Collateral

Question 1

TERMS

Collateral definition

Answer 1

= the property subject to a security interest

Question 2

TERMS

Secured Party definition

Answer 2

= a person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding

Question 3

TERMS

Debtor Definition

Answer 3

= a person having an interest in the collateral, whether or not the person is an obligor

Question 4

TERMS

Obligor definition

Answer 4

= a person who owes payment or other performance of the obligation

Question 5

TERMS
Definition of “goods”
(+ 5 insane things included in that category)

Answer 5

= tangible, moveable, personal property

category includes

1. fixtures
2. standing timber that is to be cut and removed under a contract for sale
3. the unborn young of animals
4. crops grown, growing, or to be grown, and
5. manufactured homes

Question 6

TERMS

4 sub-categories of goods

Answer 6

1. Consumer Goods
2. Inventory
3. Farm Products
4. Equipment

Question 7

TERMS

Definition of consumer goods

Answer 7

= goods that are used or bought for use primarily for personal, family, or household purposes

Question 8

TERMS

Definition of inventory

Answer 8

= good held for sale or lease

Also includes goods furnished under services contracts

Also includes materials used or consumed in a business in a short period of time

Question 9

TERMS

Farm products definition (4 parts)

Answer 9

= crops, livestock, supplies used or produced in farming operations, or products of crops/livestock in unmanufactured states IF in the possession of debtor engaged in farming operations

Examples = maple syrup, milk

Question 10

TERMS

Equipment definition

Answer 10

= goods other than inventory, farm products, or consumer goods

Question 11

TERMS

Instrument definition

Answer 11

= negotiable instruments

Examples = checks, notes, drafts

Question 12

TERMS

Definition of chattel paper

Answer 12

= record(s) which evidence BOTH a monetary obligation AND a security interest in or a lease of specific goods

Stored in an electronic medium = electronic chattel paper

Question 13

TERMS

Two types of documents covered under the “documents” category

Answer 13

(1) warehouse receipt

(2) bill of lading

Question 14

TERMS

Investment property definition

Answer 14

= a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account.

Question 15

TERMS

Account definition

Answer 15

= right to payment for property sold or services rendered (aka account receivable)

Question 16

TERMS

Deposit account definition

Answer 16

= account maintained with a bank (bank account)

Article 9 only applies to non-consumer deposit accounts

Question 17

TERMS

Commercial tort claim definition

Answer 17

= claim arising in tort with respect to which

• claimant is an organization OR
• claimant is an individual and claim arose in scope of business/profession and not personal injury to individual

Question 18

TERMS

General intangible definition

Answer 18

= any personal property that doesn’t come within scope of other definitions

Default/catchall category

Examples = liquor license, tax refund claim, intellectual property stuff like patents, trademarks, licenses

Question 19

TESTS FOR THE TEST

Test for classifying collateral

Answer 19

Look to see how DEBTOR is using the collateral

Question 20

INTANGIBLE GOODS

8 Types of intangible goods

Answer 20

Instruments 
Documents 
Chattel paper
Investment property
Account 
Deposit accounts 
Commercial tort claim 
General intangible (catchall)

Question 21

TERMS

Document definition

Answer 21

= special documents evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods that it covers

Example = bill of lading, warehouse receipt