General Terms - Sec Trans Flashcards
Security Interest
An interest in personal property or fixtures that secures payment or performance of an obligation.
What are “Goods”?
4 Types of Goods
Anything that is moveable at time that the SI attaches; the debtor’s principal use at the time the SI attaches determines the class of the goods.
- Consumer Goods
- Farm Products
- Inventory
- Equipment
How is software classified?
- If it is embedded in goods, it is treated as part of goods in which it is embedded.
- If it is NOT embedded it is treated as general intangibles
Chattel Paper
One or more records that evidence both:
1. Monetary obligation AND
2. a SI in specific goods or a lease of specific goods
EX: promissory note coupled w/ a SA, or a motor vehicle financing agreement that includes both a payment obligation and a security interest in the financed vehicle.
Documents
A document of title which confers on the holder ownership rights in goods held by a bailee.
Instruments
Encompasses both negotiable and
non-negotiable instruments
Investment Property
Includes both certificated and uncertificated securities, as well as securities accounts.
Accounts
The right to payment for property sold, leased, or licensed; or services rendered
Commercial Tort Claims
Excludes tort claims by an individual for personal injury or death
Deposit Accounts
Checking, savings
General Intangibles
A residual category; copyrights, software NOT embedded
What is the general rule regarding
eligible transactions?
Art 9 governs a transaction that creates an SI in pesonal property or a fixture
Leases as secured transactions?
can be covered under Art 9 when the transaction, although in the form of a lease, is in substance a secured transaction
Consignments as secured transactions?
If the consignor retains title to the consigned goods, the consignee does NOT have rights in them.
If subject to Art 9, the consignor’s SI in the consigned goods is treated as a PMSI in inventory.
Letter of Credit Rights
the right to receive payment from the issuing bank when and if the beneficiary makes a drawing under the letter of credit
Basically says “I am purchasing this expensive thing… and my bank is saying that it will make sure the payments are made as required… and if I miss a payment, the bank wil pay it.” So an SI in these basically is an additional level of security in the underlying thing.
