Types of Collateral Flashcards
Goods
All things which are tangible, moveable, personal property. Includes the unborn young of animals and growing crops.
Classifications of Goods
Goods can be further classified as either consumer goods, equipment, farm products, or inventory.
In classifying goods, look to see how the debtor is using the collateral.
Consumer Goods
A type of goods, used or bought for use primarily for personal, family, or household purposes.
Equipment
A type of goods, used or bought for use in business. Tends to be the default category for items that don’t fit into other categories.
Farm Products
A type of goods.
Crops or livestock or supplies used or produced in farming operations or products of crops/livestock in their unmanufactured states (i.e. eggs, maple syrup, wool-clip) if they are in possession of a debtor engaged in farming operations.
Inventory
A type of goods.
Held by a person who holds them for sale or lease or to be furnished under service contracts or materials used or consumed in a business in a short period of time. This includes raw materials needed to make something else.
Semi-intangible and Intangible Property
Instruments Documents Chattel Paper Investment Property Accounts Deposit Accounts Commerical Tort Claims General Intangibles
Types of Collateral
Goods
Semi-intangible and Intangible Property
Instruments
A form of intangible property.
Negotiable instruments and any other writing which evidences a right to payment or a monetary obligation. Think checks, drafts, notes, etc.
Documents
A form of intangible property.
A document which in the regular course of business is treated as evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers (e.g. warehouse receipt).
Chattel Paper
A form of intangible property.
A record or records which evidence both a monetary obligation and a security interest in or a lease of specific goods. A “record” is information that is stored in either a tangible or intangible medium (i.e. paper or electronically).
Usually, this is a security agreement and a promissory note.
Investment Property
A form of intangible property.
Includes items such as stocks, bonds, mutual funds, and brokerage accounts containing such items.
Accounts
A form of intangible property.
A right to payment (not evidenced by chattel paper) for property sold or services rendered.
Includes healthcare insurance receivables, energy provided or to be provided, the use or hire of a vessel and lottery receivings.
Accounts do not include contractual obligations arising from a loan of money, those are general intangibles.
Deposit Accounts
A form of intangible property.
An account maintained with a bank.
Note: Article 9 only applies to nonconsumer deposit accounts (generally business acounts).
Commercial Tort Claims
A form of intangible property.
A claim arising in tort with respect to which (1) the claimant is an organization or (2) the claimant is an individual and the claim arose in the claimant’s business or profession and does not include damages for personal injury or the death of an individual.
