Attachment

Question 1

Attachment Is

Answer 1

A creation of a legally enforceable security interest against debtor

Question 2

Elements of Attachment

Answer 2

Secured party gives value AND Debtor has rights in collateral AND Debtor authenticates OR gives possession of collateral.

Elements may occur in any sequence over any period of time.

Question 3

Four Attachment Issues

Answer 3

Did debtor signed security agreement? Does Security Agreement Correctly Identify Collateral? Does Security Agreement extend to After-Acquired Property? Did Debtor Give Possession of Collateral Under and Oral Agreement?

Question 4

If Debtor Did not Sign Security Agreement

Answer 4

Security Agreement must be: written, authenticated, grant or create security interest, identify collateral.

Question 5

Does Security Agreement Correctly Identify Collateral?

Answer 5

Art. 9 permits collateral to be described by “item” or type”

Question 6

Identifying Collateral by “Item”

Answer 6

Description of the collateral in non Art. 9 terms.

Sufficient only if it permits collateral to be identified.

Question 7

Identifying Collateral by “Type”

Answer 7

Description must fall into Art. 9 descriptions.

Farm Products, Inventory, Consumer Goods, Equipment

Exception: description consumer goods, in sufficient in written security agreement given in consumer transaction.

Question 8

Does Security Agreement Extend to After Acquired Property?

Answer 8

Art. 9 permits after acquired clauses, security interest automatically attaches.

EXCEPTION for consumer goods acquired more than 10 days after secured party gives value.

Question 9

Did Debtor Give Secured Party Possession of Collateral under Oral Agreement?

Answer 9

Debtor must consent to secured party’s possession, pledge ceases to be effective if secured party loses possession of collateral.

Question 10

Pledge

Answer 10

Only way security interest can attach under Art. 9 absent a written security agreement.