An oral security agreement is valid. But that agreement is only enforceable as between the parties. If you want to have priority rights against third parties then there has to be a security agreement in writing.
“Enforceability” against third parties:
A security interest is enforceable against a third party only where… a description of the collateral by item or kind or by reference to one or more of the following: “crops”, “goods”, “chattel paper”, etc. etc.”
“by kind” – i.e. a generic description of the item. So you can refer to the item as “a car” rather than “a black on black 2008 BMW M3 with six speed manual transmission” or whatever. That being said, while this generic description may satisfy s10, in real life it may not be specific enough for the world of evidence or contracts if things ever went to litigation.
While the provision is very generous, you cannot refer to the collateral as “consumer goods”, “inventory”, or “equipment”.
Any possessory interest can be used as collateral. However, a very weak interest (e.g. the transient, temporary possession of a consignee) will be defeated by a stronger interest (e.g. an owner). That being said, registration substantially improves the strength of an interest. So, for example, in the video shop case, a lessee’s registered possessory interest defeated an owner’s unregistered interest.