Secured Trans

Question 1

Application of Art. 9

Answer 1

‘Article 9 of the UCC applies to all transactions that create a security interest in personal property or fixtures by contract
-a security interest is a legal claim on collateral that has been pledged, usually to obtain a loan

Question 2

Types of Tangible Goods

Answer 2

4 Kinds

1) Consumer goods: goods that are used or bought for use primarily for personal, family or housefuls purposes
2) Inventory: goods other than farm products that are held by a person for sale or lease to be furnished under a contract of service or raw materials, work in process, or materials used or consumed in a business
3) Equipment: goods other than inventory, farm products, or consumer goods
4) Farm Products: crops, livestock, supplies produced in a farming operation; or products of crops or livestock in their unmanufactured state that are in possession of the debtor who is engaged in a farming question

Question 3

Attachment

Answer 3

A security interest is not enforceable until attachment.
Three requirements:
1) parties must agree to create the security interest
2) value must be given by the secured party and
3) the debtor must have rights in the collateral

Question 4

Types of Intangible Goods

Answer 4

Eight types:

1) instruments
2) documents
3) chattel paper
4) accounts
5) deposit accounts
6) investment property
7) commercial tort claims
8) general intangibles

Question 5

Perfection

Answer 5

Perfection occurs usually by filing a financing statement with the Secretary of State but in some cases no financing statement is needed because perfection is automatic upon attachment

• not automatic for non-consumer goods such as equipment
• a perfected PSMI is always the top priority

Question 6

Lien Creditor

Answer 6

A lien creditor is a creditor who acquires a lien through judicial process, such as attachment or levy

Judgment lien creditor obtains priority if its lien is establish before a security interest is perfected