AFM231 Chapter Notes - Chapter 26: Unsecured Creditor, Secured Creditor, Customs Declaration
11 Jul 2018
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Document Summary
Two classes are set aside to discuss credit (ch. 26), banking (ch. Credit transactions are a typical part of business. Depending on the transaction a business may be a debtor (borrower) or a creditor (lender). A credit transaction is a contractual relationship, which means the laws of contract that you have already studied will apply. In addition, there are laws that are specific to credit transactions. Make sure you read the entire chapter, as there is important background material. We will, however, touch only lightly on personal property security legislation in class. New legal concepts you will need to understand include: personal property security registration system that helps record assets. Use of security or collateral to reduce the risk to the lender: creditor (lender) wants to minimize risk of non-payment. Limits on a lender: need to act reasonably (reasonable care, reasonable price public auction or use appraiser, reasonable notice, avoid conflicts of interest, notify debtors of sale of collateral.
