I. INTRODUCTORY TERMS
Voluntary Credit Transactions
Credit Sales – purchase but no payment (pay on time)
Loans – borrow money to do something
· All definitions are found in either 9-102 or 1-201 and 9-102 trumps in the case that there are any discrepancies between definitions in the two sections.
· Start w/ Art. 9. Then go to other UCC provisions. If not in UCC, 1-103 says that common law controls.
· Remember that Unsecured Parties can include those obligated through involuntary credit transactions. Such as Tortfeasor (D) and injured party (CR).
· A defendant in a patent infringement suit. If someone gets a judgment, they are a creditor, they owe someone.
· If person has a positive balance in their bank account, the Bank is the D (b/c they’re borrowing your money) and you are the CR.
· 3d parties include:
(a) Buyer #2 who buys from Buyer #1
(b) Trustee in bankruptcy
(c) Bank #2 who loans you money after Bank #1.
Bank #2 (can use good as collateral)
Bank Borrower-D TIB (trustee in bankruptcy)
Buyer #2 (sells good to buyer)
3d parties to a loan –
Bank Borrower-D TIB
If there is a D-creditor relationship created, what are the rights of that creditor as against third parties. That is where almost all of the litigation is. The very same issues apply to both above.
A. Difference B/W Unsecured and Secured CRs
Types of Credit –
CREDIT REAL PROPERTY
PERSONAL PROPERTY *****(this course)
D has given a specific interest
in specific property by K to CR
to ensure performance
Kinds of Unsecured Credit –
Seller credit cards are for dealings only w/ that seller that allow D to buy on
seizure and sale. Includes transportation regularly used and costing less than $20K. The car above is exempt from seizure and sale (not all states have exact, but all states have these exempting statutes). Attachment reference in statute is not to Article 9, but rather a pre-judgment creditor’s remedy.
Same facts as hypo except for there was a security agreement signed. Does the exemption, like the Kansas one above, apply? NO, the exemption statute does not apply because the security agreement is created by contract.
Simply put, a perfected secured creditor is going to win against anyone in a claim in the property.
Difference B/W Security Interest, Judicial Lien, and Statutory Lien