Path: utzoo!attcan!uunet!maverick.ksu.ksu.edu!hoss!hoss.unl.edu!riddle From: riddle@hoss.unl.edu (Michael H. Riddle) Newsgroups: comp.org.eff.talk Subject: Re: logistar (logistan?) and Revlon Keywords: legal precedent?? Message-ID: <1990Oct27.161200.18165@hoss.unl.edu> Date: 27 Oct 90 16:12:00 GMT References: <15913@hydra.gatech.EDU> <1990Oct27.022442.16115@lavaca.uh.edu> Sender: news@hoss.unl.edu (Network News Administer) Distribution: na Organization: University of Nebraska, Computing Resource Center Lines: 47 In <1990Oct27.022442.16115@lavaca.uh.edu> jet@karazm.math.uh.edu (J. Eric Townsend) writes: [ original post related how Logistar entered the Revlon computers via dial-up access and "repossessed" software ] >>this incident has GOT to be illegal... Unless there is something >>in some sort of contract giving them (logistar ) the right to do this >>I think that it would be equivalant to a rental agency breaking into >>your house and repossessing your furnature without a court order >I dunno, sounds legit to me. Ever see a repo man take back a car? >Well, maybe there's some sort of "breaking and entering" clause. If >your car is on the street it's one thing, but if it's in a locked >garage, that's another. > Hmm. This is an interesting situation. Let's suppose a hypothetical. Vendor provides Customer with software on account. Software gets delivered. Written purchase agreement establishes a security interest in the "goods" and is either perfected by filing a financing statement in the appropriate office or filing is not yet required because any applicable "grace period" under the state law has not yet run. Customer defaults by refusing payment as specified in the agreement. Agreement is silent as to repossession of the goods. Section 9-503 of the Uniform Commercial Code provides: Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action. * * * without removal a secured party may render equipment unusable, and may dispose of collateral on the debtor's premises under section 9-504. It would seem like Vendor may lawfully repossess. The bit about the financing statement may even be surplusage, since 9-503 only talks about a "secured party," and does not require a "perfected" secured party. I think that we have once again seen the extension of ordinary commercial law into the computer world, in a manner that few would have foreseen. How about it, Mike Godwin? Remember enough from Secured Transactions? -- riddle@hoss.unl.edu | University of Nebraska riddle@crchpux.unl.edu | College of Law mike.riddle@f27.n285.z1.fidonet.org | Lincoln, Nebraska, USA