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What is measurable value under the UCC?

Measurable value is one of the key criteria that must exist for collateral to be attached to a security interest under the UCC. Measurable value is captured in item #2 in the visual below:

Basically, this requirement relates to the fact that the collateral must have tangible value, which means it would have value to an unrelated party. This is important because the creditor may need to sell the collateral to recoup the loan proceeds if the debtor defaults.

In the two examples below, measurable value can be found with Jenny’s car, but not Jenny’s humor!

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