Every state has laws that control commercial transactions, most notably the Uniform Commercial Code. Under these laws, many different aspects of the sale and its impact on both sides of the deal are defined as to warranty, revocation, rights of collection and numerous other aspects. These laws almost universally provide that they apply only if the parties have not otherwise agreed in their sale contract. This gives the parties the ability to define for themselves what terms and conditions will apply to the transaction. (more…)
Banking and Financial Industry Blog
Terms and Condition Statements – An Opportunity and a Caution
Tuesday, March 29th, 2011Down on the Farm – Taking a Security Interest in Motor Vehicles
Thursday, March 24th, 2011When making an agricultural loan, questions often arise about how to properly take a security interest in collateral typically associated with such a loan. Commonly, questions arise when taking a security interest in motor vehicles owned by a farmer.
Indiana’s motor vehicle code draws a distinction between “motor vehicles” on the one hand, and “farm tractors,” “farm trucks, farm trailers, or farm semitrailers and tractors,” “farm vehicles loaded with a farm product,” and “farm wagons” on the other. A “motor vehicle” is one which is self-propelled upon a highway, excluding farm tractors and farm implements designed to be primarily operated in a farm field or farm premises, among other things. A “motor vehicle” is subject to a certificate of title issued by the Indiana Bureau of Motor Vehicles.
In order to take a security interest in a motor vehicle, the secured party must include a specific description of the motor vehicle in the security agreement, and the secured party’s lien should be noted on the certificate of title and the certificate of title is then held by the secured party. Where a vehicle is required to be registered (as opposed to titled), the item should be specifically listed on the security agreement and a financing statement should be filed. Included among these vehicles are farm implements, farm tractors, and certain other types of farm machinery.
Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com
Top Ten Tips for Debtor Names in Financing Statements
Tuesday, March 15th, 2011An often confusing and frustrating element for a lender when preparing a UCC financing statement is making sure that the debtor’s name is correct. Failure to have the correct name of the debtor on the financing statement can invalidate the effectiveness of your financing statement. Here are ten tips for making sure that you get the debtor’s name right: (more…)
Verbal Mortgage Release Not Enforceable
Thursday, March 10th, 2011An employer loaned his employee money to buy a house. As the employment relationship went on, the employee alleged that the employer agreed to release the mortgage on the house. However, no written document was ever signed releasing the mortgage. (more…)
Multiple Guarantors of a Single Debt
Tuesday, March 8th, 2011Virtually all business is transacted these days in some form of limited liability entity, such as a corporation or LLC. One of the primary purposes of these entities is to shield the owners of the entity from personal liability for the debts and obligations of the entity. This is particularly useful in the event of business failure or when all of the trade accounts cannot be paid, or in the event of a catastrophic, uninsured personal injury loss or the like. However, as anyone who has tried to do otherwise has learned, the banks providing the financing for these entities (except in very rare circumstances) require personal guaranties from the owners so that they do become personally liable for the bank debt in the event that the entity cannot pay. (more…)
A Guarantor Makes an Ingenious Argument to Try to Wiggle Off the Hook
Wednesday, February 23rd, 2011Guaranties of debt are a funny thing under the law. Generally speaking, the law is deliberately biased in favor of protecting the rights of a guarantor against the creditor holding the guaranty. Guarantors are sometimes called the “darlings of the law” because of their preferred position. As a result, guaranties have to be very carefully drafted in order to make sure that the guarantor is held to its contract. You are literally drafting against the bias of the law in attempting create an enforceable guaranty. (more…)
Why Should I Buy a Survey?
Friday, February 18th, 2011A survey should be considered for all purchases of real estate and when lenders are making significant mortgage loans. A survey will locate boundaries, encroachments, overlaps and access to the real estate. The survey will reveal whether improvements have been built in the proper location. The survey will also confirm the accuracy of a legal description to be used in a deed or mortgage. Finally, a survey will determine the acreage amounts contained within a tract of land. (more…)
A Few Years Ago We Thought Receiverships Were Dead
Wednesday, February 16th, 2011Over the past few years, a number of amendments to the Bankruptcy Code have made bankruptcy a less flexible tool for debtors dealing with real estate related debt problems. As a result, state law receiverships are on the rise. Where before we rarely, if ever, saw receivership action initiated by a lender, they are now quite common. (more…)
Indiana Introduces Amendments to Revised Article 9
Tuesday, February 1st, 2011On January 11, 2011, Indiana became the fourth state to introduce legislation to adopt the proposed revisions to UCC Article 9. The Indiana law largely adopts the revisions as proposed by the study committee. (more…)
Highlights of the Proposed Amendments to Article 9
Thursday, January 27th, 2011The group of experts that studied the Uniform Commercial Code have proposed various amendments to Article 9. These amendments are already under consideration by four state legislatures, including Indiana, and are expected to be considered by other state legislatures as well. The goal is to have all states enact the amendments by July 1, 2013, the uniform effective date. What follows are some of the highlights of the proposed amendments. (more…)