Article 9 UCC Secured Transactions

Question 1

Secured Party

Answer 1

The creditor who has a security interest in the debtor’s collateral. Can be a seller, or a buyer of accounts or chattels

Question 2

Debtor

Answer 2

The “person” who owes payment or other performance of the secured obligation

Question 3

Security Interest

Answer 3

The interest in the collateral (personal property, fixtures etc.), that secures payment or performance of an obligation

Question 4

What type of property is subject to a security interest?

Answer 4

• Personal property
• Fixtures
• Sales of accounts
• Chattel paper
• Promissory notes
• General intangibles
• Commercial tort claims

Question 5

Security Agreement

Answer 5

An agreement that creates or provides for a security interest

Question 6

Collateral

Answer 6

The personal property or intangible interest that is the subject of the security interest

Question 7

Financing Statement

Answer 7

Referred to as a UCC-1 form, this instrument usually is filed to give public notice to third parties of the secured party’s security interest

Question 8

Article 9 UCC

Answer 8

used for purposes of establishing creditor’s rights in collateral.

Question 9

Chattel Paper

Answer 9

Writing(s) that evidence both a security interest in a good (or software) and a monetary obligation to pay—example of a security agreement

Question 10

Describe the criteria necessary for a security interest attachment when the collateral is not in possession of the secured party.

Answer 10

• A written or authenticated agreement describing collateral, signed or authenticated by the debtor
• Secured party must give the debtor something of value.
• The debtor must have rights in the collateral.

Question 11

Intangibles

Answer 11

Any personal property other than goods, accounts, chattel paper, documents, instruments, money, deposit accounts, letters of credit, and investment property - examples: oil or book royalties, patents, copyrights

Question 12

Attachment

Answer 12

It is the time when security interest becomes valid. It requires a security agreement and a debtor with interest in the property, and a creditor who gives value.

Question 13

Describe when a creditor can have a valid oral security agreement

Answer 13

When the creditor is in possession of the collateral

Question 14

Describe what happens to a security interest when a debtor has signed and executed a security agreement, but the collateral has not been shipped to the debtor from the seller.

Answer 14

The security interest does not attach until the debtor has an interest in the goods (i.e., until identification has occurred).

Question 15

Define “Perfection”

Answer 15

A means by which a secured party gains priority to a debtor’s collateral over other third parties who also claim to have an interest in the same collateral