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BLPR - Secured Transactions, Prop, Emp


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What is attachment?
The specific moment in time when a newly created security interest becomes enforceable against the debtor.
When does attachment occur?
1) value is given by the secured party
2) the debtor obtains rights in the collateral
3) the debtor and creditor acknowledge the creation of a security interest in an agreement signed by the debtor, or the collateral is in the possession of the secured party
What is chattel paper?
Writings that simultaneously embody a monetary obligation and a security interest
What is a PMSI (Purchase Money Security Interest)?
An interest that is either (UCC 9-107):

Taken or retained by the collateral seller to secure the amount due on the collateral.

Taken by a person who gives value (makes advances or incurs obligations) enabling the debtor to acquire rights in the collateral to the extent that such value is so used.
What is a security interest?
An interest in personal property or fixtures which secures a payment or the performance of an obligation. A lease or consignment for the purpose of obtaining security creates a security interest
What is a secured transaction?
A debt secured by personal property
What is a PMSI?
-money advanced to enable debtor to obtain collateral
-credit extended to enable debtor to get the goods
What is a floating lien?
-follows collateral as its changed into other collateral
- wool -> sweater -> receivable -> cash
What is an after-acquired property clause?
-interest in present inventory
-interest in inventory acquired afterwards
-allowed in secured transactions
How can a security interest be created?
1. Written security agreement signed by debtor
2. Authentication of debtors signature (ecommerce)
3. Creditor takes possession of collateral (negotiable instruments, stocks and bonds). Impractical for inventory.
What is required for a security interest to attach?
Attachment = rights against debtor
-invisible string on goods (leash on dog)
1. Security interest (agreement, authentication or possession)
2. Value given
3. Debtor rights in collateral (possession)

-Attachment occurs when final prerequisite is in place
What is required for perfection of a SI?
"If you're not perfected, you're not protected"
perfection = rights against most 3rd parties (attachment is vs. creditor)
1. Possession of collateral (stocks, bonds, neg insts)
2. File financing statement (FS) (in case of inventory goods, farm products and equipment), most practical and safest
3. Automatic Perfection by Attachment - only consumer goods, and have to file
Attachment by automatic perfection beats everyone except who?
Good faith purchaser from the debtor for personal, family, or HH use
(neighbor buying tv cant be sued by store)
With non-inventory collateral (equipment, etc), how will the PMSI creditor win?
Later PMSI will win if they file within 10 days after debtor gets goods
What remedy does a creditor have when the debtor defaults?
1. Sue for debt (unlikely)
2. Repossess collateral
3. Resell collateral (public or private sale)

-must not breach the peace - right to claim property peacefully
If you move the property to another jurisdiction what is the grace period?
4 month grace period to file in foreign jurisdiction.
Lien for work, labor or services has priority over what?
All secured transactions
-repair of automobile, tv, stereo
What is the effect of perfecting a security interest by filing a financing statement?
Perfecting a security interest by filing a financing statement serves to protect the secured party's interest in the collateral against most creditors who acquire a security interest in the same collateral after the filing.
Under the UCC Secured Transactions Article, if a debtor is in default under a payment obligation secured by goods, the secured party has the right to what 3 things?
1. Peacefully repossess the goods w/o judicial process
2. Reduce the claims to a judgment
3. Sell the goods and apply the proceeds toward the debt
What is real property? Personal property?
Real - Not moveable - land, attachments to land (elevator, timber in ground)
personal - moveable (books, tvs, cut and sold lumber)
How can you acquire title to personal property?
What is a gift?
Voluntary transfer of title and possession, without consideration
What is an Inter Vivos gift?
-transfer of goods during someones lifetime
-executed if there is intent and delivery
What is a Causa Mortis Gift?
-made in expectation of death
-must die from that particular peril/ailment
Who owns abandoned property?
-someone finds abandoned property, new possessor becomes absolute owner
-(put picture out on the curb, neighbors take it, its a picasso, tough shit for the original owners)
Who owns lost property?
-unintentionally misplaced property
-finder has better rights than anyone but the actual owner
(no finders keepers)
What is mislaid property and who owns it?
-intentionally put down and forgotten
Ex: leave pen set on desk
-owner of premises has better rights than anyone but the true owner.
What is a bailment?
delivery of personal property from bailor to bailee for a specified purpose
- transfer of possession, not title
- borrow luggage for trip, borrow a car, park car in garage
What is the liability of a bailee?
-bailee is only liable if negligent
-must return goods upon demand (can't say "i dont know what happened)
Ex: Check coat at coat check, if coat is gone, and rest. says that theives took property they are not liable. but if they dont know what happened, then they are liable
If you park and lock your car at the airport, is that a bailment? What happens if its damaged?
-just renting space, not a bailment
-if damaged, no course of action
If a sign and receipt claiming no liability above $25 are not called to your attention, is that valid?
Place can be held fully liable if something happens to your parcel
If a garage claims no responsibility for damage to property regardless of causation, and they make you sign and say you are aware, can you hold them liable if damages?
-it is against public policy to completely exempt yourself from all liability to negligence
-you can limit your liability if you call attention to limitations
-can exclude liability for outsider's negligence, but not yours
What is a fixture?
-was once personal property
-now, permanently attached to real property, and becomes part of the real property
Can you take a fixture with you when your lease expires?
-attached to real property and becomes part of it
-damages caused by removal
What is a deed?
document that transfers title to real estate
- must be in writing, signed by seller, delivered, description of property, and recorded
What happens if a deed is not recorded?
-valid only between original seller (grantor) and buyer (grantee)
- a third person (unaware of unrecorded deed) may get another deed, record this deed and become owner of the property
- valid without recording, but to should to protect yourself from subsequent good faith purchasers (gives constructive notice to the world about your claim)
What are the 3 types of recording statues?
1. Notice
2. Race Notice
3. Race Statute
What is a race statute?
"bad person"
- first person to record wins, even with knowledge of a prior unrecorded deed
What is race notice (also called notice race)?
-record without notice of prior unrecorded deed, you are owner in property if acting in good faith
-most common
What is a notice statute?
-subsequent purchaser is owner if acting in good faith, even if previous purchaser records later
What are the 3 types of Joint Ownership of Property?1
1. Joint Tenancy
2. Tenancy in Common
3. Tenanty by the Entirety
What is joint tenancy?
- there is a right of survorship
- A and B have property as joint tenants and A dies, it goes to B and vice versa
-cant defeat right of surviorship by a will
What is Tenancy in Common?
-property descends to heirs, not to other tenants in common
-Ex: A and B own stock as tenants in common, if A dies, prop goes to heirs of A, and same for B
-no right of survivorship
If a joint tenant sells his interest to someone else, what happens?
The new owner becomes a tenant in common, and the other joint tenants remain JTs with rights of surviorship
What is Tenancy by the Entirety?
Joint tenancy between husband and wife
- upon death, interest goes to spouse
- neither party can defeat ROS by a will
Name three items that require intent and delivery.
What is the difference between "assuming a mortgage" and "taking property subject to a mortgage"?
**Assumes mortgage -> purchaser is personally liable for mortgage debt. Original mortgagor remains liable for debt unless released (novation), acts as surety for purchaser

**Take subject to a mortgage-> no personal liability on mortgage debt, stand to lose only the property. Property is always security for mortgage
What is Equity of Redemption?
-mortgagor's right to redeem property after foreclosure sale
-valuable right in most states upon default
What is a lease? What is rent?
A lease is a contract between landlord and tenant.
Rent is consideration for lease
What is the difference between an assignemnt of a lease, and a sublease?
**Assignment of lease-> transfer of full balance remaining
- new assignee has same rights against landlord, assignor remains liable unless released by landlord, landlord owes same duties to new tenant
**Sublease -> transfer of less than full balance remaining
- landlord is a stranger to subletter, subletter owes rent to original tenant
What is Constructive Eviction?
-landlord makes premises unlivable.
-If tenant vacates premises, he is excused from paying rent, but must vacate to make claim

Ex: AC in winter, heat in summer
What is a Warranty of Habitability?
-similar to constructive eviction, except stay on premises, hold rent in escrow
-implied in lease
What is workers compensation?
covers employees for injuries in scope of their employemnt.
-employees cant waive it
-compulsory in most states
Under workers comp, who do you sue?
-sue your employer's carrier, not your employer
When you can NOT collect workers comp?
-result of intoxication
-self inflicted
-result of fighting
Does negligence bar you from recovery of workers comp?
If you are injured by a third person, what happens if you elect to sue the carrier?
Carrier pays you and goes after third party
-carrier subrogates your rights
What is FUTA?
Federal Unemployment Tax Act
-employer required to contribute, not employee
What is SUTA?
State Unemployment Tax
- may be adjusted
- based on number and frequency of claimes filed
When can you collect unemployment insurance?
-worker discharged due to no fault of their own
-not avaialble to self-employed
What is COBRA?
Federal Consolidated Budget Reconciliation Act
-former employees may retain health insurance coverage 18-36 months after quitting, being fired or laid off
Who is taxed under FICA?
employer and employee are taxed -- employer must withhold employee share.
- can collect more than you contribute
- benefits are taxable after a certain amount
What is OSHA?
Occupational Safety and Health Act
- ensures a safe working environment
- employers and businesses in interstate commerce are covered by OSHA
- inspectors have warrant to determine if premises are unsafe - probable cause is necessary to have a warrant
- employees may make complaints without retaliation, and right to have names withheld upon request
- employers must keep record of accidents on the job
What is the EEOC - Title VII? What are defenses?
Prohibits sexual harrassment and employment discrimination on the basis of race, color, religion, sex, or national origin
- nothing to do with age!

Defenses: occupational qualification, seniority or merit
What is the Age Discrimination in Employment Act?
Protects workers age 40 or older from discrimination on basis of age?
What is the Rehabilitation Act of 1973?
-federal contractors - affirmative action in hiring otherwise qualified handicapped people
What is the Equal Pay Act?
Prohbits wage discrimination on the basis of sex
- cannot discriminate between men and women who have same qualifications
What is reverse discrimination?
Challenges affirmative action program
- that remedy under-representation of a protected class
- by considering race or gender as a hiring criteria
What is ERISA?
Employee Retirement Income Security Act
- provides rules for companies who set up retirement pension plans
- employee contributions must vest immediately
- investment of funds subject to standards
What is the EPA?
Environmental Protection Agency
- enforces environmental laws
- can use civil and criminal prosecution
What does the Clean Air Act of 1963 cover?
-stationary emissions
-mobile emissions
-acid rain
-toxic industrial emissions (have to install the best available emission control technology)
What is the Clean Water Act? Safe Drinking Water Act?
-improve quality of our waterways by making it safe for recreational use and wildlife in it

Safe - sets standards for drinking water
What is CERCLA - Super Fund?
National inventory of inactive hazardous waste sites
-liability for clean up costs
-corporate officers and executives also liable
Which form of tenancy will be created if a tenant stays in possession of the leased premises without the landlord's consent, after the tenant's one-year written lease expires?
Tenancy at sufferance

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