Categories of goods Flashcards
Goods (Tangible Collateral)
Goods include all things which are movable at the time the security interest attaches
(including unborn animals and growing crops).
Also includes fixtures.
Category of goods depends on how debtor is using the collateral.
Types of Goods (Tangible Collateral)
Four types:
- Consumer goods –
- Inventory –
- Equipment –
- Farm products—
Consumer goods
goods used or bought primarily for personal, family, or household purposes
Inventory
Goods, other than farm products, that are for sale or lease or to be furnished under a contract.
Goods held for sale or lease, and
Raw materials, work in process, or materials used or consumed in a business
Supplies/materials used or consumed in a business in a short period of time, and…
[ex - Pencils and other stationery supplies used by a large retailer in its credit offices.]
goods that are to be furnished under service contracts [ex-rental cars].
- Equipment –
- Equipment –
[DEFAULT category for goods].
Any physical goods other than consumer goods, inventory, or farm products. if the collateral is a good, and it doesn’t fit the definition of consumer goods, inventory, or farm products, it gets classified as equipment.
Also goods that are used or bought for use in a business but not inventory.
- Farm products—
- Farm products—
crops or livestock or supplies used or produced in farming operations, OR
products of crops or livestock in their unmanufactured states (such as ginned cotton, wool-clip, maple syrup, milk, and eggs) if they are in the possession of a debtor engaged in farming operations
Intangible collateral
&
Semi-Intangible collateral
Category into which intangible or semi-intangible collateral is placed depends on the nature of the collateral, not its use.
Chattel Paper,
Accounts,
*Also:
Instruments,
Documents,
Investment Property,
Deposit Accounts,
Commercial Tort Claims,
General Intangibles.
All Rarely/never tested
Instruments
Instruments - pieces of paper representing right to be paid money (promissory notes, checks, certificates of deposit).
[*think guys on the street playing INSTRUMENTs, always have a hat out to get paid money]
Documents
Documents- reps the right to receive goods (bill of lading, warehouse receipt).
[*think down at the docks, they receive GOODS]
Chattel paper
Chattel paper- record(s) that evidence BOTH
(1) a monetary obligation, and
(2) a SI in or a lease of specific goods.
Can be electronic. Electonir CP Can be perfected by CONTROL.
Chattel Paper = promsiory note+ security agreement)
Investment property
Investment property - includes stocks, bonds, mutual funds, and brokerage accounts containing these.
Can be perfected by CONTROL.
Accounts
Accounts – a right to payment (accounts receivable) (that is not evidenced by an instrument or chattel paper) for property sold or services rendered.
A contractual obligation arising from a loan of money is not an account—it is a general intangible
Ex: ACCOUNTS PAYABLE of a BIZ?
Deposit accounts
Deposit accounts - a bank account - accounts maintained with bank, Article 9 only applies to NONCONSUMER deposit accounts and account monies that are claimed as proceeds of other collateral
Nonconsumer deposit accounts Can be perfected by CONTROL.
Commercial tort claims
Commercial tort claims - where (1) the claimant is
an organization (for example, a partnership or corporation), or (2) the claimant is an individual, the claim arose out of the claimant’s business or profession, and the claim does not include damages for personal injury or the death of an individual
General intangibles
General intangibles - any personal property not within scope fo other definitions. A general intangible under which the account debtor’s principal obligation is a monetary obligation is a payment intangible.
Includes A contractual obligation arising from a loan of money is not an account
