Which of the following best defines 'Chattel Paper'?

Chattel paper is defined as a record or records that evidence both a monetary obligation and a security interest in specific goods. This definition aligns perfectly with the selected answer, as chattel paper involves documents that not only represent a promise to pay—indicating a monetary obligation—but also provide a property right in goods, which is essential in secured transactions.

In the context of secured transactions, the significance of chattel paper lies in its dual nature; it functions as a security instrument, demonstrating a creditor’s interest in the specific collateral while also indicating the debtor’s obligation to perform a payment. This makes it a hybrid document that is specifically useful for financing and security purposes involving tangible personal property.

The other options do not accurately encapsulate the concept of chattel paper. Documents evidencing a right to physical property, for example, describe a broader range of ownership documents without emphasizing the promise to pay aspect that is central to chattel paper. Similarly, contracts focused solely on personal property exclude the critical element of a monetary obligation, and financial records of accounts payable pertain to a different category of financial documentation not directly tied to the physical goods or the promise of payment integral to the definition of chattel paper.