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18 Cards in this Set
- Front
- Back
* Importance of collateral classification
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Many rules regarding perfection, priority, repossession, resale, etc., depends on the type of collateral involved
Mutually exclusive: item can only be one collateral type Debtor's perspective (use) is determinative |
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Goods, generally
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1) Movable items & fixtures
2) Specific Inclusions: - Standing timber; growing crops; unborn young of animals 3) Specific Exclusions: - Money; minerals before extraction (still real property); collateral that fits other categories |
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Classifications of Goods
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Consumer Goods
Equipment- business Inventory Farm Products Multiple Uses- principal use determinative |
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Consumer goods
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Personal, family, or household purposes
Examples: everything you own |
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Equipment- Business Purposes
*Default Category* |
Goods used or bought for use primarily in business (including farming, professions)
Includes goods bought by a nonprofit or gov. subdivision/agency |
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Inventory
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1) Goods held for sale or lease in the ordinary course of business
2) Raw material & work in progress 3) Consumed materials |
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Farm Products
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Ex: Chickens, wheat, crops, livestock
To be a farm product, 2 requirements: 1) In possession of the farmer engaged in farming operations, and 2) Unmanufactured condition "raw" |
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Multiple Uses
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Principal use determinative
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Semi-Tangible and Intangible Collateral
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Instruments
Documents Chattel Paper Account Deposit Accounts Investment Property Commercial Tort Claims General Intangibles |
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Instruments
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Represent money.
Ex: Promissory notes, CODs, checks, drafts |
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Documents
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Written or electronic representation of goods, that is, documents of title under Article 7
Warehouse Receipt: goods in storage Bill of Lading: goods in transit |
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Chattel Paper:
on paper: tangible electronic: electronic |
Single writing or group of writings evidencing 2 things
1) Monetary obligation (promissory note) PLUS 2) Security Interest in or Lease of Goods |
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Account
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Any right to payment of $ for goods sold or leased or for services rendered NOT evidenced by an instrument or chattel paper.
Typical accounts receivable of a business- what your clients will owe you. Includes contract rights not yet earned by performance. Includes computer software license fees and credit card receipts. |
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Deposit Accounts
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Accounts with a financial institution
ex: checking & savings accounts |
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Investment Property
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Ex: stocks, bonds
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Commercial Tort Claims
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Business tort claims that do not involve personal injury
Ex: unfair competition |
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General Intangibles
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Any other type of personal property, except money.
Ex: copyright, patents, trademarks, goodwill, soul |
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Proceeds
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Whatever received upon the sale, exchange, collection or other disposition of collateral or proceeds
Proceeds may include collateral a creditor could not have a security interest in if originally used as collateral, such as cash |