Creation of a Security Interest - Attachment of a Security Interst

Question 1

Attachment

Answer 1

A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral

Question 2

For a security interest to attach:

Answer 2

1. The creditor must provide some value to the debtor
   - Done by giving any consideration that could support the formation of a simple contract; extending credit, lending money, obligating themselves to do something int he future
2. The debtor must have rights in the collateral or the power to transfer rights in the collateral to a third party, and
   - Debtor need not hold title to the collateral; ex. valuable lease on equipment or true owner’s permission
3. The debtor must authenticate (sign or electronic equivalent) a written agreement that grants the creditor rights in specific collateral and reasonably describes the collateral
   - Security agreement must reasonably describe the collateral with sufficient particularity
   - Sufficiently particular if the agreement refers to a subgroup of the debtor’s property by the term the UCC would use to describe that class of collateral (ex. all equipment)
   - Identification “by any other method” is sufficient, “if the identity of the collateral is objectively determinable.”
   - A description of personal property is sufficient, whether or not it is specific, if it reasonably identifies what is described
   - Supergeneric description is not sufficient (ex. all the debtor’s personal property)