A Security Interest Can Be Created Through An Oral Agreement If

In this chapter, we take into account the security interests in personal property and warranty. In the next chapter, we look at mortgages and non-consensual instructions. Chattel is another word for goods. Chattel paper is a record (paper or electronic) that demonstrates both “a financial obligation and an interest in security, either for certain goods or for a lease for certain goods”. Single Commercial Code, § 9-102, paragraph 11. Paper is a precious asset and can be used itself as collateral. For example, the Creditor Car Company David Debtor sells a car and takes back a note and a guarantee contract (this is a purchase money guarantee contract; the ticket and the guarantee contract are cat paper). The document is not yet a certainty; it`s the automobile. Now creditor Car Company buys a new hydraulic lift from Lift Co. and grants Lift Co.