Article 9 - Secured Transactions

Question 1

Secured Transactions- General Law

Answer 1

The transaction is governed by Art 9 of the UCC. A security interest arises when one party uses certain collateral in order to secure payment of a loan or obligation from another party. Attachment is the process by whcih a security agreement is created. Attachment occurs when the secured party: (1) gives value, (2) the debtor has rights in the collateral, and (3) vali security agreement exits. A valid security agreement is one in which is (1) in writing, (2) is authenticated by the debtor, (3) contains a granting clause indicating that a security agreement exists, and (4) contains a description of the collateral. A description of the collateral is sufficient. if it reasonably identifies what is being described. Perfection is the process by whcih a secured party gives notice to the entire world of its interest. Perfection is necessary for establishing priority. The most common method of perfection is filing a financing statement with an appropriate public office. Posession or control (deposit accounts) of the collaterla and PMSI are two other forms.

Question 2

Attachment

Answer 2

Agreement
Secured party gives value
Debtor has rights in the collateral

Question 3

PMSI

Answer 3

Typically point-of-sale financing, in which a creditor extends value to the debtor for the purpose of enabling the debtor to acquire rights in the collateral. generally it is a retailer like Best Buy offers a buyer direct financing for major purchases. The retailer has priority over other lenders.