A secured transaction is created when a buyer or borrower (debtor) grants a seller or lender (creditor or secured party) a security interest in personal property (collateral). A security interest allows a creditor to repossess and sell the collateral if a debtor fails to pay a secured debt.
A secured transaction involves a sale on credit or lending money where a creditor is unwilling to accept the promise of a debtor to pay an obligation without some sort of collateral. The creditor requires the debtor to secure the obligation with collateral so that if the debtor does not pay as promised, the creditor can take the collateral, sell it, and apply the proceeds against the unpaid obligation of the debtor. A security interest is an interest in personal property or fixtures that secures payment or performance of an obligation. The property that is subject to the security interest is called the collateral. The party holding the security interest is called the secured party.
A North Carolina Security Agreement in Accounts and Contract Rights refers to a legal contract that is established to secure the repayment of a debt or obligation using a borrower's accounts and contract rights as collateral. This agreement is commonly utilized in commercial loans and financing transactions. A security agreement grants the lender a security interest in the borrower's accounts receivable, which represent funds owed to the borrower by its customers, and the borrower's contract rights, which refer to the rights and obligations derived from contractual agreements between the borrower and its customers. By creating a security interest in these assets, the lender can have a claim against them in the event of default by the borrower. The security agreement generally outlines the rights and responsibilities of both parties and establishes the procedures for enforcing the security interest. In North Carolina, there are different types of security agreements that can be established depending on the nature of the underlying transaction. Some notable variations include: 1. General Security Agreement: This type of agreement grants the lender a security interest in all present and future accounts and contract rights of the borrower. It offers a broad coverage of all assets owned by the borrower that fall under the accounts and contract rights category. 2. Specific Security Agreement: Unlike the general security agreement, a specific security agreement targets particular accounts and contract rights outlined in the agreement. This type of agreement is often used when only a specific subset of accounts and contract rights are considered essential for securing the debt. 3. Floating Lien Agreement: This type of agreement allows the borrower to continue conducting business and generating new accounts and contract rights during the borrowing period while still providing collateral for the lender. The lender has a security interest in the borrower's fluctuating accounts and contract rights, providing a flexible approach to securing the debt. 4. Pledge Agreement: While not strictly a security agreement in accounts and contract rights, a pledge agreement involves the borrower transferring possession of the accounts and contract rights to the lender as collateral. The lender holds the assets until the debt is repaid, upon which the ownership is returned to the borrower. In summary, a North Carolina Security Agreement in Accounts and Contract Rights provides a mechanism for securing debt by granting a lender a security interest in a borrower's accounts receivable and contract rights. Various types of agreements can be established based on the specific needs and circumstances of the parties involved, such as general security agreements, specific security agreements, floating lien agreements, and pledge agreements.A North Carolina Security Agreement in Accounts and Contract Rights refers to a legal contract that is established to secure the repayment of a debt or obligation using a borrower's accounts and contract rights as collateral. This agreement is commonly utilized in commercial loans and financing transactions. A security agreement grants the lender a security interest in the borrower's accounts receivable, which represent funds owed to the borrower by its customers, and the borrower's contract rights, which refer to the rights and obligations derived from contractual agreements between the borrower and its customers. By creating a security interest in these assets, the lender can have a claim against them in the event of default by the borrower. The security agreement generally outlines the rights and responsibilities of both parties and establishes the procedures for enforcing the security interest. In North Carolina, there are different types of security agreements that can be established depending on the nature of the underlying transaction. Some notable variations include: 1. General Security Agreement: This type of agreement grants the lender a security interest in all present and future accounts and contract rights of the borrower. It offers a broad coverage of all assets owned by the borrower that fall under the accounts and contract rights category. 2. Specific Security Agreement: Unlike the general security agreement, a specific security agreement targets particular accounts and contract rights outlined in the agreement. This type of agreement is often used when only a specific subset of accounts and contract rights are considered essential for securing the debt. 3. Floating Lien Agreement: This type of agreement allows the borrower to continue conducting business and generating new accounts and contract rights during the borrowing period while still providing collateral for the lender. The lender has a security interest in the borrower's fluctuating accounts and contract rights, providing a flexible approach to securing the debt. 4. Pledge Agreement: While not strictly a security agreement in accounts and contract rights, a pledge agreement involves the borrower transferring possession of the accounts and contract rights to the lender as collateral. The lender holds the assets until the debt is repaid, upon which the ownership is returned to the borrower. In summary, a North Carolina Security Agreement in Accounts and Contract Rights provides a mechanism for securing debt by granting a lender a security interest in a borrower's accounts receivable and contract rights. Various types of agreements can be established based on the specific needs and circumstances of the parties involved, such as general security agreements, specific security agreements, floating lien agreements, and pledge agreements.
