Secured Transactions

Question 1

Classify

TV for home

Answer 1

Consumer Good

Question 2

Classify

Personal Cellphone

Answer 2

Consumer Good

Question 3

Classify

Raw Materials

Answer 3

Inventory

Question 4

Classify

Paper at paper store

Answer 4

Inventory

Question 5

Classify

Paper in personal printer

Answer 5

Consumer Good

Question 6

Classify

Cow’s Milk

Answer 6

Farm Product

Question 8

Classify

Crops

Answer 8

Farm Product

Question 9

Classify

Good that is not inventory, not consumer good, not farm product

Answer 9

Equipment

Question 10

[Opening to Secured Transactions Essay]

Answer 10

Article 9 applies to all security interests in personal property or fixtures by contract.

Question 11

Attachment Requirements

Answer 11

A security interest attaches when the ollowing are present:
1. Debtor has rightsin the collatoral
2. Value is given by the secured party
3. There is a binding security agreement

A security agreement is binding if there is a valid authentication, intent, and description of the collateral.
* Authentication - signed writing or possession
* Intent - to create a security agreement
* Description - accurate; may use AR9 Classification Name but cannot be general using “all assets” or similar

Question 12

Perfection

Answer 12

Perfection puts others on notice of the security interest.

1. File a financing statement [debtor’s name, description of collateral (may be broad/generic), and the secured party’s name)
2. Automatic perfection upon attachment for PMSI in Consumer Good
3. Possession for goods and money
4. Control of deposit account or investment property

Question 13

PMSI

Answer 13

PMSI creditors are given super priority over other interests because they enable a debtor to obtain the property.

• Consumer goods - automatic perfection upon attachment