A security agreement need not be in writing if the collateral is transferred to the secured party.

Question

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According to the Uniform Commercial Code (UCC), a security agreement does not need to be in writing if the collateral is transferred to the secured party. This is known as "perfection by possession." However, it is still recommended to have a written security agreement to clearly outline the terms and conditions of the agreement.

A Security Agreement Need Not Be in Writing If the Collateral