This agreement contains a security agreement creating a security interest in the property being sold. A security interest refers to the property rights of a lender or creditor whose right to collect a debt is secured by property. A secured transaction is created by means of a security agreement in which a lender (the secured party) may take specified collateral owned by the borrower if he or she should default on the loan. Collateral is the property, that secures the debt and may be forfeited to the creditor if the debtor fails to pay the debt. Property of numerous types may serve as collateral, such as houses, cars, and jewelry. By creating a security interest, the secured party is also assured that if the debtor should go bankrupt he or she may be able to recover the value of the loan by taking possession of the specified collateral instead of receiving only a portion of the borrowers property after it is divided among all creditors.
The Uniform Commercial Code is a model statute covering transactions in such matters as the sale of goods, credit, bank transactions, conduct of business, warranties, negotiable instruments, loans secured by personal property and other commercial matters. Article 9 of the Uniform Commercial Code covers most types of security agreements for personal property that are both consensual and commercial. All states have adopted and adapted the entire UCC, with the exception of Louisiana, which only adopted parts of it.
The Hawaii Contract for the Sale of Personal Property — Owner Financed with Provisions for Note and Security Agreement is a legal document used in the state of Hawaii that outlines the terms and conditions of a sale of personal property where the seller offers financing to the buyer. This contract is particularly useful when a buyer may not have immediate access to funds or prefers to make payments over time. A typical Hawaii Contract for the Sale of Personal Property — Owner Financed with Provisions for Note and Security Agreement includes several key provisions to ensure the rights and obligations of both parties are clearly defined and protected. These provisions may vary depending on the specific terms agreed upon, but the document typically includes the following sections: 1. Parties: This section identifies the buyer, referred to as the "Buyer," and the seller, referred to as the "Seller." It includes their legal names, addresses, and contact information. 2. Description of Personal Property: This section provides a thorough description of the personal property being sold, including its condition, make, model, and any unique features. It may also include any warranties or guarantees provided by the seller. 3. Purchase Price: The purchase price section outlines the total amount agreed upon for the personal property. It may include a breakdown of any down payment, principal balance, interest rate, and the total amount financed. 4. Payment Terms: This section details the payment method, frequency, and due dates. It also defines late payment penalties, if applicable, and any grace periods. Additionally, this section may outline any escalation clauses or provisions for balloon payments at the end of the financing term. 5. Security Agreement: The security agreement provision establishes that the personal property being sold will serve as collateral for the seller until the buyer pays the entire amount owed. It outlines the rights and responsibilities of both parties in case of default or breach. 6. Default and Remedies: This section explains the consequences if either party fails to fulfill their obligations under the contract. It outlines the remedies available to the non-defaulting party, such as repossession of the personal property, selling the collateral to cover the outstanding balance, or seeking legal recourse. 7. Governing Law: The governing law provision specifies that the contract shall be interpreted and enforced according to Hawaii state laws. It clarifies the jurisdiction and venue for any legal disputes arising from the contract. Types of Hawaii Contracts for the Sale of Personal Property — Owner Financed with Provisions for Note and Security Agreement may include variations based on the specific nature of the personal property being sold. For example, there might be separate contracts designed for vehicles, real estate, equipment, or livestock. Each contract would include relevant details pertaining to the specific type of personal property involved and any industry-specific regulations.
