Introduction

Question 1

Secured transactions involve _______________.

Answer 1

credit transactions

Question 2

For a security interest in property to be effective, there must be _______________.

Answer 2

attachment

Question 3

What happens if after attachment, the debtor defaults?

Answer 3

the creditor has a right to take the property to satisfy the obligation.

Question 4

In order to maximize its rights in collateral property, the creditor must ___________ their interest in property.

Answer 4

perfect

Question 5

Where there is more than one creditor who has a lien on property, rule of ___________ determine whose interest is superior.

Answer 5

priority.

Question 6

Article 9 of the UCC applies to what kinds of transactions?

Answer 6

CACALS: contractual security interests; agricultural liens; commercial assignments; a seller’s retention of title to delivered goods; leases that are intended to serve as security arrangements; and sales of accounts, chattel paper, payment tangibles, and promissory notes.

Question 7

Does Art. 9 apply to transfers of interest in land?

Answer 7

no

Question 8

Purchase Money Security Interest

Answer 8

a type of security interest in goods.

Question 9

A person with a PMSI holds __________ over other security interests in the same goods if certain requirements are met.

Answer 9

priority

Question 10

What are the two ways that PMSIs can arise?

Answer 10

1) where the creditor sells the debtor the goods on credit; or 2) the creditor gives the debtor the funds to purchase the goods and retains a security interest in the goods purchased with the funds.

Question 11

Does a security interest in nonconsumer goods lose its status as a PMSI if the security interest also is secured by property that was not purchased with the loan money or credit?

Answer 11

no

Question 12

Does a security interest in nonconsumer goods lose its status as a PMSI if the collateral also secures advances that were not made for the purchase of the collateral?

Answer 12

no

Question 13

Does a security interest in nonconsumer goods lose its status as a PMSI if the PMSI has been refinanced, consolidated, etc?

Answer 13

no

Question 14

What are the three classifications that collateral can be placed into?

Answer 14

1) tangible collateral or goods; 2) intangible or semi-tangible collateral; and 3) proceeds.

Question 15

What categories of collateral are included in tangible collateral or goods?

Answer 15

1) consumer goods; 2) inventory; 3) farm products; 4) equipment.

Question 16

What categories of collateral are included in intangible collateral or semi-tangible collateral?

Answer 16

1) instruments; 2) documents; 3) chattel paper; 4) accounts; 5) deposit accounts; 6) investment property; 7) commercial tort claims; 8) general intangibles.

Question 17

Proceeds

Answer 17

whatever is received upon the sale, exchange, collection or other disposition of collateral or proceeds.