ExpertHard1 markMultiple Choice
CPA · Question 32 · Area II: Business Law
Which of the following is a requirement for a security interest to 'attach' under UCC Article 9?
Which of the following is a requirement for a security interest to 'attach' under UCC Article 9?
Answer options:
A.
Filing a financing statement.
B.
The debtor must have title to the collateral.
C.
The debtor must have rights in the collateral.
D.
The creditor must take possession of the collateral.
How to approach this question
Recall the 3 requirements for attachment: 1) Agreement (or possession), 2) Value given, 3) Debtor has rights.
Full Answer
C.The debtor must have rights in the collateral.✓ Correct
C
Attachment requires three elements: (1) Value must be given by the creditor, (2) The debtor must have rights in the collateral, and (3) There must be an authenticated security agreement (or possession/control). Filing is for perfection, not attachment.
Common mistakes
Confusing Attachment (creation of right against debtor) with Perfection (protection against third parties).
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