Georgia § 11-9-203 - Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.

§ 11-9-203. Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.

Attachment. A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment. Enforceability. Except as otherwise provided in subsections (c) through (i) of this Code section, a security interest is enforceable against the debtor and third parties with respect to the collateral only if: Value has been given; The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and One of the following conditions is met: The debtor has authenticated 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; The collateral is not a certificated security and is in the possession of the secured party under Code Section 11-9-313 pursuant to the debtor's security agreement; The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under Code Section 11-8-301 pursuant to the debtor's security agreement; or The collateral is deposit accounts, electronic chattel paper, investment property, letter of credit rights, or electronic documents, and the secured party has control under Code Section 11-7-106, 11-9-104, 11-9-105, 11-9-106, or 11-9-107 pursuant to the debtor's security agreement. Other provisions of this title. Subsection (b) of this Code section is subject to Code Section 11-4-210 on the security interest of a collecting bank, Code Section 11-5-118 on the security interest of a letter of credit issuer or nominated person, Code Section 11-9-110 on a security interest arising under Article 2 or 2A of this title, and Code Section 11-9-206 on security interests in investment property. When person becomes bound by another person's security agreement. A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this article or by contract: The security agreement becomes effective to create a security interest in the person's property; or 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. Effect of new debtor becoming bound. If a new debtor becomes bound as debtor by a security agreement entered into by another person: The agreement satisfies paragraph (3) of subsection (b) of this Code section with respect to existing or after acquired property of the new debtor to the extent the property is described in the agreement; and Another agreement is not necessary to make a security interest in the property enforceable. Proceeds and supporting obligations. The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by Code Section 11-9-315 and is also attachment of a security interest in a supporting obligation for the collateral. Lien securing right to payment. 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. Security entitlement carried in securities account. 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. Commodity contracts carried in commodity account. The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contract carried in the commodity account. (Code 1981, § 11-9-203 , enacted by Ga. L. 2001, p. 362, § 1; Ga. L. 2010, p. 481, § 2-20/HB 451.) The 2010 amendment, effective May 27, 2010, in subparagraph (b)(3)(D), substituted "letter of credit rights, or electronic documents," for "or letter of credit rights," and inserted "11-7-106,". See the Editor's notes for applicability. Editor's notes. - Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010. Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010. Law reviews. - For article on the 1963 amendment to Georgia Uniform Commercial Code, see 14 Mercer L. Rev. 378 (1963). For article discussing the Uniform Commercial Code provisions regarding sufficiency of the description of collateral in security agreements and financing statements, see 28 Mercer L. Rev. 611 (1977). For article discussing the resolution of conflicting claims to goods between an unsecured seller of goods and a creditor of a buyer claiming under an after-acquired property clause, see 28 Mercer L. Rev. 625 (1977).