§ 41-09-13 — (9-203) Attachment and enforceability of security interest - Proceeds - Supporting obligations - Formal requisites

North Dakota § 41-09-13

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-09: Secured Transactions

Text

Supporting obligations - Formal requisites.
1. A security interest attaches to collateral when the security interest becomes
enforceable against the debtor with respect to the collateral, unless an agreement
expressly postpones the time of attachment.
2. Except as otherwise provided in subsections 3 through 9, a security interest is
enforceable against the debtor and third parties with respect to the collateral only if:
a. Value has been given;
b. The debtor has rights in the collateral or the power to transfer rights in the
collateral to a secured party; and
c. One of the following conditions is met:
(1) The debtor has signed a security agreement that provides a description of
the collateral and, if the security interest covers timber to be cut, a
description of the land concerned;
(2) The collateral is not a certificated security and is in the possession of the
secured party under section 41-09-33 pursuant to the debtor's security
agreement;
(3) The collateral is a certificated security in registered form and the security
certificate has been delivered to the secured party under section 41-08-27
pursuant to the debtor's security agreement;
(4) The collateral is controllable accounts, controllable electronic records,
controllable payment intangibles, deposit accounts, electronic documents,
electronic money, investment property, letter-of-credit rights, or
uncertificated certificates of deposit, and the secured party has control
under section 41-07-06, 41-09-04, 41-09-05, 41-09-05.1, 41-09-06,
41-09-07, or 41-09-07.1 pursuant to the debtor's security agreement; or
(5) The collateral is chattel paper and the secured party has possession and
control under section 41-09-34.1 pursuant to the debtor's security
agreement.
3. Subsection 2 is subject to section 41-04-22 on the security interest of a collecting
bank, section 41-05-18 on the security interest of a letter-of-credit issuer or nominated
person, section 41-09-10 on a security interest arising under chapter 41-02 or 41-02.1,
and section 41-09-16 on security interests in investment property.
4. A person becomes bound as debtor by a security agreement entered into by another
person if, by operation of law other than this chapter or by contract:
a. The security agreement becomes effective to create a security interest in the
person's property; or

b. The person becomes generally obligated for the obligations of the other person,
including the obligation secured under the security agreement, and acquires or
succeeds to all or substantially all of the assets of the other person.
5. If a new debtor becomes bound as debtor by a security agreement entered into by
another person:
a. The agreement satisfies subdivision c of subsection 2 with respect to existing or
after-acquired property of the new debtor to the extent the property is described
in the agreement; and
b. Another agreement is not necessary to make a security interest in the property
enforceable.
6. The attachment of a security interest in collateral gives the secured party the rights to
proceeds provided by section 41-09-35 and is also attachment of a security interest in
a supporting obligation for the collateral.
7. Except as provided in section 47-19-41, the attachment of a security interest in a right
to payment or performance secured by a security interest or other lien on personal or
real property is also attachment of a security interest in the security interest, mortgage,
or other lien.
8. The attachment of a security interest in a securities account is also attachment of a
security interest in the security entitlements carried in the securities account.
9. The attachment of a security interest in a commodity account is also attachment of a
security interest in the commodity contracts carried in the commodity account.