an interest in property that exists by contract as security for payment or performance of an obligation <the security interest
of a mortgagee in the mortgaged property>
See also lien
While a lien may be created by statutory or judicial means without any agreement providing for security (as in the case of a tax lien or judgment lien), a security interest and lien may inhere in the same claim, as when a mortgage comprises both a lien on and security interest in the mortgaged property. 2 :
an interest in personal property or fixtures created by a security agreement that secures payment or performance of an obligation <the creditor had a security interest
in the inventory and accounts receivable of the business>
see also attach perfect purchase money security interest
in this entry
Security interests in personal property are governed by Article 9 of the Uniform Commercial Code. The security interest set out in Article 9 largely replaces the traditional devices for security, such as the pledge and chattel mortgage. A security interest in property that has attached enables a creditor to obtain satisfaction of a debt out of the property without the need to obtain a judgment in court and levy on the property. Further, it provides the creditor with priority over competing claims against the property.
|Based on Merriam-Webster's Dictionary of Law ©2001.
Published under license with Merriam-Webster, Incorporated.