Absolute bar rule - sustany/dvg GitHub Wiki

The absolute bar rule prohibits a creditor who disposes of collateral in a commercially unreasonable manner from obtaining a deficiency judgment.�

For example:

• � 9-610 of the Uniform Commercial Code (UCC) codifies the commercially reasonable requirement for disposing of collateral after a debtor defaults
  • California has adopted the language of UCC � 9-610 and codified the same commercially reasonable requirement for disposing of collateral in � 9-610 of the California Commercial Code (COM).
• UCC � 9-611 requires that the debtor be notified before disposition of collateral.
  • California has adopted and codified the same notification requirement in COM � 9-611.
• In Beardmore v. Am. Summit Fin. Holdings, L.L.C., the court applied the absolute bar rule even though the Texas legislature had abandoned it because the disposition of collateral had �occurred before the abrogating act became effective.�

See also:

• UCC � 9-627 and COM � 9-627 set guidelines for determining whether conduct was commercially reasonable.