Introduction Flashcards
Secured Transaction
Transaction intended to create a security interest in personal property or fixtures
Debtor
Person who owes payment or performance of the obligation secured
Secured Party
A lender, seller or other person in whose favor there is a security interest
Security Agreement
Agreement between debtor and secured party that creates the security interest
Security Interest
Interest in personal property or fixtures which secures payment or performance
Collateral
Property subject to security interest
PMSI
Secured party sells debtor collateral on credit and retains an interest in item sold
Loan to debtor for the purpose of enabling the debtor to acquire specific collateral
After-Acquired Property Clause
Explicit Clause in security agreement that allows secured party to obtain interest in future property
Exception: inventory accounts usually included
Future Advance Clause
New security agreement not needed, relates to original agreement
Attachment
Steps legally required to give the security interest in collateral
Perfection
Gives secured party an interest in collateral that is effective against the world
Financing Statement
Document used to provide public notice of security interest and can perfect
Types of Collateral- Goods
Things that are movable at the time of attachment
Either:
consumer goods- used for personal
equipment- used or bought for use in business
farm products- crops, livestock, supplies used in farming
inventory
Types of Collateral- Semi Inangible and Intangible Property
Instruments- document indicating right to be paid money
Documents- document represents right to receive goods
Chattel Paper- Record evidence a monetary obligation and security interest
Investment Property- stocks/bonds/mutual funds
Accounts
Deposit Accounts
Commercial Tort Claims
General Intangible
Proceeds
Includes whatever is received upon sale, lease, or disposition exchange of collateral
Automatically included to identifiable proceeds
