TITLE 28

COMMERCIAL TRANSACTIONS

CHAPTER 9

SECURED TRANSACTIONS

PART 3.

PERFECTION AND PRIORITY

28-9-323.  Future advances. (a) Except as otherwise provided in subsection (c) of this section, for purposes of determining the priority of a perfected security interest under section 28-9-322(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 28-9-309 when it attaches; or

(B)  temporarily under section 28-9-312(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 28-9-309 or 28-9-312(e), (f) or (g).

(b)  Except as otherwise provided in subsection (c) of this section, 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 (45) 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) of this section 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) of this section, 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 (45) days after the purchase.

(e)  Subsection (d) of this section 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 (45) day period.

(f)  Except as otherwise provided in subsection (g) of this section, 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 (45) days after the lease contract becomes enforceable.

(g)  Subsection (f) of this section 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 (45) day period.

History:

[28-9-323, added 2001, ch. 208, sec. 2, p. 746.]