What three actions must occur for a security interest to attach?

A security interest must adhere to specific requirements to attach, essentially creating enforceable rights for the secured party over the collateral. The correct answer highlights three critical elements necessary for this attachment to occur.

First, the secured party must give value. This means that the secured party has provided consideration, which could be money, goods, or services in exchange for the security interest in the collateral.

Second, the debtor must have rights in the collateral. This ensures that the debtor has some legal claim or ownership over the collateral being used to secure the obligation.

Third, there must be an authenticated security agreement. An authenticated security agreement is one that is signed by the debtor and adequately describes the collateral, thereby signaling the debtor's consent to the arrangement. This written agreement is crucial because it provides proof of the security interest, ensuring clarity and enforceability in the event of a dispute.

The combination of these three actions—value given, rights of the debtor in the collateral, and a signed security agreement—results in a legally enforceable security interest, which is essential in secured transactions under the Uniform Commercial Code (UCC). Without any one of these elements, the attachment of the security interest cannot occur effectively.