North Dakota Code 41-09-14 – (9-204) After-acquired property – Future advances
1. Except as otherwise provided in subsection 2, a security agreement may create or provide for a security interest in after-acquired collateral.
Terms Used In North Dakota Code 41-09-14
- Debtor: means a natural person whose name was provided in a financing statement record as an individual debtor or one of the types of persons listed in section 41-09-76. See North Dakota Code 41-10-01
- paper: means any flexible material upon which it is usual to write. See North Dakota Code 1-01-27
- Property: includes property, real and personal. See North Dakota Code 1-01-49
- 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.
2. Subject to subsection 4, a security interest does not attach under a term constituting an after-acquired property clause to:
a. Consumer goods, other than an accession if given as additional security, unless the debtor acquires rights in the consumer goods within ten days after the secured party gives value; or b. A commercial tort claim.
3. 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, regardless of whether the advances or value is given pursuant to commitment.
4. Subsection 2 does not prevent a security interest from attaching:
a. To consumer goods as proceeds under subsection 1 of section 41-09-35 or commingled goods under subsection 3 of section 41-09-56; b. To a commercial tort claim as proceeds under subsection 1 of section 41-09-35; or c. Under an after-acquired property clause to property that is proceeds of consumer goods or a commercial tort claim.