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UCC article 9 bc involve security interests in personal property
a security interest is an interest that creditor has in debtors property in order to secure payment of a debt
any K that creates a security interest, including a writing in which debtor grnats to creditor a security interest in the described collateral to secure a debt. Collateral can be described by type or by item. Consumer goods are insufficient and type of consumer good must be named. After acquired prop must be named to be attached.
did secuirty K attach?
requires creditor give value, the debtor have rights in collateral, and either debtor signs K or creditor takes possession
purchase money security interest
PMSI secures claim for credit or loan that enabled debtor to acquire that collateral
perfect by takingi possession. Or by filing financing statement. Must give correct name and address of debtor. Trade name not ok. Must indicate collateral and be authorized by the debtor. must be filed with DOL, but if fixture, must be filed with county auditor
goods that are physically united with other goods in such a manner that identity of original goods not lost. ususally, gen rules for priority apply to accessions.
who has priority?
two unperfrected, first to attach does. Perfected over unperfected. between two perfected, first to file/perfect does.
- PMSI - in non inventory has priority over other security interests in the same collateral if perfected before or within 20 days afteer debtor gets property.
- PMSI - in consumer goods, perfects auto and take spriority
- PMSI - in inventory has priority over others only if before debtor gets, the secured party files and notifies other parties of recrod that he is taking a PMSI
buyer in ordinary course of biz
BIOC takes free from security interest created by his seller, even if that secuirty is perfected and even if buyer knows of it, unless buyer also knows the sale of goods is in violation of security K (good faith needed). Buyer must be buying goods in ordinary course of biz from someone engaged in biz of dealing in goods of that kind
Upon default, can repossess if dont without breach of peace. If breach, then must get action in replevin. After repossession, can sell ONLY IF gives notice of sale to debtor and other secured parties on record, and every aspect of sale is commercially reasonable including manner, method, time place etc. Notice req doesnt apply to collateral that is perishable or threatens to decline rapidly in value.
who gets proceeds from sales?
first to pay for repossession and the sale, then satisfaction of debt, than to any third party debts, and any surplus goes to debtor.