Article 9 — Secured Transactions · Section 9-334
A guide to UCC § 9-334, focusing on the treatment of security interests in after-acquired property.
Source: U.C.C. § 9-334
A security interest in after-acquired property is a security interest in property that the debtor obtains after the security agreement is executed. The security interest attaches to the after-acquired property automatically when the debtor acquires rights in the property, subject to the limitations outlined in this section.
UCC § 9-334 allows a lender to take a security interest in property that a debtor will acquire in the future. This means that the lender has a claim on the property as soon as the debtor owns it, provided certain conditions are met.
Property that a debtor acquires after the date of the security agreement.
A legal claim on collateral that secures the payment or performance of an obligation.
Example 1
1. A business borrows money and pledges its inventory as collateral. Under UCC § 9-334, any additional inventory it buys in the future is automatically subject to the lender's security interest.
Example 2
2. An individual takes out a loan to purchase a car and agrees that the lender will have a security interest in the car as well as any vehicle they buy in the next five years.