Creation of an Article 9 Security Agreement (Attachment)

Question 1

Writing required?

Answer 1

Unless the collateral is in the possession or control of the secured party pursuant to an agreement, a written or electronically stored security agreement is required.

Question 2

Form of Security Agreement

Answer 2

A record (written or electronic)

1. Intent to create a security interest
2. Authenticated (signed or marked electronically by Debtor)
3. Description to “reasonably identify” collateral

*No magic words are necessary to show intent

Question 3

Attachment

Answer 3

A security interest is not enforceable unless it has attached. 3 things must happen in order for the security interest to attach:

1. The parties must have a written agreement to attach the security: (i.e., security agreement)
   a. Intent
   b. Signed by debtor
   c. Reasonably identifies collateral
2. Value must be given to the secured party, and
3. The debtor must have rights in the collateral.

Question 4

After Acquired Property Clause

Answer 4

A secured party will sometimes obtain a security interest in a debtor’s present property AND future property. This IS permissible. As soon as the debtor acquires an interest in the property, the security interest attaches.

Clause Not effective for:

1. Commercial tort claims OR
2. Consumer good unless debtor aquires righs in them w/in 10 days after secured party give value
   * Note: Proceeds automatically attach

Ex: SI exists in Debtor’s car. Debtor trades car for truck. SI is now in truck because truck was proceed of car.