Commercial Transactions

by LoPucki, Lynn M.

• ISBN13: 9780735556478
• ISBN10: 0735556474
• Edition: 3rd
• Format: Hardcover
• Copyright: 2006-03-17
• Publisher: Wolters Kluwer

Summary

The new edition of this comprehensive overview of the law governing commercial transactions continues to effectively use the systems approach to enlighten your students and enliven your course. Incorporating a wide range of new material, COMMERCIAL TRANSACTIONS: A Systems Approach, Third Edition, Is a proven vehicle for conveying the realities of practice. The casebook builds on its demonstrated strengths: extraordinary authorship from four of the leaders in the field the systems approach examines how the law is applied in actual transactions, with the code taught in the context of the transactions teachable problems are prefaced by straightforward textual explanations offers great flexibility for structuring a course by supporting different emphases and approaches organization by assignment takes the effort out of preparing assignments cutting-edge coverage keeps users on the forefront of developments the thorough Teachers Manual includes answers to all problems in the book, As well as suggestions on omitting sections because of time constraints This extensive revision presents changes and updates in all three major sections: Sales Systems features: additional material and a new problem on sellers reclamation, anticipatory repudiation, and firm offers coverage of important differences between original and revised Article 2, addressing the question of whether and how the Revised Article 2 is an improvement over the original new material on the Federal E-Sign statute and UETA at least 20% new cases, including Phillips v. Cricket Lighters Financial Systems introduces: Check Clearing For The 21st Century Act (Check 21) electronic and internet payment systems, including electronic checks, internet payments, PayPal, stored-value cards, and electronic money new coverage of negotiable instruments at the beginning of the book in response to users who wanted it sooner new cases, such as Halifax Corp. v. Wachovia Bank and NBT Bank v. First National Community Bank Secured Credit now covers: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 recent amendments To The Model Rules of Professional Conduct treatment of Revised Article 1, In light of its adoption by a number of states new cases, including Till v. SCS Credit, Kinderknecht, RFC Capital v. Earthlink, and Spearing Tool ;An author website to support classroom instruction using this title is available at http://www.aspenlawschool.com/lupucki_commercial3

Table of Contents

Acknowledgments	xxxv
Introduction	xxxix
BOOK ONE Sales Systems	1	(286)
Formation	3	(112)
Assignment 1: The Role and Scope of Codes in Sales Systems	3	(19)
Fundamental Aspects of Sales	3	(1)
The Real World of Sales	4	(2)
Functions of a Code in Sales Systems	6	(2)
Scope of Article 2	8	(3)
Ragus Co. v. City of Chicago	11	(2)
Dakota Pork Indus. v. City of Huron	13	(2)
Cook v. Downing	15	(4)
Problem Set 1	19	(3)
Assignment 2: Scope Issues with Leases, CISG, and Real Estate	22	(18)
Scope of Article 2A	22	(2)
Carlson v. Giachetti	24	(3)
In re Bailey	27	(7)
Scope of the CISG	34	(1)
Viva Vino Import Corp. v. Farnese Vini S.r.l.	34	(2)
Real Estate	36	(1)
Problem Set 2	37	(3)
Assignment 3: The Process of Sales Contract Formation	40	(21)
Hill v. Gateway 2000, Inc.	40	(8)
Ionics, Inc. v. Elmwood Sensors, Inc.	48	(10)
Problem Set 3	58	(3)
Assignment 4: Formation with Leases, International Sales, and Real Estate	61	(15)
Formation of Contracts for Leases	61	(1)
Formation of Contracts for International Sales	62	(1)
Filanto v. Chilewich International Corp.	63	(2)
Formation of Real Estate Contracts	65	(1)
Albright v. McDermond	66	(5)
Messler v. Phillips	71	(3)
Problem Set 4	74	(2)
Assignment 5: Statute of Frauds with Sales of Goods	76	(15)
DF Activities Corp. v. Brown	79	(5)
General Trading Int'l v. Wal-Mart Stores	84	(5)
Problem Set 5	89	(2)
Assignment 6: Parol Evidence with Sales of Goods	91	(11)
Betaco, Inc. v. Cessna Aircraft Co.	91	(6)
C-Thru Container Corp. v. Midland Mfg. Co.	97	(3)
Problem Set 6	100	(2)
Assignment 7: Requisites to Formalization in Leases, International Sales, and Real Estate Sales	102	(13)
Requisites to Formalization in Leases	102	(1)
Requisites to Formalization in International Sales	103	(1)
MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D'Agostino, S.p.A.	103	(5)
Requisites to Formalization in the Real Estate System	108	(1)
Holbrook v. Holbrook	109	(3)
Problem Set 7	112	(3)
Terms	115	(68)
Assignment 8: Warranties with Sales of Goods	115	(18)
The Effects of Warranty Law on Business Practice	115	(1)
The Basic UCC Quality Warranties	116	(1)
Phillips v. Cricket Lighters	117	(4)
Leal v. Holtvogt	121	(8)
Extended Warranties and Maintenance Agreements	129	(1)
Problem Set 8	130	(3)
Assignment 9: Lease, International, and Real Estate Warranties	133	(13)
Lease Warranties: The Case of Finance Leases	133	(1)
Warranties with International Sales	134	(1)
Medical Marketing Int'l v. Internazionale Medico Scientifica	135	(1)
Real Estate Warranties	136	(1)
Warranties Generally	136	(1)
Hershey v. Rich Rosen Construction Co.	137	(6)
Third-Party Home Warranties	143	(1)
Problem Set 9	143	(3)
Assignment 10: Reducing or Eliminating Warranty Liability: Basics	146	(14)
Warranty Reduction with Sales of Goods	146	(3)
Wilbur v. Toyota Motor Sales, U.S.A.	149	(3)
Warranty Reduction with Leases	152	(1)
Warranty Reduction with International Sales	153	(1)
Supermicro Computer, Inc. v. Digitechnic, S.A.	154	(1)
Disclaiming the Real Estate Implied Warranty of Habitability	155	(1)
Axline v. Kutner	156	(1)
Problem Set 10	157	(3)
Assignment 11: Commercial Impracticability	160	(15)
Commercial Impracticability with Sales of Goods	160	(1)
Resources Investment Corp. v. Enron Corp.	161	(3)
Alamance County Bd. of Educ. v. Bobby Murray Chevrolet	164	(6)
Commercial Impracticability with Leases	170	(1)
Commercial Impracticability with International Sales	171	(1)
Commercial Impracticability with Real Estate	172	(1)
Problem Set 11	172	(3)
Assignment 12: Unconscionability	175	(8)
Unconscionability with Sales of Goods	175	(1)
Maxwell v. Fidelity Financial Services, Inc.	176	(3)
Unconscionability with Leases	179	(1)
BMW Financial Services v. Smoke Rise Corp.	179	(1)
Unconscionability with International Sales	180	(1)
Unconscionability with Real Estate	181	(1)
Problem Set 12	181	(2)
Performance	183	(52)
Assignment 13: Closing the Sale with Sales of Goods	183	(14)
North American Lighting, Inc. v. Hopkins Manufacturing Corp.	186	(4)
Berning v. Drumwright	190	(4)
Problem Set 13	194	(3)
Assignment 14: Closing with Leases, International Sales, and Real Estate	197	(15)
Closing with Leases	197	(1)
Colonial Pacific Leasing Corp. v. J.W.C.J.R. Corp.	197	(5)
Closing with International Sales	202	(1)
Delchi Carrier SpA v. Rotorex Corp.	203	(2)
Real Estate Closings	205	(1)
Gray v. First NH Banks	206	(4)
Problem Set 14	210	(2)
Assignment 15: Risk of Loss with Sales of Goods	212	(13)
Cook Specialty Co. v. Schrlock	214	(4)
Design Data Corp. v. Maryland Casualty Co.	218	(3)
Problem Set 15	221	(4)
Assignment 16: Risk of Loss with Leases, International Sales, and Real Estate	225	(10)
Risk of Loss with Leases	225	(1)
Risk of Loss with International Sales	225	(1)
BP Oil Int'l v. Empresa Estatal Petroleos de Ecuador	226	(3)
Risk of Loss with Real Estate	229	(1)
Voorde Poorte v. Evans	230	(2)
Problem Set 16	232	(3)
Remedies	235	(52)
Assignment 17: Seller's Remedies with Sales of Goods	235	(15)
Why Do Legal Remedies Matter at All?	235	(1)
What Are a Seller's Legal Remedies?	236	(2)
Sack v. Lawton	238	(4)
Firwood Mfg. Co. v. General Tire	242	(5)
Problem Set 17	247	(3)
Assignment 18: Lessor's and Seller's Remedies with Leases, International Sales, and Real Estate	250	(13)
Lessor's Remedies	250	(1)
C.I.C. Corp. v. Ragtime, Inc.	251	(5)
Seller's Remedies with International Sales	256	(1)
Seller's Remedies with Real Estate Sales	257	(1)
Williams v. Ubaldo	257	(3)
Problem Set 18	260	(3)
Assignment 19: Buyer's Remedies with Sales of Goods	263	(13)
In re Beeche Systems	266	(5)
Problem Set 19	271	(5)
Assignment 20: Buyer's and Lessee's Remedies with Leases, International Sales, and Real Estate	276	(11)
Lessee's Remedies	276	(1)
Buyer's Remedies with International Sales	277	(2)
Buyer's Remedies with Real Estate	279	(1)
Jue v. Smiser	280	(3)
Problem Set 20	283	(4)
BOOK TWO Financial Systems	287	(2)
Part One Payment Systems	289	(270)
Introduction to Payment Systems	291	(4)
Figure 21.1---Basic Payment System	292	(1)
Figure 21.2---Payment by Third Party	293	(2)
Checking Accounts as the Paradigm Payment System	295	(118)
Assignment 21: The Basic Checking Relationship and the Bank's Right to Pay Checks	295	(14)
The Basic Relationship	295	(1)
Figure 21.3---Payment by Check	296	(1)
The Bank's Right to Pay	297	(1)
When Is It Proper for the Bank to Pay?	297	(1)
Overdrafts	298	(1)
McGuire v. Bank One, Louisiana, N.A.	298	(4)
Stopping Payment	302	(2)
Remedies for Improper Payment	304	(1)
McIntyre v. Harris	304	(2)
Problem Set 21	306	(3)
Assignment 22: The Bank's Obligation to Pay Checks	309	(20)
When Are Funds Available for Payment?	309	(1)
Time of Evaluation	309	(1)
Availability of Funds	310	(2)
Figure 22.1---Basic Funds Availability Rules	312	(2)
Figure 22.2---Low-Risk Items Availability Rules	314	(3)
First National Bank v. Colonial Bank	317	(2)
Wrongful Dishonor: What Happens If the Bank Refuses to Pay?	319	(1)
Mayott v. First National Bank	320	(6)
Problem Set 22	326	(3)
Assignment 23: Collection of Checks	329	(36)
The Payor Bank's Obligation to the Payee	329	(1)
Outdoor Technologies, Inc. v. Allfirst Financial, Inc.	329	(5)
The Process of Collection	334	(1)
Obtaining Payment Directly	335	(1)
Figure 23.1---Direct Presentment	336	(1)
Obtaining Payment Through Intermediaries	336	(1)
Payee/Customer to Depositary Bank	336	(1)
Depositary Bank to Payor Bank	337	(1)
Multilateral Arrangements (Clearinghouses)	338	(2)
Kimberly A. Allen Trust v. FirstBank of Lakewood, N.A.	340	(3)
Figure 23.2---Clearinghouse Collection	343	(1)
Bilateral Arrangements (Direct-Send and Correspondent Clearing)	344	(1)
Collection Through the Federal Reserve System	345	(1)
Figure 23.3---Direct-Send Collection	346	(1)
Figure 23.4---Federal Reserve Collection	347	(3)
Figure 23.5---Sample EARNS Notice	350	(1)
Figure 23.6---Return Obligations	351	(1)
NBT Bank v. First National Community Bank	351	(11)
Problem Set 23	362	(3)
Assignment 24: Risk of Loss in the Checking System---The Basic Framework	365	(16)
Nonpayment	365	(2)
Figure 24.1---Indorser Liability	367	(1)
Forged Signatures	367	(1)
Forged Drawers' Signatures and the Rule of Price v. Neal	368	(1)
What If the Payor Bank Pays the Forged Check?	368	(1)
Decibel Credit Union v. Pueblo Bank & Trust Company	369	(1)
Figure 24.2---Presentment and Transfer Warranties	370	(3)
What If the Payor Bank Dishonors the Forged Check?	373	(1)
The Special Case of Telephone Checks	374	(1)
Forged Indorsements	375	(1)
What If the Payor Bank Dishonors the Check Because of the Forged Indorsement?	375	(1)
What If the Payor Bank Pays the Check Despite the Forged Indorsement?	375	(2)
Conversion	377	(1)
Alteration	378	(1)
Problem Set 24	378	(3)
Assignment 25: Risk of Loss in the Checking System---Special Rules	381	(22)
Negligence	381	(1)
HSBC Bank v. F & M Bank Northern Virginia	381	(4)
Bank Statements	385	(1)
Stowell v. Cloquet Co-op Credit Union	386	(5)
Theft by Employees	391	(1)
Cable Cast Magazine v. Premier Bank	392	(3)
Halifax Corp. v. Wachovia Bank	395	(2)
Impostors	397	(1)
Meng v. Maywood Proviso State Bank	398	(2)
Problem Set 25	400	(3)
Assignment 26: Truncation and Check 21	403	(10)
Payor-Bank Truncation	403	(1)
Figure 26.1---MICR Line	404	(2)
Depository-Bank Truncation and the Check 21 Act	406	(2)
Figure 26.2---Check Processing under Check 21	408	(1)
Figure 26.3---Substitute Check	409	(1)
Problem Set 26	410	(3)
Electronic Payments	413	(94)
Assignment 27: The Credit-Card System	413	(14)
The Issuer-Cardholder Relationship	413	(3)
Using the Credit-Card Account	416	(1)
Collection by the Payee	417	(1)
The Mechanics of Collection	417	(2)
Figure 27.1---Payment by Credit Card	419	(1)
Figure 27.2---Dividing the Credit-Card Dollar	420	(1)
Finality of Payment	420	(2)
Hyland v. First USA Bank	422	(2)
Problem Set 27	424	(3)
Assignment 28: Error and Fraud in Credit-Card Transactions	427	(19)
Erroneous Charges	427	(1)
Belmont v. Associates National Bank (Delaware)	428	(9)
Unauthorized Charges	437	(1)
Minskoff v. American Express Travel Related Services Co.	438	(6)
Problem Set 28	444	(2)
Assignment 29: Debit Cards	446	(19)
Payment with a Debit Card	446	(1)
Establishing the Debit-Card Relationship	447	(1)
Transferring Funds with a Debit Card	448	(1)
Collection by the Payee	448	(1)
PIN-Based Debit Cards	449	(1)
PIN-Less Debit Cards	449	(1)
Error and Fraud in Debit-Card Transactions	450	(1)
Erroneous Transactions	451	(1)
Fraudulent Transactions	451	(5)
Hospicomm, Inc. v. Fleet Bank, N.A.	456	(3)
Heritage Bank v. Lovett	459	(3)
Problem Set 29	462	(3)
Assignment 30: The Wire-Transfer System	465	(24)
Introduction	465	(1)
How Does It Work?	466	(1)
Initiating the Wire Transfer: From the Originator to the Originator's Bank	466	(1)
Figure 30.1---Payment by Wire Transfer	467	(1)
Trustmark Ins. Co. v. Bank One	467	(5)
Banco de la Provincia v. BayBank Boston, N.A.	472	(4)
Executing the Transfer: From the Originator's Bank to the Beneficiary's Bank	476	(1)
Bilateral Systems (Including SWIFT)	476	(1)
CHIPS	477	(1)
Fedwire	478	(1)
Figure 30.2---Multilateral Netting on CHIPS	478	(1)
Figure 30.3---Sample Fedwire Message	479	(3)
Completing the Funds Transfer: From the Beneficiary's Bank to the Beneficiary	482	(1)
Discharge of the Originator's Underlying Obligation	483	(1)
Finality of Payment	484	(1)
Aleo International, Ltd. v. Citibank, N.A.	484	(2)
Problem Set 30	486	(3)
Assignment 31: Error in Wire-Transfer Transactions	489	(18)
Recovering from Parties in the System	489	(1)
Errors by the Originator	490	(1)
Corfan Banco Asuncion Paraguay v. Ocean Bank	490	(6)
Errors in the System	496	(1)
Sending Excessive Funds	496	(1)
Sending Inadequate Funds	497	(1)
Bank-Statement Rule	498	(1)
Recovering from the Mistaken Recipient	499	(1)
Fraud	500	(3)
Problem Set 31	503	(4)
Developing Payment Systems	507	(22)
Assignment 32: Internet Payments	507	(22)
Background	507	(1)
Mark A. Lemley & David McGowan, Legal Implications of Network Economic Effects	507	(5)
Ronald J. Mann, Making Sense of Payments Policy in the Information Age	512	(4)
Credit Cards on the Internet	516	(1)
Processing the Transactions	516	(1)
Problems	517	(1)
Fraud	517	(3)
Privacy	520	(1)
Micropayments	521	(1)
Debit Cards on the Internet	522	(1)
ACH Transfers (WEB Entries)	523	(1)
Foreign and Cross-Border Payments	524	(1)
Figure 32.1---ACH ``Checks''	525	(1)
A Note on Mobile Payments	526	(1)
Problem Set 32	527	(2)
Letters of Credit	529	(30)
Assignment 33: Letters of Credit -- The Basics	529	(19)
The Underlying Transaction	530	(1)
Figure 33.1---Irrevocable Commercial Letter of Credit	531	(2)
Advising and Confirming Banks	533	(1)
Figure 33.2---Issuing the Letter of Credit	533	(1)
The Terms of the Credit	534	(2)
Drawing on the Credit	536	(1)
Samuel Rappaport Family Partnership v. Meridian Bank	537	(3)
Carter Petroleum Products, Inc. v. Brotherhood Bank & Trust Co.	540	(5)
Reimbursement	545	(1)
Figure 33.3---Payment with a Letter of Credit	545	(1)
Problem Set 33	545	(3)
Assignment 34: Letters of Credit---Advanced Topics	548	(11)
Error and Fraud in Letter-of-Credit Transactions	548	(1)
Wrongful Honor	548	(2)
Wrongful Dishonor	550	(2)
Fraud	552	(1)
Forged Drafts	552	(1)
Fraudulent Submissions by the Beneficiary	552	(2)
Assigning Letters of Credit	554	(2)
Choice-of-Law Rules	556	(1)
Problem Set 34	556	(3)
Part Two Credit Systems	559	(64)
Introduction to Credit Systems	561	(2)
The Borrower's Obligation	563	(14)
Assignment 35: Promissory Notes and Interest Rates	563	(14)
Promissory Notes	563	(1)
Schillace v. Channell Shopping Partnership	563	(6)
Determining the Amount of Compensation	569	(1)
Fixed and Variable Interest Rates	569	(2)
Interest-Rate Swaps	571	(1)
Figure 35.1---Interest-Rate Swap	572	(1)
The Enforceability of Interest-Rate Agreements	572	(1)
Problem Set 35	573	(4)
Credit Enhancement	577	(46)
Assignment 36: Credit Enhancement by Guaranty	577	(13)
The Role of Guaranties	577	(2)
Thomas S. Hemmindinger, Hillman on Commercial Loan Documentation 373-377	579	(4)
Rights of the Creditor Against the Guarantor	583	(1)
F.T.L., Inc. v. Crestar Bank (In re F.T.L., Inc.)	584	(3)
Problem Set 36	587	(3)
Assignment 37: Protections for Guarantors	590	(16)
Rights of the Guarantor Against the Principal	590	(1)
Performance	590	(1)
Reimbursement	590	(1)
Figure 37.1---Rights of the Guarantor	591	(1)
Subrogation	591	(1)
Corporate Buying Service v. Lenox Hill Radiology Associates	592	(3)
Figure 37.2---Guarantor Preferences	595	(1)
Rights of the Guarantor Against the Creditor	596	(1)
Suretyship Defenses	596	(2)
Waiver of Suretyship Defenses	598	(1)
Modern Photo Offset Supply v. The Woodfield Group	598	(4)
Bankruptcy of the Guarantor	602	(1)
Trimec, Inc. v. Zale Corporation	602	(2)
Problem Set 37	604	(2)
Assignment 38: Third-Party Credit Enhancement -- Standby Letters of Credit	606	(17)
The Standby Letter-of-Credit Transaction	606	(2)
Figure 38.1---Standby Letters of Credit	608	(1)
Nobel Insurance Co. v. First Nat'l. Bank	609	(2)
Figure 38.2---Form Standby Letter of Credit	611	(2)
Wood v. State Bank	613	(2)
Problems in Standby Letter-of-Credit Transactions	615	(1)
Bankruptcy of the Applicant	615	(1)
In re Ocana	616	(2)
The Issuer's Right of Subrogation	618	(1)
CCF, Inc. v. First National Bank (In re Slamans)	618	(2)
Problem Set 38	620	(3)
Part Three Systems for Enhancing Liquidity	623	(70)
Negotiability	625	(50)
Assignment 39: Negotiable Instruments	625	(18)
Negotiability and Liquidity	625	(2)
A Typical Transaction	627	(1)
Figure 39.1---Sample Negotiable Draft	627	(1)
The Negotiability Requirements	628	(1)
Figure 39.2---The Players in a Negotiable Draft Transaction	629	(1)
The Promise or Order Requirement	629	(2)
The Unconditional Requirement	631	(1)
DBA Enterprises, Inc. v. Findlay	631	(3)
The Money Requirement	634	(1)
The Fixed-Amount Requirement	634	(1)
Nagel v. Cronebaugh	635	(2)
The Payable-to-Bearer-or-Order Requirement	637	(1)
The Demand or Definite-Time Requirement	638	(1)
The No-Extraneous-Undertakings Requirement	639	(1)
Problem Set 39	640	(3)
Assignment 40: Transfer and Enforcement of Negotiable Instruments	643	(16)
Transferring a Negotiable Instrument	643	(1)
Negotiation and Status as a Holder	643	(1)
Special and Blank Indorsements	644	(2)
Restrictive and Anomalous Indorsements	646	(1)
Enforcement and Collection of Instruments	646	(1)
The Right to Enforce an Instrument	646	(1)
Presentment and Dishonor	647	(1)
Defenses to Enforcement	648	(1)
Turman v. Ward's Home Improvement, Inc.	648	(1)
Liability on an Instrument	649	(2)
Figure 40.1---Liability on an Instrument	651	(1)
The Effect of the Instrument on the Underlying Obligation	651	(2)
McMahon Food Corp. v. Burger Dairy Co.	653	(3)
Problem Set 40	656	(1)
Figure 40.2---Reverse of Sample TKO Check	656	(3)
Assignment 41: Holders in Due Course	659	(16)
Holder-in-Due-Course Status	659	(1)
The Requirements for Holder-in-Due-Course Status	659	(2)
Rights of Holders in Due Course	661	(2)
State Street Bank & Trust Co. v. Strawser	663	(2)
Payment and Discharge	665	(2)
Transferees Without Holder-in-Due-Course Status	667	(1)
The Fading Role of Negotiability	668	(1)
The Declining Use of Negotiable Instruments	668	(1)
The Decreasing Relevance of Negotiability to Negotiable Instruments	669	(2)
Problem Set 41	671	(4)
Securitization	675	(18)
Assignment 42: Securitization	675	(18)
Securitization and Liquidity	675	(1)
The Rise of Securitization	676	(1)
Investment Securities and Article 8	677	(1)
The Subject Matter: What Is a Security?	678	(1)
The Obligation of the Issuer	679	(2)
The Two Holding Systems	681	(1)
The Direct Holding System	681	(1)
Making the Transfer Effective as Between Seller and Purchaser	681	(1)
Making the Transfer Effective Against the Issuer	682	(1)
The Effect of a Transfer on Third Parties	682	(1)
The Indirect Holding System	683	(1)
The Basic Framework	683	(2)
Rights Against the Intermediary	685	(2)
Rights Against Third Parties	687	(2)
Problem Set 42	689	(4)
BOOK THREE Secured Credit	693	(2)
Part One The Creditor-Debtor Relationship	695	(248)
Creditors' Remedies Under State Law	697	(88)
Assignment 43: Remedies of Unsecured Creditors Under State Law	697	(17)
Who Is an Unsecured Creditor?	697	(1)
How Do Unsecured Creditors Compel Payment?	698	(1)
Vitale v. Hotel California, Inc.	699	(8)
Limitations on Compelling Payment	707	(1)
Wisconsin Statutes Annotated	708	(3)
Is the Law Serious About Collecting Unsecured Debts?	711	(1)
Problem Set 43	711	(3)
Assignment 44: Security and Foreclosure	714	(15)
The Nature of Security	714	(2)
The Invention of Security: A Pseudo History	716	(3)
Basile v. Erhal Holding Corporation	719	(2)
Foreclosure Procedure	721	(1)
Judicial Foreclosure	721	(3)
Wisconsin Statutes Annotated	724	(1)
Power of Sale Foreclosure	725	(1)
U.C.C. Foreclosure by Sale	726	(1)
Problem Set 44	726	(3)
Assignment 45: Repossession of Collateral	729	(20)
The Importance of Possession Pending Foreclosure	729	(1)
The Right to Possession Pending Foreclosure -- Real Property	730	(1)
The Debtor's Right to Possession During Foreclosure	730	(1)
Appointment of a Receiver	730	(2)
California Code of Civil Procedure	732	(1)
Illinois Mortgage Foreclosure Law	732	(1)
Assignments of Rents	732	(1)
The Right to Possession Pending Foreclosure -- Personal Property	733	(1)
Del's Big Saver Foods, Inc. v. Carpenter Cook, Inc.	734	(3)
The Article 9 Right to Self-Help Repossession	737	(1)
The Limits of Self-Help: Breach of the Peace	738	(1)
Salisbury Livestock Co. v. Colorado Central Credit Union	738	(5)
Self-Help Against Accounts as Collateral	743	(2)
Problem Set 45	745	(4)
Assignment 46: Judicial Sale and Deficiency	749	(20)
Strict Foreclosure	749	(1)
Foreclosure Sale Procedure	750	(1)
Problems with Foreclosure Sale Procedure	751	(1)
Armstrong v. Csurilla	752	(4)
Advertising	756	(1)
Wisconsin Statutes Annotated	756	(1)
Figure 46.1---Notice of a Foreclosure Sale	757	(1)
Inspection	757	(1)
Homebuyer Finds Remains of Owner	758	(1)
Title and Condition	758	(1)
Marino v. United Bank of Illinois N.A.	758	(3)
Hostile Situation	761	(1)
The Statutory Right to Redeem	762	(1)
Antideficiency Statutes	762	(1)
California Code of Civil Procedure	763	(1)
Credit Bidding at Judicial Sales	764	(2)
Judicial Sale Procedure: A Functional Analysis	766	(1)
Problem Set 46	766	(3)
Assignment 47: Article 9 Sale and Deficiency	769	(16)
Strict Foreclosure Under Article 9	769	(1)
Sale Procedure Under Article 9	770	(1)
Problems with Article 9 Sale Procedure	771	(1)
Failure to Sell the Collateral	771	(1)
The Requirement of Notice of Sale	772	(1)
In re Downing	772	(2)
The Requirement of a Commercially Reasonable Sale	774	(1)
Chavers v. Frazier	775
Article 9 Sale Procedure: A Functional Analysis	580	(201)
Problem Set 47	781	(4)
Creditors' Remedies in Bankruptcy	785	(38)
Assignment 48: Bankruptcy and the Automatic Stay	785	(19)
The Federal Bankruptcy System	785	(1)
Filing a Bankruptcy Case	786	(3)
Stopping Creditors' Collection Activities	789	(2)
Lifting the Stay for Secured Creditors	791	(4)
In re Craddock-Terry Shoe Corporation	795	(6)
Strategic Uses of Stay Litigation	801	(1)
Problem Set 48	802	(2)
Assignment 49: The Treatment of Secured Creditors in Bankruptcy	804	(19)
The Vocabulary of Bankruptcy Claims	804	(2)
The Claims Process	806	(2)
Calculating the Amount of an Unsecured Claim	808	(1)
Payments on Unsecured Claims	809	(2)
Calculating the Amount of a Secured Claim	811	(1)
Selling the Collateral	812	(1)
Who Pays the Expenses of Sale by the Trustee?	813	(2)
Chapters 11 and 13 Reorganizations	815	(1)
Valuing Future Payments	816	(1)
Till v. SCS Credit Corporation	817	(3)
Problem Set 49	820	(3)
Creation of Security Interests	823	(62)
Assignment 50: Formalities for Attachment	823	(20)
A Prototypical Secured Transaction	823	(1)
Fisherman's Pier: A Prototypical Secured Transaction	824	(2)
Formalities for Article 9 Security Interests	826	(1)
Possession or Authenticated Security Agreement	826	(2)
In re Thompson (Wieberg v. Thompson)	828	(2)
In re Ace Lumber Supply, Inc.	830	(6)
Value Has Been Given	836	(1)
The Debtor Has Rights in the Collateral	837	(2)
Formalities for Real Estate Mortgages	839	(1)
Ohio Revised Code Ann.	839	(1)
Problem Set 50	839	(4)
Assignment 51: What Collateral and Obligations Are Covered?	843	(13)
Interpreting Security Agreements	843	(1)
Debtor Against Creditor	843	(1)
Creditor Against Third Party	844	(1)
Interpreting Descriptions of Collateral	844	(1)
Sufficiency of Description: Article 9 Security Agreements	845	(1)
In re Shirel	845	(3)
Describing After-Acquired Property	848	(1)
Stoumbos v. Kilimnik	849	(2)
Sufficiency of Description: Real Estate Mortgages	851	(1)
What Obligations Are Secured?	852	(1)
Problem Set 51	853	(3)
Assignment 52: Proceeds, Products, and Other Value-Tracing Concepts	856	(16)
Proceeds	857	(1)
Definition	857	(2)
Termination of Security Interest in the Collateral After Authorized Disposition	859	(1)
Continuation of Security Interest in the Collateral After Unauthorized Disposition	860	(1)
Illinois Revised Statutes	861	(1)
New York Penal Law	862	(2)
Limitations on the Secured Creditor's Ability to Trace Collateral	864	(1)
In re Oriental Rug Warehouse Club, Inc.	865	(3)
Other Value-Tracing Concepts	868	(1)
Non-Value Tracing Concepts	869	(1)
Problem Set 52	869	(3)
Assignment 53: Tracing Collateral Value During Bankruptcy	872	(13)
Distinguishing Proceeds from After-Acquired Property	872	(1)
In re Delbridge	873	(5)
In re Hotel Sierra Vista Limited Partnership	878	(2)
``Cash Collateral'' in Bankruptcy	880	(2)
Problem Set 53	882	(3)
Default: The Gateway to Remedies	885	(36)
Assignment 54: Default, Acceleration, and Cure Under State Law	885	(21)
Default	885	(1)
Standard Default Provisions	885	(1)
When Is Payment Due?	886	(1)
Installment Loans	887	(1)
Single-Payment Loans	887	(1)
Lines of Credit	888	(1)
Acceleration and Cure	889	(1)
Acceleration	889	(1)
Limits on the Enforceability of Acceleration Clauses	890	(1)
J.R. Hale Contracting Co. v. United New Mexico Bank at Albuquerque	890	(5)
The Debtor's Right to Cure	895	(1)
Old Republic Insurance Co. v. Lee	895	(1)
Reinstatement	896	(1)
The Enforceability of Payment Terms	896	(2)
Kham & Nate's Shoes No. 2, Inc. v. First Bank of Whiting	898	(3)
Procedures After Default	901
Figure 54.1---The Spider Ad	402	(501)
Problem Set 54	903	(3)
Assignment 55: Default, Acceleration, and Cure Under Bankruptcy Law	906	(15)
In re Moffett (Tidewater Finance Co. v. Moffett)	906	(3)
Stage 1: Protection of the Defaulting Debtor Pending Reorganization	909	(1)
Stage 2: Reinstatement and Cure	910	(1)
Modification Distinguished from Reinstatement and Cure	910	(1)
Reinstatement and Cure Under Chapter 11	911	(1)
Reinstatement and Cure Under Chapter 13	912	(2)
When Is It Too Late to File Bankruptcy to Reinstate and Cure?	914	(1)
In re DeSeno	914	(4)
Binding Lenders in the Absence of a Fixed Schedule for Repayment	918	(1)
Problem Set 55	918	(3)
The Prototypical Secured Transaction	921	(22)
Assignment 56: The Prototypical Secured Transaction	921	(22)
The Parties	921	(1)
Deutsche Approves Bonnie's Loan	922	(1)
Deutsche and Bonnie's Document the Loan	923	(1)
Security Agreement and Statement of Transaction	923	(8)
Figure 56.1---Statement of Transaction	931	(1)
The Financing Statement	932	(1)
Figure 56.2---U.C.C.-1 Financing Statement	932	(1)
The Personal Guarantee	933	(1)
Bonnie's Buys Some Boats	933	(1)
The Floorplan Agreement	933	(3)
The Buy	936	(1)
Bonnie's Sells a Boat	937	(1)
Monitoring the Existence of the Collateral	937	(1)
Problem Set 56	938	(5)
Part Two The Creditor-Third Party Relationship	943	(200)
Perfection	945	(66)
Assignment 57: The Personal Property Filing Systems	945	(19)
Competition for the Secured Creditor's Collateral	945	(1)
What Is Priority?	946	(1)
Peerless Packing Co. v. Malone & Hyde, Inc.	947	(2)
How Do Creditors Get Priority?	949	(2)
The Theory of the Filing System	951	(1)
The Multiplicity of Filing Systems	952	(1)
National Peregrine, Inc. v. Capitol Federal Savings and Loan Association of Denver (In re Peregrine Entertainment, Limited)	953	(6)
In re: Pasteurized Eggs Corporation (Pasteurized Eggs Corporation v. Bon Dente Joint Venture)	959	(1)
Methods and Costs of Searching	960	(1)
Problem Set 57	961	(3)
Assignment 58: Article 9 Financing Statements: The Debtor's Name	964	(17)
The Components of a Filing System	964	(1)
Financing Statements	965	(1)
The Index	966	(1)
Search Systems	967	(1)
Correct Names for Use on Financing Statements	968	(1)
Individual Names	969	(1)
In re Kinderknecht (Clark v. Deere and Co.)	970	(2)
Corporate Names	972	(1)
Partnership Names	973	(1)
Trade Names	973	(1)
The Entity Problem	974	(1)
Errors in the Debtor's Names on Financing Statements	974	(2)
In re Spearing Tool and Manufacturing Co., Inc. (United States v. Crestmark Bank)	976	(3)
Problem Set 58	979	(2)
Assignment 59: Article 9 Financing Statements: Other Information	981	(13)
Introduction	981	(1)
Filing Office Errors in Acceptance or Rejection	982	(1)
Wrongly Accepted Filings	982	(1)
Wrongly Rejected Filings	983	(1)
Filer Errors in Accepted Filings	983	(1)
Information Necessary Only to Qualify for Filing	983	(1)
Required Information	984	(4)
In re Pickle Logging, Inc. (Deere Credit, Inc. v. Pickle Logging, Inc.)	988	(1)
Authorization to File a Financing Statement	989	(2)
U.C.C. Insurance	991	(1)
Problem Set 59	991	(3)
Assignment 60: Exceptions to the Article 9 Filing Requirement	994	(17)
Collateral in the Possession of the Secured Party	994	(1)
The Possession-Gives-Notice Theory	994	(2)
What Is Possession?	996	(1)
Possession as a Means of Perfection	997	(2)
Collateral in the Control of the Secured Party	999	(1)
Purchase-Money Security Interests in Consumer Goods	1000	(1)
Purchase Money Security Interest (PMSI)	1000	(1)
Consumer Goods	1001	(1)
Gallatin National Bank v. Lockovich (In re Lockovich)	1002	(3)
Security Interests Not Governed by Article 9 or Another Filing Statute	1005	(1)
Bluxome Street Associates v. Fireman's Fund Insurance Co.	1006	(2)
What Became of the Notice Requirement?	1008	(1)
Problem Set 60	1008	(3)
Maintaining Perfection	1011	(56)
Assignment 61: Maintaining Perfection Through Lapse and Bankruptcy	1011	(16)
Removing Filings from the Public Record	1011	(1)
Satisfaction	1011	(1)
Arizona Revised Statutes Annotated	1012	(1)
Florida States Annotated	1013	(1)
Release	1013	(1)
Article 9 Termination and Release	1014	(1)
``Self-Clearing'' and Continuation in the Article 9 Filing System	1015	(2)
Worthen Bank & Trust Co., N.A. v. Hilyard Drilling Co. (In re Hilyard Drilling Co.)	1017	(4)
The Effect of Bankruptcy on Lapse and Continuation	1021	(1)
In re Schwinn Cycling and Fitness, Inc. (Expeditors International of Washington, Inc. v. The Liquidating Trust)	1022	(2)
Problem Set 61	1024	(3)
Assignment 62: Maintaining Perfection Through Changes of Name, Identity, and Use	1027	(12)
Changes in the Debtor's Name	1028	(2)
Changes Affecting the Description of Collateral	1030	(2)
Exchange of the Collateral	1032	(1)
Barter Transactions	1032	(2)
National Bank of Alaska v. Erickson (In re Seaway Express Corporation)	1034	(2)
Collateral to Cash Proceeds to Noncash Proceeds	1036	(1)
Collateral to Cash Proceeds (No New Property)	1037	(1)
Problem Set 62	1037	(2)
Assignment 63: Maintaining Perfection Through Relocation of Debtor or Collateral	1039	(11)
State-Based Filing in a National Economy	1039	(1)
Initial Perfection	1040	(1)
At the Location of the Debtor	1040	(1)
Lynn M. LoPucki, Why the Debtor's State of Incorporation Should Be the Proper Place for Article 9 Filing: A Systems Analysis	1041	(2)
At the Location of the Collateral	1043	(1)
Relocation of the Debtor	1043	(2)
Nation-Based Filing in a World Economy	1045	(3)
Problem Set 63	1048	(2)
Assignment 64: Maintaining Perfection in Certificate of Title Systems	1050	(17)
Figure 64.1---Sample Certificate of Title	1051	(1)
New Zealand Law Commission, Motor Vehicle Title Systems in the USA and Canada	1052	(3)
Perfection in a Certificate of Title System	1055	(1)
Accessions and Removals	1056	(2)
In What State Should a Motor Vehicle Be Titled?	1058	(1)
Motor Vehicle Registration	1059	(1)
Figure 64.2---Sample Vehicle Registration	1060	(1)
Maintaining Perfection on Interstate Movement of Collateral	1060	(1)
How It Is Supposed to Work	1060	(1)
Some Things That Can Go Wrong	1061	(1)
Movement of Goods Between Non-Certificate and Certificate Jurisdictions	1062	(1)
Problem Set 64	1063	(4)
Priority	1067	(14)
Assignment 65: The Concept of Priority: State Law	1067	(14)
Priority in Foreclosure	1067	(3)
Reconciling Inconsistent Priorities	1070	(1)
Bank Leumi Trust Co. of New York v. Liggett	1071	(2)
The Right to Possession Between Lien Holders	1073	(1)
The Grocers Supply Co. v. Intercity Investment Properties, Inc.	1074	(1)
Frierson v. United Farm Agency, Inc.	1075	(2)
Problem Set 65	1077	(4)
Competitions for Collateral	1081	(62)
Assignment 66: Lien Creditors Against Secured Creditors: The Basics	1081	(11)
How Creditors Become ``Lien Creditors''	1081	(1)
Judgment Liens on Real and Personal Property	1082	(1)
Priority Among Lien Creditors	1083	(1)
Preference Between Writs of Execution	1084	(1)
Priority Between Lien Creditors and Secured Creditors	1084	(1)
People v. Green	1085	(3)
Priority Between Lien Creditors and Mortgage Creditors	1088	(1)
Purchase-Money Priority	1088	(1)
Problem Set 66	1089	(3)
Assignment 67: Lien Creditors Against Secured Creditors: Future Advances	1092	(14)
Priority of Future Advances: Personal Property	1092	(2)
Priority of Nonadvances: Personal Property	1094	(1)
Uni Imports, Inc. v. Exchange National Bank of Chicago	1094	(4)
Priority of Future Advances and Nonadvances: Real Property	1098	(1)
Shutze v. Credithrift of America, Inc.	1098	(5)
Problem Set 67	1103	(3)
Assignment 68: Secured Creditors Against Secured Creditors: The Basics	1106	(16)
The Basic Rule: First to File or Perfect	1106	(2)
Priority of Future Advances	1108	(2)
Priority in After-Acquired Property	1110	(1)
Priority of Purchase-Money Security Interests	1111	(1)
Purchase-Money Security Interests Generally	1111	(3)
Purchase-Money Security Interests in Inventory	1114	(1)
Purchase-Money Priority in Proceeds	1115	(1)
Priority in Commingled Collateral	1116	(1)
Problem Set 68	1117	(5)
Assignment 69: Buyers Against Secured Creditors	1122	(21)
Introduction	1122	(1)
Buyers of Real Property	1123	(1)
Buyers of Personal Property	1124	(1)
The Authorized Disposition Exception: U.C.C. §9-315(a)(1)	1124	(1)
RFC Capital Corporation v. EarthLink, Inc.	1125	(3)
The Buyer-in-the-Ordinary-Course Exception: U.C.C. §9-320(a)	1128	(3)
Daniel v. Bank of Hayward	1131	(5)
The Buyer-Not-in-the-Ordinary-Course Exception: U.C.C.§§9-323(d) and (e) and 9-317(b)	1136	(1)
The Consumer-to-Consumer Sale Exception: U.C.C. §9-320(b)	1137	(1)
Problem Set 69	1138	(5)
Table of Cases	1143	(10)
Table of Statutes and Regulations	1153	(18)
Index	1171