Business Law- Chapter 27

Question 1

Personal Property

Answer 1

Tangible property such as equipment, vehicles, furniture, and jewelry, as well as intangible property such as securities, patents, trademarks and copyrights.

Question 2

Revised Article 9 of the UCC

Answer 2

An article of the Uniform Commercial Code that governs secured transactions in personal property.

Question 3

Secured Transaction

Answer 3

A transaction that is created when a creditor makes a loan to a debtor in exchange for the debtor’s pledge of personal property as security.

Question 4

Collateral

Answer 4

Personal property that is subject to a security agreement.

Question 5

Security Agreement

Answer 5

A written document signed by a debtor that creates a security interest in personal property.

Question 6

Floating Lien

Answer 6

A security interest in property that was not in the possession of the debtor when the security agreement was executed.

Question 7

After-acquired Property

Answer 7

Property that a debtor acquires after a security agreement is executed.

Question 8

Sale Proceeds

Answer 8

The resulting assets from the sale, exchange, or disposal of collateral subject to a security agreement.

Question 9

Future Advances

Answer 9

Funds advanced to a debtor from a line of credit secured by collateral. Future advances are future withdrawals from a line of credit.

Question 10

Perfection of a Security Interest

Answer 10

A process that establishes the right of a secured creditor against other creditors who claim an interest in the collateral.

Question 11

Financing Statement

Answer 11

A document filed by a secured creditor with the appropriate government office that constructively notifies the world of his or her security interest in personal property.

Question 12

Perfection by Possession of the Collateral

Answer 12

A rule that says if a secured creditor has physical possession of the collateral, no financing statement has to be filed; the creditor’s possession is sufficient to put other potential creditors on notice of the creditor’s secured interest in the property.

Question 13

Purchase Money Security Interest

Answer 13

An interest a creditor automatically obtains when she extends credit to a consumer to purchase consumer goods.

Question 14

Termination Statement

Answer 14

A document filed by a secured party that ends a secured interest because the debt has been paid.

Question 15

Priority of Claims

Answer 15

The order in which conflicting claims of creditors in the same collateral are solved.

Question 16

Buyer in the Ordinary Course of Business

Answer 16

A person who is in good faith and without knowledge of another’s ownership or security interest in goods buys the goods in the ordinary course of business rom a person in the business of selling goods of that kind.

Question 17

Default

Answer 17

Failure to make scheduled payments when due, bankruptcy of the debtor, breach of the warranty of ownership as to the collateral, and other events defined by the parties in a security agreement.

Question 18

Repossession

Answer 18

A right granted to a secured creditor to take possession of the collateral upon default by the debtor

Question 19

Retention of Collateral

Answer 19

A secured creditor’s repossession of collateral upon a debtor’s default and proposal to retain the collateral in satisfaction of the debtor’s obligation.

Question 20

Disposition of Collateral

Answer 20

A secured creditor’s repossession of collateral upon a debtor’s default and selling, leasing or otherwise disposing of it in a commercially reasonable manner.

Question 21

Deficiency Judgment

Answer 21

A judgment that allows a secured creditor to successfully bring a separate legal action to recover a deficiency from the debtor. It entitles the secured creditor to recover the amount of the judgment from the debtor’s other property.

Question 22

Judgment on the Underlying Debt

Answer 22

A right granted to a secured creditor to relinquish her security interest in the collateral and sue a defaulting debtor to recover the amount of the underlying debt.

Question 23

Artisan’s or Mechanic’s Lien

Answer 23

A statutory lien given to workers on personal property to which they furnish services or materials in the ordinary course of business.