California Commercial Code 9204 – (a) Except as otherwise provided in subdivision (b), a security …
(a) Except as otherwise provided in subdivision (b), a security agreement may create or provide for a security interest in after-acquired collateral.
(b) Subject to subdivision (c), a security interest does not attach under a term constituting an after-acquired property clause to either of the following:
Terms Used In California Commercial Code 9204
- agreement: means the total legal obligation that results from the parties' agreement as determined by this code and as supplemented by any other applicable laws. See California Commercial Code 1201
- Security interest: includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Division 9 (commencing with Section 9101). See California Commercial Code 1201
- Term: means a portion of an agreement that relates to a particular matter. See California Commercial Code 1201
- Tort: A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.
(1) Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value.
(2) A commercial tort claim.
(c) Subdivision (b) does not prevent a security interest from attaching to any of the following:
(1) Consumer goods as proceeds under subdivision (a) of Section 9315 or commingled goods under subdivision (c) of Section 9336.
(2) A commercial tort claim as proceeds under subdivision (a) of Section 9315.
(3) Property that is the proceeds of consumer goods or a commercial tort claim under an after-acquired property clause.
(d) A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment.
(Amended by Stats. 2023, Ch. 210, Sec. 31. (SB 95) Effective January 1, 2024.)