Article 9-102 Definitions

Question 1

Accession

Answer 1

Goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

Question 2

Account

Answer 2

Means a right to payment of a monetary obligation, whether or not earned by performance,

(i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of,
(ii) for services rendered or to be rendered,
(iii) for a policy of insurance issued or to be issued,
(iv) for a secondary obligation incurred or to be incurred,
(v) for energy provided or to be provided,
(vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or
(viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State.

The term includes health-care-insurance receivables.

The term does not include

(i) rights to payment evidenced by chattel paper or an instrument,
(ii) commercial tort claims,
(iii) deposit accounts,
(iv) investment property,
(v) letter-of-credit rights or letters of credit, or
(vi) rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card.

Question 3

Account debtor

Answer 3

Means a person obligated on an account, chattel paper, or general intangible. The term does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.

Question 4

Accounting

Answer 4

Except as used in “accounting for”, means a record:

(A) authenticated by a secured party;

(B) indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and

(C) identifying the components of the obligations in reasonable detail.

Question 5

Agricultural lien

Answer 5

Means an interest in farm products:

(A) which secures payment or performance of an obligation for:

(i) goods or services furnished in connection with a debtor’s farming operation; or
(ii) rent on real property leased by a debtor in connection with its farming operation;

(B) which is created by statute in favor of a person that:

(i) in the ordinary course of its business furnished goods or services to a debtor in connection with a debtor’s farming operation; or
(ii) leased real property to a debtor in connection with the debtor’s farming operation; and

(C) whose effectiveness does not depend on the person’s possession of the personal property.

Question 6

As-extracted collateral

Answer 6

Means:

(A) oil, gas, or other minerals that are subject to a security interest that:

(i) is created by a debtor having an interest in the minerals before extraction; and
(ii) attaches to the minerals as extracted; or

(B) accounts arising out of the sale at the wellhead or minehead of oil, gas, or other minerals in which the debtor had an interest before extraction.

Question 7

Authenticate

Answer 7

Means:

(A) to sign; or

(B) with present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol, or process.

Question 8

Bank

Answer 8

Means an organization that is engaged in the business of banking. The term includes savings banks, savings and loan associations, credit unions, and trust companies.

Question 9

Cash proceeds

Answer 9

Means proceeds that are money, checks, deposit accounts, or the like.

Question 10

Certificate of title

Answer 10

Means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. The term includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral.

Question 11

Chattel paper

Answer 11

Means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. In this paragraph, “monetary obligation” means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include (i) charters or other contracts involving the use or hire of a vessel or (ii) records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.

Question 12

Collateral

Answer 12

Means the property subject to a security interest or agricultural lien. The term includes:

(A) proceeds to which a security interest attaches;

(B) accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and

(C) goods that are the subject of a consignment.

Question 13

Commercial tort claim

Answer 13

Means a claim arising in tort with respect to which:

(A) the claimant is an organization; or

(B) the claimant is an individual and the claim:

(i) arose in the course of the claimant’s business or profession; and
(ii) does not include damages arising out of personal injury to or the death of an individual.

Question 14

Commodity account

Answer 14

Means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.

Question 15

Commodity contract

Answer 15

Means a commodity futures contract, an option on a commodity futures contract, a commodity option, or another contract if the contract or option is:

(A) traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or

(B) traded on a foreign commodity board of trade, exchange, or market, and is carried on the books of a commodity intermediary for a commodity customer.

Question 16

Commodity customer

Answer 16

Means a person for which a commodity intermediary carries a commodity contract on its books.

Question 17

Commodity intermediary

Answer 17

Means a person that:

(A) is registered as a futures commission merchant under federal commodities law; or

(B) in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law.

Question 18

Communicate

Answer 18

Means:

(A) to send a written or other tangible record;

(B) to transmit a record by any means agreed upon by the persons sending and receiving the record; or

(C) in the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-office rule.

Question 19

Consignee

Answer 19

Means a merchant to which goods are delivered in a consignment.

Question 20

Consignment

Answer 20

Means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:

(A) the merchant:

(i) deals in goods of that kind under a name other than the name of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be substantially engaged in selling the goods of others;

(B) with respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery;

(C) the goods are not consumer goods immediately before delivery; and

(D) the transaction does not create a security interest that secures an obligation.

Question 21

Consignor

Answer 21

Means a person that delivers goods to a consignee in a consignment.

Question 22

Consumer debtor

Answer 22

Means a debtor in a consumer transaction.

Question 23

Consumer goods

Answer 23

Means goods that are used or bought for use primarily for personal, family, or household purposes.

Question 24

Consumer-goods transaction

Answer 24

Means a consumer transaction in which:

(A) an individual incurs an obligation primarily for personal, family, or household purposes; and

(B) a security interest in consumer goods secures the obligation.

Question 25

Consumer obligor

Answer 25

Means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family, or household purposes.

Question 26

Consumer transaction

Answer 26

Means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. The term includes consumer-goods transactions.

Question 27

Continuation statement

Answer 27

Means an amendment of a financing statement which:

(A) identifies, by its file number, the initial financing statement to which it relates; and

(B) indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

Question 28

Debtor

Answer 28

Means:

(A) a person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;

(B) a seller of accounts, chattel paper, payment intangibles, or promissory notes; or

(C) a consignee.

Question 29

Deposit account

Answer 29

Means a demand, time, savings, passbook, or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument.

Question 30

Document

Answer 30

Means a document of title or a receipt of the type described in Section 7-201(2).

Question 31

Electronic chattel paper

Answer 31

Means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.

Question 32

Encumbrance

Answer 32

Means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property.

Question 33

Equipment

Answer 33

Means goods other than inventory, farm products, or consumer goods.

Question 34

Farm products

Answer 34

Means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are:

(A) crops grown, growing, or to be grown, including:

(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural operations;

(B) livestock, born or unborn, including aquatic goods produced in aquacultural operations;

(C) supplies used or produced in a farming operation; or

(D) products of crops or livestock in their unmanufactured states.

Question 35

Farming operation

Answer 35

Means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation.

Question 36

File number

Answer 36

Means the number assigned to an initial financing statement pursuant to Section 9-519(a).

Question 37

Filing office

Answer 37

Means an office designated in Section 9-501 as the place to file a financing statement.

Question 38

Filing-office rule

Answer 38

Means a rule adopted pursuant to Section 9-526.

Question 39

Financing statement

Answer 39

Means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement.

Question 40

Fixture filing

Answer 40

Means the filing of a financing statement covering goods that are or are to become fixtures and satisfying Section 9-502(a) and (b). The term includes the filing of a financing statement covering goods of a transmitting utility which are or are to become fixtures.

Question 41

Fixtures

Answer 41

Means goods that have become so related to particular real property that an interest in them arises under real property law.

Question 42

General intangible

Answer 42

Means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. The term includes payment intangibles and software.

Question 43

Good faith

Answer 43

Means honesty in fact and the observance of reasonable commercial standards of fair dealing.

Question 44

Goods

Answer 44

Means all things that are movable when a security interest attaches. The term includes

(i) fixtures,
(ii) standing timber that is to be cut and removed under a conveyance or contract for sale,
(iii) the unborn young of animals,
(iv) crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes, and
(v) manufactured homes.

The term also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if

(i) the program is associated with the goods in such a manner that it customarily is considered part of the goods, or
(ii) by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods.

The term does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded.

The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction.