Chapter 3

9-203 a and b has reqs for security attachment

3 Reqs
1. Creditor must give value
2. Debtor must have sufficient rights in property or power to transfer rights
3. Plus one of these:
a. Authentication of security agreement by debtor that describes collateral
b. Secured party’s possession of collateral pursuant to debt agreement under 9-313
c. Delivery of collateral (not certified security) pursuant to agreement
d. Collateral is deposit accts, electronic chattel apper, investment property, LOC rights, or
electronic documents where sec party controls it under 9-104 to 9-107
FS cannot be the SI
Reasonable ID of collateral
9203b2- power to transfer rights in collateral is good enough for “rights” requirement
2-702: 10 days to reclaim goods sold on credit, unless it’s a good faith purchaser

3-1
Attachment under 9203
Perfection via possession under 9313

3-2
No pledge- Creation of pledge must be consensual

Authenticate- to sign or with present intent to accept a record 9102-a7

1-201 37- signed

3-3
Hewey- There is no reference to collateral to satisfy attachment
Dewey- you can possibly piece together info to create a sufficient description, but odds are against you
- No reference to credit agreement in financing statement
Lewey- no language of grant. ASK ABOUT THIS

3-4
Did the letter constitute an authenticated security agreement?
It referenced a doc that had yet to be executed
“Constructively agreed” is LOI language
Creditor wrote contract- risk of adverse construction

9-108 sufficiency of description

a. Sufficient if reasonably id’s what is described
b. Comment 2: does description make possible the ID of whats described? Rejects serial number
test
c. When dealing with inventory, think about categories
 d. can describe by type except for, in consumer transaction, consumer goods, a sec entitlement, a
sec account, or a commodity account. Also tort claims

3-5
Mistake is probably fatal under the objective standard

3-6
Consumer goods- goods used or bought for primarily personal, family or household purposes
If change is temporary, this helps lender- comment 4 9102
- but a permanent change can be fatal to lender
3-7
Address change can be ambiguous
- charger: simply specification of where collateral is now; not words of limitation
- bank: words of complete limitation
- middle: all collateral acquired while located at old address and was moved to new address.
Collater bought after the move isn’t attached

3-8
First- “hog inventory” will probably suffice
Second- equipment means goods other than inventory. Inventory is goods held for sale. Thus, must
describe it as inventory
Third- IRS refund is not an account. Should have included “general intangibles”

3-9
No present intent with “got it”; only acknowledges receipt of email
Fax- “city hardo co” was a signature

3-10
JR had no rights in the collateral- no security interest
JR isn’t the debtor, SR must authenticate
JR is obligator- look at 9102 59 and 28. ASK ABOUT THIS

9-204c Future Advances and After Acquired Property

- exception to consumer goods: must be acquired within 10 days; also tort claim exception
3-11
Language that creates “now” and “future” is absent
w/o after acquired property clause, you're limited to collateral at the date of security
potential counter: usage of trade
comment 3: descriptions of after acquired stuff is a matter of contract interpretation
9-204 comment 7: references to after acquired stuff is for the security agreement, not the financing
statement

3-12
Creditor can:
- get more collateral via amendment
- accelerate payment to reduce principal
- bankruptcy
- get officers to guarantee debt with their own assets
Only hope for creditors is if it isn’t a true lease

3-14
Polly: 1-204 taking rights for value- preexisting debt ASK ABOUT THIS
GNG: 9-317 person who becomes a lien creditor before perfection has priority
Loan was funded the day after levey, which is necessary for attachment
Requirement is that value must be given
- not necessary to debtor… debtor vs obligator

3-15
Debtor vs obligor
See comment 2a to 9-102

3-17
Full value can be claimed
9-102a64D extent of the value of collateral
9-204 after acquired property clause

3-18
Must have after acquired property clause
- exception is inventory and a/r because they constantly change
identifiability problem

Chapter 4
9-308a Perfection is when attached and additional steps are taken
Additional steps in 9-310 to 9-316- 4 categories:
- constructive notice to 3rd parties; financing statement 9-310a
- possession 9-312 and 9-313
- control 9-106 and 9-314: investment property; 9-105 and 9-314: electric chattel paper
- automatic perfection 9-309

PMSI 9-103

4-1
There is a PMSI per 9-103 for the price of the collateral

4-2
Better to assign contract per 9-310c1
9-103 cmt3: must have a close nexus between acquisition of collateral and secured obligation. Thus,
there is no PMSI if a creditor acquires property on unsecured credit and subsequently creates the
security interest to secure the purchase price.

4-3
Have to show value given was used to buy the truck
Comingling funds problem
Should’ve paid seller directly
4-4
In 9308, unless stated otherwise, you must file finance statement to perfect
Code 544 allows trustee to void an unperfected security interest
Thus, we need 9309a1 PMSI
- is it consumer goods?
9012 44 considers computers as goods

4-5
9309 a5- health care insurance receivable perfected at attachment
Does debtor have sufficient rights to attach?
Is assignment in writing the same thing as a security agreement?
Definition of account includes “right of payment”, do patients have that right yet?

4-6
Accounts- perfected at attachment
Chattel paper- electronic CP perfected with control
Deposit accounts- control
Documents- electronic perfected with control
Instruments
Investment property- perfected with control
General intangibles (including payment intangibles)- payment intangible is at perfection
Goods- PMSI
Money- possession
Fixtures

9-309 Perfection Upon Attachment

9-310 Filing Req’d to Perfect and Exceptions
9-312 Perfection in Money, Docs, Etc
9-313 Perfection via possession
9-314 Perfection via control

4-7
1-201 24- money is not limited to legal tender
9313 cmt3- rules of agency apply to possession
Cmt 4- third party must authenticate acknowledgement of possession on behalf of third party
- notification doesn’t suffice
9-313c- third party must authenticate record acknowledging his holding for third party

4-8 ASK about this

8-106 Control for Securities
8-301 delivery of securities
9-104 Control of deposit account if
1. SP is the bank where account is
 2. All 3 parties authenticate record which directs bank with instructions originated by the SP
directing disposition of funds w/o debtor’s further consent OR
3. SP becomes banks customer with respect to the deposit account
If the above is satisfied, SP has control even if debtor retains right to direct funds from the account
9-106 control of security
9-312b1- SI in DA can only be perfected by control
9-313 SP can perfect interest in securities via delivery according to 8-301

4-9
9-313d- if perfection is dependent on possession, then perfection takes place when SP takes possession
9-601 Rights at default
Cmt 4- no distingction between possessory and non-possessory interest before default
9-609 right to take Collateral at Default
Thus, at least the goods in the truck are perfected, but maybe cmt4 can get all of them

Perfection by Filing
9-510 if party isn’t authorized to file FS, it is ineffective
Cmt 2- if additional collateral is in FS, then FS covers up to authorized collateral
9-502 3 reqs
- Debtor name
- SP name
- Indication of collateral
Failure to include info from 9-516B reqs an officer to reject it under 9-520

4-12 ASK
Hoffman- Look at 9502
Strickland- trade name isn’t adequate substitute 9503c; 9506c
Silverline- 9102a68+71 pub organic record is decisive of entity formation;
Happy hog- 9517

4-13
9-503 Name of Debtor
9-506 Effect of Errors- B- name change is seriously misleading
9-507 Effect on Events on Effectiveness of FS
- C: 4 months to correct misleading name
9-516 What constitutes filing

4-14
9-203d- when person becomes bound by another’s contract
e- if new debtor is bound then new agreement not needed
9-508a- FS with original debtors name is still effective to perfect
Cmt 3- how new debtor becomes bound

4-15
 1. 9-502d- financing statement can be filed before attachment
Cmt2- notice filing
9-509 Persons Who Can File A Record
Person can file as authorized by debtor
Debtor authorizes by authenticating SA or by acquiring collateral which has a SI
Cmt3- doesn’t need signature to file but authentication is needed
2. 9509 cmt4- authentication of SI is ipso fact authentication of FS. Applies to new debtor too. If SA
covers X but FS covers X and Y, then FS is effective to cover X. If FS covers inventory and seller
sells inventory to buy equipment, FS perfects equipment for 20 days before needing to be
refilled or amended
9-315 SI attaches to proceeds from sale of collateral
3. 9-509d- Who can file amendments- person can file amendment that adds collateral or debtor to
FS if SP of record authorizes or it’s a termination statement; 9-510a- filing is effective if filer was
authorized person under 9509. CMT 2: same as 9509 cmt4.
4. Secured party authorized the filing….

4-16
9-504: financing statement sufficiently indicates collateral if: describes collateral pursuant to 9-108 or if it
covers all assets
9-506- FS is OK with minor errors, unless they are seriously misleading. Seriously misleading-> 9503a

4-17
Sal
9-203d person becomes liable to SA when they acquire all of the original party’s assets. E- another
agreement isn’t necessary
9-326 cmt 2- SPX has FS for current and after acquired inventory of X. SPZ has the same thing for Z. Z
becomes bound to X’s SA. But for 9508 SPX’s FS would be ineffective to perfect inventory which SPZ has
rights. But (a) subordinates SPX to SPZ even though SPX filed first. This would apply to new inventory
coming in after merger
9507a- financing statement remains intact even after sale
Cmt3- SP remains perfected even though there is new creditor and pub record hasn’t been updated
Jane
9504- FS can cover all assets
9108c- sufficiency of description: cannot be supergeneric
Bubba
9-210 can make a request for collateral statement

4-18
“As extracted” collateral
- Has additional filing req’s under 9-502b
FS must go to RE records not central database

4-19
9-515 continuation statement must be filed every 5 years unless there's an exception
d- must be filed within 6 mos of 5 yr period
FS lapsed and perfection is lost
But new FS filed on 1/5

Req’s for FS
1. Debtor’s name
2. SP’s name
3. Description of collateral 9-502a2
SI signed by debtor is authentication to file FS
If name is inaccurate under 9503, it wont be seriously misleading if it can be found under regular search.
Try describing collateral by type or item (combined too) instead of serial number
Avoid supergeneric descriptions

Minor errors
9506(a)- minor errors are ok. Definition of FS includes amendments or continuations
(b) if FS doesn’t provide D’s name in accordance w/ 9503(a)-> seriously misleading
A debtor who authenticates a SI authorizes SI to file amendments

Postfiling Changes
9507(c) if debtor changes name to become seriously misleading, FS perfects SI in collateral before or
within 4 months after the change
- Amendment must be filed within 4 months
Newdebtor isn’t the same as name change (business reshuffle)
9203(d)2- new debtor becomes obligated; no need for new security agreement
What about the FS?
9-507a allows FS to remain intact
For assets acquired after transfer, 4 month rule applies

Preloan filing can be made, just make sure FS covers later extentions of credit
9516(a)- filing occurs upon presentment of FS to filing office or tender of filing fee by office
Filing continuation 9515
Refilling the name of an assignee is optional
CHAPTER 5
Secured has priority over unsecured
First to file has priority over competing SP
9-315: SI attaches to proceeds of collateral sale
- Transferee takes collateral subject to SI except when:
o Purchaser is buyer in ordinary course
o SI is lost for failure to perfect
o SP consents to transfer
- Upon discovery of transfer PS can repossess or take conversion action

5-1
Priority goes to first filer for after acquired property
First 4 vats go to BNB
May vats
9322b1- perfection applies to proceeds
AAP clause from Feb will perfect May vats- BNB wins
July Vats
BNB wins bc of earlier filing date

5-2
9108e- description by type doesn’t apply to CG’s
9204b-AAPC doesn’t attach to CG’s
- 10 day limit
HFC loaned after the piano was bought so AAPC doesn’t apply

5-3
Is it a true lease? See 1-203 for criteria
If disguised sale- attachment for the hoes took place on Jan 30, when the extension was signed
- FNB attached on may1
- BNB perfection on Hoes took place on 1/30 when amendment was filed
- FNB took possession on 5/31 thus being perfected then
- FNB could have filed precautionary FS even as a lessor

5-4
Jan- 500k w/ SI in Eq and AR w/ AAPC
1/10 FS
16 mos earlier in april 20- BH si for 50k w/ fs for equip which was paid off
BH loans another 100k 11 mos after BNB w/ new SI. Still looking for FS
BNB should have confirmed no outstanding loan balances
If BH had AAPC in original SA then second SA wouldn’t be necessary
Should have asked debtor to enforce termination statement
5-5
7/1 (year b4 BNB lends) PF lends 50k w/ fs
1/10 BNB loan w/ aapc
6/1 PF lends another 35k w/ SA for generator that hooping got 3/30

5-6

5-29
Did sale from bildgewater to bligh. Bligh is buyer in ordinary course of business. BW is dealer in boats,
thus good faith buy 9320a. Tidewater isn’t secured bc of 9320. Anything bligh does subsequent, bligh
doesn’t have to worry about tidewater.
Bligh sells to FYB, another dealer. Does that cut off BW sec int? see 9320a and b. Bligh isn’t a dealer, boat
is consumer goods in his hands. BW could’ve relied on PMSI. FYB is wrong kind of buyer for 9320b.
9320b only applies if holder of si doesn’t file. 9320a and b extinguish bligh sec int in favor of bw. Now we
have bw and chase SI.
Sale from FYB to ahab. Now we have SI in favor of FF, a PMSI. BW also has PMSI. Does this transfer
eliminate any SI’s? chase sec int disappears under 9320a. What about BW SI? SI survives FYB ahab
transfer. 9325 a also?
Now we have BW vs FF. 9324 resolves this dueling pmsi. G says BW wins.
- Another way is by looking at 9325. Sec int created by ahab is sub to sec created by bligh.
Transferee is sub to transferor

5-31
BNB loans to CD. BNB takes si in equip. perfected w/ FS. SA prohibits sale of collateral w/o consent.
T and BNB in priority contest.
In CD’s hands machine is equipment. Can T use 9320a? no, CD isn’t a dealer of machines. B doesn’t work
either. No cut off in SI yet.
9323d and e covers buyers other than in ord course of business. Doesn’t affect 60 days ago advance or
the advance 30 days ago
8 day advance isn’t protected. Its sub to buyer. BNB knew of sale and 45 days passed. 45 days is absolute
except for subsection e, advance is a commitment.

Comments to 9334
Once incorporated into RE, you cant take SI
Goods can be incorporated into RE and will pass with RE conveyance and lose their chattel character
Fixtures are where you have contestes between sec party and RE party. 9334 c is default rule.

5-32
9501 and 502 tells you differences between fixture filings.
NA wants to defeat 9334c. PMSI triggers 9334d. 9334d is s PM super priority.
Does NA take prioirity over BOA’s second mortgage? E1 enables fixture financer who makes a filing …

9-334 c is default rule for RE and fixtures

5-32
EM will prob have priority over lien creditor. RE law, first to file
Swelter needs superprioirity to beat EM. Didt do a fixture filing per 9334D
- Can he use e1? No because e1 reqs fixed filing and e1 isnt superpriority.
- Swelter will lose to EM
Swelter vs tort creditor
- 9501 and 2: can use art 9 filing for some purposes. Does central filing help swelter over lien
creditor. 9334E3 art 9 secured party who perfect before lien arises wins.
- Priority for fixtures: EM, then swelter bc of central filing under 917 or 9334e3
EM wins against Elite?
- Defining heating and cooling system.
- 9334c RE mortgagee wins

5-33
BNB has construction mortgage. 9334d refers you to 9334h PMSP is subject to rights of construction
mort and provided goods become fixtures prior to completion of construction.
Why does 9334d create superpriority? Reward for enabling debtor to add new assets to estate.

5-35

4/15/19
Secured parties remedies
Definition of default is matter of contract

7-4
Catchall clause helps secured party to determine where they're insecure
Acceleration clause

7-1
1-309- power to accelerate at will has good faith qualification. Can’t be arbitrary
Subjective insecurity isn’t enough- reasonable commercial standards of fair dealing
Value of truck hasn’t diminished and hes making payments

7-2
1-309 comment 1: doesn’t apply to demand letters
Creates installment application not a demand note?

7-3
Waiver estoppels and 1303

4/17/19
9609 creates sec party right to take possession of collateral in foreclosure
- B sec party can do so w/o judge if no breach of peace
7-6
Conversion
9625b- sec party violates ucc9, hes liable
Breach of the peace- isn’t confined to physical violence
- Trespass is ok
- Repo from unlock garage is also ok
- If debtor protests, you should stop
- Bringing a cop friend is breach. Comments to 9609
- Cant waive duty of repo w/o breach of peace
9626

Skip 7-7

7-8
Sometimes sec party must take steps to prepare collateral for sale
9615- if coll doenst bring enough to satisfy expenses of sale, then obligor is liable for deficiencies
Issue of notice- 9611b
9610 allows for disposition anytime if reasonable
9612a- timliness of notice is question of fact
- In transaction other than CGs safe harbor