Attachment Flashcards
What is attachment?
Once attachment occurs, the creditor will be a secured party and have rights against the debtor. Attachment refers to the creditors lien attaching to the collateral.
When does the security interest attach?
The secured party must give value, the debtor must have an interest in the collateral, and the debtor either authenticates a security agreement or the secured party obtains possession of the Collateral.
Does an article 9 security agreement have to satisfy the statute of frauds?
Yes.
What must be included for a security agreement to satisfy the statute of frauds?
There must be words showing a grant of a security interest, a description of the collateral that reasonably identifies it, and it is authenticated by signing or with intent, Mark, or the intent to adopt the record.
What is an after acquired property clause?
A security agreement may include an after acquired property clause, creating a security interest not only in the current Collateral, but also collateral the debtor acquires in the future. The security interest attaches as soon as the debtor acquires an interest in the collateral.
What is an exception to the after required property clause?
It cannot be used with a businesses’ tort claim or consumer goods, unless the goods were acquired within 10 days after the secured party gave value.
What is a future advance clause?
It allows the Collateral to secure any future advances (additional earnest) given by the secured party.
What are proceeds?
Pros are anything given exchange for the collateral as a result of the debtors rights in the collateral. A security interest will automatically attach to identifiable proceeds.
