The Glannon Guide to Secured Transactions 2 EDITORIAL ADVISORS Rachel E. Barkow Segal Family Professor of Regulatory Law and Policy Faculty Director, Center on the Administration of Criminal Law New York University School of Law Erwin Chemerinsky Dean and Professor of Law University of California, Berkeley School of Law Richard A. Epstein Laurence A. Tisch Professor of Law New York University School of Law Peter and Kirsten Bedford Senior Fellow The Hoover Institution Senior Lecturer in Law The University of Chicago Ronald J. Gilson Charles J. Meyers Professor of Law and Business Stanford University Marc and Eva Stern Professor of Law and Business Columbia Law School James E. Krier Earl Warren DeLano Professor of Law The University of Michigan Law School Tracey L. Meares Walton Hale Hamilton Professor of Law Director, The Justice Collaboratory Yale Law School Richard K. Neumann, Jr. Professor of Law Maurice A. Deane School of Law at Hofstra University Robert H. Sitkoff John L. Gray Professor of Law 3 Harvard Law School David Alan Sklansky Stanley Morrison Professor of Law Faculty Co-Director, Stanford Criminal Justice Center Stanford Law School 4 The Glannon Guide to Secured Transactions Learning Secured Transactions Through Multiple-Choice Questions and Analysis Third Edition Scott J. Burnham Frederick N. and Barbara T. Curley Professor of Law Gonzaga University School of Law (retired) 5 Copyright © 2018 CCH Incorporated. Published by Wolters Kluwer in New York. Wolters Kluwer Legal & Regulatory U.S. serves customers worldwide with CCH, Aspen Publishers, and Kluwer Law International products. (www.WKLegaledu.com) No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or utilized by any information storage or retrieval system, without written permission from the publisher. For information about permissions or to request permissions online, visit us at www.WKLegaledu.com, or a written request may be faxed to our permissions department at 212-771-0803. To contact Customer Service, e-mail [email protected], call 1-800-234-1660, fax 1-800-901-9075, or mail correspondence to: Wolters Kluwer Attn: Order Department PO Box 990 Frederick, MD 21705 Library of Congress Cataloging-in-Publication Data Names: Burnham, Scott J., author. Title: The Glannon guide to secured transactions : learning secured transactions through multiple-choice questions and analysis / Scott J. Burnham, Frederick N. and Barbara T. Curley Professor, Gonzaga University School of Law (ret.). Description: Third edition. | New York : Wolters Kluwer Law & Business, [2017] | Includes index. Identifiers: LCCN 2017047312| eISBN: 978-1-4548-9754-5 | ISBN 1454850086 Subjects: LCSH: Security (Law) — United States. | Security (Law) — United States — Problems, exercises, etc. | LCGFT: Study guides. Classification: LCC KF1050.Z9 B87 2017 | DDC 346.7307/4 — dc23 LC record available at https://lccn.loc.gov/2017047312 6 About Wolters Kluwer Legal & Regulatory U.S. Wolters Kluwer Legal & Regulatory U.S. delivers expert content and solutions in the areas of law, corporate compliance, health compliance, reimbursement, and legal education. Its practical solutions help customers successfully navigate the demands of a changing environment to drive their daily activities, enhance decision quality, and inspire confident outcomes. Serving customers worldwide, its legal and regulatory portfolio includes products under the Aspen Publishers, CCH Incorporated, Kluwer Law International, ftwilliam.com, and MediRegs names. They are regarded as exceptional and trusted resources for general legal and practice-specific knowledge, compliance and risk management, dynamic workflow solutions, and expert commentary. 7 For my students. Gloria discipuli gloria magistri est. 8 Contents Acknowledgments Chapter 1: A Very Short Introduction A. Introduction to Secured Transactions B. Answering Multiple-Choice Questions C. How to Use This Book Chapter 2: Working with the Uniform Commercial Code A. Introduction 1. It Is Not Uniform 2. It Is Not Commercial 3. It Is Not a Code B. Working with the Code C. Closer Burnham’s Picks Chapter 3: What Is a Security Interest? A. What Is a Secured Transaction? B. Is It Better to Be a Secured Creditor Than an Unsecured Creditor? C. Does a Transaction Create a Security Interest? D. Closers Burnham’s Picks Chapter 4: Overview of Secured Transactions A. A Secured Transactions Roadmap B. Classification of Collateral 1. Introduction 2. Goods 3. Intangible Property 4. Quasi-Tangible Property 5. Fixtures C. Consumer Transactions D. Purchase Money Security Interests E. Closers Burnham’s Picks 9 Chapter 5: The Scope of Article 9 A. Introduction B. § 9-109(a) “Except as otherwise provided in subsections (c) and (d)” C. § 9-109(a)(1) “a transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract” D. § 9-109(a)(2) “an agricultural lien” E. § 9-109(a)(3) “a sale of accounts, chattel paper, payment intangibles, or promissory notes” F. § 9-109(a)(4) “a consignment” G. Closers Burnham’s Picks Chapter 6: Creation of a Security Interest A. Introduction B. Sample Agreements C. Is There a Security Agreement Authenticated by the Debtor? D. Does the Security Agreement Contain a Description of the Collateral? E. Closers Burnham’s Picks Chapter 7: The Security Interest as a “Floating Lien” A. The “Floating Lien” 1. Sale or Exchange 2. Proceeds 3. After-Acquired Property 4. Future Advances B. Sale or Exchange 1. The General Rule 2. First Exception: “When the Secured Party Authorized the Disposition” 3. Second Exception: “Except as Otherwise Provided in This Article” C. Proceeds D. After-Acquired Property E. Prohibitions Against Security Interests in Certain Property F. Future Advances G. Closers Burnham’s Picks Chapter 8: Secured Party v. Debtor 10