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Uniform Law

U.C.C. § 9-203 — Attachment and Enforceability of Security Interest; Proceeds; Supporting Obligations; Formal Requisites

Editorial summary. Section 9-203 states the three requirements for attachment of a security interest: (1) value has been given; (2) the debtor has rights in the collateral or the power to transfer rights to the secured party; and (3) either the debtor has authenticated a security agreement providing a description of the collateral, or the collateral is in the possession of, or under the control of, the secured party pursuant to a security agreement.

Citation: U.C.C. § 9-203 (Am. L. Inst. & Unif. L. Comm'n 1998)Jurisdiction: United StatesEffective: 2001-07-01

Text

Governing Rule

Uniform Act text.

Editorial note. Attachment occurs, and the security interest becomes enforceable against the debtor and third parties, when all three § 9-203(b) requirements are met. The security agreement authenticated by the debtor is the ordinary formal requirement, though possession or control may substitute for tangible or controllable collateral.

Uniform Act text.

Editorial note. Section 9-203 is the Statute of Frauds for Article 9. Without an authenticated security agreement or possession/control, no enforceable security interest arises.

Uniform Act text.

Editorial note. Section 9-203 is heavily litigated in bankruptcy, particularly on the sufficiency of the collateral description and on the authentication requirement in electronic transactions.

Uniform Act text.

Editorial note. See U.C.C. §§ 9-102 (definitions of 'authenticate' and 'security agreement'); 9-108 (sufficiency of description); 9-308 (perfection generally); Restatement (Third) of Property: Mortgages (Am. L. Inst. 1997).

Uniform Act text.

Editorial note. Every secured-lending transaction must satisfy § 9-203 to create an enforceable security interest. Documentation errors at attachment are ordinarily unfixable ex post.

Revision history

  • 1998-07-25 — Revised Article 9 promulgated.

Related Publications

Editorial articles from Real Law Society Press that discuss this authority.

Canonical source: https://www.law.cornell.edu/ucc/9/9-203
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