Attachment Flashcards
Attachment
process by which security interest is created
Requirements for attachment
elements must exist simultaneously
authenticate security agreement sufficient to describe collateral
have rights in collateral
party gives value
giving value
making the loan
rights in the collateral
debtor generally owns collateral with funds provided
authenticate security agreement sufficient to describe collateral
sign agreement
collateral description is sufficient when
reasonably identifies what is described
includes description by type
What types of collateral descriptions are deemed sufficient under UCC
inventory
equipment
accounts receivable
chattel paper
Not consumer goods if transaction is a consumer goods transaction
Supergeneric descriptions
not sufficient in a security agreement as a matter of policy
ie. all assets
consumer goods
user purchases for household, personal, or family purposes.
After Acquired Collateral
security agreements must provide interest in after acquired equipment in an after-acquired property clause otherwise it will not be implied
EXCEPT for inventory and accounts receivable
Where after-acquired collateral is implied into the security agreement
inventory
accounts receivable
After Acquired Collateral Interest in consumer goods
10 day rule
security agreement cannot provide that it covers after acquired consumer goods
unless debtor acquires rights in consumer goods within 10 days of secured party giving value
Future Advances
security agreement can provide collateral
secures future advances
proceeds of collateral
interest in collateral automatically extends to identifiable proceeds of the collateral.
includes anything received on sale or other disposition of collateral
or insurance payable because of loss or damage to collateral
If a secured parties has an interest in identifiable collateral AND proceeds
he can only receive one satisfaction
