Creation of an Enforceable Security Interest: Attachment

Question 1

Def: Attachment

Answer 1

attachment means that the security is enforceable. To ask “Is the security interest enforceable?” is to ask “has it attached?”

Question 2

Three Requirements for attachment:

Answer 2

VCR!!! VCR !!!

V- VALUE must be given by the creditor
C- a CONTRACT or written record, called the “security agreement” must evidence the secured transaction UNLESS the secured party has taken possession of the collateral.
R- RIGHTS in the collateral: debtor must have rights in the collateral

Question 3

Contract/Record Requirements

Answer 3

• CONTRACT or written record, called the “security agreement” must evidence the secured transaction UNLESS the secured party has taken possession of the collateral
• It MUST: (1) be AUTHENTICATED by debtor (signed or electronically marked) AND (2) reasonably identify the collateral

Question 4

Are after-acquired collateral clauses enforceable?

Answer 4

• after-acquired collateral clause (aka the floating lint) is enforceable!! (aka it has attached so long as it meets VCR requirements)