Security Agreement - Short Form
Overview of this form
The Security Agreement - Short Form is a legal document executed between a buyer and a seller to secure the payment of a seller note. It grants the seller a security interest in the specified personal property listed in an attached exhibit, ensuring that obligations under the seller note are met. This agreement differs from other security agreements by its concise format, catering to straightforward transactions while still providing essential protections for both parties involved.
Form components explained
- Liability Secured: Details the financial amount of the Seller Note and terms of payment.
- Granting Clause: Establishes the security interest in the personal property listed by the buyer.
- Warranties of Title: Affirms that the buyer legally owns the collateral and it is free of encumbrances.
- Insurance: Requires the buyer to maintain insurance on the collateral with the seller named as loss payee.
- Event of Default: Defines what constitutes a default and the seller's rights upon such occurrence.
When to use this form
This form is typically used when a seller requires security for a loan placed against the buyer, especially when the buyer takes out a promissory note. It is applicable in transactions involving significant personal property, where the seller desires reassurance regarding repayment and the security of their interests.
Who should use this form
- Buyers who are obtaining financing through seller notes and need to provide security for their obligations.
- Sellers who require collateral to ensure payment for loans secured through promissory notes.
- Individuals or businesses engaging in sales agreements involving significant assets.
Instructions for completing this form
- Identify the parties involved by entering the names of the buyer and seller.
- Specify the date and the financial amount of the seller note.
- List all personal property that serves as collateral in Exhibit A.
- Include any necessary warranties, like proof of ownership and lack of encumbrances.
- Have both parties sign the agreement to formalize it.
Does this form need to be notarized?
To make this form legally binding, it must be notarized. Our online notarization service, powered by Notarize, lets you verify and sign documents remotely through an encrypted video session.
Mistakes to watch out for
- Failing to attach Exhibit A, which lists the personal property being secured.
- Not accurately stating the financial terms of the seller note.
- Omitting signatures or dates, making the agreement unenforceable.
- Neglecting to update the agreement if additional loans or changes occur.
Advantages of online completion
- Convenience of downloading and filling out the form at any time.
- Editability allows users to tailor the agreement to their specific needs.
- Access to reliable templates drafted by licensed attorneys, ensuring legal validity.
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FAQ
A Specific Security Agreement (formerly known as Chattel Mortgage) is an equipment financing option that allows businesses to own their equipment upon purchase. BOQ Equipment Finance Limited secures the loan by registering a charge over the goods.
Debtor's rights in collateral. In such cases, the business will sign a conditional sales contract, which is also considered a security agreement, and which, under UCC sales rules, will give the business the necessary rights in the purchased items to use them as collateral.
The trademark security agreement filed with the USPTO must specifically identify the trademarks, which is typically accomplished by attaching a schedule which lists the mark, the jurisdiction, registration number, registration date, and record owner.
By Practical Law Finance. This is a standard form of pledge agreement to be used in connection with a syndicated loan agreement. It is intended to create a security interest over equity interests and promissory notes owned by the grantors. The grantors are usually the borrower, its parent and its subsidiaries.
A General Security Agreement (GSA) is a contract signed between two parties a creditor (lender) and a debtor (borrower) to secure personal loans, commercial loans, and other obligations owed to a lender. General security agreements list all the assets pledged as collateral.
Pledge is a security interest in a chattel or in an in- tangible represented by an indispensable instrument, the interest being created by a bailment for the pur- pose of securing the payment of a debt or the perfor- mance of some other duty.
Security agreements and financing statements are often confused with one another. The primary difference is that the financing statement largely serves as notice that a creditor possesses security interest in the debtor's assets or property. The financing statement is not a contract.
An agreement typically used to create a security interest in equity interests (including capital stock, LLC interests, and partnership interests) and promissory notes. Under the UCC, a pledge agreement is a security agreement.
A security agreement is a document that provides a lender a security interest in a specified asset or property that is pledged as collateral. Security agreements often contain covenants that outline provisions for the advancement of funds, a repayment schedule, or insurance requirements.
