Scope (Secured Trans)
UCC Article 9 - security interests in personal property
- (1) Creditor Give Value
- (2) the debtor have rights in the collateral
- (3) debtor authenticate (sign) a record of agreement (written security agreement or electronic form) describing collateral, or creditor take possession.
Classification of Goods
Determined by the debtor's primary intended use at the time of attachment.
Goods held for sale and raw materials
Durable goods used in a business or porfession
After-aquired property clause
Valid; security interest attaches when the debtor acquires rights in the collateral.
Purchase money security interest (defined)
Secures a claim for credit or a loan that enabled the debtor to acquire the collateral.
Reuires notice filing only (given by filing of a financial statement).
- Financing statement requirements:
- (1) correct name and mailing address of the debtor and the secured party. ID of debtor not enough. cannot be name of business in sole proprietorship.
- (2) indicate collateral
- (3) authorized by the debtor in an authenticated record (signed)
- (4) filed with DOL
Fixture Filing Perfection
- (1) indicatedd that it covers fixtures to be attached to realty
- (2) described the realty using a legal description
- (3) be filed in the county auditor's office in the county where the realty was located.
Buyer in ordinary course of business
A buyer ins the ordinary course of business takes free of a security interest created by his seller, even if that security interest is perfected and even if the buyer knows of the security interest.
- A BIOC buys in good faith and without knowledge of the sale when:
- (1) he buys from the seller who deal in goods of the kind
- (2) in the ordinary course of business.
Buyer in good faith
Takes subject to any perfected security interest unless the secured party consents to the sale free of the interest.
Priority - Perfected
Generally, betweeen two perfected security interets, the first to file or perfect has priorty.
With a PMSI in noninventory collateral, if it is perfected within 20 days after the debtor recives possession, it has priority over all others.
Change in Use
A perfected security interest remains perfected if the debtor changes the use of the collateral so as to render the financing statement misleading.
Priority - PMSI in Inventory
Only if, before debtor recieves possession of the collateral, the secured party both files and notifies other secured parties of record that he is taking a PMSI.
May repossess, if it doesnt breach the peace.
May file replevin action for judicial reposession.
Once gain possession: give notice to debtor, other creditors - sell collateral at public or private sale. Must be commercial reasonable. Apply proceeds to costs and debts, then surplus to other secured parties, then debtor.
May choose to retain repossessed collateral in full satisfaction of debt if debtor does not object within 21 days
May be identified by type.