What is the first requirement of Strict Foreclosure?

The correct answer, which is the proposal of terms, aligns with the fundamental concept of strict foreclosure in secured transactions. Strict foreclosure refers to a process by which a secured party may retain the collateral in satisfaction of the debt owed without having to sell it.

For strict foreclosure to proceed, the secured party must propose terms to the debtor regarding the retention of the collateral. This proposal ensures that the debtor is aware of the secured party's intent and provides an opportunity for them to respond or negotiate the terms before the secured party can fully retain the collateral in satisfaction of the debt. Requirements such as the debtor's assent, notification to other creditors, or immediate possession, while relevant in the broader context of secured transactions, are not the primary component that triggers the strict foreclosure process. The terms proposed are foundational as they establish the basis for the debtor's understanding and agreement to the secured party’s retention of the collateral.