Uniform commercial code in a nutshell / by Bradford Stone and Kristen David Adams.
2012
KF889.3 .S68 2012 (Map It)
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Items
Details
Author
Title
Uniform commercial code in a nutshell / by Bradford Stone and Kristen David Adams.
Published
St. Paul, MN : Thomson/West, [2012]
Copyright
©2012
Call Number
KF889.3 .S68 2012
Edition
Eighth edition.
ISBN
9780314277442 (pbk.)
0314277447 (pbk.)
0314277447 (pbk.)
Description
clxxxi, 614 pages : illustrations ; 19 cm.
System Control No.
(OCoLC)779883689
Note
Includes index.
Series
Record Appears in
Added Author
Table of Contents
Preface
v
Introduction
xi
Table of Citations to the Uniform Commercial Code
xlv
pt. ONE
THE PROCESS OF SELLING GOODS
A.
Scope of Article 2 Sales
1
B.
The Contract for Sale
4
1.
Formation of the Sales Contract---Mutual Assent
4
A.
When and How Agreement Is Made
4
B.
The Indefinite Offer
5
C.
Firm Offer to Buy or Sell
9
D.
Acceptance of Offer
10
(1).
Manner and Medium of Acceptance
10
(2).
Acceptance of Ambiguous Offer by Performance or Promise to Perform
10
(3).
Acceptance with Additional or Different Terms
12
E.
"Qualified" Acceptance Containing Additional Terms
12
F.
Offer and Acceptance in Sale by Auction
19
G.
Buyer's Right to Cancel Home Solicitation Sale
20
2.
The Requirement of Consideration
20
A.
In General
20
B.
Firm Offer
21
C.
Changing the Contract---Modification, Rescission, Waiver
21
D.
The Illusory Promise
23
3.
Form of the Contract
24
A.
Statute of Frauds
24
B.
Seals
29
4.
Terms and Interpretation of the Sales Contract
30
5.
Parol Evidence Rule
35
6.
Assignment of Rights and Delegation of Performance Under the Contract
36
7.
Checklist of Items to Be Included in Contracts for the Sale of Goods
39
C.
Property Incidents of the Sales Contract
41
1.
Title
42
2.
Special Property
50
3.
Insurable Interest
51
4.
Security Interest
52
5.
Risk of Loss
52
D.
Seller's Warranty Obligations
57
1.
Warranty of Title
57
2.
Warranties of Quality
58
A.
Express Warranties
58
B.
Implied Warranties
62
(1).
Implied Warranty of Merchantability
62
(2).
Implied Warranties Arising From Course of Dealing or Trade Usage
64
(3).
Implied Warranty of Fitness for Particular Purpose
64
3.
Cumulation and Conflict of Warranties
65
4.
Defenses to Warranty Actions
65
A.
Causation
65
B.
Statute of Limitations
66
C.
Notice of Breach
67
5.
Exclusion or Modification of Warranties
68
A.
Warranty of Title
68
B.
Warranties of Quality
68
(1).
Express Warranties
68
(2).
Implied Warranties
69
(a).
Examination
69
(b).
Course of Dealing, Course of Performance, or Trade Usage
69
(c).
Language
70
6.
Limitation of Remedies for Breach of Warranty
74
7.
Beneficiaries of Warranties
75
E.
Performance of the Sales Contract
85
1.
General Rights and Obligations of Sellers and Buyers
85
A.
Performance in Good Faith
85
B.
Right to Unimpaired Expectation That the Other Party Will Duly Perform Its Obligations
86
(1).
Anticipatory Repudiation
86
(2).
Adequate Assurance of Performance
87
2.
Seller's Obligation to Deliver Goods
89
3.
Buyer's Obligation to Accept Goods
93
4.
Buyer's Obligation to Pay for Goods
95
5.
Buyer's Right to Inspect Goods
97
6.
Buyer's Rights on Improper Delivery
99
A.
In General
99
B.
Buyer's Rejection
101
(1).
Situations in Which Buyer Has a Right to Reject
101
(2).
Manner and Effect of Rightful Rejection
101
(3).
Requirement That Buyer Specify Reasons for Rejection
102
(4).
Buyer's Rights and Obligations After Rightful Rejection
104
(a).
When Buyer Has a Security Interest
104
(b).
When Buyer Has No Security Interest
104
(c).
Buyer's Remedies in General
105
(5).
Effect of Wrongful Rejection
105
(6).
Effect of Failure to Reject
106
C.
Buyer's Acceptance
106
D.
Buyer's Revocation of Acceptance
108
7.
Buyer's Rights and Obligations When One or More Nonconforming Installments Are Delivered Under Installment Contract
110
8.
Seller's Right to Cure
111
9.
Dispute as to Quality of Goods: Preserving Evidence
115
10.
Excuse of Performance
116
A.
Failure of Presupposed Conditions
116
B.
Casualty to Identified Goods
117
C.
Substitute Performance
118
F.
Remedies
119
1.
Remedies Generally
119
2.
Seller's Remedies
120
A.
Seller's Remedies for Buyer's Breach
120
(1).
Seller May Cancel
120
(2).
Seller May Take Action as to the Goods
121
(a).
Seller May Withhold Delivery of the Goods
121
(b).
Seller May Stop a Bailee's Delivery of the Goods
121
(c).
Under [§] 2-704, Seller May Identify Goods to the Contract Notwithstanding Breach or Salvage Unfinished Goods
122
(3).
Seller May Recover Monies From Buyer Per[§][§] 2-706, 2-708, or 2-709
123
(a).
Seller May Resell and Recover Damages
123
(b).
Seller May Recover Damages for Non-Acceptance or Repudiation
125
(c).
Seller May Recover the Price
126
B.
Seller's Remedies Upon Buyer's Insolvency
128
C.
Seller's Remedies in a "Cash Sale"
129
3.
Buyer's Remedies
131
A.
Buyer's Remedies for Breach When Buyer Has Not Accepted the Goods or Has Justifiably Revoked Acceptance
131
(1).
Buyer May Cancel
132
(2).
Buyer May Recover Price Paid
132
(3).
Buyer Has a Security Interest in Goods Within Buyer's Possession or Control
132
(4).
Buyer's Recovery of Money Damages
133
(a).
Buyer May "Cover" and Recover Damages
133
(b).
Buyer May Recover Damages for Non-Delivery or Repudiation
134
(5).
Buyer's Remedies Reaching the Goods Themselves
135
(a).
In a Proper Case, Buyer May Obtain Specific Performance
135
(b).
In a Proper Case, Buyer May Replevy the Goods
136
(c).
Buyer May Recover Identified Goods Upon Seller's Insolvency, Repudiation, or Failure to Deliver
137
B.
Buyer's Remedies When Buyer Has Finally Accepted the Goods
139
4.
Remedy Principles Applicable to Sellers and Buyers
143
A.
Terms or Clauses in the Sales Contract That Provide for Remedies
143
(1).
Liquidated Damages
143
(2).
Contractual Modification or Limitation of Remedy
145
B.
Remedies for Fraud
148
C.
Who Can Sue Third Parties for Injury to Goods
149
D.
Statute of Limitations
149
G.
Rights of Third Parties---Purchasers From, and Creditors of, Seller and Buyer
151
1.
Purchasers From Buyer
151
2.
Creditors of Buyer
158
3.
Purchasers From Seller
162
4.
Creditors of Seller
163
5.
Rights of Third Parties Found Elsewhere in the UCC
164
H.
Bulk Sales
165
I.
Sale of Investment Securities
166
pt. TWO
THE PROCESS OF LEASING GOODS
A.
Scope of Article 2A
169
B.
The Lease Contract
172
1.
Formation of a Lease Contract
172
A.
Manner and Moment of Agreement
172
B.
The Indefinite Offer
172
C.
Firm Offer to Lease
173
D.
Manner and Medium of Acceptance
173
2.
The Requirement of Consideration
173
A.
In General
173
B.
Firm Offer
173
C.
Modification, Rescission, Waiver
173
3.
Form of the Lease Contract
174
A.
Statute of Frauds
174
B.
Seals
175
4.
Terms, Construction, and Interpretation
175
5.
Parol Evidence Rule
176
C.
Property Incidents of the Lease Contract
176
1.
Title to and Possession of Goods
176
2.
Special Property
176
3.
Insurable Interest
177
4.
Security Interest
177
5.
Risk of Loss
178
D.
Lessor's Warranty Obligations
180
1.
Express Warranties
180
2.
Warranties Against Interference and Infringement
181
3.
Implied Warranty of Merchantability
182
4.
Implied Warranty of Fitness for Particular Purpose
183
5.
Cumulation and Conflict of Warranties
183
6.
Defenses to Warranty Actions
183
A.
Causation
183
B.
Statute of Limitations
184
C.
Notice of Breach
184
7.
Exclusion or Modification of Warranties
185
8.
Limitation of Remedies for Breach of Warranty
187
9.
Third-Party Beneficiaries of Warranties (Privity)
187
10.
Warranties, etc., Under Finance Lease
188
E.
Repudiation, Substituted Performance, and Excused Performance of a Lease Contract
188
1.
Repudiation
188
A.
Insecurity and Adequate Assurances
188
B.
Anticipatory Repudiation
189
2.
Substituted Performance
189
3.
Excused Performance
189
4.
Irrevocable Promises: Finance Leases
190
F.
Effect of Lease Contract
192
1.
Validity and Enforceability
192
A.
General Rule
192
B.
Transfer of Rights and Duties
192
2.
Priority of Various Claims to Goods
193
A.
Lessor's Subsequent Lease of Goods
193
B.
Lessee's Sale or Sublease of Goods
194
C.
Priority of Liens Arising by Operation of Law
195
D.
Priority of (1) Liens Arising by Attachment or Levy, (2) Security Interests, and (3) Other Claims to Goods
196
E.
Special Rights of Lessor's or Seller's Creditors
197
F.
Lessor's and Lessee's Rights in Fixtures
198
G.
Lessor's and Lessee's Rights in Accessions
199
H.
Priority Subject to Subordination
200
G.
Default
200
1.
Default Procedure
200
A.
What Constitutes Default
200
B.
Enforcement When Lessor or Lessee Defaults
200
C.
Notice After Default
201
2.
Default Provisions Applicable to Lessors and Lessees
201
A.
Terms or Clauses in the Lease Agreement Providing for Remedies or Damages
201
(1).
Modification or Impairment of Rights and Remedies
201
(2).
Liquidation of Damages
201
B.
Remedies for Fraud
202
C.
Statute of Limitations
202
D.
Suits Against Third Parties for Injury to Goods
202
3.
Lessor's Default
203
A.
What Constitutes Lessor's Default
203
B.
Lessee's Rights on Improper Delivery to (1) Reject, or (2) Accept
204
(1).
In General---Perfect Tender Rule
204
(2).
Lessee's Rejection of Goods
204
(a).
Situations When Lessee Has Right to Reject
204
(b).
Manner and Effect of Rightful Rejection
204
(c).
Requirement That Lessee Particularize Reasons for Rejection
205
(d).
Rights and Obligations of Lessee After Rightful Rejection
205
(i).
When Lessee Has a Security Interest
205
(ii).
When Lessee Has No Security Interest
206
(e).
Effect of Wrongful Rejection
207
(f).
Effect of Failure to Reject
207
(3).
Lessee's Acceptance of Goods
207
(4).
Lessee's Revocation of Acceptance
208
C.
Lessor's Right to Cure Improper Tender or Delivery
209
D.
Nonconformity of Installment(s) in Installment Lease Contract
210
E.
Lessee's Remedies Where (1) Goods Are Not Accepted, or (2) Acceptance Is Revoked
210
(1).
Lessee May Cancel the Lease Contract
211
(2).
Lessee May Recover Rent and Security
Paid
211
(3).
Lessee's Security Interest in Goods in Lessee's Possession or Control
211
(4).
Lessee's Recovery of Money Damages
212
(a).
Lessee May "Cover" and Recover Damages
212
(b).
Lessee May Recover Damages for (i) Lessor's Non-Delivery or Repudiation, or (ii) Lessee's Rejection or Revocation
212
(5).
Lessee May Exercise Contractual Remedies
213
(6).
Lessee's Remedies Reaching the Goods Themselves
213
(a).
On Lessor's Insolvency, Lessee May Recover Identified Goods
213
(b).
In a Proper Case, Lessee May Obtain Specific Performance
214
(c).
In a Proper Case, Lessee May Replevy the Goods
214
F.
Lessee's Remedies When Goods Are Finally Accepted
214
G.
Lessee's Remedies for Lessor's Default Under an Installment Lease Contract
215
4.
Lessee's Default
216
A.
What Constitutes Lessee's Default
216
B.
When Lessee is Otherwise in Default Under Lease Contract
216
C.
Lessor's Remedies When Lessee Defaults
216
(1).
Lessor May Cancel the Lease Contract
216
(2).
Lessor May Take Action As to the Goods
217
(a).
Lessor May Identify Goods to the Lease Contract Notwithstanding Default or Salvage Unfinished Goods
217
(b).
Lessor May Withhold Delivery of Goods and Take Possession of Goods Previously Delivered
217
(c).
Lessor May Stop Delivery of the Goods by Any Bailee
218
(3).
Lessor May Recover Monies From Lessee
218
(a).
Lessor May Dispose of the Goods and Recover Damages
218
(b).
Lessor May Retain the Goods and Recover Damages
219
(c).
Lessor May Recover the Rent
220
(4).
Lessor May Exercise Contractual Remedies
221
(5).
Lessor May Recover Loss Resulting in Ordinary Course of Events
221
(6).
Lessor May Recover for Loss to Residual Interest
222
D.
Lessor's Remedies When Lessee Defaults Under an Installment Lease Contract
222
pt. THREE
THE PROCESS OF PAYING FOR GOODS WITH NEGOTIABLE INSTRUMENTS
A.
Introduction to Negotiable Instruments
223
B.
The Negotiability Concept---Rights of Takers of Negotiable Instruments
227
1.
Introduction to Negotiability
227
2.
Effectiveness of Defenses and Claims in Recoupment Against Subsequent Takers of Instruments
231
A.
Requisites to Greater Rights for Good Faith Purchasers
231
(1).
The Instrument Must Be Negotiable
233
(a).
There Must Be a Written Promise or Order to Pay, Signed by Maker or Drawer
233
(b).
The Promise or Order Must Be Unconditional
235
(c).
The Unconditional Promise or Order Must Be for a Fixed Amount of Money
237
(d).
The Writing Must Be Payable to Bearer or to Order
238
(e).
The Writing Must Be Payable on Demand or at a Definite Time
239
(f).
The Writing Must Not State Any Other Undertaking or Instruction to Do Any Act in Addition to Payment of Money
240
(2).
The Taker of the Instrument Must Be a "Holder"
241
(a).
How Issuance and Negotiation to a Holder is Effected
242
(b).
The Indorsement Requirement
244
(3).
The Holder Must Be a "Holder in Due Course"
251
(a).
Requisites to Holder in Due Course Status
251
(i).
The Taker Must Be a Holder of a Negotiable Instrument
251
(ii).
The Instrument Must Not Be So Irregular or Incomplete as to Call Its Authenticity Into Question
251
(iii).
The Holder Must Take the Instrument for Value
251
(iv).
The Holder Must Take the Instrument Without Notice That It Is Overdue or Has Been Dishonored
254
(v).
The Holder Must Take the Instrument in Good Faith, Without Notice of Claims or Defenses
255
(b).
Payee as a Holder in Due Course
261
(c).
Unusual Circumstances in Which a Holder Does Not Become a Holder in Due Course
262
(d).
Holder of Security Interest as Holder in Due Course
262
(e).
Successors to Holders in Due Course---Shelter Principle
263
(f).
Burden of Establishing Signatures and Status as Holder in Due Course
264
(4).
Holder in Due Course Is Subject to "Real Defenses" But Not "Personal Defenses" or "Claims in Recoupment"
265
(a).
Real Defenses
265
(b).
Personal Defenses and Claims in Recoupment
269
(i).
Personal Defenses of the Obligor Found Elsewhere in Article 3
269
(ii).
Personal Defenses Available at Common Law in an Action to Enforce a Right to Payment Under a Simple Contract
270
(iii).
Claims in Recoupment
271
(c).
Effectiveness of Discharge
272
(d).
Discharge, Defenses, and Claims in Recoupment of Accommodation Parties
273
B.
Effect of Consumer Protection Legislation on the Rights of a Holder in Due Course
273
3.
Effectiveness of Claims to a Negotiable Instrument as Against a Subsequent Taker
277
4.
Jus Tertii---Claims and Defenses of Third Persons
278
5.
Electronic Notes
279
C.
Liabilities of Parties: Contract, Warranty, Tort
280
1.
Liability on an Instrument
280
A.
Signature in General
280
B.
Signature by Representative
280
C.
Unauthorized Signature
282
2.
Obligation of Maker of Note or Issuer of Cashier's Check
283
3.
Obligation of Drawer of Draft or Indorser of Instrument
284
A.
Drawer or Indorser's General Obligation
284
B.
Presentment, Dishonor, Notice of Dishonor, Evidence of Dishonor (Protest)
285
(1).
Dishonor
286
(a).
When Note is Dishonored
286
(b).
When Unaccepted Draft is Dishonored
286
(c).
When Accepted Draft (e.g., Certified Check) Is Dishonored
287
(d).
Requisites for Presentment (If Required for Dishonor)
288
(2).
Notice of Dishonor
290
(a).
When Notice of Dishonor is Required
290
(b).
How Notice of Dishonor is Given
291
(c).
Time for Giving Notice of Dishonor
291
(d).
When Notice of Dishonor is Excused
292
(e).
Effect of Failure to Give Timely Notice of Dishonor
292
(3).
Evidence of Dishonor and Notice of Dishonor
293
4.
Liability of Transferors---Transfer Warranties
293
5.
Liability of Drawee and Acceptor
296
A.
Contract Liability on the Draft
296
(1).
Drawee
296
(2).
Acceptor
297
B.
Conversion (Tort) Liability
299
(1).
When Instrument is Paid on a Forged Indorsement
299
(2).
When Instrument is Delivered for Payment or Acceptance and Not Accepted, Paid, or Returned on Demand
300
6.
Obligation of Accommodation Party
301
A.
Introduction
301
B.
Accommodation Party Defined
301
C.
Obligation of Accommodation Party
302
D.
Accommodation Party's Right to Contribution From Cosureties
303
E.
Accommodation Party's Assertion of Accommodated Party's Defenses or Claims in Recoupment Against Person Entitled to Enforce Instrument
304
F.
Accommodation Party's Special Defenses
304
(1).
No Liability of Accommodation Party to Accommodated Party
305
(2).
Discharge of Secondary Obligors
305
(a).
Impairment of Recourse
306
(b).
Impairment of Collateral
308
(c).
Effect of Lack of Knowledge or Notice That Instrument Was Signed for Accommodation
309
(d).
Consent to Event or Conduct, or Waiver of Discharge
309
(e).
Effectiveness of Discharge against Holder in Due Course
310
G.
Conclusion
310
7.
Accrual of Cause of Action and Statute of Limitations
310
8.
Discharge of Obligations
311
9.
Effect of Instrument on Underlying Obligation
317
10.
Lost, Destroyed, or Stolen Instruments
319
D.
The Relationship Between a Payor Bank and Its Customer
320
1.
Factual Setting
320
2.
Rightful vs. Wrongful Payment
321
A.
When a Bank May Charge Its Customer's Account
321
B.
Customer's Duties to Bank---Effect on Bank's Liability for Wrongful Payment
323
(1).
Preparation and Issuance of Instruments
323
(a).
Negligence Contributing to Forged Signature or Alteration
323
(b).
Completion of Incomplete Instrument
325
(c).
Instruments Payable to Impostors or Fictitious Payees
325
(i).
Impostors
325
(ii).
Fictitious Payees
327
(d).
Employees' Fraudulent Indorsements of Instruments Issued by Employers
328
(2).
When Bank Sends or Makes Available a Statement of Account or Items---Customer's Duty to Discover and Report Unauthorized Signature or Alteration
329
(a).
Requisites to Impose on Customer the Duty to Discover and Report Unauthorized Signature or Alteration
329
(b).
Customer's Duty to Discover and Report Customer's Unauthorized Signature or Any Alteration
330
(c).
Bank's Failure to Exercise Ordinary Care---Comparative Negligence Test
331
(d).
No Duty to Discover and Report Unauthorized Indorsement
332
(e).
Time Limit on Customer's Right to Assert Against Bank (i) Customer's Unauthorized Signature, (ii) Any Alteration, or (iii) An Unauthorized Indorsement
332
C.
Events or Circumstances That Suspend or Terminate Bank's Authority to Pay
332
(1).
Customer's Right to Stop Payment
333
(2).
Checks Presented More than Six Months Old
336
(3).
Death or Incompetence of Customer
336
(4).
Customer's Bankruptcy
337
3.
Wrongful Dishonor
338
E.
The Bank Collection Process
339
1.
The Process Described
339
2.
Status of Collecting Bank as Agent
345
3.
Rights, Obligations, and Responsibilities of Collecting Banks
347
4.
Final Payment of Item by Payor Bank
348
5.
Priorities in Customer's Account---When Items are Subject To (1) Notice, (2) Stop-Payment Order, (3) Legal Process, or (4) Setoff
351
6.
Priorities in Customer's Account---Order in Which Items May Be Charged or Certified
354
F.
Finality of Payment or Acceptance (1) By Mistake or (2) In Good Faith---Relationship Between Payor or Acceptor and Presenter
354
1.
Finality of Payment
354
A.
Typical Factual Setting
354
B.
Payment by Mistake Rules---Pre-Ucc
355
C.
Payment by Mistake Rules---Former Articles 3 and 4
356
D.
Payment by Mistake Rules---Revised Articles 3 and 4
358
2.
Finality of Acceptance
361
3.
Warrantor/Presenter as Beneficiary of Drawee/Payor's Rights Against Drawer
363
4.
Encoding and Retention Warranties
363
G.
Review of Liability for Altered and Forged Instruments
364
1.
Altered Instrument
364
2.
Forged Drawer's Signature
365
3.
Forged Indorsement
366
H.
Investment Securities as Negotiable Instruments
369
I.
Funds Transfers
371
pt. FOUR
SHIPPING AND STRONG GOODS COVERED BY DOCUMENTS OF TITLE
A.
Introduction
375
B.
Bailee's Delivery Obligation: The Document as a Symbol or Representative of Goods
379
C.
Obligation of Bailee-Warehouse to Keep the Goods Covered by Each Warehouse Receipt Separate
391
D.
Negotiation and Transfer of Documents of Title
391
1.
Introduction
391
2.
Negotiation of Warehouse Receipts and Bills of Lading by "Due Negotiation"
392
A.
Requirements of "Due Negotiation"
392
B.
Rights Acquired by "Due Negotiation"
394
C.
Certain Cases When Holder's Rights are Defeated Despite "Due Negotiation"
396
(1).
Unauthorized Bailment
396
(2).
Two or More Documents Issued by Different Issuers Representing the Same Goods
397
(3).
Two or More Documents Issued by the Same Issuer Representing the Same Goods
399
(4).
Fungible Goods
399
3.
Transfer in the Absence of "Due Negotiation"
400
A.
When Document of Title is Transferred Rather Than "Duly Negotiated"
400
B.
Rights Acquired by a Transferee of a Document Not "Duly Negotiated"
400
C.
Certain Cases In Which Transferee or Consignee's Rights in a Nonnegotiable Document May Be Defeated
402
(1).
Defeat of Transferee's Rights Prior to Notification to Bailee of Transfer--- The "Seller in Possession"
402
(2).
Diversion or Other Change of Shipping Instructions---Loss of Consignee's Title as Against Buyer in Ordinary Course of Business
405
(3).
Stoppage of Delivery in Transit
405
4.
Obligations of Indorsers and Persons Who Negotiate or Deliver Documents
406
E.
Situations Excusing Delivery to a "Person Entitled Under the Document"
407
F.
Nonreceipt or Misdescription of Goods
411
G.
Forged or Altered Documents
413
pt. FIVE
FINANCING THE SALE OF GOODS: THE SECURED TRANSACTION
A.
Fundamentals of a Secured Transaction
415
B.
Pre-Code Personal Property Security Law
418
C.
Secured Transactions Under UCC Article 9
423
1.
Purpose and Policy of UCC Article 9
423
2.
Applicability of UCC Article 9
434
A.
General Scope of Article 9
434
B.
Transactions Excluded From Article 9
444
C.
Statutes Not Affected by Article 9
445
3.
Requisites to an Enforceable Security Interest
445
A.
Requisite of an Agreement
446
(1).
Formal Requisites of a Security Agreement
446
(2).
Possession, Delivery, or Control of Collateral Pursuant to Security Agreement
447
(3).
Terms of Security Agreement
448
(4).
Effect of Debtor's Use or Disposition of Collateral Without Accounting to Secured Party
451
B.
Requisite That Value be Given
452
C.
Requisite That Debtor Have Rights in the Collateral
453
4.
Requisites to Protection of Secured Party Against Third-Party Claims-Perfection of a Security Interest
454
A.
How and When a Security Interest is Perfected and Effect of Perfection
454
B.
Perfection by Filing
456
(1).
Types of Collateral Perfected by Filing
456
(2).
What Is Filed---A Financing Statement
456
(3).
When a Financing Statement May Be Filed
462
(4).
Place of Filing
464
(5).
Filing Fees
467
(6).
What Constitutes Filing
467
(7).
Duration of Effectiveness of Filing
468
(8).
Effect of Lapsed Filing
469
(9).
Continuation of Effectiveness of Filing
469
(10).
Amendment of a Financing Statement
470
(11).
Assignment of Secured Party of Record's Powers
470
(12).
Termination Statement
471
(13).
Functions, Duties, Etc., of Filing Office
472
C.
Perfection by Possession
472
(1).
Types of Collateral Perfected by Possession or Delivery
472
(2).
Requirement of Secured Party's Possession
473
(3).
When Security Interest Becomes Perfected by Possession
475
D.
Perfection by Control
475
(1).
Types of Collateral Perfected by Control
475
(2).
Requirements for Control
476
(3).
Time of Perfection by Control
477
E.
Automatic Perfection
477
5.
Priorities Among Conflicting Interests in the Same Collateral
479
A.
Introduction to Priority Rules
479
B.
Overview of Priority Rules in Common Situations Involving Goods
483
(1).
When No Purchase-Money Security Interest Is Involved
483
(a).
Equipment or Consumer Goods Collateral
483
(b).
Inventory Collateral
485
(2).
When a Purchase-Money Security Interest Is Involved
487
(a).
Introduction
487
(b).
Equipment Collateral
491
(c).
Consumer Goods Collateral
493
(d).
Inventory Collateral
495
C.
Operation of Article 9 Priority Rules
498
D.
Priority Rules For Various Types of Collateral
509
(1).
Goods Collateral
509
(a).
Goods for Use---Equipment and Consumer Goods
509
(b).
Goods Held for Sale or Lease---Inventory
514
(c).
Farm-Related Goods
517
(d).
Goods Affixed to Land or Other Goods---Fixtures, Accessions
520
(i).
Fixtures
520
(ii).
Accessions
523
(e).
Commingled Goods
525
(2).
Indispensable Paper Collateral
525
(3).
Purely Intangible Collateral
533
(4).
Proceeds of Collateral
537
E.
Priority Rules Involving the Trustee in Bankruptcy or a Federal Tax Lien
542
(1).
Trustee in Bankruptcy
542
(a).
Trustee as a Federal Counterpart of the Lien Creditor
543
(b).
Trustee's Power to Avoid Preferential Transfers
545
(2).
Federal Tax Lien
553
6.
Perfection and Priority for Multiple State Transactions
553
A.
Which Jurisdiction's Law Normally Governs
554
B.
Which Jurisdiction's Law Governs (I) When Debtor Moves From the Jurisdiction Whose Law First Governed, or (II) When Collateral is Moved From the Jurisdiction Whose Law First Governed
556
7.
Rights and Duties of Debtor, Secured Party, and Interested Third Parties---Before Default
559
A.
Rights and Duties of Debtor and Secured Party
559
B.
Rights of Third Parties
562
8.
Rights and Duties of Debtor, Secured Party, and Interested Third Parties---After Default
568
A.
Procedures Available to Secured Party After Debtor's Default
568
B.
Foreclosure
569
(1).
Introduction
569
(2).
Secured Party's Right to Take Possession or Control of Collateral
571
(3).
Strict Foreclosure or Foreclosure by Sale
573
(a).
Acceptance of Collateral in Satisfaction of the Debt (Strict Foreclosure)
574
(b).
Disposition of Collateral and Application of Proceeds to the Debt (Foreclosure by Sale)
576
(i).
Secured Party's Right or Duty to Dispose of Collateral
576
(ii).
Method, Manner, Time, Place, and Terms of Sale
576
(iii).
Pre-Disposition Notification
580
(iv).
Application of Proceeds of Disposition, Debtor's Right to Surplus, and Obligor's Liability for Deficiency
583
(v).
Rights of Transferees of Collateral Upon Disposition
586
(c).
Right to Redeem the Collateral
587
(d).
Remedies for Secured Party's Failure to Comply With Article 9
588
pt. SIX
THE ENTIRE TRANSACTION MADE PURSUANT TO A LETTER OF CREDIT [p. 592]
Index
607