Attachment

Question 1

Attachment Requirements

Answer 1

1) parties must have a security agreement;
2) value must be given by the secured party; AND
3) debtor must have rights in the collateral

Question 2

Form of the Security Agreement

Answer 2

i) must be evidenced by a record and show an intent to create a security interest
ii) must be authenticated by debtor
iii) must contain a description of the collateral (reasonably identify)

Question 3

After-Acquired Property

Answer 3

without an explicit after-acquired property clause in the agreement, secured party’s S.I. only reaches collateral that debtor had rights in at the time the debtor signed the sec. agreement

Question 4

After-Acquired Property - EXCEPTION

Answer 4

even when there is not an explicit after acquired property clause, courts will often imply it when the collateral is of a type that is rapidly depleted and replenished (inventory or accounts) - courts assume the parties must have meant to cover after-acquired property or the S.I. will reach nothing

Question 5

Proceeds

Answer 5

Unless otherwise agreed, a S.I. automatically gives the secured party a right to identifiable proceeds

*identifiable means that the secured creditor can prove the the proceeds can be traced back to the creditors original collateral