Introduction Flashcards
What is a secured transaction?
transaction intended to create security interest in personal property or fixtures
What is a debtor?
person who owes payment or performance of the obligation secured
What is a secured party (i.e., creditor)?
lender, seller, or other person in whose favor there is a security interest
What is a security agreement?
agreement between debtor and secured party that creates security interest
What is a security interest?
interest in personal property or fixtures that secures payment or performance of an obligation; contingent property interest which gives creditor right to debtor’s collateral upon happening
What is collateral?
Property subject to a security interest; property that creditor can repossess upon default to ensure debt paid
How can a PMSI arise?
Seller-financed: secured party sells goods to debtor on credit AND retains security interest in goods sold; OR
Financier-financed: secured party loans funds to debtor to enable debtor to buy specific collateral AND secured party takes security interest in that collateral
What is a purchase money security interest (PMSI)?
Special type of security interest in goods
What is an after-acquired property clause?
Permissible provision allowing creditor to obtain security interest in property debtor will obtain in future
What is a future advance clause?
Permissible provision allowing creditor to secure future advances/loans in present agreement
What is attachment?
Steps necessary to create security interest in collateral against debtor; creditor NOT secured until attachment occurs
What is perfection?
Steps required to give secured party interest in collateral that’s effective as against the world (i.e., public notice)
What is a financing statement?
document used to convey public notice of security interest AND so to perfect security interest
