What is one example of automatic perfection upon attachment?

One example of automatic perfection upon attachment is a purchase money security interest (PMSI) in consumer goods. When a seller provides financing to a buyer to purchase goods for personal use, and those goods are considered consumer goods, the security interest is automatically perfected at the moment it attaches. This means that no filing or additional steps are necessary to provide third parties with notice of the security interest.

PMSIs are particularly important in consumer transactions because they give sellers a higher level of protection. The law favors PMSIs in consumer goods due to the nature of the transactions, recognizing the reality that consumers often do not have the resources to negotiate and understand complex financing arrangements. Therefore, the security interests associated with these transactions are designed to be simplified and streamlined, allowing the seller to have priority in the event of the buyer's default without the burden of further requirements for perfection.

Other options, such as real estate transactions, security interests in motor vehicles, and negotiable instruments, typically require either filing with the appropriate governmental authority or certain conditions to be met in order to perfect the security interest. Thus, they do not benefit from the same automatic perfection provided to PMSIs in consumer goods.