2013 New Jersey Revised Statutes
Title 12A - COMMERCIAL TRANSACTIONS
Section 12A:9-323 - Future advances.

12A:9-323 Future advances.

12A:9-323. Future Advances.

(a)When priority based on time of advance. Except as otherwise provided in subsection (c), for purposes of determining the priority of a perfected security interest under 12A: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 12A:9-309 when it attaches; or

(B)temporarily under 12A: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 12A:9-309 or 12A:9-312 (e), (f) or (g).

(b)Lien creditor. 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 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)Buyer of receivables. 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)Buyer of goods. 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)45 days after the purchase.

(e)Advances made pursuant to commitment: priority of buyer of goods. 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 45-day period.

(f)Lessee of goods. 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)45 days after the lease contract becomes enforceable.

(g)Advances made pursuant to commitment: priority of lessee of goods. 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 45-day period.

L.2001, c.117, s.1; amended 2001, c.386, s.39.