Question

BUSINESS LAW QUESTION

Please give an example of a secured transaction that you are personally familiar with. It can be something you know from your parents, a friend, family, or searching on the internet. For example, my personal experience was going to a pawn shop when I was in college and in desperate need of money and pawning my gold chain for $50 even though I paid $250 for it. Explain how UCC Article IX applied.

Answer 1

The UCC article tells us about the governance and enforcement of secured transactions which involves security interest of creditor when a person takes debt from creditor so any property ( movable or intangible ) and fixtures are kept by creditor as collateral damage. This safeguard or secure the interest of creditor.

for example- If I have a laptop which i have given to repair shop. My laptop is repaired.The repair of laptop require $100 which i have not now. so until i have the $100, the repair shop owner kept the laptop as security.

Now, In you given example, UCC Article IX applied like you take the debt of  $50 from pawn shop by depositing your gold chain to the pawn shop owner so in this case, If you do not pay the debt of $50. The owner has the right to sell the gold chain and collect his debt with interest.

In this case, you have done secured transaction with Pawn shop owner because his interest as creditor is secured with your debt of $50 against your gold chain.

This  UCC Article IX applied.creates a credit-debt relationship. like it did between you and pawn shop owner.

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