Section 400.9-323

Title XXVI TRADE AND COMMERCE

Chapter 400

Effective - 28 Aug 2002, 2 histories   

  400.9-323.  Future advances. — (a)  Except as otherwise provided in subsection (c), for purposes of determining the priority of a perfected security interest under section 400.9-322(a)(1), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:

  (1)  Is made while the security interest is perfected only:

  (A)  Under section 400.9-309 when it attaches; or

  (B)  Temporarily under section 400.9-312(e), (f), or (g); and

  (2)  Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under section 400.9-309 or 400.9-312(e), (f), or (g).

  (b)  Except as otherwise provided in subsection (c), a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than forty-five days after the person becomes a lien creditor unless the advance is made:

  (1)  Without knowledge of the lien; or

  (2)  Pursuant to a commitment entered into without knowledge of the lien.

  (c)  Subsections (a) and (b) do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.

  (d)  Except as otherwise provided in subsection (e), a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:

  (1)  The time the secured party acquires knowledge of the buyer's purchase; or

  (2)  Forty-five days after the purchase.

  (e)  Subsection (d) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer's purchase and before the expiration of the forty-five-day period.

  (f)  Except as otherwise provided in subsection (g), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:

  (1)  The time the secured party acquires knowledge of the lease; or

  (2)  Forty-five days after the lease contract becomes enforceable.

  (g)  Subsection (f) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the forty-five-day period.

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(L. 2001 S.B. 288, A.L. 2002 S.B. 895)