secured transactions Flashcards
PMSI!!!!
purchase money secured interest
- secured party sells goods and takes sec interest in them OR
- creditor loans money for a purchase AND takes interest in that purchase (must use actual funds given)
after acquired property clause
in a security agreement, a secured party takes interest in some yet to be attained property of the debtor
future advance clause
allows the secured party to attach sec interest for future loans given to the creditor on existing (or future if after acquired clause) property
perfection and attachment
attachment: secured interest is associated to collateral
perfection: all third parties on notice of attachment (important for priority)
types of tangible goods (otherwise referred to as goods)
consumer goods: goods used or bought for personal family or household use
equipment: goods that are used or bought for use in
a business. Note: This is also the default category for
goods.
inventory: goods held for sale or lease, goods that are to
be furnished under service contracts, and materials used
or consumed in a business in a short period of time
farm products: requires farmer. farm stuff; crops/livestock/supplies
intangible goods
instruments: promissory notes, cert of deposit, drafts
documents: right to recieve goods, not payment
chattel paper
investment property: stocks, bonds, mutual fund
accounts: right to payment for property sold/services rendered (ppl owe debtor money)
deposit accounts: business deposit accounts
commercial tort claim
general intangible: everything else; patents, copyright, trademark, goodwill
requirements for attachment
- must enter into security agreement
1. creditor takes possession of collateral
2. authenticated security agreement
3. creditor takes control of intangible - value given BY the secured party
- debtor has rights in the collateral
authenticated security agreement
- evidenced by a record
- -written or ESI
- -shows intent to enter agreement
- agreement authenticated
- -usually means signed by debtor
- -MUST describe collateral
- no supergeneric terms, but general terms of class of goods works
what value is sufficient for a security agreement
- any consideration, even past
when does attachment occur
ONLY when all three elements met, meaning until last one is realized no attachment
when can a creditor attach to future collateral
with an express after acquire property clause
with repidly depleted and replneished collatral
do after acquired property clauses apply to consumer goods?
NO unless creditor acquires 10 days after giving value
proceeds
WHATEVER is gained in exchange, sale, collection or other disposition of collatera so long as it is IDENTIFIABLE
comingled cash rule
lowest balance rule:
take the lowest balance of account where proceeds deposited so long as not larger than initial value of proceeds
five methods of perfection
filing* taking possession of collateral control of collateral auto perfection temp perfection
can a security interest be perfected before attachment
NO, BUT can be filed for perfection, giving earlier priority, then maintains that date even if not perfected yet
What automatically perfects upon attachment?
PMSI in consumer goods! ONLY consumer goods
except motor vehciles and fixtures (stuff attached to real property)
perfection by possession
ONLY tangible goods
perfects at time of actual possession
perfection by control
investment property, electronic chattel paper, deposit accounts (only can by control)
control of NONCONSUMER deposit accounts
- name on account (first priority)
- creditor bank with whom debtor has account (enters into agreement)
- another bank, debtor, and deposit bank enter agreement
how to perfect motor vehicle
novation on certificate of title (a place on title dentoes it)
finance statement
how to perfect by filing
reqs for a filing statement
debtors name/mailing address
- secured party name/mailing address
- description of the collateral (supergeneric OK)
- auth by debtor
what name is used for debtor
un expired license
if no licnse, individual name or personal name
