WHO IS THE GRANTOR?

● He is the one who offers or grants the security interest to secure his or someone else’s obligation.
● He can be a buyer or transferee of collateral who acquires the right to the collateral subject to the security
interest.
● He can also be the transferor in an outside outright transfer of accounts receivable.
● He can also be a lessee of goods so again regardless of the status of the grantor or regardless of the status
of the secured creditor this is also regardless of the nature of the secured obligations and it also includes the
security interest includes the right of a buyers, buyer of accounts receivable or a lessor under an operating
lease for not less than 1 year.

This security interest extends to the identifiable and traceable proceeds of the personal property in case the
personal property produces proceeds like funds or money, negotiable documents etc. And this security interest will
continue in the collateral even if such collateral or personal property is sold, least, licensed, exchanged or otherwise
disposed off so even if the grantor sells that property the security interest will follow that property after its
transferred to the any subsequent transferee.

Now it will continue as I said unless there is an exception or unless there is a stipulation to the contrary or engage
the subsequent transferee is a buyer in good faith meaning he has no knowledge of any defect in the title however of
course he will not be a buyer in good faith if the security interest is registered before the transferee acquired it
because of course registration is notice to the whole world and binds third parties.
Incase of a security interest in accounts receivable which arise from either a contract of supply of lease or lease
of goods or services or in case which are not financial services by the way or in case of a construction contract or in
case of account receivable from a contract of sale or lease of real property or sale, lease or license of intellectual
property the security interest will still be valid even if there is a contractual limitation put upon that even if
there is a contractual limitation on the grantors right to create a security interest (meaning that if the parties to
the account receivables in the cases I mentioned tried to put a limitation that you would say na “hey grantor you
cannot make this into a security interest or there is a limit upon your right to make a security interest.
- The law expressly states that any stipulation limiting the grantor's right to create a security interest is
VOID. (In other words the security interest on that accounts receivable in the cases will continue to be
valid in the stipulation limiting the right of the grantor to create a security interest shall be VOID).