Secured Transactions: Fundamental Concepts - Scope of Article 9
Terms in this set (24)
the process by which the security interest in favor of the creditor becomes effective against the debtor.
who wins if creditors, buyers, or other parties contest the rights in the collateral.
if debtor defaults Article 9 sets out what the creditor may and may not do to repossess the collateral and sell it to get paid
Security interest 1-201(b)(35)
means an consensual lien in personal property or fixtures which secures payment or performance of an obligation. Includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Article 9. Not Land.
Scope of Article 9-109(a)
except as otherwise provided in subsections (c) and (d), this article applies to the following SI's:
1.A contractual transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract
2.An agricultural lien
3.A sale of accounts, chattel paper, payment intangibles, or promissory notes
4. A true consignment
5. A security interest arising under Section: 2-401, 2-505, 2-711(3), or 2A-508(5), as provided in Section 9-110
6. A security interest arising under Section 4-210 or 5-118
§9-109(c) (Statute Rule) Article does NOT cover
Things Governed by Fed, State or Foreign Statutes, they will preempt this article and rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under section 5-114
§9-109(d) (Lien & consignment rule) Article does NOT cover [see pgs. 679-680 for full list]
(1) A landlord's lien & other statutory liens, other than an agricultural lien; (except: if consensual §9-109(a)(1)). (2) Liens given by statue for services or materials. (3) iii. an assignment of a claim for wages, salary, or other compensation of any employee (but people can contract this between each other if not employee employer relationship). see page 679 - 680 for full listing.
means the property subject to a security interest or agricultural lien. The term includes: (a) proceeds to which a security interest attaches. (b) accounts, chattel paper, payment intangible, and promissory notes that have been sold and (c) goods that are the subject of consignment. Classification of Collateral determines how to apply Article 9.
Collateral Goods 9-102(a)(44)
All things that are moveable when a security interest attaches. The term includes (i) fixtures (ii) standing timber that is to be cut and sold. (iii) crops grown, growing, or to be grown, (v) manufactured homes (vi) computer programs embedded in goods.
Consumer Goods 9-102(a)(23)
Goods that are used or brought for use primarily for personal, family, or household purposes.
Goods other than inventory, farm products, or consumer goods.
(exception for standing timber, that debtor is in business of farming. Includes: (a) Crops (grown, growing, or to be grown); (b) Live stock(born or unborn); (c.) Aquatic goods produced in aquacultural operations; (d.)Supplies used in farming; (e )Products of crops or livestock in their un-manufactured states.
Goods other than farm products which are: (a.)Leased by lesssor (b).Held by a person for sale or lease or to be furnished under a contract of service. (c)Are furnished by a person under a contract of service (d).Consist of raw materials used or consumed in a business
Quasi- Tangible Property - Instruments
a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of type that in ordinary course of business is transferred by delivery with any necessary endorsement or assignment. Does not include(i) investment property, (ii) letter of credit, or (iii)writings that evidence a right to payment arising out of the sue of a credit or charge card or information contained on or for use with the card.
Quasi- Tangible Property - Investment Property
(stocks and bonds and rights to accounts containing same) a security whether certified or uncertified, security entitlement, securities account, commodity contract, or commodity account.
Quasi- Tangible Property - Documents
(warehouse receipts and bills of lading) Document of title
Quasi- Tangible Property - Chattel paper
a record or records that evidence both a monetary obligation and a security interest in specific goods.
Quasi- Tangible Property - Letter-of-credit right
means a right to payment or performance under a letter of credit.
Intangible property - Accounts
a right to payment of monetary obligation, whether or not earned by performance.
Intangible property - Health insurance receivable
an interest in or claim under a policy of insurance which is a right to payment of monetary obligation for health-care goods or services provided or to be provided.
Intangible property - Deposit Accounts
means a demand, time savings, passbook, or similar account maintained with a bank (does not included investment property).
Intangible property - General Intangibles
Any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents.
Intangible property - Payment intangible
General intangible under which the account debtor's principal obligation is a monetary obligation.
Morgan County Feeders, Inc. Rule
Items sold in the ordinary course of business (inventory) pass to the buyer free of even perfected interests; pieces of equipment generally do NOT.