ATTACHMENT

Question 1

Secured Transactions

Answer 1

Article 9 of the Uniform Commercial Code (UCC) applies to transactions where a security interest is created in personal property by contract. Article 9 also applies to secured sales disguised as a lease, but not to “true leases.” The key inquiry is whether at the time the parties entered into the transaction, it was reasonably likely that the lessor would get the item back when it still had meaningful economic value.

Question 2

Attachment

Answer 2

In order to have a valid security interest in collateral (personal property), the interest must attach to the collateral. Attachment sets the secured parties rights against the debtor.

a. Security interest is not enforceable against the debtor unless it has attached to the collateral. Three requirements for attachment:
i. The secured party gives value;
ii. The debtor has rights in collateral; (ownership)
iii. The debtor has authenticated (signed) a security agreement (or C’or has possession/control), that reasonably identifies the collateral.

b. Supergeneric descriptions do not reasonably identify the collateral. Commercial tort claims and Consumer Goods cannot be described by type alone. (D’or’s equipment is sufficient)