Basic Uniform Commercial Code

Security Agreement

An authenticated security agreement is a writing (or electronic record) that provides a description of the collateral, the debtor's intent to grant a security interest, and the debtor's signature.

Authentication

Authentication means signing something, including electronic signatures. UCC § 9-102(a)(7).

The description must be sufficient to describe the particular item, as defined in UCC § 9-108.

In a majority of states, inventory, accounts receivable, chattel papers, etc. are assumed to include future inventory, etc. However, this should not be relied upon.

A financing statement can also be a security agreement.

Financing Statement

A financing statement is a record that is publicly filed to put other people on notice of a security interest in the collateral.

A financing statement does not have to be very specific.

A financing statement does not have to be signed.

UCC § 9-108(c) says the very generic from the financing statement will not work.

A security agreement can be oral. An authenticated security agreement cannot.

A non-authenticated security agreement cannot satisfy UCC § 9-203(b)(3)(A). It can still show intent to attach if one of UCC § 9-203(b)(3)(B)–(D) are met.

Sometimes people may disguise a security agreement as a "lease," but this is ineffective if it works as a security agreement. (Like if the property can be bought for $10 after paying the value plus interest.) UCC § 1-203.