statutory scheme

Question 1

purchase money security interest. (PMSI)

Answer 1

seller-financed PMSI
= secured party sells the good to the debtor on credit and retains a security interest in the goods sold

financier-financed PMSI
= creditor loans the funds to the debtor to enable the debtor to buy specific collateral, those funds are sued by the debtor to acquire the collateral, and the creditor takes a security interest in that collateral

Question 2

types of collateral in general

Answer 2

tangible and intangible collateral

Question 3

tangible collateral (goods)

Answer 3

[movable at the time the security interest attaches, including unborn animals and growing crops]

CATEGORY DEPENDS ON HOW DEBTOR IS USING THE COLLATERAL

(1) consumer goods
goods used or bought primarily for personal, family or household purpose

(2) equipment
- default category for goods that don’t fit into other definitions
- goods used or bought for use in a business

(3) farm products
- crops, livestock, supplies used or produced in farming operations, or products etc. in unmanufactured states if in the possession of a debtor engaged in farming operations

(4) inventory
- goods held for sale or lease
- goods that are to be furnished under service Ks
- materials used or consumed in a business in a short period of time (raw materials)

Question 4

intangible collateral

Answer 4

(1) Instruments
- paper representing right to be paid money (promissory notes, checks)
- certificates of deposit

(2) Chattel paper
- record which evidences both (a) a monetary obligation and (b) a security interest in or a lease of specific goods [may be electronic]
Ex: a written contract in which a car buyer purchasing on credit promises to pay the dealership for the car and grants the dealership a security interest

(3) accounts
- a right to payment that is not evidenced by an instrument or chattel paper for property sold or services rendered
Ex: When Tires R US sells some tires on credit, its customer’s obligations are called “accounts”

(4) commercial tort claim

(5) deposit accounts (non consumer)

(6) investment property (stocks, bonds etc.)

(7) general intangible
- catchall
- patents, trademarks, goodwill
- contractual obligation arising from a loan of money

Question 5

agricultural liens

Answer 5

nonpossessory liens on farm products that are created by state statute in favor of persons providing goods, services, or rental land to farmers

note that only the perfection and priority of agricultural liens are governed by Article 9; creation and enforcement of the liens are governed by state statutes