Mnemonics

Question 1

To have an “attached”, enforceable security interest between the contracting parties

Answer 1

requires three elements:
CAR:
C – (UCC 9-203) The creditor must give CONSIDERATION (value) e.g. sell on credit or make a loan to the debtor or a binding contract to do so which is sufficient consideration;
A – The debtor must AUTHENTICATE the security agreement either by taking possession of the collateral, or by executing a security agreement or other writing specifically describing the collateral; and
R – The debtor must have RIGHTS to the collateral. UCC §9-203. E.g., goods that have been delivered to a debtor, but ordered or undelivered goods do not give the debtor rights to such goods.

Question 2

A creditor’s security interest can attach

Answer 2

to three (3) different types of
PIG personal property:
P – Commercial PAPER, such as negotiable notes,
a chattle lease note,
corporate or government bonds, or
corporate shares of stock.
I – INTANGIBLE PROPERTY such as patent rights,
domain names, contract rights (e.g. a breach of contract claim),
a commercial tort claim,
bank accounts,
stock brokerage accounts or
accounts receivable (e.g. a hospital or doctor’s healthcare insurance receivables,
a merchant’s account receivables from credit card companies) are all perfected by filing a financing statement with the secretary of state.
G – GOODS which have five mutually exclusive categories, i.e., the secured goods can only fit into one of the FIFE-C categories.

Question 3

CATEGORIES OF GOODS

Answer 3

– which have five mutually exclusive categories, i.e., the secured goods can only fit into one of the following FIFE-C categories.
F- FIXTURES which are goods attached to realty.
I – INVENTORY held for sale or lease as well as the raw materials used to make
inventory.
F – FARM PRODUCTS
E – EQUIPMENT used in a business
C – CONSUMER GOODS used for personal, family, or household purposes.