(810 ILCS 5/9-203)
(from Ch. 26, par. 9-203)
Attachment and enforceability of security interest; proceeds;
supporting obligations; formal requisites.
(a) Attachment. A security interest attaches to collateral when it becomes
enforceable against the debtor with respect to the collateral, unless an
expressly postpones the time of attachment.
(b) Enforceability. Except as otherwise provided in subsections (c)
through (i), a security interest is enforceable against the debtor and third
with respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the
power to transfer rights in the collateral to a secured party; and
(3) one of the following conditions is met:
(A) 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;
(B) the collateral is not a certificated security
and is in the possession of the secured party under Section 9-313 pursuant to the debtor's security agreement;
(C) the collateral is a certificated security in
registered form and the security certificate has been delivered to the secured party under Section 8-301 pursuant to the debtor's security agreement; or
(D) the collateral is deposit accounts,
electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under Section 7-106, 9-104, 9-105, 9-106, or 9-107 pursuant to the debtor's security agreement.
(c) Other UCC provisions. Subsection (b) is subject to Section 4-210 on
the security interest of a collecting bank, Section 5-118 on the security interest of a
letter-of-credit issuer or nominated person, Section 9-110 on a security interest
arising under Article 2 or 2A, and Section 9-206 on security interests in investment
(d) 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:
(1) the security agreement becomes effective to
create a security interest in the person's property; or
(2) 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.
(e) Effect of new debtor becoming bound. If a new debtor becomes
bound as debtor by a security agreement entered into by another person:
(1) the agreement satisfies subsection (b)(3) with
respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and
(2) another agreement is not necessary to make a
security interest in the property enforceable.
(f) Proceeds and supporting obligations. The attachment of a security
interest in collateral gives the secured party the rights to proceeds provided
Section 9-315 and is also attachment of a security interest in a supporting
obligation for the collateral.
(g) 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
personal or real property is also attachment of a security interest in the
interest, mortgage, or other lien.
(h) Security entitlement carried in securities account. The attachment
of a security interest in a securities account is also attachment of a security
in the security entitlements carried in the securities account.
(i) Commodity contracts carried in commodity account. The
attachment of a security interest in a commodity account is also attachment of
security interest in the commodity contracts carried in the commodity
(Source: P.A. 95-895, eff. 1-1-09.)