Secured Transactions- Attachment

Attachment Elements

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Terms in this set (7)

Attachment Elements

1. Written Security Agreement or Creditor must have taken possession of collateral
2. Creditor Must Have Given Value
3. Debtor Must Have Rights in the Collateral

Form of Security Agreement

1. Intent
2. Authentication
3. Description that reasonably id's

Scope of Security Interest (4)

1. Future Advance
2. After Acquired Property
3. Generally INcludes Proceeds
4. Automatically attaches to supporting obgliation (like a sureity)

General Rules for After Acquired Property

without After Acquired Property Clause, security interest only attaches to collateral in debtors possession

Exceptions to Limits on AQP

1. Court will imply if collateral is type that rapidly depletes and replinishes
2. Generally doesn't work for consumer goods acquired 10 days out
3. Ineffective as to comercial tort claims

Security Agreement generally gives rise to rights in proceeds from sale of collateral

What to Do you Thomas if Cash Proceeds a Co-Mingled with Non Cash Proceeds

use lowest intermediate balance test
look at the balance from the time the secured interest is deposited and the lowest balance is the identifiable proceeds