What Is A Security Agreement Under The Ucc

However, it is not necessary to file a financing statement for a security right in a receivable that does not constitute “a substantial part of the debtor`s unpaid accounts”. This is obviously a vague standard. If you have the choice, it is best to enter a financing statement to perfect this security. However, if you receive a contract letter that awards you a single claim, it is probably not necessary to file a financing statement. The allocation of funds in the annexes is an example of a simple assignment of receivables. When setting up the car loan, you also sign a “security contract”. This security agreement gives the bank a “security” on the “guarantee” or “title of the guarantee” (the car). The security agreement gives the bank the right to go against security (car) if you are in default. .