor 2. Repossession 3. Disposition 4. Disposition NCG 5. Disposition CG 6. (After disp.) Application of proceeds

Question 182

Notification requirement of CG disposition? 9-614

Answer 182

1. Same as 9-613 + 2. Description of remaining liability for a deficiency, which includes phone # and amount due for payment + mailing address and phone # for add. questions.

Question 183

Can notification of disposition rules be waived in the SA?

Answer 183

No!

Question 184

Purpose of notification of disposition?

Answer 184

1. Give debtor info to use to protect his interests in collateral 2. Ensure collateral not disposed for less than FMV

Question 185

Application of proceeds code? (After disposition of collateral)

Answer 185

9-615

Question 186

Pursuant to 9-615, how are proceeds applied? 1. 2. 3. 4.

Answer 186

1. Pay reasonable expenses of repo/sale 2. Pay off debtors debt owed to creditor 3. Pay of any other junior secured parties who gave notice of their interest 4. Pay off consignors (owner of goods who entrusts them to another party (the consignee) to sell, transport, or handle on their behalf.)

Question 187

Which code for effects of disposition? (After items sold off and payments allocated)

Answer 187

9-617 = Effects of Disposition

Question 188

Lowest Intermediate balance rule? IE: When cash proceeds put in bank account, secured party gets lesser of: 1. 2.

Answer 188

When cash proceeds are deposited into a bank account, the secured party is entitled to recover the lesser of: (1) the amount of the proceeds; or (2) the lowest (daily balance) in the account between the time the proceeds were deposited and the time the creditor seeks to enforce its interest.

Question 189

LIBR rule? 1. 2.

Answer 189

SP gets lowest of: 1. Cash proceeds; or 2. Lowest balance between dates: When proceeds deposited & when creditor seeks to enforce.

Question 190

Steps 1-4?

Answer 190

0. Dont panic 1. Determine if article 9 applies 2. Identify collateral 3. Classify collateral as to debtor 4. Determine if attachment occurred

Question 191

Rule statement for step 1 in essay?

Answer 191

Article 9-109 governs transactions that create security interests in PP or fix. by K. Here,....

Question 192

What does article 9 govern?

Answer 192

Transactions that create SI in PP or fix. by K.

Question 193

9-102 (a)(2)

Answer 193

Accounts

Question 194

9-102 (a) (2) Accounts?

Answer 194

Rights to payment of monetary obligation, whether or not earned by performance.

Question 195

9-102 (a) (48)?

Answer 195

Inventory: Goods that are held by person for sale or lease. Including raw materials, work in process, or materials used up in business.

Question 196

9-102 (a) (34)?

Answer 196

Goods other than standing timber, to which debtor is engaged in farming operation.

Question 197

9-102 (a) (34) examples?

Answer 197

1. Livestock + products of livestock (unmanf state) 2. Acquatic goods 3. Crops grown + products of crops (unmanf state) 4. Supplies used / produced

Question 198

9-102 (a) (42) Defines ______ _____ as any PP that does not fit into any other UCC definition.

Answer 198

General intangibles

Question 199

9-102 33?

Answer 199

Goods other than CG, FP, or inventory.

Question 200

Accounts code?

Answer 200

9-102 (a) (2)

Question 201

Gen. Intang. code?

Answer 201

9-102 (a) (42)

Question 202

How is "value" defined?

Answer 202

1-204/ Any extension of credit, commitment to lend, or any consideration sufficient to support a simple K.

Question 203

Value given code ?

Answer 203

1-204

Question 204

Debtor rights... is physical possession important?

Answer 204

No. Its whether the debtor has any rights in the collateral.

Question 205

(33) Define equipment

Answer 205

Goods that are not CG, FP, or Inv.

Question 206

(42) Define accounts

Answer 206

Right to payment of a monetary obligation, whether or not earned by performance.

Question 207

(23) Define CG

Answer 207

Goods used / bought primarily for personal, family, or household purposes.

Question 208

(48) Define inventory

Answer 208

Goods held out for sale, lease, or consisting of RMs, WIP, or materials used up in a business.

Question 209

(34) Define Farm Products

Answer 209

Goods, other than standing timber, to which debtor uses / is engaged in farming operation: 1. Crops grown + Unmanf. Prod 2. Livestock + Unmanf. Prod 3. Supplies used

Question 210

(42) Define Gen. Intangibles

Answer 210

Any PP that does not fit into any other UCC definition.

Question 211

How to ensure S.I. attaches to after acquired property?

Answer 211

Explicit provision in the S.A. to that effect. 9-204(a)

Question 212

After acquired property clause provision

Answer 212

9-204(a)

Question 213

9-204 (a)

Answer 213

After acquired property clause

Question 214

I. 9-204 (a) II. 9-315 III. 9-336

Answer 214

I. After acquired property II. LIBR III. Commingled goods

Question 215

9-204 (a) ?

Answer 215

AA Property

Question 216

9-315?

Answer 216

LIBR

Question 217

LIBR code?

Answer 217

9-315 (a) (2)

Question 218

LIBR code?

Answer 218

9-315 (a) (2)

Question 219

9-336

Answer 219

Commingled goods

Question 220

Commingled goods code?

Answer 220

9-336

Question 221

SP can dispose of property if: 1. 2.

Answer 221

1. Public sale 2. Recognized market w/ standard price quotations "Commercially reasonable"

Question 222

T/F) Sometimes the SP is interested in getting the collateral. May acquire if: 1. Public sale 2. Sold on recognized market

Answer 222

True, this is commercially reasonable.

Question 223

Is a private sale where a newly created entity of the SP purchases the collateral legit?

Answer 223

No.

Question 224

_________ allows a SP to accept the collateral to satisfy the debt.

Answer 224

Acceptance

Question 225

Acceptance rules around foreclosure of the collateral? (9-620)

Answer 225

1. SP sends proposal to debtor 2. Debtor consents 3. If full satisfaction, debtors consent is shown by failure to object. 4. If partial satisfaction, debtors consent must be signed. 5. MUST be obtained from debtor after default. ****IE: This cannot be agreed to in the SA.

Question 226

(9-620) Regarding foreclosure of collateral / acceptance, can the debtor's consent come from the SA or elsewhere?

Answer 226

No.

Question 227

(9-620) Regarding foreclosure of collateral / acceptance, if the collateral is a partial satisfaction of debt? If full satisfaction?

Answer 227

1. Debtor must sign 2. Need not sign. In fact, failure to object within 20 days after proposal sent is consent.

Question 228

If a proposal to foreclose is sent to debtor for full satisfaction?

Answer 228

No objection in 20 days is consent to the proposal to foreclose on the collateral.

Question 229

(9-620)(A) For full or partial acceptance, instead of disposition: 1. Debtor must consent 2. SP must receive no... 3. If collateral CG... 4. If collateral is CG, less than....

Answer 229

1. Debtor must consent 2. SP gets no objection from other interested party 3. If CG, SP has possession; and 4. Less than 60% of the debt has been paid.

Question 230

Can a SP accept collateral where 75% of the debt has been paid?

Answer 230

No! Must be less than 60%.

Question 231

9-620(A) Can a SP accept collateral that is CG when they do not have possession of it?

Answer 231

No!

Question 232

9-602 (A) What if SP receives timely objection from other person with interest in the collateral.

Answer 232

Then, may not accept.

Question 233

T/F) in CONSUMER TRANSACTIONS, the SP is prohibited from accepting collateral for partial satisfaction of debt.

Answer 233

True! Only full strict foreclosure allowed.

Question 234

T/F) Strict foreclosure prohibited when 60% or more of the price has been paid.

Answer 234

True!

Question 235

Does acceptance affect interests superior in priority to the security interest foreclosed?

Answer 235

No. Only discharges junior.

Question 236

Who is proposal sent to?

Answer 236

Debtor Any 2nd obligors Any other SP / lienholder

Question 237

Instructions to pay for "account debtor?" (Like on accounts, chattel paper, gen. intangibles, etc.)

Answer 237

Simply provide account debtor with a notification to make payment

Question 238

When can instruction to pay be sent to account debtor?

Answer 238

After default or before if put in SA

Question 239

Can disposition rules be WAIVED in SA?

Answer 239

HELL NO