Secured Transaction Intro Cards

Question 1

Revised Article (i) ____ of the UCC governs secured transactions, in which a (ii) _____ ____ ____ in (iii) ____ _____ arises in a creditor’s favor to secure payment or (iv) ______ of an obligation

Answer 1

(i) 9; (ii) consensual security interest; (iii) personal property; (iv) performance

Question 2

(i) _____ is personal property that is subject to a (ii) ____ ____ or an (ii) _____ ____.

Answer 2

(i) collateral; (ii) security interest; (iii) agricultural lien

Question 3

A (i) _____ _____ is a right, or interest, in personal property or fixtures. A (ii) ____ ______ is not (iii) _____. Rather, a (iv) _____ ______ is a (v) ____ _____ that secures an obligation’s payment or performance, similar in concept to a mortgage on real property.

Answer 3

(i) security interest; (ii) security interest; (iii) ownership; (iv) security interests; (v) consensual encumbrance

Question 4

A (i) _____-_____ security interest (__SI) arises if the underlying obligation is incurred (A) as some or all of the (ii) ___ ____ of collateral constituting goods or software or (B) to (iii) _______ _____ to enable the debate to (iv) _____ _____ collateral, if the debtor (v) ___ _____ uses the value for that purpose.

Answer 4

(i) purchase-money (PMSI); (ii) purchase price; (ii) supply value; (iv) acquire rights; (v) in fact

Question 5

A (i) ____ is someone with an (ii) ______ in the (iii) ______ other than a security interest

Answer 5

(i) debtor; (ii) interest; (iii) collateral

Question 6

An (i) ____ is someone who owes payment or performance of an obligation subject to a security interest in collateral. (ii) _____ are commonly (iii) _____.

Answer 6

(i) obligor; (ii) debtors; (iii) obligors

Question 7

A (i) ____ is someone whom an obligor owes payment or performance of an obligation

Answer 7

(i) creditor

Question 8

An obligor is (i) _____ if the obligor has generally (ii) ____ to pay or is (iii) ___ to pay his obligations as they come due

Answer 8

(i) involved; (ii) ceased; (iii) unable

Question 9

An (i) ________ is any legal or business entity other than (ii) ____ _____, such as a corporation, limited partnership, or a government agency

Answer 9

(i) organization; (ii) natural person

Question 10

A (i) _____ is either a natural person or an organization

Answer 10

(i) person

Question 11

A (i) ____ is information either written on physical or tangible media, or stored electronically in such a way that one can pull it up in a perceptible form

Answer 11

(i) record

Question 12

(i) _____ is the actual (ii) ____ of _____, or currency, adopted by a domestic or foreign corporation

Answer 12

(i) money; (ii) medium of exchange

Question 13

A (i) ____ is a person engaged in the business of (ii) ____, such as a savings (iii) ____, a credit union, a savings-and-loan association, or a trust company.

Answer 13

(i) bank; (ii) banking; (iii) bank

Question 14

The rights of the (i) ____, and (ii) ______, the (iii) ___ ____, and third parties are generally the same under Article 9, regardless of whether (iv) ____ purportedly rests in the debtor, the secured party, or another

Answer 14

(i) debtor; (ii) obligor; (iii) secured party

Question 15

In general, (i) ______-_______ law under Article 9 applies to: (iI) _____ ______ ______ in personal property and fixtures; (iii) _______; (iv) security interests in _______ _______ arising under Article 2 or 2a of the UCC; (v) ______ liens; and (vi) the _____ of (vii) _____, ___ ____, _____ ______, and _____ ____.

Answer 15

(i) secured-transaction; (ii) consensual security interests; (iii) consignments; (iv) movable goods; (v) agricultural; (vi) sale; (vii) accounts, chattel paper, payment intangibles, and promissory notes

Question 16

A (i) ____ ______ commercial transaction creating a security interest in (ii) ___ _____ is the most common transaction subject to Article 9.

Answer 16

(i) mutually consensual; (ii) personal property

Question 17

(i) _____ are tangible goods that have become so integrated into the real property than interest in them arises under (ii) _____-______ law (e.g., furnaces). To determine whether something qualifies as a (iii) _______, courts consider: (A) the (iv) ______ of the person affixing collateral to the realty; (B); the (v) ____ to which the good is physically affixed to the realty; and (C) the (vi) _____ to which the (vii) _________ has been (viii) _______ to the particular characteristics of the (ix) _______.

Answer 17

(i) fixtures; (ii) real-property; (iii) fixture; (iv) intent; (v) extent; (vi) degree; (vii) fixture; (viii) adapted; (ix) realty

Question 18

A (i) _____ is a marketing procedure by which the owner of (ii) ____ ____, the (iii) _______, turns the goods over to a (iv) _______, the (v) ________, for sale to the public.

Answer 18

(i) consignment; (ii) movable goods; (iii) consignor; (iv) retailer; (v) consignee

Question 19

To qualify as consignment under Article 9: the (i) _____ must (ii) _____ the ______ to the (iii) _________; the (iv) _____ must be a (v) _______ ______ _______ in goods of that kind; the (vi) _____ must not be an (vii) _______ or general known by the creditors to sell others’ goods; each (viii) ____ of _____ must have an aggregate value of (ix) ______ or more; the (x) ____ must (xi) ___ be (xii) _____ as (xiii) ______ goods; and the (xiv) ____ must not create a (xv) ____ _______ securing an obligation

Answer 19

(i) consignor (ii) deliver the goods; (iii) consignee; (iv) consignee; (v) merchant normally dealing; (vi) consignee; (vii) auctioneer; (viii) delivery of goods; (ix) $1,000; (x) goods; (xi) no; (xii) classified; (xiii) consumer; (xiv) consignee; (xv) security interest

Question 20

An (i) ______ _____ is a statutory, non-possessory interest in farm products such as (ii) ____ and (iii) _____. Generally, a (iv) ___ ____ secures payment or performance of an obligation relating to goods or services provided in connection with the (v) _____’s (vi) _____ _____.

Answer 20

(i) agricultural lien; (ii) crops; (iii) livestock; (iv) agricultural lien; (v) debtor’s; (vi) farming operation

Question 21

Many transactions, all (i) ________, are outside the scope of Article 9, including: (ii) ____ under UCC article 2a; (iiI) most _____ liens (except agricultural); transactions implicated in federal statutes that (iv) ____ Article 9; (v) _____’s lends; and the creation or transfer of an interest in a lien on (vi) _____ ______.

Answer 21

(i) nonconsensual; (ii) leases; (iii) statutory; (iv) preempt; (v) landlord’s; (vi) real property

Question 22

Any type of (i) ___ _____ may be used as (ii) ______. The there categories of (iii) ____ are: goods; (iv) _____-_____ property; and (v) _______ property.

Answer 22

(i) personal property; (ii) collateral; (iii) collateral; (iv) quasi-tangible; (v) intangible

Question 23

(i) ____ are tangible things that can be (ii) _____, like consumer goods, farm products, inventory, and equipment

Answer 23

(i) goods; (ii) moved

Question 24

(i) ___-____ property includes (ii) _______, (iii) ____ _____, documents, investment property, and (iv) ____-of-_____ rights

Answer 24

(i) quasi-tangible; (ii) instruments; (iii) chattel paper; (iv) letter-of-credit

Question 25

(i) ______ property is (ii) _____ _____ that is (iii) ____ to touch and move, including: accounts, (iv) ______ ____; (v) ______ ______ claims; and general intangibles, such as software, causes of action, or patent rights

Answer 25

(i) intangible; (ii) personal property; (iii) impossible; (iv) deposit accounts; (v) commercial tort

Question 26

(i) _______ means the (ii) ______ ______ ______ has come to exist in the debtor’s (iii) ____ _______, or that the creditor holding the (iv) ______ ______ is a secured credit with rights in the debtor’s personal property. For a security interest to (v) _____: the (vi) _____ must provide some value to the (vii) _______; the (viii) ____ must have rights in the collateral or the power to (ix) ______ _____ in the collateral to a (x) ____ ____; and, in most cases, the debtor must (xi) _______ a (xii) ____ ______ that grants the creditor rights in specific collateral and (xiii) _______ _______ the collateral.

Answer 26

(i) attachment; (ii) enforceable security interest; (iii) personal property; (iv) security interest; (v) attach; (vi) creditor; (vii) debtor; (viii) debtor; (ix) transfer rights; (x) third party; (xi) authenticate; (xii) written agreement; (xiii) reasonable describe

Question 27

Article 9 accommodates (i) _____ ______ relationships by permitting the original (ii) _____ _______ to cover (iii) ______ secured transactions without the need to amend the (iv) ________ ______. The most important of these cases are (v) _____-_______ collateral and (vi) _____ _____.

Answer 27

(i) ongoing financial; (ii) secured transactions; (iiI) subsequent; (iv) security agreement; (v) after-acquired; (vi) future advances

Question 28

A (i) ____ ____ is a security interest in property (ii) _____ after the security interest takes effect, typically created by an (iii) _____-_______-______ clause.

Answer 28

(i) floating lien; (ii) after; (iii) after-acquired-proeprty

Question 29

A (i) _____ _____ may contain a (ii) _____-______ ____ providing that the collateral will secure later (iii) ______ of _____, regardless of whether the secure party is obligated to (iv) ______ ______ _____.

Answer 29

(i) security agreement; (ii) future-advance clause; (iii) extensions of credit; (iv) extend future credit

Question 30

A (i) _____ may generally use or deal with the (ii) ____ in any lawful manner. A secured party need not (iii) _____ the collateral or the debtor’s use or movement of it.

Answer 30

(i) debtor; (ii) collateral; (iii) monitor

Question 31

A (i) ____ may confirm or clarify the scope of the (ii) _____ _____ by sending the secured creditor a request: (A) for (iii) _______; (B) regarding a (iv) ______ of _____; or (C) regarding a (v) _____ of _____.

Answer 31

(i) debtor; (ii) secured obligation; (iii) accounting; (iv) list of collateral; (v) statement of account

Question 32

(i) ________ a (ii) _____ ______ provides (iii) ______ to (iv) _____ _____ that the perfecting secured creditor has or claims an enforceable security interest in the debtor’s personal property.

Answer 32

(i) perfecting; (ii) security interest; (iii) notice; (iv) third parties

Question 33

There are five main ways for a secured party to perfect his interest: (A) (i) ______ a (ii) _____ _______ or (iii) ____ _____ with the appropriate office; (B) (iv) ___ _____ of the collateral; (C) (v) _____ ____ of the collateral; (D) it may be (vi) ______ ______ upon (vii) _____, without further action; (E) in (viii) ______ _______ types of collateral, the secured party must use the state’s (ix) ______-of-_______ system.

Answer 33

(i) file; (ii) financing statement; (iii) fixture filing; (iv) take possession; (v) take control; (vi) automatic; (vii) attachment; (viii) perfect specific; (ix) certificate-of-title

Question 34

To (i) _______ a (ii) ___ ______ by filing, a (iii) ____ _______ must be (A) (iv) ______ in the appropriate office (often the Secretary of State) and (B) (v) ______ ______, setting forth: the debtor’s complete and correct name and mailing address; the name of the secured party or its representative; and an indication of the collateral covered by the financing statement. A (vi) ____ ______ includes additional information

Answer 34

(i) perfect; (ii) secured interest; (iii) financing statement; (iv) filed; (v) properly completed; (vi) fixture filing

Question 35

To (i) _______ a (ii) ______ ______ by (iii) ______, the secured party may take possession of the collateral. Possession is the (iv) ___ way to perfect a security interest in (v) _____. Other types of collateral may be perfected through possession.

Answer 35

(i) perfect; (ii) security interest; (iii) possession; (iv) only; (v) money

Question 36

If the (i) ______ is quasi-intenqgible or intangible, a secured party may (ii) _____ a (iii) ___ ______ by (iv) _____ _____ of the collateral. Control is the only legitimate method to (v) _____ a security interest in (vi) _____ _____ or (vi) ______-of-_____ rights.

Answer 36

(i) collateral; (ii) perfected; (iii) security interest; (iv) taking control; (v) perfect; (vi) deposit accounts; (vi) letters-of-credit

Question 37

(i) _____ perfection of a (ii) _______ _______ can occur on (iii) ________, with: a (iv) _____-______ security interest in consumer goods; a sale of a payment intangible or a (v) ______ _____; an (vi) ______ of accounts or payments intangible; or the (vii) _____ of (viii) _____.

Answer 37

(i) automatic; (ii) security interest; (iii) attachment; (iv) purchase-money; (v) promissory note; (vi) assignment; (vii) proceeds; (viii) collateral

Question 38

Generally, the only way to (i) _____ a (ii) ___ _____ in collateral subject to a (iii) ______-of-_____ system (notably vehicles) is to ensure that a (iv) ____ is made, or a (v) ___ is placed, on the title document for each piece of collateral.

Answer 38

(i) perfect; (ii) security interest; (iii) certificate-of-title; (iv) notation; (v) lien

Question 39

A security interest can remain (i) _____ despite (ii) _____ _____ and changes to the debtor’s name, capital structure, and other attributes.

Answer 39

(i) perfected; (ii) multistate transactions

Question 40

The general (i) _____-of-____ rule under Article (ii) __ is that if the (iii) _______ is located in a particular jurisdiction, that jurisdiction’s laws govern (iv) _____ and the (v) ______ of the (vi) ____ ____. There are many exceptions.

Answer 40

(i) choice-of-law; (ii) 9; (iii) debtor; (iv) perfection; (v) priority; (vi) security interest

Question 41

A (i) ______ location may be a business’s (ii) ____ of _____, (iii) ______ of ______, (iv) _____ of ______ offices, or an individual’s (v) ______ _____. A security interest may (vi) ___ if the debtor changes location or name unless the (vii) _____ _____ takes certain steps to (viii) _______ _____. A new debtor will often be bound by an original debtor’s security agreement.

Answer 41

(i) debtor’s; (ii) state of registration; (iii) place of business; (iv) location of executive offices; (v) principal residence; (vi) lapse; (vii) secured creditor; (viii) continue perfection

Question 42

Article 9’s (i) ____ rules determine the order in which competing (ii) _____ may satisfy their claims against the (iii) _____ ______. In general, the claimant with the (iv) _____ ____ _____ wins (FIFO); a (v) ______ _____ has priority over a general unsecured creditor who has not acquired a (vi) ____; among (vii) _____ security interests, the first to (viii) ___ or (ix) ____ wins; between two secured but (x) _______ creditors, the first secured creditor to (xi) ____ its security has top priority; holders of PMSIs may have (xii) ______ rights; and for security interest perfected by (xiii) ____, the secured party with (xiv) ________ always has priority.

Answer 42

(i) priority; (ii) claimants; (iii) same collateral; (iv) earlier priority date; (v) secured creditor; (vi) lien; (vii) perfected; (viii) file; (ix) perfect; (x) unperfected; (xi) attach; (xii) superior; (xiii) control; (xiv) control

Question 43

A (i) ____ _______ secures an obligation for (ii) ____ or _____ furnished concerning goods. A (iii) ______ ____ has priority over a prior or subsequent security interest in the goods, unless the statute creating the lien explicitly alters the priority rule

Answer 43

(i) possessor lien; (ii) services or materials; (iii) possessory lien

Question 44

In general, a (i) _____ ______ continues to exist even if the (ii) _____ is (iii) _____, leased, exchanged, licensed, or otherwise disposed of. Exceptions include: (iv) ______ in the ordinary course of business; buyers of (v) ______ _____ from consumers; purchasers of (vi) ___ ____ not constituting proceeding of inventory collateral; and (vii) _____ of (vii) _______.

Answer 44

(i) security interest; (ii) collateral; (ii) sold; (iv) buyers; (v) consumer goods; (vi) chattel paper; (vii) purchasers; (viii) instruments

Question 45

In general, a (i) ______ _____ created by a (ii) ____ is subordinate to a (iii) _______ ____ created by another person if: (A) the debtor acquired the collateral (iv) _____ to the (v) ____ _____ that the other person created; (B) the (vi) ____ ____ was (vii) ______ when the debtor acquired the collateral; and (C) there is no (viii) ____ ______ when the security interest is unperfected

Answer 45

(i) security interest; (ii) debtor; (iii) security interest; (iv) subject; (v) security interest; (vi) security interest; (vii) perfected; (viii) later period

Question 46

Goods subject to a (i) ___ ____ can be united with either (ii) __ ____ or other goods in such a way that the goods change into another type of (iii) ______ if the goods become (iv) _____, _______ or commingled goods.

Answer 46

(i) security interest; (ii) real property; (iii) collateral; (iv) fixtures, accessions, or commingled goods

Question 47

A party entitled to (i) ____ ____ may (ii) _____ his position to another by agreement.

Answer 47

(i) superior priority; (ii) subordinate

Question 48

A (i) ____ ____ in (ii) ________ or (iii) ______ of collateral: (A) must (iv) _____ ______ care in preserving collateral in his possession; (B) keep the collateral (v) ______; (C) may hold proceeds, except money or funds, from any collateral it possess or controls as (vi) _____ _____; and (D) may generally create a (vii) ____ _____ in collateral it controls or possesses.

Answer 48

(i) secured party; (ii) possession; (iii) control; (iv) exercise reasonable; (v) identifiable; (vi) additional security; (vii) security interest

Question 49

The parties may agree on what constitutes (i) _____, limited only by the UCC’s (ii) ____-____ requirement and the general rules of contract law. After (iii) _____, the (iv) _____ _____ has these general remedies against the (v) _____: (vi) ________; disposition of collateral (simple (vii) ______); (viii) ______ on intangible assets; and (ix) _____ ______.

Answer 49

(i) default; (ii) good-faith; (iii) default; (iv) secured party; (v) collateral; (vi) repossession; (vii) foreclosure; (viii) foreclosure; (ix) strict foreclosure

Question 50

A (i) ____ ____ is entitled to exercise self-help and take (ii) ________ of tangible collateral, or disable collateral that is too heavy to move, provided that this is done without a (iii) _______ of ___ _____. Best practices to avoid (iv) _______ the ______ includes: providing the debtor with (v) ______ before the (vi) _______; repossession during (vii) _____ ____ and on (viii) ____ _____; and notifying the (ix) _____ _____ that the collateral has been lawfully repossessed. The secure party is generally (x) _____ for any damages arising from the repossession.

Answer 50

(i) secure party; (ii) repossession; (iii) breach of the peace; (iv) breaching the peace; (v) notice; (vi) repossession; (vii) daylight hours; (viii) public land; (ix) local police; (x) liable

Question 51

Simple (i) _____ means to dispose of collateral by sale, lease, licensee, or there means. The terms of (ii) ____ foreclosure must be (iii) _____ ________; the secured party must take (iv) _____ steps to assure that the disposition (v) ______ a (vi) ___ ______ for the collateral. The secure party may dispose of the collateral by (vii) _____ or ______ sale, including sale over the (viii) _____.

Answer 51

(i) foreclosure; (ii) simple; (iii) commercially reasonable; (iv) adequate; (v) yields; (vi) fair price; (vii) public or private; (viii) Internet

Question 52

If the collateral consists of (i) ____ ______, such as accounts, investment property, or chattel paper, the (ii) ______ _______ may take steps to collect, from the account debtor, amounts due on the account to the debtor. (iii) _______ on accounts is often done by (iv) _____ _______, in which the secured creditor (v) ______ the account debtor to pay the secured party directly. The (vi) _______ serves to (vii) ________, and to (viii) _____ the account debtor to, an (ix) ______ of the debtor’s rights to the secured party.

Answer 52

(i) intangible assets; (ii) secured party; (iii) foreclosure; (iv) notification lending; (v) notifies; (vi) notification; (vii) effectuate; (viii) alert; (ix) assignment

Question 53

(i) ______ foreclosure occurs when a (ii) ____ _____ simply accepts the (iii) _____ as full or partial satisfaction of the secured obligation. (i) _______ foreclosure extinguishes the foreclosed security interest and transfer to the secured party all the debtor’s rights in the collateral.

Answer 53

(i) strict; (ii) secured party; (iii) collateral; (iv) strict

Question 54

The (i) _____, a secondary (ii) ______, or a (iii) ____ ___ or lien holder other than the one foreclosing may (iv) _____ the collateral. The (v) _____ party must (vi) _____ ____ ____ of all obligations secured by the collateral that are then due and owing, along with (vii) ____ ______ of foreclosure, including (viii) ______’s ____.

Answer 54

(i) debtor; (ii) obligor; (iii) secured party; (iv) redeem; (v) redeeming; (vi) tender full payment; (vii) reasonable expenses; (viii) attorney’s fees

Question 55

A (i) _____ _____ may become obligated to perform the secured party’s duties, and the secured party may correspondingly be relive of those duties, if: (A) the secured party (ii) ______ its ______ to the secondary obligor; (B) the secured party (iii) _______ the ______ to the secondary obligor; or (C) the secured party (iv) ______ its _____ to the collateral to the secondary obligor

Answer 55

(i) secondary obligor; (ii) assigns its rights; (iii) transfers the collateral; (iv) surrogates its rights