What are the core elements of a valid security agreement governing collateral?

• A. A grant of a security interest in described collateral, authenticated by the debtor, with a schedule of collateral, and an authorization to file and perfect on behalf of the secured party.
• B. A simple promise to pay with no security interest.
• C. A lease agreement describing the collateral.
• D. A deed of trust filed in the county recorder's office.

Answer: (A)

A valid security agreement that governs collateral must create a security interest in identified assets and be properly authenticated and described, with a clear path to perfection. Specifically, it must grant a security interest in the collateral, be signed or otherwise authenticated by the debtor, describe the collateral (often with a schedule or description that identifies the assets), and authorize the secured party to file the necessary financing statement to perfect the interest. This combination ensures the secured party has a legally enforceable claim to the collateral and can achieve perfection to establish priority.

The described option fits all of these requirements: it grants the security interest in the collateral, is authenticated by the debtor, includes a schedule identifying the collateral, and authorizes the secured party to file and perfect on their behalf. The other choices fall short because a simple promise to pay lacks a security interest; a lease describes occupancy or use rather than ownership of collateral secured by the debtor; and a deed of trust filed with a county recorder deals with real property, not a UCC security interest in personal property collateral.