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Can you summarize Chapter 3 ?
Secured Transactions; Sales of Accounts and Chattel Paper > Rights of Third Parties: Perfected and
Short Summary
This legal document governs the rights of priority for unperfected security interests. It states that an unperfected security interest is subordinate to the rights of certain parties, including persons entitled to priority under Section 9312, lien creditors, and transferees in bulk or other buyers not in the ordinary course of business. Additionally, in the case of accounts and general intangibles, a person who gives value without knowledge of the security interest and before it is perfected also takes priority. However, if a secured party files with respect to a purchase money security interest before or within 10 days after the debtor receives possession of the collateral, they take priority over certain transferees in bulk or lien creditors. The document defines a lien creditor as a creditor who has acquired a lien on the property involved by attachment, levy, or the like. It also specifies that a person who becomes a lien creditor while a security interest is perfected takes subject to the security interest only to the extent that it secures advances made before or within 45 days after they become a lien creditor, or made without knowledge of the lien or pursuant to a commitment entered into without knowledge of the lien.
Whom does it apply to?
Creditors and secured parties involved in secured transactions.
What does it govern?
The legal document governs the rights of priority for unperfected security interests.
What are exemptions?
Certain exemptions include security interests in collateral in possession of the secured party, security interests temporarily perfected in instruments or documents without delivery or in proceeds for a 10-day period, security interests created by an assignment of a beneficial interest in a trust or a decedent's estate, purchase money security interests in consumer goods (except for motor vehicles or boats required to be registered), security interests of a collecting bank or arising under the division on sales, assignments for the benefit of all the creditors of the transferor, subsequent transfers by the assignee, security interests in a deposit account, and security interests in or claims under any policy of insurance including unearned premiums.
What are the Penalties?
No specific penalties are mentioned in this document.
Jurisdiction
Guam