Collateral Flashcards
What are the types of collateral identified in Article 9?
Tangible (Goods/Fixtures), Intangible, and Quasi-Intangible property
What are the different types of Goods as classified by Article 9?
- Consumer Goods
- Equipment
- Farm Products
- Inventory
What are “consumer goods” as classified in Article 9?
Goods used primarily for personal, family, or household purposes
What is “equipment” as classified in Article 9?
Goods used primarily in business. Generally equipment is the default category for “goods,” even if it does not fit the definition
What are “farm products” as classified in Article 9?
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 (easy to spot because there is a farmer
What is “inventory” as classified in Article 9?
Held by a person who holds them for sale or lease or to be furnished under service contracts; materials used or consumed in a business
What is a guitar purchased by Harry Homebody as a present for his son Marvin?
Harry Debtor purchases guitar - This is a consumer good
I think this is a consumer good under art. 9, The definition of consumer good in article 9 is …, and then specify the fact that I think makes it a consumer good (personal reasons, etc.)
What kind of collateral is a guitar purchased by Sterling Studly, a professional rock musician, to be used on tour
Equipment, equipment is used…, Sterling uses this for .. .
What kind of collateral is milk in the hands of a farmer (who got it from his cows)?
A farm product
What kind of collateral is milk in the hands of a grocery store (or a restaurant)?
Inventory
What kind of collateral are automobiles held by a local car rental agency?
Inventory
What kind of collateral are pencils and other stationery supplies used by Office Depot or some other large retailer in its credit offices?
Equipment, on the other hand this could be inventory - In the real world there can only be one - Mutually exclusive, on the bar you can hypothesize how it could be both (that would be good for points)
What are the 8 types of semi-intangible and intangible property?
- Instruments
- Documents
- Chattel Paper
- Investment Property
- Accounts
- Investment Accounts
- Commercial Tort Claims
- General Intangibles
In quasi-intangible and intangible property what is an instrument?
Negotiable instruments and any other writing which evidences a right to the payment of a monetary obligation, and which are in the ordinary course of business transferred by delivery with any necessary indorsement or assignment (does not include investment property).
In semi-intangible and intangible property what is a document?
A document which in the regular course of business is treated as evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers (e.g., bill of lading, warehouse receipt).
In quasi-intangible and intangible property what is chattel paper?
A promise to pay and a security interest and put them together - A record or records which evidence both a monetary obligation and a security interest in or a lease of specific goods. A record is information that is stored in either a tangible medium (e.g., written on paper), or an intangible medium (e.g., electronically stored). Chattel paper that is stored in an electronic medium also is called electronic chattel paper.
In quasi-intangible and intangible property what is investment property?
Includes items such as stocks, bonds, mutual funds, and brokerage accounts containing such items.
In quasi-intangible and intangible property what are accounts?
A right to payment [not evidenced by an instrument or chattel paper] (1) for goods, (2) for services, (3) for real property, (4) for a policy of insurance issued or to be issued, (5) for a secondary obligation incurred or to be incurred, (6) for energy provided or to be provided, (7) for the use or hire of a vessel, (8) arising out of the use of a credit card, or (9) as lottery winnings. Health care insurance receivables are included. A contractual obligation arising from a loan of money is not an account - it is a general intangible (usually just the 1 & 2)
In quasi-intangible and intangible property what are deposit accounts?
An account maintained with a bank. Note: Article 9 only applies to nonconsumer deposit accounts and deposit accounts that are claimed as proceeds of other collateral. (i.e. Bank cannot take an article 9 security interest in a personal bank checking account)
In quasi-intangible and intangible property what is a commercial tort claim? (2 ways)
A claim arising in tort with respect to which the claimant is an organization (e.g., partnership or corporation), or;
where the claimant is an individual and the claim arose in the claimant’s business or profession and does not include damages for personal injury or the death of an individual.
In semi-intangible and intangible property what is a general intangible? (Default category)
Any personal property not coming within the scope of the other definitions (e.g. software, patent and trademark rights, copyrights, goodwill). A general intangible under which the account debtor’s principal obligation is a monetary obligation is a payment intangible.
How would a promissory note be classified?
Instrument of semi-intangible and intangible property, art. 9 defintion of instrument
How would a stock certificate be classified?
Investment property of semi-intangible and intangible property
How would a receipt given to a farmer by a silo operator when the farmer stored her grain there be classified?
It’s a Warehouse receipt so a Document of semi-intangible and intangible property
