Also known as: authenticated notifications
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A communication bearing a signature or electronic mark that identifies the sender and shows the sender's intent to adopt the message.
An authenticated communication that a secured party must send to the debtor and other specified persons before disposing of collateral after default.
A communication bearing a signature or electronic mark that identifies the sender and shows the sender's intent to adopt the message.
Select any source to read its text and confirm it supports the definition.
An authenticated communication that a secured party must send to the debtor and other specified persons before disposing of collateral after default.
Select any source to read its text and confirm it supports the definition.
Each sense below has its own examples, sources, and questions.
A notification is authenticated when it bears a signature or electronic mark that identifies the sender and shows the sender's intent to adopt the message. Oral communications and unsigned emails do not qualify. The requirement ensures a verifiable record that the debtor and other protected parties received advance warning of a disposition.
Supporting sources
Metro Finance repossessed vehicles from Apex Motors after discovering out-of-trust sales. Metro sent a single properly addressed email from its authorized account to Apex's shared dealership address announcing the upcoming wholesale auction and identifying the vehicles. Apex received the email in time to monitor the sale. The email satisfied the requirement because it was attributable to the secured party and reasonably informed the debtor of the disposition.
First Bank repossessed factory equipment from Delta Manufacturing after default. The bank sent an authenticated email from its secured lending officer to Delta's counsel describing the public auction date, location, and collateral. Delta received the notice ten days before the sale and was able to attend. The communication constituted a reasonable authenticated notification of disposition.
Yes. The secured party must send a reasonable authenticated notification of disposition to the debtor and any secondary obligor unless a narrow exception applies. A personal guarantor qualifies as a secondary obligor entitled to notice so that the guarantor can redeem the collateral or arrange a higher bid.
Supporting sources
No. General warnings about repossession or payment demands do not substitute for a reasonable authenticated notification that specifically describes the planned disposition. The statute requires the secured party to create a record that informs the debtor of the time, place, or method of sale so the debtor can exercise redemption rights or monitor commercial reasonableness.
Supporting sources