The Description of Collateral in Security Agreements and Financing Statements

Perhaps the Bard of Avon was correct in his assertion that misdescription of a rose dims its fragrance not one whit; but a misdescription in a security agreement or financing statement may have the most profound consequences, mostly unpleasant, for the "secured" party. The purpose of this article is to explore what constitutes an adequate description of collateral under the Uniform Commercial Code and the judicial decisions interpreting the description requirements of the Code. The discussion is organized by type of collateral as defined in Article 9: inventory, accounts receivable, equipment and consumer goods, as well as an all-encompassing discussion of "serial-number" cases.