Attachment of SI Flashcards
When is a SI enforceable against the debtor with respect to collateral?
Once it has attached
What is required for there to be an “attachment”?
1) value given by the secured party
2) the debtor has rights in the collateral, and
3) the debtor has authenticated a security agreement that describes the collateral, or the secured party has possession or control of the collateral
How is “value given” for the first element of attachment?
- consideration sufficent to form a contract
- extending credit
- accepting delivery under a preexisting contract or
- satisfaction of a pre-existing claim
What is required to be in a security agreement?
1) be in a record
2) contain a description of the collateral
3) be authenticated by the debtor
satisfy the satute of frauds
RAD
When is a description insufficent?
when it is super-generic such as “all debtors assets”
“all debtors equipment” would be valid
Can possession or control of the collateral by the secured party satisfy the SOF?
YES
When does a SI attach to identifiable proceeds?
automatically
What is a PMSI
Purchase Money security interest
When do PMSI exist?
1) a secured party gave value to the debtor and the debtor used the value to incur an obligation that enable the debtor to acquire goods
OR
2) a secured party sold goods to the debtor, and the debtor incurred an obligation to pay the secured party all or part of the purchase price
What is accession
goods that are physically untied with other goods such that the indentity of the good is not lost
Is SI lost due to accession?
no, SI can also be created into collateral that is an accession
What are commingled goods?
good that are physically united with other goods such that their indentity is lost in a product or mass
Can an existing SI in collateral that subsequently becomes commingled be transferred?
Yes, may be transfereed to the resulting product or mass
