Classification of collateral Flashcards
What is goods?
Anything that is “moveable at the time that a security interest attaches.”
What is included in the definition of goods, even though not movable at the time of attachment?
(i) fixtures, (ii) standing timber that is to be cut and removed pursuant to a contract, (iii) unborn animals, (iv) growing or unharvested grown crops, including crops produced on trees (e.g., apples), vines (e.g., grapes), or bushes (e.g., blueberries), and (v) manufactured homes
What are consumer goods?
Goods acquired primarily for personal, family, or household purposes
What are farm products?
Goods that are crops grown, growing, or to be grown, livestock born or unborn, supplies that are used or produced in farming, and products of crops or livestock in their unmanufactured state.
Excluded from farm products is standing timber for which there is not a contract to cut and remove.
It is important to remember that for goods to be considered farm products, the debtor must be engaged in a farming operation.
What is inventory?
Goods, other than farm products, that are held for sale or lease; are furnished under a service contract; or consist of raw materials, works in process, or materials used or consumed in a business
What is equipment?
Equipment is a catchall class, consists of goods that are not consumer goods, farm products, or inventory
What is chattel paper?
“Chattel paper” consists of one or more records that evidence both (i) a monetary obligation (e.g., a negotiable note) and (ii) a security interest in specific goods (e.g., a security agreement) or a lease of specific goods.
What is a document?
A “document” refers to a document of title, which confers on the holder ownership rights in goods held by a bailee, such as a bill of lading, transport document, a dock warrant, a dock receipt, a warehouse receipt, and an order for the delivery of goods
Which classes of collateral are referred to as “quasi-intangible” property, and why?
(i) chattel paper, (ii) documents, (iii) instruments, and (iv) investment property
Referred to as “quasi-intangible” property because a writing usually exists that defines the property right
What kinds of collateral depends on how the collateral is used?
Goods (determined at the time of attachment, but can change over time)
What is accounts?
“Accounts” include the right to payment for property sold, leased, licensed, or otherwise disposed of, or services rendered or to be rendered.
Incl. the right to payment for the issuance of an insurance policy, the use of a credit or charge card, or winning a lottery.
What is a deposit account?
A “deposit account” includes a savings, passbook, time, or demand account maintained with a bank.
What is a letter-of-credit right?
A “letter-of-credit right” is a right to payment or performance under a letter of credit, even though the beneficiary has not demanded—nor is the time ripe for —payment or performance.
What are general intangibles?
“General intangibles” is the residual category of personal property that is not included in other types of collateral. Included among items that are general intangibles are copyrights, things in action (e.g., legal claims), payment intangibles (i.e., a general intangible under which the account debtor’s principal obligation is a monetary obligation), and software-not-part-of-goods.
