Understanding UCC Article 9 for the Bar Exam

There’s no getting around it—UCC article 9 is one of the hardest parts of the Uniform Bar Exam (UBE). But don’t be too discouraged. You just need a way to wrap your head around all the components of UCC Article 9 that will be tested. And lucky for you, that’s just what we’ve done here.

How is UCC Article 9 tested on the Uniform Bar Exam?

Good news! The UCC Article 9 is only tested on the Multistate Essay Exam portion of the UBE. That means you don’t have to worry about the UCC Article 9 on the multiple choice questions on the Multistate Bar Exam, so that’s a huge plus as you’re working your way through those 200 multiple choice questions. It’s hard enough without throwing in Article 9!

To ensure you can conquer the UCC Article 9 questions, let’s do a quick overview of the recommended approach for both the MEE and the secured transactions essay:

  1. Outline the issue presented by the essay prompt.
  2. Move on quickly and jot down your notes on the rule of law or rules being tested.
  3. Once you’ve sketched out the issue and the rules of law, apply the rule or rules of law to the issue presented.
  4. Make a note of what your conclusion will be.
  5. Write your essay (fast and well) in about 23 minutes.
  6. Take your final two minutes and do a quick edit of your response!

Given the level of difficulty of secured transactions, you should plan to write quite a few practice essays on UCC Article 9. Use some of the sample essays provided by the NCBE and follow the approach above in 30 minutes.

Make sure at least one of the essays tests secured transactions, and as you review sample answers, note any issues you missed. By completing this practice, you’ll start to recognize the common secured transactions issues so you can spot them on the bar exam!

UCC Article 9 Overview

UCC Article 9 is a challenging concept, and not one that can be easily explained or addressed in a short blog post. There are entire semester-long law school courses dedicated to secured transactions. But don’t let that get you down. And don’t worry if you didn’t take secured transactions in law school. I didn’t, and I was fortunate to pass bar exams in two states. I’m here to tell you that you can do it.

However, you will need to dedicate more time to learning secured transactions than those who took the course in law school. No matter what, you need to dedicate time to wrapping your head around the terminology of UCC Article 9 and how it’s tested. (As mentioned above, the best way to learn how the UCC is tested is to practice spotting issues by reviewing past exam questions.)

So, just what is UCC Article 9? UCC Article 9 governs transactions where a secured interest is created in any property that is not real property. (Think intangible property, fixtures, and moveable property.) UCC Article 9 helps to give lenders a secured interest in these other types of properties, and a secured interest is what allows a lender to have a right to that property above all other lenders, such as in the event of a bankruptcy.

UCC Article 9 Issue Spotting

The key issues you’ll be looking for in a secured transactions question on the bar exam are:

  1. Has the security interest attached, and
  2. Has the security interest been perfected.

To determine whether a security interest has attached and is thus enforceable, three factors must be met based on UCC §9-203:

  • value be given,
  • the debtor must have some rights in the collateral, and
  • the debtor “authenticates” a type of security agreement.

Always review an essay prompt to ensure that these conditions are met. Keep in mind that while “authenticate” sounds formal, it can be as simple as an electronic signature. Don’t make the question harder than it has to be!

Next, a debtor must perfect their security interest. By perfecting a security interest, a lender ensures that it will take priority over other lenders. There are multiple ways to secure a security interest, such as having actual possession or control over the security interest. Also, remember that some interests automatically perfect upon attachment, so no further steps are needed for these security interests.

Always look to see whether the security interest has attached and the debtor has perfected their interest in the collateral. Typically, the issue is that one or many of the conditions above have not been met or properly conducted, and the debtor does not have a priority interest in the collateral.

This is only a quick overview of UCC Article 9 issues, so be sure to continue your review using other study materials, such a Secured Transactions Quick Sheet or book on Mastering Secured Transactions. With a lot of practice, you’ll be ready to tackle any secured transaction question you see on the UBE!

Takeaway

Yes, the UCC Article 9 is one of the most challenging topics on the bar exam, and it is daunting. But with the tips above in mind and a lot of strategic studying, you will be ready to crush any UCC Article 9 question or essay you see on the bar exam!

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