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Simple English definitions for legal terms

chattel paper

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A quick definition of chattel paper:

Chattel paper is a special document used when someone wants to sell something on credit but still keep some ownership of it. It has to show that the buyer owes money to the seller and that the seller still has some rights to the thing being sold. It used to be a physical paper, but now it can also be electronic.

A more thorough explanation:

Chattel paper is a legal document used in secured transactions to sell property on credit while still keeping some interest in the property. It is important that the document shows:

  • A monetary obligation from Party A to Party B
  • A security interest or other interest retained in the property by Party B

Chattel paper can be physical or electronic, and it is authorized by UCC §9-105.

Example 1: John wants to buy a car from Jane, but he cannot pay the full amount upfront. They agree that John will pay Jane in installments over the next two years. To secure the transaction, Jane creates a chattel paper that shows John's monetary obligation to her and her retained interest in the car until John pays off the debt.

Example 2: Sarah wants to buy a new computer for her business, but she does not have enough money to pay for it upfront. She decides to finance the purchase and signs an electronic chattel paper that shows her obligation to the lender and the lender's retained interest in the computer until Sarah pays off the debt.

These examples illustrate how chattel paper is used to secure transactions where one party sells property on credit while still retaining some interest in the property until the debt is paid off.

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babycat
19:29
Dk can I read your writing?
babycat
19:29
@milktoast: what types of books do you read?
babycat
19:31
I am reading a book on mysticism
Dkk
19:33
You wouldn't like them lol. Mainly business plans. But maybe one day.
Dkk
19:34
Psshh what book on mysticism. Is this like a catch all different politcal theories crash course book on mysticism or is this like a fun happy spiritual book?
2big2fail
19:36
@babycat: read some meister eckhart
Dkk
19:36
Not my type of mysticism but I guess that can be fun to read.
Dkk
19:37
"to see what is there and stand with what is there ecstatically." impossible.
1a2b3c4d26z
19:37
5 books or so
1a2b3c4d26z
19:37
I'm the reading the Odyssey rn :)
concorde
19:38
17th c is always unintentionally funny
@1a2b3c4d26z: much better than the Iliad
1a2b3c4d26z
19:40
Sweet now I don't have to read that piece of crap
babycat
19:40
@2big2fail: will check out ty!
Dkk
19:41
@concorde: that one looks cool
babycat
19:41
I need to read st Augustine’s confessions
concorde
19:41
Confessions is goaty
2big2fail
19:42
confessions is entry level
@babycat: have you read Carson’s Eros the bittersweet
Dkk
19:42
Maybe @babycat
2big2fail
19:42
read the zohar lol
Dkk
19:42
Confessions is vital to understanding the evolution of love in philosophy.
1a2b3c4d26z
19:42
who was I yappin about serotonin with
concorde
19:42
Serotonin so good
1a2b3c4d26z
19:42
top 5 of all time and it aint 4
babycat
19:43
We sharing Goodreads on here?
1a2b3c4d26z
19:43
jurassic park unironically good
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