Legal Definitions - goods

In commercial law, specifically under Article 9 of the Uniform Commercial Code (UCC), the term goods refers to all tangible items that are physically moveable at the moment a legal claim, known as a security interest, is established over them. This definition is crucial for determining what types of property can be used as collateral for a loan or other financial obligation. Essentially, if you can pick it up and move it, it's likely considered "goods" in this legal context, excluding intangible assets like intellectual property or bank accounts.

Here are some examples to illustrate this concept:

• Retail Store Inventory: Imagine a furniture store that needs a loan to purchase new stock. The bank agrees to provide the loan, but places a security interest on all the furniture currently in the showroom and warehouse, including sofas, dining tables, and beds. These items are all physical and can be moved from the store to a customer's home or another location.

  How it illustrates the term: Since the sofas, tables, and beds are tangible objects that are moveable, they qualify as "goods" for the purpose of the bank securing its loan.

• Farm Equipment: A farmer buys a new tractor and several specialized implements to cultivate their fields. To finance this purchase, the farmer grants the lender a security interest in this new machinery. Each piece of equipment can be driven or transported from one field to another, or even to a different farm.

  How it illustrates the term: The tractor and implements are physical assets that are designed to be moved, making them "goods" under the UCC when used as collateral.

• Automobile Dealership Stock: A car dealership maintains a large inventory of new and used vehicles on its lot. To fund this inventory, the dealership obtains a line of credit from a bank, which takes a security interest in all the cars, trucks, and SUVs available for sale. Each vehicle can be driven off the lot at any time.

  How it illustrates the term: Every car, truck, and SUV is a distinct, moveable item. Therefore, the entire stock of vehicles constitutes "goods" that can be used to secure the dealership's financing.