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

Section 9--203. Attachment and Enforceability of Security Interest;\n Proceeds; Supporting Obligations; Formal Requisites.\n (a) Attachment. A security interest attaches to collateral when it\nbecomes enforceable against the debtor with respect to the collateral,\nunless an agreement expressly postpones the time of attachment.\n * (b) Enforceability. Except as otherwise provided in subsections (c)\nthrough (i), a security interest is enforceable against the debtor and\nthird parties with respect to the collateral only if:\n (1) value has been given;\n (2) the debtor has rights in the collateral or the power to\n transfer rights in the collateral to a secured party; and\n (3) one of the following conditions is met:\n (A) the debtor has authenticated a security agreement that\n provides a description of the collateral and, if the\n security interest covers timber to be cut, a description\n of the land concerned;\n (B) the collateral is not a certificated security and is in\n the possession of the secured party under Section 9--313\n pursuant to the debtor's security agreement;\n (C) the collateral is a certificated security in registered\n form and the security certificate has been delivered to\n the secured party under Section 8--301 pursuant to the\n debtor's security agreement; or\n (D) the collateral is deposit accounts, electronic chattel\n paper, investment property, letter-of-credit rights, or\n electronic documents, and the secured party has control\n under Section 7--106, 9--104, 9--105, 9--106, or 9--107\n pursuant to the debtor's security agreement.\n * NB Effective until June 3, 2026\n * (b) Enforceability. Except as otherwise provided in\n subsections (c) through (i), a security interest is\n enforceable against the debtor and third parties with respect\n to the collateral only if:\n (1) value has been given;\n (2) the debtor has rights in the collateral or the power to\n transfer rights in the collateral to a secured party; and\n (3) one of the following conditions is met:\n (A) the debtor has signed a security agreement that provides\n a description of the collateral and, if the security\n interest covers timber to be cut, a description of the\n land concerned;\n (B) the collateral is not a certificated security and is in\n the possession of the secured party under Section 9--313\n pursuant to the debtor's security agreement;\n (C) the collateral is a certificated security in registered\n form and the security certificate has been delivered to\n the secured party under Section 8--301 pursuant to the\n debtor's security agreement;\n (D) the collateral is controllable accounts, controllable\n electronic records, controllable payment intangibles,\n deposit accounts, electronic documents, electronic money,\n investment property or letter-of-credit rights, and the\n secured party has control under Section 7--106, 9--104,\n 9--105, 9--105A, 9--106, 9--107, or 9--107A pursuant to\n the debtor's security agreement; or\n (E) the collateral is chattel paper and the secured party has\n possession and control under Section 9--314A pursuant to\n the debtor's security agreement.\n * NB Effective June 3, 2026\n (c) Other UCC provisions. Subsection (b) is subject to Section 4--210\non the security interest of a collecting bank, Section 5--118 on the\nsecurity interest of a letter-of-credit issuer or nominated person,\nSection 9--110 on a security interest arising under Article 2 or 2-A,\nand Section 9--206 on security interests in investment property.\n (d) When a person becomes bound by another person's security\nagreement. A person becomes bound as debtor by a security agreement\nentered into by another person if, by operation of law other than this\narticle or by contract:\n (1) the security agreement becomes effective to create a security\n interest in the person's property; or\n (2) the person becomes generally obligated for the obligations of\n the other person, including the obligation secured under the\n security agreement, and acquires or succeeds to all or\n substantially all of the assets of the other person.\n (e) Effect of new debtor becoming bound. If a new debtor becomes bound\nas debtor by a security agreement entered into by another person:\n (1) the agreement satisfies subsection (b)(3) with respect to\n existing or after-acquired property of the new debtor to the\n extent the property is described in the agreement; and\n (2) another agreement is not necessary to make a security\n interest in the property enforceable.\n (f) Proceeds and supporting obligations. The attachment of a security\ninterest in collateral gives the secured party the rights to proceeds\nprovided by Section 9--315 and is also attachment of a security interest\nin a supporting obligation for the collateral.\n (g) Lien securing right to payment. The attachment of a security\ninterest in a right to payment or performance secured by a security\ninterest or other lien on personal or real property is also attachment\nof a security interest in the security interest, mortgage, or other\nlien.\n (h) Security entitlement carried in securities account. The attachment\nof a security interest in a securities account is also attachment of a\nsecurity interest in the security entitlements carried in the securities\naccount.\n (i) Commodity contracts carried in commodity account. The attachment\nof a security interest in a commodity account is also attachment of a\nsecurity interest in the commodity contracts carried in the commodity\naccount.\n