R6: Secured Transactions

Question 1

3 requisites for security interest to attach (attachment)

Answer 1

1. agreement evidenced by either: (i) authenticated record of the security agreement or (ii) creditor takes possession of collateral (pledge)
2. value must be given by the secured party
3. debtor must have rights in the collateral

Question 2

5 methods of perfection

Answer 2

1. filing
2. taking possession of the collateral
3. control
4. automatic perfection
5. temporary perfection

Question 3

Defenses of a surety

Answer 3

"CPRS"
Creditor is a bad guy
Payment
Release of debtor
Surety lacks capacity - discharged

Question 4

Gratuitous Surety vs. Compensated Surety

Answer 4

Gratuitous (non compensated) - any change to risk by creditor, surety obligation discharged.
Compensated - creditor must make material change increasing surety risk for obligation discharge.