Secure Transactions Flashcards
Security Interest
interest in personal property or fixtures that secures payment or performance
Security Agreement
Contract that creates a security interest
Secured party
creditor who obtains security interest
obligor
partyt hat must pay or perform obligation
debtor
has an interest in the collateral
Scope of A.9
transactions that create a security interest in property or fixtures by contract
Goods
a. consumer goods
b. inventory
c. equipment
d. farm products
Right to Payment
- instruments
- chattel paper
- Accounts
- Payment intangibles
Attachment
Arrangement linking debt to a particular part of collateral
Requirements for Attachment
- value given
- debotr has rights to collateral
- security agreement
Security Agreements
- recording in tangible medium
- authienticated by debtor
- describes the collateral, must reasonably identify
- posseison or control can be alternative to authenicated record
Rights and Duties of the Secured Party in Possesion
- Secured party must act with reasonable care
- must keep collateral identifiable
- Must relinquish collateral once satisfied
- may charge for reasonable expenses.
After-acquired property
Property acquired by debtor after the security interest attaches.
Generally, lender must include an after-acquired property clause to include
Accessions
Goods that are physically united with other goods but identity of original goods is not lost.
comingled goods
Goods that united to the point that their identity is lost.
Proceeds
Whatever results when collateral is sold, leased, licensed, or exchanged.
Security interest automatically attaches to proceeds of collateral.
Purchase Money Security Interest
Security interest where money is used to acquire goods or software.
Methods of Perfection
- Filing
- Possession
- Control
- Alternate Perfection Systems
Perfection by Filing
File at central filing office of appropriate state.
All applicable except deposit accounts, letters of credit, money, cars, and collateral subject to special state regulations.
Financing Statement
Notice filing, should be filed in state where debtor is located.
State of incorporation, or principle residence.
Requires: name of debtor, name of secure party, description of collateral
Debtor must authorize
Perfection by Possesion
Security Interest in Tangible Collateral may be perfected by taking possession of the collateral
- money
- goods
- instruments
- negotiable documents
- tangible chattel paper
Perfection by Control
- deposit accounts
- investment property
- Electronic Dox
- Electronic Chattel paper
- Letter of credit rights
Automatic Perfection
Some automatically perfect at attachment.
- PMSI in consumer goods
- sales of payment intagibles or promissory notes
Temporary Automatic Perfection
If a debtor moves out of state, changes their name, etc., generally have 4 month window to discover change and file an amendment.
