Attachment

Question 1

Consequences of Attachment

Answer 1

Once security interest has attached, secured party has the enforcement rights under Art. 9.

Question 2

When does attachment occur?

Answer 2

Security interest attaches when:

+ secured party gives value;

+ Debtor has rights in the collateral; AND

+ Debtor has authenticated a security agreement that sufficiently describes the collateral.

Description must reasonably identify what is described, including the UCC type (except for a transaction with a consumer for consumer goods). A SUPER-generic description is insufficient.

Question 3

When does attachment occur with After-Acquired Collateral

Answer 3

Security interest attaches to after-acquired collateral if the agreement contains an EXPRESS after-acquired collateral clause.

EXCEPTIONS:

+ an interest in inventory or accounts receivable automatically creates SI in after-acquired collateral.

+ a security agreement can’t cover after-acquired consumer goods unless Debtor acquires rights in the good within 10 days of the SP giving value.

Question 4

Future Advances

Answer 4

Security agreement can provide that the collateral secured future advances (e.g., revolving-credit agreement)

Question 5

Attachment of proceeds

Answer 5

Security interest AUTOMATICALLY extends to identifiable proceeds of the collateral.