Secured Transactions Exam Checklist

Use one sequence for every fact pattern, even when the call of the question looks narrow. Scope → classification → attachment → perfection → priority → default and enforcement → bankruptcy. If you jump straight to priority, you will assert that a party is 'perfected' without having proven attachment, and graders treat that as a missed element, not a shortcut.

Scope is § 9-109. Article 9 covers any transaction that creates a security interest in personal property or fixtures by contract, plus agricultural liens, sales of accounts, chattel paper, payment intangibles, and promissory notes, and consignments. Flag the § 9-109(d) exclusions when the facts invite them: real property interests, most statutory liens (but note § 9-333 gives possessory repair liens priority), wage assignments, and most tort claims other than commercial tort claims. Also run § 1-203 when a lease is on the facts: a 'lease' that is not terminable by the lessee and runs for the goods' remaining economic life is a disguised security interest, and the lessor loses if it never filed.

Classification is the hinge. The same asset can be inventory in the dealer's hands, equipment in the buyer's hands, and consumer goods in the consumer's hands, and each label changes both the perfection method and the PMSI rules. Under § 9-102, classify goods by the debtor's primary use at the time the security interest attaches: consumer goods, equipment (the residual category), farm products, or inventory.

For intangibles and quasi-intangibles, distinguish the payment rights carefully. An account is a right to payment for goods sold or services rendered, not evidenced by an instrument or chattel paper. Chattel paper is a record evidencing both a monetary obligation and a security interest in or lease of specific goods — a car retail installment contract is the paradigm. An instrument is a negotiable instrument or other writing evidencing a right to payment that is transferred by delivery with indorsement in the ordinary course. Deposit accounts, investment property, letter-of-credit rights, and commercial tort claims each get their own perfection rules. General intangibles (including payment intangibles and software) are the catch-all.

Two classification traps recur. Money is perfected only by possession (§ 9-312(b)(3)). A commercial tort claim must be described with specificity in the security agreement; a supergeneric 'all tort claims' description fails under § 9-108(e), and after-acquired property clauses do not reach commercial tort claims or, for consumer goods, goods acquired more than ten days after value is given (§ 9-204(b)).

Recite all three elements of § 9-203(b) every time: value has been given; the debtor has rights in the collateral or power to transfer rights; and either the debtor authenticated a security agreement containing a description of the collateral, or the secured party has possession or control under an agreement. Value under § 1-204 includes a binding commitment to extend credit and antecedent debt.

The description problem is the most commonly tested. Under § 9-108, a description is sufficient if it reasonably identifies the collateral, including by UCC type ('all equipment'). But 'all the debtor's assets' — supergeneric — is insufficient in a security agreement even though it is sufficient in a financing statement (§ 9-504(2)). Check the composite-document rule if the signed writing is a loan agreement that incorporates an unsigned schedule.

Also check debtor rights: a debtor who has only bare possession of consigned or leased goods may still have power to transfer rights under § 2-403 or the entrustment rule, and after-acquired property clauses (§ 9-204) supply future attachment automatically. Attachment gives the secured party rights against the debtor; do not conflate it with priority against third parties.

Filing is the default (§ 9-310), but automatic and non-filing methods swallow much of the exam. Automatic perfection under § 9-309 covers a PMSI in consumer goods (not motor vehicles subject to a certificate-of-title statute) and the sale of a payment intangible or promissory note. Possession (§ 9-313) is required for money and is available for goods, instruments, negotiable documents, and tangible chattel paper. Control is the exclusive method for a deposit account as original collateral (§§ 9-104, 9-312(b)(1)) and the priority method for investment property (§ 9-106) and letter-of-credit rights. Certificate-of-title goods are perfected by notation on the title (§§ 9-303, 9-311).

For filing, check five things: the correct office under §§ 9-301 and 9-501 (generally the state of the debtor's location — for a registered organization, its state of organization under § 9-307); the debtor's name under § 9-503, which for a registered organization must match the public organic record; whether an error is seriously misleading under § 9-506, applying the standard-search-logic safe harbor; the indication of collateral under § 9-504; and authorization under § 9-509, since a filing the debtor never authorized is ineffective. Do not forget § 9-515's five-year lapse and continuation window.

Movement facts trigger § 9-316: four months to reperfect after the debtor relocates to a new state, one year after collateral is transferred to a debtor located in another state, and four months under § 9-507(c) after a name change makes the filing seriously misleading as to later-acquired collateral. Proceeds are automatically perfected for twenty days under § 9-315(d), continuing beyond that only if the same-office/cash-proceeds/lien-perfected conditions are met; for commingled cash proceeds, apply the lowest intermediate balance rule.

Build a timeline first: for each claimant, note the attachment date, the perfection date and method, and knowledge. Then apply the general rule of § 9-322(a): first to file or perfect wins between perfected secured parties; perfected beats unperfected; between unperfected, first to attach. The 'file or perfect' language means a filing made before attachment can win the race.

Then check whether a special rule displaces § 9-322. PMSIs under §§ 9-103 and 9-324: for non-inventory collateral, perfect within twenty days after the debtor receives possession; for inventory, perfect before delivery and send authenticated notification to conflicting filers who have filed against inventory. Control beats filing for deposit accounts (§ 9-327), investment property (§ 9-328), and letter-of-credit rights (§ 9-329). Purchasers of chattel paper and instruments who take possession in good faith and without knowledge can beat an earlier filer (§§ 9-330, 9-331).

Buyers get their own tier. A buyer in ordinary course of business under § 9-320(a) takes free of a security interest created by its seller even with knowledge — but not farm products (check the federal Food Security Act of 1985, 7 U.S.C. § 1631). Section 9-320(b) protects consumer-to-consumer buyers of consumer goods where the secured party relied on automatic perfection. A buyer for value who takes delivery without knowledge before perfection wins under § 9-317(b). Lien creditors take priority over unperfected security interests under § 9-317(a)(2), and future advances are limited by the forty-five-day rule of § 9-323. Finish with the specialty rules if the facts fit: fixtures (§ 9-334), accessions (§ 9-335), commingled goods (§ 9-336), and possessory liens (§ 9-333).

Define default by the agreement — Article 9 does not define it. Then walk the sequence: repossession under § 9-609, either by judicial process or by self-help without breach of the peace; disposition under § 9-610, which requires every aspect to be commercially reasonable; notification under §§ 9-611 to 9-614, with the ten-day safe harbor of § 9-612(b) in non-consumer transactions and the more demanding content requirements of § 9-614 for consumer-goods transactions; and application of proceeds under § 9-615.

Breach of the peace is fact-driven: confrontation, entry into a closed garage, or repossession over the debtor's objection typically breaches; a quiet daytime tow from a public driveway typically does not. Note that the duty is non-delegable, so the creditor is liable for the independent contractor's conduct.

For deficiency, apply § 9-626: in non-consumer transactions, a noncomplying secured party faces the rebuttable presumption that the collateral equaled the debt. Section 9-626(b) leaves consumer transactions to the courts, which split between the rebuttable presumption and absolute bar rules — say so explicitly rather than picking one. Add strict foreclosure under § 9-620, including the debtor's right to compel disposition when 60 percent of a consumer-goods obligation has been paid, redemption under § 9-623, and the statutory minimum damages in consumer-goods transactions under § 9-625(c)(2).

Bankruptcy is the most common overlay. The trustee's strong-arm power under § 544(a) defeats an unperfected security interest as of the petition date. Then run preferences under § 547: a transfer on account of antecedent debt within ninety days (one year for insiders) while insolvent that improves the creditor's position, subject to the enabling-loan exception in § 547(c)(3) when the secured party perfects within thirty days of the debtor's receipt of the collateral. Section 552 cuts off most after-acquired property clauses post-petition, except for proceeds of prepetition collateral.

Federal preemption also matters. Aircraft, vessels, and railroad rolling stock have federal registries; registered copyrights are recorded with the Copyright Office rather than under Article 9, while security interests in unregistered copyrights, patents, and trademarks are generally perfected by UCC filing. Note the split rather than overstating a single rule.

Finally, watch the termination-statement problem illustrated by the General Motors litigation, where an unauthorized but debtor-approved UCC-3 termination was held effective under § 9-509 (In re Motors Liquidation Co., Del. 2014, answering a Second Circuit certified question). For citation format, cite the Code as U.C.C. § 9-322 (Am. L. Inst. & Unif. L. Comm'n 2010) in a paper; on an exam, bare section numbers are fine and faster.