Types of Collateral Flashcards
Consumer goods—goods used or bought primarily for personal,
family, or household purposes
Equipment—goods that are used or bought for use in a business.
Note: This is also the default category for goods. In other words, if
the collateral is a good, and it doesn’t fit the definition of consumer
goods, inventory, or farm products, it gets classified as equipment.
Farm products—crops or livestock or supplies used or produced
in farming operations or products of crops or livestock in their
unmanufactured states (such as ginned cotton, wool-clip, maple
syrup, milk, and eggs) if they are in the possession of a debtor
engaged in farming operations
Inventory—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
Instruments—Pieces of paper representing the right to be paid
money, like promissory notes, drafts (for example, checks), and
certificates of deposit
Documents—A document that represents the right to receive
goods (for example, a bill of lading, a warehouse receipt)
Chattel paper—A record or records which evidence both (1) a monetary
obligation, and (2) a security interest in or a lease of specific
goods. A “record” is information that is stored in either a tangible
medium (for example, written on paper), or an intangible medium
(for example, electronically stored). Chattel paper that is stored in
an electronic medium is also called “electronic chattel paper.”
Investment property—Includes items such as stocks, bonds, mutual
funds, and brokerage accounts containing such items
Accounts—Includes a right to payment (that is not evidenced by
an instrument or chattel paper) for property sold or services rendered.
Note: A contractual obligation arising from a loan of money
is not an account—it is a general intangible (see below)
Deposit accounts—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.
Commercial tort claims—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
General intangibles—Any personal property not coming within
the scope of the other definitions, such as patent and trademark
rights, copyrights, and goodwill. A general intangible under which
the account debtor’s princip
