Basic Uniform Commercial Code

Semi-Intangible


Semi-intangibles are physical, tangible papers that evidence or embody an intangible right. Semi-intangible is not a formal legal category, but encompasses three types of collateral:

  1. Chattel Paper

    "Chattel paper" means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. In this paragraph, "monetary obligation" means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include

    1. charters or other contracts involving the use or hire of a vessel or
    2. records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.

    Mortgages are not chattel papers. They're probably usually instruments.

    Chattel papers can theoretically be perfected by either filing or possession. UCC § 9-313.

  2. Instrument

    "Instrument" means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment. The term does not include

    1. investment property,
    2. letters of credit, or
    3. writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

    E.g., checks, CDs, etc.

  3. Document

    "Document" means a document of title or a receipt of the type described in [UCC § 7-201(2)].