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U.C.C. § 9-601 cmt. 3 (2010).
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1Does Article 9 of the Uniform Commercial Code (UCC) define default?
Does Article 9 of the Uniform Commercial Code (UCC) define default?2In general, what remedial options does a secured party have upon a debtor or obligor’s default?
In general, what remedial options does a secured party have upon a debtor or obligor’s default?3Do remedies available to a secured party after default depend on whether the secured party has perfected its security interest?
Do remedies available to a secured party after default depend on whether the secured party has perfected its security interest?4Are all of a debtor’s rights concerning a secured creditor’s post-default behavior waivable pursuant to an agreement?
Are all of a debtor’s rights concerning a secured creditor’s post-default behavior waivable pursuant to an agreement?5May the parties determine by agreement the standards by which the rights of the debtor and the duties of the creditor upon default are measured?
May the parties determine by agreement the standards by which the rights of the debtor and the duties of the creditor upon default are measured?6A debtor purchased inventory on credit from a seller. The seller took a security interest in the inventory. In the security agreement, the debtor a...
A debtor purchased inventory on credit from a seller. The seller took a security interest in the inventory. In the security agreement, the debtor agreed that the seller could resell any repossessed inventory in the debtor’s stores upon default. The debtor also agreed that the seller would have 60 days to restock and price the inventory before trying to resell it and that the debtor would pay reasonable attorney’s fees if the debtor unsuccessfully challenged the commercial reasonableness of any sale in court.Are these provisions of the security agreement enforceable under Article 9 of the UCC?7A debtor purchased a car on credit from a seller. The seller took an enforceable security interest in the car. In the security agreement, the debto...
A debtor purchased a car on credit from a seller. The seller took an enforceable security interest in the car. In the security agreement, the debtor agreed that in the event of her default, she would relinquish the car when asked. She further agreed that if she did not relinquish the car when asked, the seller could forcibly enter the debtor’s garage and repossess the car. The debtor’s garage was not attached to her home, although it was in close proximity to her home. Is the provision permitting forcible entry into the debtor’s garage enforceable under Article 9 of the UCC?8If a security agreement covers both real property and personal property, may a creditor seek remedies available under the UCC and remedies availabl...
If a security agreement covers both real property and personal property, may a creditor seek remedies available under the UCC and remedies available under state law governing real property?9May a secured party with an interest in fixtures remove the fixtures from the real property following a debtor’s default?
May a secured party with an interest in fixtures remove the fixtures from the real property following a debtor’s default?10Must a secured party who removes fixtures following a debtor’s default reimburse an encumbrancer or owner for any injury to the real property resul...
Must a secured party who removes fixtures following a debtor’s default reimburse an encumbrancer or owner for any injury to the real property resulting from the removal?11What information must a secured party know about a debtor in order to owe any duties or obligations to the debtor upon default?
What information must a secured party know about a debtor in order to owe any duties or obligations to the debtor upon default?12If a secured party does not know of a debtor, does the secured party owe any duties to another secured party who has perfected its security interes...
If a secured party does not know of a debtor, does the secured party owe any duties to another secured party who has perfected its security interest by filing a financing statement on that debtor?13For purposes of determining the parties’ rights and duties after default, when does default on an agricultural lien occur?
For purposes of determining the parties’ rights and duties after default, when does default on an agricultural lien occur?14When may a secured party foreclose, or collect upon, on intangible collateral?
When may a secured party foreclose, or collect upon, on intangible collateral?15May a secured party collect and enforce a security interest in a right to payment, even if the security interest is junior to a conflicting securit...
May a secured party collect and enforce a security interest in a right to payment, even if the security interest is junior to a conflicting security interest in the same right to payment?16If the secured party is a bank that controls the deposit account, how may that bank collect against deposit account collateral following a debtor’s...
If the secured party is a bank that controls the deposit account, how may that bank collect against deposit account collateral following a debtor’s default?17If the secured party is not a bank that controls the deposit account, how may the secured party collect against deposit account collateral followin...
If the secured party is not a bank that controls the deposit account, how may the secured party collect against deposit account collateral following a debtor’s default?18A debtor maintained a deposit account at a bank. The bank held a valid perfected security interest in the deposit account. When the debtor defaulte...
A debtor maintained a deposit account at a bank. The bank held a valid perfected security interest in the deposit account. When the debtor defaulted on its obligations to the bank, the bank applied the balance in the deposit account to the outstanding obligations. Is the bank within its rights to exercise this self-help remedy?19What is notification lending?
What is notification lending?20A creditor held a valid perfected security interest in the accounts of a debtor, a local coffee shop. When the debtor defaulted on its obligations,...
A creditor held a valid perfected security interest in the accounts of a debtor, a local coffee shop. When the debtor defaulted on its obligations, the creditor sent notification to the debtor’s account debtors, including the credit-card companies through which the debtor’s customers paid. The notification instructed them to pay the creditor instead of the debtor. Is the creditor within its rights to instruct the account debtors to pay the creditor instead of the debtor?21Must a secured party’s efforts to foreclose or collect upon intangible collateral be commercially reasonable?
Must a secured party’s efforts to foreclose or collect upon intangible collateral be commercially reasonable?22What expenses does Article 9 permit a secured party to deduct from any collections made on intangible collateral?
What expenses does Article 9 permit a secured party to deduct from any collections made on intangible collateral?23If a secured party has collected against collateral securing a right to payment or performance of an obligation, in what order should the party dis...
If a secured party has collected against collateral securing a right to payment or performance of an obligation, in what order should the party distribute cash proceeds?24Under what circumstances must a secured party apply or pay over noncash proceeds of its collection efforts?
Under what circumstances must a secured party apply or pay over noncash proceeds of its collection efforts?25What must a secured party do with any surplus proceeds following disposition of intangible collateral?
What must a secured party do with any surplus proceeds following disposition of intangible collateral?26Does a secured party have a right to take possession of collateral after the debtor’s default?
Does a secured party have a right to take possession of collateral after the debtor’s default?27What is the secured party’s right to self-help?
What is the secured party’s right to self-help?28What is a breach of the peace?
What is a breach of the peace?29To avoid breaching the peace during a repossession, should the secured party provide the debtor notice before the repossession and repossess on pub...
To avoid breaching the peace during a repossession, should the secured party provide the debtor notice before the repossession and repossess on public property during daylight hours?30A debtor was in default on his secured obligation to a bank, and he rejected the bank’s request to relinquish the collateral, his truck. The bank h...
A debtor was in default on his secured obligation to a bank, and he rejected the bank’s request to relinquish the collateral, his truck. The bank hired a repossession company to repossess the collateral. At 3:00 a.m., the truck was parked in the debtor’s driveway at the debtor’s house, located in a residential suburb. No lights were on in the house. In just a few minutes, the company repossessed the truck. As the repossessor was leaving, he saw lights come on in the house. The company later learned that the debtor called the police to report the truck stolen. The police officer informed the debtor that before the repossession, the company called to notify the police of the repossession. Was there likely a breach of the peace?31If a debtor is present and objects to the repossession, must the repossession immediately stop?
If a debtor is present and objects to the repossession, must the repossession immediately stop?32Is there a breach of the peace if, without consent from one authorized to give it, a creditor or its agent enters the debtor’s home or a structure ...
Is there a breach of the peace if, without consent from one authorized to give it, a creditor or its agent enters the debtor’s home or a structure attached or in close proximity to it to repossess collateral?33If the collateral consists of equipment at the debtor’s premises that is impracticable to move, how may a creditor repossess it?
If the collateral consists of equipment at the debtor’s premises that is impracticable to move, how may a creditor repossess it?34Is a secured party liable for any damages resulting from the repossession if there is no breach of the peace?
Is a secured party liable for any damages resulting from the repossession if there is no breach of the peace?35What is a foreclosure sale or simple foreclosure?
What is a foreclosure sale or simple foreclosure?36To whom must a secured party provide notification before reselling foreclosed-upon collateral?
To whom must a secured party provide notification before reselling foreclosed-upon collateral?37Before reselling foreclosed-upon collateral, how should a secured party identify potentially competing claimants with properly filed and indexed fi...
Before reselling foreclosed-upon collateral, how should a secured party identify potentially competing claimants with properly filed and indexed financing statements?38When should a secured party send notification of its intent to dispose of foreclosed-upon collateral in a private or public sale?
When should a secured party send notification of its intent to dispose of foreclosed-upon collateral in a private or public sale?39For a non-consumer transaction, what information should a secured party’s authenticated notification of disposition contain?
For a non-consumer transaction, what information should a secured party’s authenticated notification of disposition contain?40For a consumer-goods transaction, what information should a secured party’s authenticated notification of disposition contain?
For a consumer-goods transaction, what information should a secured party’s authenticated notification of disposition contain?41Once a secured creditor properly disposes of collateral, in what order must the proceeds be applied?
Once a secured creditor properly disposes of collateral, in what order must the proceeds be applied?42How does the UCC require that a deficiency be calculated if foreclosed-upon collateral is sold to a person related to the secured party?
How does the UCC require that a deficiency be calculated if foreclosed-upon collateral is sold to a person related to the secured party?43If the disposition of collateral yields a surplus or creates a deficiency, what information must a secured party provide in a consumer-goods transa...
If the disposition of collateral yields a surplus or creates a deficiency, what information must a secured party provide in a consumer-goods transaction?44When must a secured party provide the debtor with detailed information about any surplus or deficiency following the disposition of collateral in a...
When must a secured party provide the debtor with detailed information about any surplus or deficiency following the disposition of collateral in a consumer-goods transaction?45Does a good-faith purchaser who gives value for collateral sold following default take collateral free of the debtor’s interest?
Does a good-faith purchaser who gives value for collateral sold following default take collateral free of the debtor’s interest?46In what three instances may a secondary obligor become obligated to perform the secured party’s duties, such that the secured party may be relieved...
In what three instances may a secondary obligor become obligated to perform the secured party’s duties, such that the secured party may be relieved of those duties?47What is a transfer statement?
What is a transfer statement?48What is strict foreclosure?
What is strict foreclosure?49May a secured party proceed with a strict foreclosure in full satisfaction of a secured obligation if the debtor does not consent?
May a secured party proceed with a strict foreclosure in full satisfaction of a secured obligation if the debtor does not consent?50What are the requirements for a strict foreclosure in partial satisfaction of the secured obligation?
What are the requirements for a strict foreclosure in partial satisfaction of the secured obligation?51To whom must a secured party proceeding with strict foreclosure provide notice?
To whom must a secured party proceeding with strict foreclosure provide notice?52Will a secured party’s failure to give notice invalidate a strict foreclosure?
Will a secured party’s failure to give notice invalidate a strict foreclosure?53If a secured party has taken possession of collateral that is consumer goods, and the consumer debtor has paid more than 60 percent of the principa...
If a secured party has taken possession of collateral that is consumer goods, and the consumer debtor has paid more than 60 percent of the principal debt, may the secured party exercise the right to strict foreclosure?54May the parties waive mandatory disposition of consumer goods if the consumer-debtor has paid more than 60 percent of the principal amount of debt?
May the parties waive mandatory disposition of consumer goods if the consumer-debtor has paid more than 60 percent of the principal amount of debt?55What is a right of redemption?
What is a right of redemption?56Can the right to redeem collateral be waived in connection with a consumer-goods transaction?
Can the right to redeem collateral be waived in connection with a consumer-goods transaction?57What requirements must be met for a party to exercise a right of redemption under Article 9 of the UCC?
What requirements must be met for a party to exercise a right of redemption under Article 9 of the UCC?58May a debtor seek judicial oversight if a secured party has violated Article 9?
May a debtor seek judicial oversight if a secured party has violated Article 9?59If a secured party fails to comply with Article 9 of the UCC when repossessing, selling, or collecting on collateral, is the secured party liable i...
If a secured party fails to comply with Article 9 of the UCC when repossessing, selling, or collecting on collateral, is the secured party liable in damages for any loss resulting from its noncompliance?60Does Article 9 define statutory damages for certain violations of default procedures by secured parties?
Does Article 9 define statutory damages for certain violations of default procedures by secured parties?61If a secured party breaches the peace while repossessing consumer goods, may the secured party be liable for punitive damages under Article 9 of th...
If a secured party breaches the peace while repossessing consumer goods, may the secured party be liable for punitive damages under Article 9 of the UCC?62A man financed a car purchase from a seller. The man planned to use the car for personal purposes, making the car a consumer good. The cash price o...
A man financed a car purchase from a seller. The man planned to use the car for personal purposes, making the car a consumer good. The cash price of the vehicle was $10,000. The man agreed to the following terms with the seller: $200 per month for 60 months, with no money down. The seller took a security interest in the car. Before the first payment was made, the man defaulted. Later, the seller repossessed the car but breached the peace while doing so. As a result of the breach, at least how much can the man recover from the seller as statutory damages under Article 9 of the UCC?63In an action challenging the amount of any surplus or deficiency in a nonconsumer transaction, under what circumstances does a secured party bear t...
In an action challenging the amount of any surplus or deficiency in a nonconsumer transaction, under what circumstances does a secured party bear the burden of proving its compliance with Article 9?64A bank properly foreclosed upon a debtor’s collateral, which consisted of non-consumer goods, and resold the collateral in a private sale. The sale...
A bank properly foreclosed upon a debtor’s collateral, which consisted of non-consumer goods, and resold the collateral in a private sale. The sale price was insufficient to satisfy the secured obligation, which left a deficiency owing to the bank. However, the debtor believed the sale price was too low given the relevant market conditions. Thus, the debtor challenged the disposition. Does the bank bear the burden of proving that the sale complied with the applicable rules under Article 9 of the UCC?65Has a secured party acted in a commercially unreasonable manner if it could have secured a higher price for collateral sold post-default?
Has a secured party acted in a commercially unreasonable manner if it could have secured a higher price for collateral sold post-default?66Under what circumstances is a secured party’s disposition of collateral commercially reasonable?
Under what circumstances is a secured party’s disposition of collateral commercially reasonable?