Security Interest Flashcards

1
Q

Security interest created by

A

(1) a security agreement or possession of the collateral by the SP; and
(2) attachment

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2
Q

Security agreement requirements

A

(1) be in writing;
(2) be authenticated (i.e., signed) by Debtor;
(3) contain a granting clause; and
(4) contain a description of the collateral

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3
Q

Sufficient description in security agreement

A

The description of collateral in security agreement is sufficient if it “reasonably identifies what is described”

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4
Q

Possession rule

A

SP must possess the collateral with the INTENT to secure a debt

If SP has possession, the security agreement can be ORAL

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5
Q

Purchase money security interest

A

SP has a PMSI if the obligation is incurred:

  • as all or part of the price of the collateral (e.g., a direct-financing seller); or
  • for value given to enable the debtor to acquire or use the collateral, if the value is in fact so used (e.g., a bank loans Debtor money to purchase the collateral)
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