What are tangible collateral?
Goods and software embedded in goods
What qualify as goods?
- Consumer goods
- Farm products
- Inventory
- Equipment
- Software embedded in goods
What are intangible collateral?
- Chattel paper
- Documents
- Instruments
- Investment property
- Accounts
- Commercial tort claims
- Deposit accounts
- Letter of credit right|
- General intangibles
What is equipment?
A catch-all category for anything that doesn’t fit in consumer goods, farm products or inventory
What is a general intangible?
A residual category including copyrights
When do leases fall under Article 9?
When the economic reality is a security interest
For a lease, what is the bright-line test?
- Lessee must pay the full obligation, regardless of early termination, AND
- One of the following:
a. term of lease is equal to or greater than the life of goods
b. Must renew lease
c. Option to renew for no or nominal CX
d. Option to become owner for no or nominal CX
When does Article 9 of the UCC apply?
For transactions that create an SI in personal property or a fixture
When is a consignment covered by Article 9?
- Consignor delivers to merchant for selling
- Merchant is not generally known by creditors to be substantially engaged in the business of selling these goods
- The value is at least $1,000
- Not consumer goods
What kind of liens are security interests?
Agricultural liens only
Are sales of a business covered by Article 9?
Typically not
When is needed for an enforceable security interest?
- Secured party gives value
- Debtor gets rights
- Authenticated (signed)
