Terminology

Question 1

Debtor

Answer 1

the person who owes payment or performance of the obligation secured.

Question 2

secured party

Answer 2

is a lender, seller, or other person in whose favor there is a security interest

Question 3

security agreement

Answer 3

agreement between the debtor and the secured party that creates the security interest.

Question 4

security interest

Answer 4

an interest in personal property or fixtures that secures payment or performance of an obligation.

Question 5

Collateral

Answer 5

the property subject to a security interest. It is property that the secured party can repossess upon default to ensure that the debt is paid.

Question 6

PMSI

Answer 6

the secured party sells the goods to the debtor on credit and retains a security interest in the goods sold, or creditor loans the funds to the debtor to enable the debtor to buy specific collateral, those funds are used by the debtor to acquire the specific collateral, and the creditor takes a security interest in that collateral.

Question 7

Classification of goods

Answer 7

1. commercial goods
2. inventory
3. equipment.
4. farm goods.

Question 8

commercial goods

Answer 8

goods used or bought primarily for personal, family, or household purposes

Question 9

equipment

Answer 9

goods used or bought for use in business and the catchall category.

Question 10

farm products

Answer 10

crops or livestock or supplies used or produced in farming operations or products of crops or livestock in their unmanufactured states

Question 11

inventory

Answer 11

goods held for sale or lease, goods that are to be furnished under service contracts, and materials used or consumed in a business in a short period of time

Question 12

general intangibles

Answer 12

Any personal property not coming within the scope of the other definitions, such as patent and trademark rights, copyrights, and goodwill.

Question 13

instrument

Answer 13

Pieces of paper representing the right to be paid money, like promissory notes, drafts.

Question 14

documents

Answer 14

A document that represents the right to receive goods (for example, a bill of lading, a warehouse receipt).

Question 15

chattel paper

Answer 15

A record or records which evidence both (1) a monetary obligation, and (2) a security interest in or a lease of specific goods.

Question 16

investment property

Answer 16

Includes items such as stocks, bonds, mutual funds, and brokerage accounts containing such item

Question 17

accounts

Answer 17

Includes a right to payment (that is not evidenced by an instrument or chattel paper) for property sold or services rendered.

Question 18

Deposit account

Answer 18

An account maintained with a bank. Note:
In general, Article 9 only applies to security interests in nonconsumer deposit accounts and account monies that are claimed as proceeds of other collateral.

Question 19

commercial tort claims

Answer 19

A tort claim where (1) the claimant is
an organization (for example, a partnership or corporation), or (2) the claimant is an individual, the claim arose out of the claimant’s business or profession, and the claim does not include damages for personal injury or the death of an individual.