1. Scope of Article 9

Question 1

What is required for commercial consignments?

Answer 1

1) TP sells Owner’s goods to Customer
2) Goods over $1,000

3) Recipients
- NOT auctioneers
- NOT dealing under consigner’s name
- NOT known to sell others’ goods

Question 2

What is required for leases?

Answer 2

Intended as security arrangement

- Option to purchase at end of lease

Question 3

Are land transfers covered by Article 9?

Answer 3

Fixtures

NOT land (mortgage law applies)

Question 4

What is purchase money security interest?

Answer 4

Creditor sells goods on credit

Creditor advances funds to purchase goods

Question 5

What are tangible goods?

Answer 5

‘Most recent’ debtor’s primary use

• Consumer goods (personal/family/household use)
• Inventory (sale/lease/temporary use for business)
• Farm products (used/in possession of farmer)
• Equipment (durable business goods)

Question 6

What are intangible goods?

Answer 6

Nature of goods (not use)

• Deposit certificates
• Chattel paper (promissory notes)
• Account receivables
• Non-consumer deposit accounts
• Stocks/Bonds
• Commercial tort claims (NOT personal injury)
• Copyrights/Goodwill

Question 7

Is title immaterial regarding Debtor and Creditor?

Answer 7

Yes (Article 9 laws applied the same way for both parties)

Question 8

What is required for electronic chattel paper?

Answer 8

System shows transfer of interests reliably establishing secured party as assignee

Question 9

What is required for investment property?

Answer 9

Certificated securities

• Bearer form (takes possession of certificate)
• Registered form (takes possession + certificate endorsed to secured party)

Securities accounts
- Account owner must instruct secured intermediary re Secured Party’s same ownership rights as Owner + Secured Intermediary to comply with Secured Party’s instructions without Owner’s consent