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
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
3
Q
Sufficient description in security agreement
A
The description of collateral in security agreement is sufficient if it “reasonably identifies what is described”
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
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)