Attachment

Question 1

Requirements for Attachment

Answer 1

There are three requirements for attachment to occur:

1. There must be a security agreement;
2. Both the debtor and the creditor must give value; and
3. The debtor must have rights in the collateral.

Question 2

In what three ways can the security agreement requirement be satisfied?

Answer 2

The security agreement requriement can be satisfied in three ways:

1. A written security agreement;
2. A pledge, which is when the secured creditor takes possession of the collateral;
3. Control of the collateral.

Question 3

Requirements for a Written Security Agreement

Answer 3

A written security agreement must satisfy three requirements for attachment to occur:

1. The agreement must be a record that shows an intent to create a security interest;
2. The record must be authenticated by the debtor, which generally means it must be signed with the present intent to authenticate;
3. The record must reasonably identify the collateral.

⇒ Note that while normal vocabulary and Article 9 categories meet the “reasonably identify” requirement. Supergeneric descriptions, such as “all the debtor’s assets,” do not.

Question 4

Requirements for “Given Value”

Answer 4

Nearly any consideration, including past consideration, will do. Note that the debtor effectively gives value automatically by promising to repay the loan.

Question 5

Requirements of “Debtor must have rights in the collateral”

Answer 5

The debtor must have property rights in the collateral. Essentially, the debtor can’s grant a contingent property interest in property that the debtor doesn’t have rights in.

Question 6

When does a security interest in after-acquired property attach?

Answer 6

A security interest in after-acquired property attaches when the debtor takes possession of the after-aquired property.