Secured Transactions Flashcards
What are the 4 types of “goods” under Art 9?
(1) consumer goods
(2) farm products
(3) inventory
(4) equipment
What are “consumer goods”?
Goods used or bought for onsumer purposes.
What are “farm products”?
Crops, livestock, or products of livestock. Only farm products if the debtor is a farmer.
What is “inventory”?
Goods held by a debtor for (1) sale, (2) lease, or (3) rapidly consumed in operation of a business.
What is “equipment”?
Residual category of goods.
What are the 8 types of “intangible personal property” under Art 9.
(1) accounts
(2) instruments
(3) chattel paper
(4) deposit accounts
(5) documents
(6) investment property
(7) commercial tort claims
(8) general intangibles
What is an “account”?
A right to payment arising out of one of the transaction specified in Art 9. Includes (1) sale of goods, and (2) rendition of a service.
What is an “instrument”?
Any negotiable instrument, including notes or checks.
What is “chattel paper”?
(1) a written lease of personal property OR
(2) documentation generated by a secured transaction
What is a “deposit account”?
A savings or checking account. BUT cannot be a consumer account when the transaction is for a consumer purpose.
What are “documents”?
Document of title, bills of lading, warehouse receipts
What are “investment property”?
Stocks, bonds, and mutual funds
What are “commercial tort claims”?
(1) any tort claim held by a business
(2) an individual tort claim that arises out of the operation of a business, and does NOT involve personal injury
What are “general intangibles”?
Residual category of non-goods. Includes copyrights, patents, and goodwill. Also includes rights to payment not covered by the Art 9 definition of an “account.”
What are the three requirements for attachment?
(1) secured party gave value (timing doesn’t matter)
(2) debtor has rights in the collateral
(3) Statute of Frauds satisfied by (a) an “authenticated” security agreement, (b) possession by the securied party
What must an authenticated security agreement contain?
(1) debtor’s signature (to authenticate)
(2) evidences grant of security agreement
(3) describes the specific collateral property (not super-generic)
What is the most generic way a security agreement can describe collateral?
Can use the Art 9 types of property. E.g., “all inventory”
Exception: (1) commercial tort claims and (2) consumer goods must be specifically described.
When is the Art 9 Statute of Frauds satisfied without an authenticated security agreement?
Possession by the secured party pursuant to the debtor’s agreement.
In what order must the three attachment events take place?
Order doesn’t matter. Attachment happens when all three are present.
What is an “after-acquired property clause”?
Allows for a security interest in property acquired after the establishment of a security agreement. Usually states “[property type] now existing and after-acquired.”
What type or property cannot be subject to an after-acquired property clause? Are there any time restrictions?
Commercial tort claims. And clauses are only good for consumer goods acquired by the consumer within 10 days of the debtor giving value.
What is a “future advance clause”?
Allows future loans to also be secured according to the security agreement.
What are proceeds?
Anything the debtor acquires as a consequence of the debtor’s rights in the collateral.
What is needed to have a security interest in proceeds?
Security agreement automatically attaches to identifiable proceeds.
Can you have a security interest in proceeds of proceeds?
Yes. So long as they are identifiable.
What types of property cannot be perfected by filing a financing statement?
(1) deposit accounts
(2) money
(3) letter-of-credit rights
Where in a state is the financing statement filed?
Secretary of State