Attachment

Question 1

3 Requirements for Attachment

Answer 1

1. A security agreement
2. Value has been given
3. Debtor has rights in the collateral

Question 2

A security agreement

Answer 2

A written or electronic security agreement is required for attachment.

*Unless collateral is in the possession of the secured party pursuant to an agreement

Question 3

Form of Security agreement

Answer 3

1. Must be evidenced by a record (written or electronic) and shows intent to create a security interest
2. Agreement must be ‘authenticated’ by debtor, usually by signature of some sort.
3. Agreement must contain description a of collateral

Question 4

Value

Answer 4

Very liberal. Any consideration sufficient to support a simple contract is enough. Even past consideration counts. Debtor’s value is promise to pay, Secured party’s value is in the collateral debtor took.

Question 5

Debtor’s Rights in Collateral

Answer 5

Debtor must have rights in collateral, because debtor can’t grant a secured party a property interest in property he doesn’t own.

Question 6

After Acquired Property Clause (AAPC)

Answer 6

a provision included in legal contracts ensuring that subsequent acquisitions of assets will be included in the debtor’s liability to the lender.

Note: Security interest doesn’t attach in AAPC to consumer goods unless debtor acquires them w/i 10 days after secured party gives value.

2nd Note: AAPC ineffective in commercial tort claims

Question 7

Property secured includes proceeds

Answer 7

Proceeds: includes whatever is received upon the sale, exchange, collection, or other disposition of collateral.