Ownership - with respect to warranties, possession is the control that a person intentionally exercises over those warranties. To have guarantees, a person must intend to possess them. A person may be in possession of an asset, but that does not mean they are the owner. Understanding and using the fundamentals of a secured Article 9 transaction can be a daunting task. It requires a thorough understanding of the code and new changes. A creditor must be able to follow the process, understand the scheme and implement a solution that best fits risk reduction. In most scenarios, the creditor can acquire greater bargaining power by requiring the debtor to grant security interest to the creditor in the transaction. This is done before a loan is granted or some value is provided, in order to maximize the likelihood of payment in the event of the debtor`s non-compliance with the terms of the contract. The creditor may exercise his rights established under Article 9. To achieve this, it is important to create an enforceable "seizure" security interest, to protect the security interest from other parties` "perfection" security requirements, and to be the highest "priority". A problem could arise if the control agreement and the "customer contract" concluded between the depositary bank and the debtor as a customer in the context of the opening of the account explicitly provide for a specific but differentiated jurisdiction as the jurisdiction of the bank for the purposes of the PEC, given that any agreement "would constitute an agreement between the bank and its customer, who regulates the current account". The same problem could arise if neither the control contract nor the customer contract explicitly provides for the competence of the bank, but any such agreement provides that it is subject to the law of a specific but different jurisdiction.
In order to avoid such problems, all secured parties (i) should expressly stipulate that a given jurisdiction is the jurisdiction of the bank for the purposes of the PEA and (ii) consider adding to their control agreements the following provision (or corresponding terms): a secured party has control of a current account when: UCC Article 9 for idiots is here; to decode and explain, from a credit manager`s point of view, the more relevant aspects of the article and demystify the relevant aspects, so that we know what to do if it is necessary to secure a transaction. There must be a high-level view of the code and highlight the riskiest areas. A credit manager should always seek legal advice from a lawyer, especially when the monetary risk is significant. It is important that the creditor is aware of the priority rules and defines the necessary measures to ensure that he is protected. Remember that the UCC-1 must be submitted - your security agreement has no value until the deposit is completed. In most cases, when there is bank financing, they usually have an advanced UCC-1 cap that is prioritized. For this reason, it is important to thoroughly research all previous submissions to determine the effectiveness of your submission. The inclusion of such a language could avoid the risks and uncertainties that would arise if the application of the provisions of the Directive implementing Article 9-304(b) of the UZK resulted in the identification of two separate courts in the context of two separate agreements. UZK § 9-304 (b) proposes a "cascade" of methods for determining the competence of a depositary bank for the purposes of the PEC.
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