(a) Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral.

(b) A security interest does not attach under a term constituting an after-acquired property clause to:

(1) Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within ten days after the secured party gives value; or

(2) A commercial tort claim.

(c) 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.

(1959, P.A. 133, S. 9-204; P.A. 76-369, S. 15; P.A. 01-132, S. 14.)

History: P.A. 76-369 deleted former Subsecs. (1) to (4)(a) re attachment of security interest and debtor's rights, inserted new Subsec. (1), designated former Subsec. (4)(b) as Subsec. (2) and renumbered former Subsec. (5) as Subsec. (3); P.A. 01-132 redesignated former Subsecs. (1), (2) and (3) as Subsecs. (a), (b) and (c), amended Subsec. (a) to rephrase provisions, amended Subsec. (b) to rephrase provisions and add Subdiv. (2) re commercial tort claim and amended Subsec. (c) to rephrase provisions.

Security agreement including as collateral all inventory “owned or hereafter acquired” was applicable to inventory acquired after the agreement was filed. 168 C. 152.

Mere possession of property by debtor does not give him rights in it which he is required to have before it can be collateral in a security transaction. 25 CS 327. Cited. 35 CS 73.