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Secured Transactions Q: Instrument v. Payment Intangible

Posted: Tue Dec 23, 2014 2:59 pm
by Geaux12
So random Sec. Trans. question I've come across while reading. I'm not in the middle of a take-home exam or anything, so don't worry.

Let's say I have a term in a contract. It says X will pay Y (or any party designated by Y) $Z. This payment obligation is conditioned by another term in the contract.

What is this contract term? A nonnegotiable instrument or a payment intangible? When I think of instruments, I think drafts or checks . . . not contract terms. The term is expressly transferable, but do contract terms constitute writings "of a type that in the ordinary course of business is transferred by delivery with any necessary indorsement or assignment"?

Of course, instrument vs. payment intangible has consequences for priority/assignment/sale/etc. So I guess it's an important distinction.

Anyone have a clue?

Re: Secured Transactions Q: Instrument v. Payment Intangible

Posted: Tue Dec 23, 2014 4:08 pm
by Geaux12
Or maybe it's an account? I'm lost.