The Security Agreement

Question 1

What is a security agreement?

Answer 1

agreement that creates a security interest in certain collateral

Question 2

What are the 3 requirements of the security agreement?

Answer 2

(1) be in writing and authenticated by the debtor (usually by signing)
(2) contain a granting clause (state that it’s creating a security interest)
(3) contain a description of the collateral (needs to reasonably identify what is described)

Question 3

When is an oral security agreement enforceable?

Answer 3

When the secured party has possession of the collateral (also called a pledge)