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Searching 2021-2022 Session

The Vermont Statutes Online

 

Title 9A : Uniform Commercial Code

Article 009 : SECURED TRANSACTIONS

(Cite as: 9A V.S.A. § 9-323)
  • § 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 subdivision 9- 322(a)(1) of this title, 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 9- 309 of this title when it attaches; or

    (B) temporarily under subsection 9- 312(e), (f), or (g) of this title; 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 9- 309 or subsection 9- 312(e), (f), or (g) of this title.

    (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 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) 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 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) 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 45-day period. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001.)