1 - Introduction Flashcards
Secured Transactions
The debtor buys something on credit from the creditor or secured party but does not pay immediately and to ensure payment the creditor takes a security interest in specific personal property.
Scope of Article 9
- Contractual security interest
- Sales of accounts, chattel paper,
- Commercial consignments of goods worth $1,000 or more
- Agricultural Liens
- Leases that are intended to serve as security arrangements
- A seller’s retention of title to delivered goods
Exceptions to Article 9
Land (except fixtures)
PMSI
Purchase money security interest
1) creditor is the one who sells the good on credit
2) the creditor advances the debtor funds used to buy goods and then takes an interest in them.
Collateral
1) Tangible collateral
2) intangible or semi-tangible
3) proceeds
Tangible Collateral
Based on primary use of the collateral
1) Consumer goods
2) Inventory
3) Farm Products
4) Equipment
Consumer Goods
goods bought or used for personal, family, or household purposes
Inventory
goods held for sale or lease and goods consumed by a business
Farm products
goods (including crops and animals) used or produced in farming that are in the possession of or used by a farmer
Equipment
goods that are not consumer goods, inventory, or farm products ( machinery in a factory)
Intangible or Sem-Tangible Collateral
Based on the nature of the collateral
1) Instruments
2) Documents
3) Chattel paper
4) Accounts
5) Deposit Accounts
6) Investment Property
7) Commercial tort claims
8) General intangibles
Instruments
notes, drafts, and certificates of deposit
Documents
bills of lading and warehouse receipts
Chattel Paper
records of a monetary obligation or security interest, such as a promissory note or written security agreement
Accounts
rights to payment for goods, services (accounts receivable)
