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Secured Transactions - Coggle Diagram

- - - - Exceptions:
        
        BIOC
        
        takes free of security interest created by THEIR seller
        
        (1) buys in good faith
        
        (2) without knowledge that the sale violates the rights of another person
        
        can still have knowledge of SI itself
        
        (3) in the ordinary course of business from a seller in the business of selling goods of the kind purchased
        
        Consumer to Consumer (garage sale)
        
        Buyer takes free of security interest, even though it's perfected, if buys:
        
        (2) for value
        
        (3) for the buyer's own personal, family, or household purposes, and
        
        (1) without knowledge of the security interest
        
        (4) before a financing statement covering the goods has been filed
        
        Authorized Sales
        
        Express
        
        Implied
        
        Sale of inventory to ordinary consumer = implied authorization
  - - - perfected SI beats judicial lien
      - judicial lien beats unperfected SI
        
        except for PMSI creditor: if file FS within 20 days after debtor receives collateral
  - - - artisan's lien
      - mechanic's lien
- - - - goods primarily used for personal, family, or household purposes
    - - Inventory
        
        goods held for sale; goods depleted quickly
      - Equipment
        
        goods used primarily in business that are not inventory, farm products, or consumer goods
      - Farm Products
        
        crops, livestock, supplies used in a farming operation
- - - - Agreement: creditor has authenticated security agreement
        
        Evidenced by a record: intent to create a security interest
        
        sufficiently describes collateral
        
        NO supergeneric descriptions
        
        Authenticated: writing signed by debtor
      - Possession: creditor takes possession of the collateral
      - Control: creditor has control of an intangible
    - - (1) Seller sells goods to a buyer on credit
      - (2) Lender lends the purchaser money to buy specific goods
- - - - Replevin Action
      - Self-help
        
        allowed as long as no breach of the peace
        
        breach of peace = physical presence + objection to repossession
  - - - Has notice been given to all parties?
        
        Notice not required if:
        
        the collateral is perishable (that is, the collateral's value is threatened to decline prior to sale
        
        Property can be sold on a recognized market, such as the stock market, or
        
        Notice can be waived
        
        waivers within the security agreement itself are not enforceable
        
        Debtor can waive notice after it has already defaulted
      - Has secured party made an effort to get the best price?
      - Public or private sale required or allowed?
    - - First secured party's debt
        
        if deficiency, debtor liable for deficiency judgment
      - Any other secured party's debt in priority order
      - Costs of sale
      - Surplus to debtor (very rare)
- - - - Purchase money security interest in consumer goods
        
        EXCEPT: anything that requires title where SI must be noted on title (vehicles)
    - - can ONLY perfect SI in nonconsumer deposit account by control
        
        putting deposit in secured party's name (first prioity)
        
        agreeing in authenticated record with debtor and the bank in which deposit account is maintained that the bank will comply with the secured party's orders
        
        bank in which nonconsumer deposit account maintained has automatic control
        
        second priority to...
    - - PMSI: other than consumer goods (equipment; inventory and livestock)
        
        temporarily perfected for 20 days
      - Proceeds: temporarily perfected for 20 days
        
        continues if:
        
        identifiable cash proceeds
        
        same office rule
        
        SI in original collateral perfected by filing a financing statement, a SI in the type of collateral constituting the proceeds would be filed in the same place as the financing statement for original collateral,
        
        and proceeds were not purchased with cash proceeds of the collateral
    - - file in Secretary of State's office where collateral is located
      - Requirements
        
        Secured party's name and mailing address
        
        Description of the collateral
        
        may contain supergeneric description (unlike security agreement)
        
        Debtor's name and mailing address
        
        Error
        
        Seriously misleading errors will invalidate a financing statement
        
        NOT seriously misleading if it would be discovered in a filing office search under the debtor's correct name