VA Bar Secured Transactions 2 — Questions and Answers
Question 1: Under UCC Article 9, which element is NOT required for attachment of a security interest?
- Value has been given by the secured party
- The debtor has rights in the collateral
- A financing statement has been filed with the state (Correct answer)
- The debtor has authenticated a security agreement
Correct answer: A financing statement has been filed with the state
Attachment requires value given, debtor rights in collateral, and an authenticated security agreement (or possession/control) — filing a financing statement is a perfection step, not an attachment requirement.
Question 2: Which type of collateral can be perfected by the secured party taking possession under UCC Article 9?
- Deposit accounts
- Electronic chattel paper
- Certificated securities (Correct answer)
- Commercial tort claims
Correct answer: Certificated securities
Certificated securities can be perfected by the secured party taking possession (delivery) of the physical certificate under UCC Article 9.
Question 3: BigBank files a financing statement covering 'all equipment' of Debtor Corp. Six months later, Debtor Corp acquires new equipment. Is BigBank's security interest perfected as to the new equipment?
- No, because the new equipment was not listed in the original security agreement
- No, because a new financing statement must be filed for after-acquired property
- Yes, if the security agreement contains an after-acquired property clause (Correct answer)
- Yes, automatically because 'all equipment' covers future acquisitions without additional language in any document
Correct answer: Yes, if the security agreement contains an after-acquired property clause
A financing statement covering 'all equipment' perfects as to after-acquired equipment if the security agreement itself contains an after-acquired property clause authorizing that coverage.
Question 4: A purchase money security interest (PMSI) in non-inventory goods must be perfected within how many days of delivery to the debtor to obtain superpriority over a prior perfected security interest?
- 10 days
- 20 days (Correct answer)
- 30 days
- 60 days
Correct answer: 20 days
Under UCC § 9-324(a), a PMSI in non-inventory goods has superpriority if perfected within 20 days after the debtor receives delivery of the collateral.
Question 5: Lender and Borrower enter into an oral security agreement granting Lender a security interest in Borrower's valuable painting. Lender immediately takes possession of the painting. Has a security interest attached?
- No, because a security agreement must always be authenticated in writing by the debtor
- No, because artwork cannot serve as collateral under UCC Article 9
- Yes, because possession of collateral by the secured party satisfies the written agreement requirement (Correct answer)
- Yes, but only if Lender also files a financing statement within 20 days
Correct answer: Yes, because possession of collateral by the secured party satisfies the written agreement requirement
Under UCC § 9-203(b)(3)(B), when the secured party takes possession of the collateral, no authenticated written security agreement is required — possession itself substitutes for the writing.
Question 6: A financing statement listing the debtor's name incorrectly will render the filing seriously misleading — and therefore ineffective — if:
- The error appears only in the debtor's middle name
- A standard search of filing office records under the debtor's correct name would not reveal the filing (Correct answer)
- The secured party's name is spelled correctly but the debtor's surname has a one-letter typo
- The collateral description is overly broad
Correct answer: A standard search of filing office records under the debtor's correct name would not reveal the filing
Under UCC § 9-506, a financing statement with a debtor name error is seriously misleading only if a search under the correct name using the filing office's standard search logic would not disclose the filing.
Question 7: Under UCC Article 9, a security interest in which type of collateral can ONLY be perfected by 'control' — not by filing?
- Equipment used in manufacturing
- Consumer goods purchased on credit
- Deposit accounts held as original collateral (Correct answer)
- General intangibles such as patents
Correct answer: Deposit accounts held as original collateral
Under UCC § 9-312(b)(1), deposit accounts as original collateral can only be perfected by control — filing a financing statement is not a permitted method for deposit accounts.
VA Bar Secured Transactions 2
Under UCC Article 9, which element is NOT required for attachment of a security interest?