Determination of whether conduct was commercially reasonable

Checkout our iOS App for a better way to browser and research.

  • (a) Greater amount obtainable under other circumstances; no preclusion of commercial reasonableness. The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.

  • (b) Dispositions that are commercially reasonable. A disposition of collateral is made in a commercially reasonable manner if the disposition is made:

    • (1) in the usual manner on any recognized market;

    • (2) at the price current in any recognized market at the time of the disposition; or

    • (3) otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.

  • (c) Approval by court or on behalf of creditors. A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:

    • (1) in a judicial proceeding;

    • (2) by a bona fide creditors' committee;

    • (3) by a representative of creditors; or

    • (4) by an assignee for the benefit of creditors.

  • (d) Approval under subsection (c) not necessary; absence of approval has no effect. Approval under subsection (c) need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.


Download our app to see the most-to-date content.