Applicability & Definitions Flashcards
Scope of Article 9
Article 9 of the UCC governs any transaction that creates a security interest in perrsonal property or fixtures.
Security Interest
Is a creditor’s interest in collateral which secures payment or performance of an obligation.
substance over form controls
Reserving Title to Collateral
When a seller delivers goods to a buyer and attempts to reserve title until goods are paid for the seller only has a security interest
Lease v. Security Interest
A transaction labeled as a lease may be deemed a security interest depending on the economic realities of the transaction.
Lease Creating Security Interest
A transaction labeled a “lease” creates a security interest if:
1) commitments to make payments for a term exist and, one of the following:
a. lease term is greater than remaining economic life of goods
b. lessee must renew
c. purchase for nominal consideration
Collateral
Is the property in which a security interest is created and extends to identifiable proceeds from the property serving as collateral.
Consumer Goods
Those used or purchased primarily for personal, family, or household purposes.
Equipment
Goods used/bought for use in business.
Goods
All things movable when a security interest attaches, including:
fixtures, timber, unborn young of animals, crops, and manufactured homes.
Inventory
Are goods held by a person for sale/lease or raw materials for manufacturing.
Account
Is a right to payment of a monetary obligation.
Account Payment Categories
1) property that has been sold/leased
2) services rendered
3) insurance policy
4) secondary obligation incurred
5) energy provided
6) use or hire of a vessel
7) credit card debt
8) lottery winnings
Deposit Account
Demand, time, savings, or similar account maintained with a bank.
only perfected by control
