law final ch 26-30

payment of debt to creditor guaranteed by debtor's personal property

secured transaction

a security agreement is an agreement hat creates or provides for a

security interest

accommodation maker

someone who agrees to cosign a promisory note for someone to buy something

"pay to specific person" above signature, the signature becomes

special endorsement

an executory promise does not constitute sufficient value to make

the promisor a holder

on default, a secured party who chooses not to retain the collateral must dispose of it in a

commercially reasonable manner

after repaying debt, debtor files a written request for termination statement. the creditor must

comply within 20 days of receipt of the letter

signature liability is

contingent liability

a writ of execution is a court order to execute a debtor after the entry of a final judgment in a creditor's lawsuit against the

debtor

a default occurs when a

debtor fails to pay a creditor as promised

the state office in which a financing statement should be filed depends on the

debtor's location

financing statement must include

debtors name, creditors name, description of collateral

negotiates an order instrument by

delivery with any necessary endorsement

a signature can be made by use of any

device or machine

creditors may contract with a debtor for

discharge of the debtor's liquidated debts

note payable on day after the issuer dies

dishonored

a blank endorsement

does not specify a particular endorsee

an imposter's endorsement on an instrument can be effective against its

drawer or maker

a bearer instrument can be converted into an order instrument through

endorsement

a debtor can confirm the amount of their outstanding secured debt by confirming their view of the debt without charge

every 6 months

to create a PMSI

extend credit for part or all of the purchase price of the goods

an acceptor is primarily liable on an

instrument

to impose liability on someone if the bank dishonors the check, you have to present it for payment within

30 days

a person who forges a check can be held personally liable for payment by a

HDC

the completion of an originally incomplete instrument in an unauthorized manner is not a defense against payment on the instrument to an

HDC

personal defenses are used to avoid payment to an ordinary holder of a negotiable instrument, but not to an

HDC or a holder through HDC

perfection in security interest may not protect creditor against the claim of

a buyer in the ordinary course of business

pledge

a lender taking possession of property in a corporation to perfect the lender's security interest in the stock

a debtor's signature or authentication is required to create

a security interest

a security agreement can be filed to perfect

a security interest

a person who doesn't qualify as an HDC but who derives his or her title through HDC can

acquire the rights and privileges of an HDC

for an ordinary holder to become an HDC, the holder must have

acted honestly in the process of acquiring the instrument

floating lien

agree to security agreement that provides for coverage of the proceeds from the sale of after-acquired property

knowledge of one defense precludes a holder from asserting HDC status in regards to

all other defenses

to continue effectiveness of its perfected interest the creditor must file

an amendment to the financing statement before the 4month period expires

a purchaser cannot become an HDC of an instrument so incomplete that

an element of negotiability is lacking

someone who transfers a draft by signing and delivering it becomes

an endorser

presentment warranties protect the person to whom

an instrument is presented for payment

keeping an object

artisan's lien

an HDC takes a negotiable instrument free of most defenses and claims that could be

asserted against its transferor

prejudgment remedy to collect debt

attachment can be used

any irregularity on the face of an instrument that creates an ambiguity as to the party to pay will

bar HDC status

state law governs the procedures that must

be followed to create a mechanic's lien

endorsement can convert an order instrument into a

bearer instrument

if a debtor does not pay a mechanic's lien, the debtor's property

can be sold to satisfy the debt

lien

claim against property to satisfy a debt

where or how to perfect a security interest sometimes depend son the

classification of the collateral

proceeds from sale of collateral are applied first to

fees for the sale

perfection is usually accomplished by

filing a financing statement

a continuation statement will continue the effectiveness of a

financing statement for 5 years

a security interest that provides for a security interest in after-acquired property is a

floating lien

each state permits a debtor to retain the family home, in its entirety or in part

free from the claims of unsecured creditors

lien on property will terminate

if voluntarily surrendered

negotiation is the transfer of an instrument

in a form and by a means that makes the transferee a holder

advances against lines of credit can be subject to a properly perfected security interest

in certain collateral

certificate-of-titel statutes establish perfection requirements for security interest

in certain types of goods

filing a subsequent continuation statement, the effectiveness of the statement can be continued

indefinitely

a drawer is secondarily liable on an

instrument

a perfected purchase-money security interest in inventory can have priority over a conflicting security interest in the same

inventory

a transfer of a negotiable instrument can give a holder more rights than

its prior possessor

intentional cancellation of an instrument discharges the

liability of all parties

an ordinary holder can recover nothing on an instrument that has been

materially altered

property sold to satisfy a debt

mechanic's lien

blank endorsement

merely needs signature

guarantor

must be in writing

an order instrument is negotiated by delivery with any

necessary endorsements

warranty liability on a negotiable instrument doesn't require a signature and extends to both signers and

nonsigners

under the UCC, a fictitious payee's endorsement is

not treated as forgery

a drawer's liability doesn't arise until presentment and

notice of dishonor

an agent who signs just her own name on an instrument will be personally liable to a holder in due course who has no

notice of her agency status

a person who receives an instrument as a gift normally becomes an

ordinary holder

an attachment is a court-ordered seizure and taking into custody of property prior to the securing of a judgment for a

past-debt due

a holder takes an instrument for value if they accept the instrument as

payment for an antecedent debt

dishonor occurs if

payment of an instrument is refused with the prescribed time

creditor's way to protect himself against the claims of 3rd parties on the property

perfection

singing a note "payable to the order of _" has

primary liability on the note

a guarantor can be required to pay an obligation only after the

principal debtor defaults

a holder takes an instrument for value by performing the

promise for which the instrument was issued

you become HDC status when you

promisee o pay the fave value and then pay the face value

signature and notation "without recourse"

qualified endorsement

a surety's right to be repaid by debtor after paying their debt is the right of

redemption

writing without recourse

relieves the person from liability on the instrument

if company changes name, the perfection will

remain effective for four months after the date of the name change

modern statutes permit the holder of an artisan's lien to foreclose and sell the property subject to the lien to

satisfy the debt

with a guaranty arrangement, the guarantor is

secondary liable

secured party has a

secured interest

guaranty is required to be in writing because of

statute of frauds

surety's right o "step into the shoes" of loaner after paying debt off, and exercising any of the loaners rights is

subrogation

someone personally liable for payment whether or not the debtor defaults

surety

a person who accepts an instrument that has been completed without knowing that it was incomplete when issued can

take it as an HDC

when a person contracts for improvements on real property but doesn't immediately pay for the improvements

the creditor can place a mechanic's lien on the property

a surety is primarily liable for

the debt of a principal

when the debtor has fully paid the debt, if the secured party perfected the security interest by filing,

the debtor is entitled to a termination statement

to obtain a writ of execution,

the debtor must be unable or refuse to pay amount of a judgment

dishonor occurs when acceptance of an instrument cannot be obtained within

the prescribed tiem

you only have a security interest for new inventory if

the security agreement included an after-acquired property clause

a secured party can release any collateral described in the financing statement

thereby terminating its security interest in that collateral

if a creditor surrenders collateral to the debtor without the consent of the guarantor

this can reduce the obligation of the guarantor

all parties to a negotiable instrument will be discharged when the party primarily liable on it pays

to a holder the full amount due

transfer of an ordinary instrument by endorsement and delivery extends warranty liability

to any subsequent holder who takes the instrument in good faith

written notice of lien

to create a lien and place on someone's property that won't pay

negotiation is a transfer in such form that the

transferee becomes a holder

negotiation

transferring an instrument to someone in a form and by means that makes the transferee a "holder"

fraud in the execution

tricking an impaired person to sign

a creditor can garnish almost all types of property

true

a security agreement must contain a description of the collateral that reasonably identifies it

true

a surety can assert his own bankruptcy as a defense to avoid liability on a principal debtor's obligation

true

an artisan's lien is possessory

true

attachment gives the creditor an enforceable security interest in the collateral

true

gifts do not constitute HDC status

true

classification of the collateral determines

when or how to perfect a security interest

transfer warranties attempt to impose liability on the wrongdoer or the person

who dealt face to face with the wrongdoer

can file a lien on property if from the last date labor or materials were provided, you act

within 60-120 days

enforceable security interest requires

written agreement or creditor's possession of property

to use attachment as a remedy from someone that has defaulted,

you must first file a suit against the person that defaults

every person who signs a negotiable instrument is liable for payment of that instrument when it comes due

true

in a few states, statutes allow the homestead exemption only if the judgement debtor has a family

true

in a suretyship relationship, a third person's credit becomes the security for a debt

true

in most states, a financing statement must be filed centrally in the appropriate state office

true

when there is a breach of an underlying contract for which an instrument was issued, the maker of a note can refuse to pay it

true

an irregularity on the face of an instrument that calls into question its validity will bar

HDC status

a person who takes a negotiable instrument from a thief may become

an HDC

an authorized agent binds a principal on an instrument if the agent

clearly names the principal in the signature

the law protects debtors as well as

creditors

composition agreement

creditors contract with debtor for the discharge of debtor's liquidated debts on payment of a lesser sum

composition agreement

creditors enter agreement with debtor to discharge the debts on payment of a sum divided proportionately

receive check after "cutoff hour" can be postponed without dishonor

until the close of the next business day

an endorser who doesn't wish to be liable on an instrument can

use a qualified endorsement