The Enforcement of Security and Private Autonomy
The Variety of Remedies
When the debtor defaults, the creditor must be entitled to remedies. However, the variety of available remedies is not the same in every jurisdiction. In some jurisdictions, a broad range of remedies are available. England is such a jurisdiction, where the four main methods of enforcement for the holder of a security interest (as opposed to a title-based security) are the repossession of the asset, sale of the asset, foreclosure (satisfaction by the secured object through court order) and appointment of receiver. In Canada, under both the PPSA in common law provinces and the Code civil of Quebec the secured creditor may take possession of the object and lease it to apply the revenues from it, satisfy its claim by the secured object, have the object sold or sell the object by the creditor himself. The remedies available under the UCC Article 9 of the United States are also broad in variety, including taking of proceeds and applying it to the secured obligation, taking possession of the collateral, rendering the equipment unusable, selling, leasing, licensing or otherwise disposing of collateral in its present condition, applying the cash proceeds from such disposition, as well as accepting the collateral in full or partial satisfaction of the secured obligation.
A few jurisdictions accommodate parties’ agreement on the variety of remedies. Finland affirms the parties’ freedom of agreement and holds an agreement (typically as a clause in the financing agreement in practice) on the types of remedy available to the creditor as valid. Also in France, the reform of 2006 brought much flexibility to the secured transactions law so as to affirm the validity of agreement on satisfaction by secured object and to authorise the court to order transfer of the secured object as the remedy. The Swiss law also upholds the validity of an agreement on the manner of enforcement, though private enforcement is considered not allowed with regard to the exercise of a mortgage in aircraft, due to the Convention on the International Recognition of Rights in Aircraft, 1948 (Geneva Convention). In Canada, the common law provinces affirm the parties’ agreement on remedies, while the Code civil of Quebec limits the available remedies to those listed in the