Business Law- Chapter 27 Flashcards
Personal Property
Tangible property such as equipment, vehicles, furniture, and jewelry, as well as intangible property such as securities, patents, trademarks and copyrights.
Revised Article 9 of the UCC
An article of the Uniform Commercial Code that governs secured transactions in personal property.
Secured Transaction
A transaction that is created when a creditor makes a loan to a debtor in exchange for the debtor’s pledge of personal property as security.
Collateral
Personal property that is subject to a security agreement.
Security Agreement
A written document signed by a debtor that creates a security interest in personal property.
Floating Lien
A security interest in property that was not in the possession of the debtor when the security agreement was executed.
After-acquired Property
Property that a debtor acquires after a security agreement is executed.
Sale Proceeds
The resulting assets from the sale, exchange, or disposal of collateral subject to a security agreement.
Future Advances
Funds advanced to a debtor from a line of credit secured by collateral. Future advances are future withdrawals from a line of credit.
Perfection of a Security Interest
A process that establishes the right of a secured creditor against other creditors who claim an interest in the collateral.
Financing Statement
A document filed by a secured creditor with the appropriate government office that constructively notifies the world of his or her security interest in personal property.
Perfection by Possession of the Collateral
A rule that says if a secured creditor has physical possession of the collateral, no financing statement has to be filed; the creditor’s possession is sufficient to put other potential creditors on notice of the creditor’s secured interest in the property.
Purchase Money Security Interest
An interest a creditor automatically obtains when she extends credit to a consumer to purchase consumer goods.
Termination Statement
A document filed by a secured party that ends a secured interest because the debt has been paid.
Priority of Claims
The order in which conflicting claims of creditors in the same collateral are solved.
Buyer in the Ordinary Course of Business
A person who is in good faith and without knowledge of another’s ownership or security interest in goods buys the goods in the ordinary course of business rom a person in the business of selling goods of that kind.
Default
Failure to make scheduled payments when due, bankruptcy of the debtor, breach of the warranty of ownership as to the collateral, and other events defined by the parties in a security agreement.
Repossession
A right granted to a secured creditor to take possession of the collateral upon default by the debtor
Retention of Collateral
A secured creditor’s repossession of collateral upon a debtor’s default and proposal to retain the collateral in satisfaction of the debtor’s obligation.
Disposition of Collateral
A secured creditor’s repossession of collateral upon a debtor’s default and selling, leasing or otherwise disposing of it in a commercially reasonable manner.
Deficiency Judgment
A judgment that allows a secured creditor to successfully bring a separate legal action to recover a deficiency from the debtor. It entitles the secured creditor to recover the amount of the judgment from the debtor’s other property.
Judgment on the Underlying Debt
A right granted to a secured creditor to relinquish her security interest in the collateral and sue a defaulting debtor to recover the amount of the underlying debt.
Artisan’s or Mechanic’s Lien
A statutory lien given to workers on personal property to which they furnish services or materials in the ordinary course of business.
