Article 9

Question 1

Security Interest

Answer 1

Limited right in specific personal property or fixtures (collateral) of the debtor that allows the creditor to take the property if the debtor fails to fulfill the credit obligation; effective when attached

Question 2

Article 9

Answer 2

Applies to consensual security interests in personalty and fixtures (NOT real estate–apply mortgages there)

Question 3

Consignments

Answer 3

Trigger A9 when the consigned goods exceed $1000, the consignor isn’t using the goods for personal purposes, and the consignee deals in goods of that kind and not in other goods (i.e., it isn’t a consignment store)

Question 4

Collateral

Answer 4

Personalty or fixtures creditors can look to for satisfaction including tangibles like consumer goods, equipment, inventory, and farm products
Also includes intangibles like patents, trademarks, copyrights, stocks/bonds, mutual funds, proceeds from the sale of collateral, account, and promissory notes and drafts

Question 5

Purchase Money Security Interest (PMSI)

Answer 5

Special type of security interest in goods that has priority over all other security interests in teh same goods if certain requirements are met; arises when (1) creditor sells goods to debtor on credit, retaining a sec interest in the goods OR (2) creditor advances funds that are used by the debtor to purchase the goods