Business Law IV: UCC Articles 5, 7, 9 Flashcards Preview

REG > Business Law IV: UCC Articles 5, 7, 9 > Flashcards

Flashcards in Business Law IV: UCC Articles 5, 7, 9 Deck (27):
1

UCC Article 5

Letters of Credit

2

Letter of Credit: Applicant

Person at whose request/on whose account letter of credit is issued

3

Letter of Credit: Beneficiary

Person under letter of credit terms entitled to have letter honored

4

Letter of Credit: Issuer

Bank/person that issues letter of credit

5

Letter of Credit: Correspondent bank

Bank designated to handle payment under authorized letter of credit

6

Letter of Credit: Nominated Person

Person/bank whom issuer designates/authorizes to pay, negotiate or give value under letter of credit

7

Letter of Credit: Presentation

Delivery of document to issuer /nominated person to honor/give value to letter of credit

8

Letter of Credit: Record

Letters of credit require record - tangible, electronic, other medium retrievable in perceivable form

9

UCC Article 7

Documents of Title

10

Document of Title

any document that proves the person in possession has title to and is entitled to receive goods

offers a means for transferring title to goods without physically moving goods

11

Document of Title: Bill of Lading

document evidencing receipt of goods by carrier for shipment

12

Parties to Document of Title

1. Issuer - bailee, issues document to bailor or third party
2. Delivery Order - order by bailor or third person for bailee to deliver goods
3. Consignor - person who delivers goods to carrier named in bill of lading
4. Consignee - person named in bill of lading to whom/whose order goods are to be delivered

13

Document of Title: Common Carrier

Have absolute/strict liability for loss/damage to goods except when:

- act of god
- act of public enemy/authority
- act of shipper
- inherent nature of goods (spoil)

14

Nonnegotiable Document of Title

Goods transferred by assignment. Assignee acquires only title/rights of assignor and is subject to all defenses/claims against assignor.

15

Negotiable Document of Title

Holder can acquire better rights than transferor-assignor

1. Bearer documents require delivery only
2. Order documents require delivery plus indorsement

16

Rights of Duly Negotiable Document

1. Holder acquires title to goods
2. Holder has right to delivery/possession of goods according to terms of contract
3. Indorser warrants negotiable document genuine
4. NO guaranty of performance under Article 7

17

UCC Article 9

Secured Transactions

18

Secured Party

Creditor who has security interest in debtor's collateral.

19

Security Interest

Interest in the collateral which secures payment/performance of an obligation

20

Security Agreement

Agreement that creates/provides for a security interest

21

Financing Statement (UCC-1 form)

Instrument usually filed to give public notice to third parties of secured parties security interest

22

Describe the criteria necessary for a security interest attachment when the collateral is not in possession of the secured party.

1. Written or authenticated agreement describing collateral, signed or authenticated by the debtor;
2. Secured party must give debtor something of value;
3. Debtor must have rights in the collateral.

23

Describe what happens to a security interest when a debtor has signed and executed a security agreement, but the collateral has not been shipped to the debtor from the seller.

The security interest does not attach until the debtor has an interest in the goods; i.e., identification has occurred.

24

Perfection

Means by which secured party gains priority to a debtor's collateral over other 3rd parties who also claim interest in same collateral

- filing
- possession - control
- automatic
- temporary

25

Perfected Security Interests give priority to:

1. Unsecured creditors
2. Unperfected secured parties
3. Subsequent lien creditors
4. Trustees in bankruptcy
5. Most buyers

26

What types of buyers take precedence over perfected secured interests?

Buyer in normal course of business

27

Rights of Secured Parties/Debtors

1. Right to require debtor to assemble collateral and place at convenient location
2. Right to render unusable (break) the collateral
3. Right to pursue self0help remedy of repossession
4. Right to pursue judicial process
5. Right to dispose of/use repossessed collateral