Creation of Security Interests

Question 1

Requirements of Attachment

Answer 1

Value must be given by the creditor, debtor must have rights in the collateral, AND debtor must have one of these (SA, possession, or control)

Question 2

Requirements for SA to be effective

Answer 2

collateral description (reasonably identified or 9-102 category), authentication, record, and present intention to grant SI

Question 3

Composite document rule

Answer 3

you can combine multiple documents for a SA to create a valid SI

Question 4

Can SA description of collateral be omnibus?

Answer 4

NO

Question 5

When is after-acquired property automatically included in the SA?

Answer 5

things that constantly turn over - inventory and accounts. Not things like equipment.

Question 6

Does a SI attach to proceeds automatically?

Answer 6

Yes so long as they are identifiable

Question 7

Types of proceeds you automatcially get SI attachment in

Answer 7

proceeds, profits, rents, and offspring. You have to bargain for substitutions, additions, replacements.