Attachment Flashcards
What is required for a security interest to attach to collateral?
- Value given by secured party
- Debtor has rights in collateral
- Debtor has authenticated a security agreement that describes it, OR secured party has possession or control of collateral
What is sufficient value given by a secured party?
Consideration sufficient to form a contract, extend credit, etc.
Can future advances be secured by collateral?
Yes
What are a debtor’s rights in collateral?
SI attaches only to the rights the debtor has in the collateral
What are a debtor’s rights in a consignment?
If the consignor retains title to the consigned goods, the consignee does not have rights in them
What are the ways for a security agreement to satisfy Article 9’s statute of frauds?
- Authenticated record
- Possession of colleteral
- Control of collateral
What must an authenticated security agreement contain?
- Must be in a record
- Describe the collateral
- Be authenticated by the debtor
What must a description in a security agreement contain?
It can list specific items or just identify the Article 9 type of collateral.
When is a super-generic description not valid for a security agreement?
If it is a consumer good or a commercial tort
What duties are imposed on someone in possession of collateral?
- Reasonable care
- Keep collateral identifiable
- Relinquish collateral once obligation satisfied
Can someone in possession of collateral bill reasonable expenses to a debtor?
Yes, to maintain the collateral
What kind of things can be possessed?
Consumer goods, equipment, farm products, chattel paper, tangible docs, certified securities, instruments, money
What kind of things can be controlled?
e-chattel paper, investment property, letter of credit rights, and deposit accounts
Can a security interest cover collateral subsequently acquired by the debtor?
Yes, except for consumer goods and commercial tort claims
When is an after-acquired clause effective against consumer goods?
When the debtor acquires them within 10 days after the secured party gives value
When does an SI attach to identifiable proceeds?
Automatically
Does someone with control or possession of collateral have the right to use it?
Yes
What rights does a debtor have?
Accounting and notification of when they no longer need to pay debts
When does a PMSI in goods exist?
- SP gave value enabling the debtor to buy goods, OR
2. SP sold goods to the debtor, and the debtor is boliged to pay the SP all/part of the price
When does a PMSI in software exist?
Only when the debtor acquired his interest in software in an integrated transaction, i.e. one in which they got an interest in other goods, AND when they got the interest for the principal purpose of the software in the goods
What is an accession?
An accession is a good that physically unites with other goods such that the identity is not lost
Does an accession cause a SI to be lost?
No
What are commingled goods?
Goods that are physically united such that their identity is lost
Does a commingled goods cause an SI to be lost?
Yes, but it can transfer to the product or mass of the commingled goods
