Preface

     Secured debt is an integral part of commercial, real estate, family, insolvency, consumer, and other areas of law practice. Repayment of debt may be secured by real property, personal property, fixtures, or a combination of all three, and the security may have been created by consent of the parties, by statute, or by judicial process. These materials focus primarily on the central issues relating to secured debt created by consent of the parties:  how such debt is created, documented, and perfected, the rights of secured party and debtor upon the debtor's default, resolution of priority disputes between multiple parties with an interest in the same collateral, and the rights of secured party and debtor in the event of the debtor's bankruptcy.

     In most law schools these issues are addressed in distinct courses and distinct sets of materials.   The law dealing with consensual secured debt using real property as collateral is treated in a course in real estate finance (a course sometimes referred to as Real Property Secured Transactions or, simply, Mortgages).  The law dealing with consensual secured debt using personal property or fixtures as collateral is treated in a course in commercial transactions (a course sometimes referred to as Article 9).  The law of bankruptcy and use of state judicial process for collection of debt is treated in a course in creditors' rights (or Debtors' and Creditors' Rights).  We hope that integration of these topics in one course and one set of materials will provide a penetrating and comprehensive view of the law of secured debt, will facilitate an understanding of mixed collateral transactions, and will more appropriately highlight the impact of bankruptcy on the relationship between debtor and creditor.

     The law of real and personal property security and of bankruptcy is complex and its volume immense.  To keep the volume of material manageable, we must of necessity sacrifice some topics and much detail. In choosing, ordering, and writing the materials, and in our problems, we strive to emphasize the structure of interacting systems (both the formal systems of written law and the broader informal social systems in which the written law operates), to expose you to the complexity of some transactions, to force careful reading and use of statutes, and to treat the planning and the dispute resolution functions of the lawyer with equal dignity.

     The format and electronic linking features of these materials also implicitly convey an important message that transcends the substantive topics.  Lawyers try to solve problems by discovering, filtering, shaping, and conveying information.  As electronic course materials reveal, the information is vast, and diverse in purpose, form, and value.  The tools for discovering and filtering information are powerful and are daily more efficient and accessible.  The form in which the lawyer can shape and convey the information, the lawyer's creative contribution, is infinite.  We hope that electronic course materials help you better comprehend the dimensions and shape of the information base, help you master the tools of discovery and discernment, and encourage your creative endeavor.  

     In 1998, the National Conference of Commissioners on Uniform State Laws ("NCCUSL") and the American Law Institute ("ALI") approved Revised Article 9 of the Uniform Commerecial Code governing security interests in personal property and fixtures.  In 1999 and 2000, sponsors presented Revised Article 9 for adoption in the legislatures of each state, to become effective, and replace old Article 9, on July 1, 2001.  These materials are based on Revised Article 9, with occassional reference for purposes of comparison to old Article 9 or to pertinent California non-uniform amendments in Division 9 of the California Uniform Commercial Code.  Until controversies under Revised Article 9 ripen into reported litigatation, these materials must of necessity use cases decided under old Article 9.  Revised Article 9 renumbers most sections of Article 9.   Accordingly, we provide in each case a reference to the section of Revised Article 9 that is most nearly comparable to the section or sections of old Article 9 referred to in the case. 

     We thank Travis Wise, Santa Clara University School of Law, Class of 2000, for his web design and other assistance.

     Editorial note:  We have deleted some material from appellate opinions and some language from the text of statutes where not reasonably related to issues under consideration.  Asterisks ( * * * ) indicate such deletions.  We have reformated some portions of appellate opinions, and have deleted some footnotes without notation and some string citations with the notation "[Citations omitted.]"