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A security agreement is the contract that governs the relationship between the parties to a Secured Transaction (ie, the lender and the borrower). Under Article 9 of the Uniform Commercial Code (UCC), which governs secured transactions in the US, a security agreement may be oral if the secured party (lender) has possession of the collateral. A written security agreement needs a description of the collateral, must be authenticated by the borrower (ie, signed), and must use words showing an intent to create a security interest (the right to seek repayment of the loan by foreclosing on the collateral). See also Secured Transactions In The United States . |
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