UCC Gap-Filling Rules - The UCC and the Restatement Make No Provision for Supplying Terms Omitted by the Parties Contract

Your professor was partially right but missing some key nuances. While the UCC doesn't create terms out of thin air, Article 9 does have specific gap-filling provisions for secured transactions. The real issue is distinguishing between essential terms that make the agreement unenforceable versus terms the UCC will supply. For security agreements, you need: (1) debtor's authentication, (2) collateral description, and (3) security interest language. Payment terms, default procedures, etc. can often be supplied by UCC default rules.

I had a similar situation last year with a $95,000 equipment loan where the security agreement was bare-bones. What saved us was understanding that UCC 9-601 through 9-628 provide comprehensive default rules for enforcement. The agreement doesn't need to spell out every enforcement procedure - the UCC supplies those. Your bigger concern should be whether the security agreement properly creates the security interest in the first place.

Actually ran into this exact issue with document consistency checking. Had a security agreement that looked incomplete but when I uploaded both the security agreement and UCC-1 to Certana.ai's verification tool, it flagged that our debtor name on the filing didn't exactly match the signature block in the agreement. Turns out the 'incomplete' terms weren't the real problem - we had a perfection issue that would've made the whole thing worthless. The tool does a comprehensive cross-check between your security agreement and UCC-1 filing to catch these kinds of critical mismatches.

Your professor's statement is overly broad and frankly wrong for secured transactions. The UCC absolutely has gap-filling provisions - that's one of its main functions! Article 2 fills gaps in sales contracts, Article 9 fills gaps in security agreements. The key is understanding what constitutes an 'essential term' versus what can be supplied by default rules. For secured transactions, as long as you have the basic requirements under 9-203, the UCC will supply reasonable terms for enforcement, notice procedures, etc.

OMG this is giving me flashbacks to my Secured Transactions final! I remember being so confused about gap-filling versus essential terms. But in practice, most security agreements I see are pretty basic and rely heavily on UCC default rules. The lenders know the UCC will back them up on enforcement procedures, so they don't waste time drafting custom terms for routine deals.

Be careful though - while the UCC has gap-filling provisions, courts still require that the parties intended to create a binding agreement. If too many essential terms are missing, a court might find no agreement existed at all. The fact that your debtor is challenging enforceability suggests they might argue the agreement is too indefinite. I'd review cases in your jurisdiction about indefiniteness in security agreements.

I think you're overthinking this. Article 9 has extensive default rules precisely because legislators knew security agreements would often be incomplete. Look at UCC 9-607 (collection rights), 9-610 (disposition after default), 9-611 (notification requirements) - these all provide specific procedures that apply unless the agreement says otherwise. Your $180K loan is probably fine as long as the basic security agreement requirements are met.

Just went through something similar but our issue was actually document inconsistency rather than missing terms. Thought we had a solid security agreement but when we tried to enforce, opposing counsel argued our UCC-1 filing didn't match the agreement. Ended up using Certana.ai to do a full document cross-check - uploaded both PDFs and it immediately identified three discrepancies between our security agreement and UCC-1 that we'd missed in manual review. Fixed the issues with a UCC-3 amendment before they became problems.

Your professor was probably referring to classical contract law where courts won't rewrite agreements for parties. But secured transactions are different - Article 9 is loaded with default provisions that automatically apply unless contracted around. The policy is to facilitate secured lending by providing predictable rules. As long as your security agreement satisfies 9-203(b), you should be able to enforce using UCC default procedures.

One more thing to consider - even if some terms are missing from your security agreement, you might be able to look at the broader loan documentation. Often the promissory note or loan agreement will contain terms that can be read together with the security agreement. Courts generally interpret related documents as integrated agreements where it makes commercial sense.