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Secured Transactions - NYBE

Terms in this set (57)

What does Article 9 apply to?
Consensual security interests in personalty or fixtures. Note: when the collateral is real estate, apply the law of mortgages. When the collateral is personalty or fixtures, apply Article 9 of the UCC
What is personalty?
Goods. Thus, Article 9 does not apply to statutory or mechanic liens
Who is the debtor?
The entity who owes the money
Who is the secured party or secured creditor?
The entity who lends the money
What is the security agreement?
The contract or record
What is the security interest?
The right creditor has in debtor's personalty or fixtures
What is collateral?
The personalty or fixtures creditor can look to for satisfaction
What can the collateral be?
(1) Tangible collateral or goods and (2) intangibles or semi-tangibles
What is tangible collateral?
(1) Consumer goods (those items used for personal or familial purposes, such as blender); (2) equipment (items used in business, such as dentist chair); (3) inventory (goods held for sale or lease); (4) farm products (crops, livestock); (5) fixtures (items annexed to realty, such as sprinkler systems)
What is intangible or semi-intangible goods?
Examples: patents, trademarks, stocks, proceeds from sale of collateral, accounts, promissory notes, etc.
What does attachment mean?
That the security interest is enforceable.
What are the requirements for attachment?
"VCR": (1) VALUE must be given by creditor; (2) a CONTRACT, called the security agreement or record, must evidence the secured transaction unless the secured party has taken possession of the collateral; (3) RIGHTS in the collateral (debtor must have rights in the collateral)
If the debtor is in possession of collateral, what is required?
Contract, called a security agreement or record. It must (1) be authenticated by debtor (signed or electronically marked) and (2) it must reasonably identify the collateral
What is an "after-acquired collateral clause"?
A floating lien, that attaches to all property debtor owns. It is enforceable
What is perfection of security interests?
Publicity. It is something that the secured party does to put the world on record or constructive notice of the secured party's existence. Property perfection helps to protect the secured party from competing creditors
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