CrAPPS

I. General Shit
A. 1-304 General obligation of Good Faith does not create a separate duty
1. 1-103 Common law shit still applies but is intended to supplement not supplant
code but 9-201 other applicable law controls
II. Scope
a) 9-109 (trans. regardless of form, if there is a SI then art. 9 applies)!1-201(35) -
secures pym t or performance of an obligation.
1. Personal
2. Tangible 9-102(a)(44)
a) Inventory 9-102a48
b) Equipment 9-102a33
c) Consumer goods 9-102a23
d) Farm products
3. Intangible 9-102(a)(42) General intangibles (point for using term)
a) Software (can be int/tan depends on imbed) 9-102a75
4. Fixtures 9-102(a)(41)
a) 9-109(a)1,(d)11
(1) 9-334(d) PMSI
(2) 9-334(h) Construction mortgage trump except;
(a) 9-334(e), f
(i) Easy to remove shit
b) see extra code law
5. PMSI 9-103(a)
a) 9-301 etc. (conflicts of law) Which Art. 9, all states and D.C. you can have ST that
is in more than one state.
II. Attachment
a) 9-203(a)when enforceable against the debtor.
(1) Attachment occurs when it becomes enforceable unless SA delays
III. Enforcement -9-203(b)
a) Three requirements
(1) Value given to the debtor (1-204)-def. of value is consideration)
(2) Debtor must have rights in the collateral (must own)
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(3) one of conditions
b) (a)Debtor has authenticated a SA that describes collateral
(1) 9-102(a)(73) creates or provides a SI
(2) how to authenticate? Sign 1-201(37)
(i) Implied need of a writing. (Statute of Frauds)
c) Is enforceable against the debtor and 3
rd
parties, see notes from day one.
B. 9-204 Future advances and After Acquired Property Clauses
1. Dragnet clause is not enforceable
IV. Perfection-9-201, 9-308, etc. ! 9-310 (conflicts law applies here too)
a) 9-308a must have attachment, and the requirements in 9-310-316. (attachment
plus rule)
A. 9-301 Location of Debtor governs perfection
1. Location of Debtor 9-307
B. Implementing Perfection
1. Three key methods:
a) file, 9-310 (need SA & FS)
b) possess, 9-313
c) control, (Defined in 8-106, Perf 9-314)
Filing Possession Control
Goods Yes Yes No
Tangible Chattel Paper Yes Yes No
Negotiable Docs Yes Yes No
Instruments Yes Yes No
Investment Property Yes No Yes
Deposit Account No No Yes
Accounts Yes No No
Fixtures Y(FF) No No
Letter-Of-Credit No No Yes
Money No Yes No
General Intangible Yes No No
Electronic Chattel Paper Yes N/A Yes
Certificated Securities Yes Yes No
C. Must classify successfully different classifications of collateral require different
methods of perfection
1. 9-310 general rule is that a FS must be filed to perfect
2. 9-311 Must note SI on title
a) (d) Except inventory
3. 9-312 exceptions to 9-310 general filing requirement
D. Proceeds Perfection Mechanics
1. 20 Days Automatic Perfection (9-315(c), (d))
a) 9-102(a)64 defines Cash Proceeds
b) 9-203f get proceeds automatically without mention in FS (should though)
2. After 20 days perfection will continue IF one of the following tests of 9-315(d)
can be met:
a) filed FS covers original collateral; AND
(1) the proceeds are the type of collateral that can be perfected by filing in
the same office where the original FS was filed; AND
(2) the proceeds in question have not been acquired with cash proceeds (i.e.
cannot be proceeds of cash proceeds)
FINANCING STATEMENT REQUIREMENTS
I. Financing Statement (FS)

A. 9-521 Format for FS
B. 9-502(a)
1. name debtor 9-503
a) 9-506(b) Insufficient name is seriously misleading 9-503 (must match)
(1) Alternative A most popular
b) 9-506(c) Search Logic
2. name SP 9-502(a)2
a) incorrect SP name not seriously misleading comment 2 9-506a
3. ID collateral (adequate description 9-108 (no super generic) & Enforceability
9-203b3A)
C. Debtor must authorize the filing statement 9-504 (9-509 persons authorized)
1. 9-502(d) Prefiling allowed
D. 9-506(a) (filing statement is sufficient with minor errors okay unless seriously
misleading)
E. 9-507 (! name Four Months)
F. 9-510a FS Effective?
1. 9-509 Who can file/Amendments (SA=Ipso facto authority) ELSE;
2. 9-625e3- $500 Damages for False filing
3. 9-625b Actual damages suffered too
4. 9-513c Debtor can demand termination of FS
G. 9-513 Termination
1. 9-509d2 Debtor can file a Termination statement
H. Ky. has Alternative A in 9-518b

Was there a filing?
9-516
9-517 (error on filing office okay)

Duration
9-515(a,c,d): (a) FS lapses after 5 years; (c) unless a continuation statement is filed before
the lapse; (d) if FS lapses SI is no longer, and never was, perfected
b) Sec. agreement-SP gets a SI from the Dr. in collateral FS gives notice to the 3d
parties. That there is a SI in the collateral.
E.
II. Priority-9-201 SP gets first shot
A. 9-317 SP v. Lien (9-102(a)52)
Unsecured Creditor
Lien
Creditor
Unperfected Secured
Creditor
UPSC wins (9-201)

LC wins (9-317)
Perfected Creditor
PSC wins (9-201)

1st wins (9-317)

B. 9-324 PMSI Rule
1. PMSI in Goods
a) No notice required
b) Consumer goods automatic perfection (certificate of title issue)
c) Must be perfected [presumably through filing. Ask how perfect a PMSI?]
2. PMSI in Proceeds of goods
a) No Notice required
b) Must be perfected within 20 days after debtor receives possession of goods
3. PMSI in Inventory
a) Notice to other SC required
(1) Notice must be received by SC within 5 years before debtor receives
possession of INV
(2) Notice must state that sender expects PMSI status
b) Must be perfected prior to debtor receiving possession of inventory
4. PMSI in identifiable cash proceeds of INV if
a) Identifiable cash proceeds are received on or before buyer takes delivery.
b) All above requirements for INV
c) NB: identifiable cash proceeds DO NOT EQUAL Accounts Receivable.
5.
C. 9-322 SP v. SP
D. 9-327 Deposit accounts
1. 9-322(c) SP priority still if
a) the SI is perfected
b) the proceeds are cash proceeds or the same type as the collateral; and
c) for proceeds of proceeds, all intervening proceeds must be either cash
proceeds or proceeds of the same type as the collateral.
E. 9-334 Fixtures Pure Race
F. 9-330 chattel papers
G. 9-328 investment property
H. 9-327 deposit accounts

9-320(a) Buyers BIOCOB takes free of security interest (K-Mart)
(b)(Garage Sale)
1-201(9) BIOCOB Def
1-201(29) PURCHASE AND 1-201(30) PURCHASER

III. Default not defined by article 9
A. 9-601, etc. ! 9-609

a) This is the point when most lawyers get involved. No one thinks about it until there
is a form agreement and the debtor defaults.
b) 9-601 rights.
(1) 9-315 rights on disposition
c) 9-609 right of self help repossession.
(1) Breach of Peace: Stone Machine
B. 9-611(b) requires notice of disposition of collateral
1. (c) Debtor and Secondary obligor entitled
a) 9-602(7) May not waive notice prior to default
b) 9-603- may define commercially reasonable by agreement
c) 9-612 notice must be sent In a reasonable time
(1) non-consumer sent after default & 10days before disposition is reasonable
d) 9-613 Notice requirements/form for notice
C. Collection Rights
1. 9-601, 9-607,8
a) account debtor 9-102a(3)
b) 9-607 and 08collection right
c) 9-607 applies if there is an acct. dr. (the collateral is an obligation of a 3d
party.)
d) SP!dr.!Acct.dr. 9-102a3person obligated on acct, chattel paper (rt. to
payment and SI), or general intangible.
e) Focus on acct. and chattel paper, or instrument
f) SP can enforce the rights of the dr. to collect from the Acct. dr. (this may only
be collection the voluntarily paid checks)
g) notice and non notice
h) notice the acct. dr. knows of the SP and may pay them
i) non notice acct. dr. not know of the SP and may pay the SP too.
j) This is normal for self liquidating collaterals, (cyclic collateral)
k) 9-607must be commercially reasonable
l) a1may notify the acct dr. if so agreed (refers to notice)
m) a2SP can take proceed to which entitled under 9-315. (proceeds from the
acct. that is the collateral).
n) a3SP can enforce the obligations of the acct. dr. or person obligated (SP
stands in the Dr. shoes for enforcement). If the dr. is an SP to the acct. dr.
then SP can do all the part 6 things. (Chattel paper can be perfected by
possession.)
o) charging backcharge back can happen in recourse fin. Recourse against the
dr.
p) 9-608scheme for allocation of the proceeds.
q) Order of payment: Expenses, sec. Obligation, junior SPs, others
r) Not only SI in accts. and chattel paper but also sales of them. 9-109.
s) What if there is an neg. instr.? SP must be a person in title (3-301) must be a
holder of the instr. to enforce the rights of the instr.
t) You can dispose of rather than collect on the accts.
2. Strict foreclosure 9-620
a) SP can take over the collateral in satisfaction of all or part of the debt. No
surplus or deficiency
b) 9-620-23 is the framework.
c) Used to have to possess of this but not now
d) Can be partial or full under 620a
e) Notice and consent
f) 9-620e disallowed for consumer drs. Who have high equity in the collateral.
g) 9-610 disposition becomes mandatory
D. BC 544 Trustee is Lean creditor so use priority 9-317