II. SCOPEOFARTICLE9

Question 1

A. SUBJECT MATTER OF ARTICLE 9

1. Collateralized Transaction

Answer 1

Any transaction (regardless of its form) which is intended to create a security interest in __personal property__ or __fixture_.
The property used as collateral may be:
a. Already owned by the debtor
b. To be acquired with loan, that is, a purchase money security interest PMSI
c. After-Acquired (inventory in future)

Question 2

2. Sales of Receivables

Answer 2

The outright sale of accounts, chattel paper, payment intangibles, and promissory notes are covered by Article 9.

Question 3

4. Agricultural Liens Created by Statute

Answer 3

Article 9 covers agricultural liens, that is, nonpossesory liens on _farm products__ such as crops and livestock created by state law in favor of a person who provides goods or services to a farmer.

Question 4

5. Lease-Purchase Agreements
   Article 9 does not govern true leases of personal property in any manner. Thus, when lease term is over, lessor can recover the leased property without complying with Article 9 free of lessee’s creditors.
   But,

Answer 4

a lease which is actually an _installment sale__ is covered.

Examples of evidence of secured transaction:
Lessee cannot terminate the lease and:
􏰀 lease term is equal to or greater than remaining ____economic life___ of goods, or
􏰀 lessee _owns__ property at end of lease term, or
􏰀 lessee has option to buy for __nominal _ consideration at end of lease term.

Question 5

B. EXCLUSIONS FROM ARTICLE 9

Answer 5

1. Rights Governed by _fed law__
2. Real Property (except fixtures)
3. Tort Claims
   However, __commercial tor claims (unfair competition)___, i.e., business claims that do not involve personal injury, are covered.
4. Deposit Accounts in consumer Transactions
5. Statutory Liens
   Examples: __landlord’s lien, mechanic lien_
6. Wage Assignments