Creating an Enforceable Sec. Interest: Attachment

Question 1

What does attachment mean?

Answer 1

That the security interest is enforceable

Question 2

What are the requirements for attachment?

Answer 2

VALUE must be given by creditor

A CONTRACT (security agreement) must evidence the secured transaction UNLESS the secured party has taken possession of the collateral

The debtor must have RIGHTS in the collateral (e.g. he must own it)

Question 3

To be valid, the security agreement (also called the record) must:

Answer 3

Be authenticated by the debtor (signed)

Reasonably identify the collateral

Question 4

What is an “after-acquired collateral clause” (AKA a floating lien)? Is it enforceable?

Answer 4

A security interest in collateral yet to be be acquired (e.g. future inventory)

Yes