EZ Loans, Inc., issues a line of credit in Glade Electronics Corporation under a security agreement. Later, Glade buys new HD-TVs to add to its inventory. EZ has a security interest in the new inventory
A) if the security agreement included an after-acquired property clause.
B) if EZ has not yet filed a financing statement.
C) if Glade bought the inventory with EZ funds.
D) under no circumstances.

Question

EZ Loans, Inc., issues a line of credit in Glade Electronics Corporation under a security agreement. Later, Glade buys new HD-TVs to add to its inventory. EZ has a security interest in the new inventory​
A) ​if the security agreement included an after-acquired property clause.
B) ​if EZ has not yet filed a financing statement.
C) ​if Glade bought the inventory with EZ funds.
D) ​under no circumstances.

Quizplus · Accepted Answer

An after-acquired property clause would allow EZ Loans to have a security interest in any new inventory obtained by Glade Electronics Corporation after the security agreement was signed. The clause would have to be included in the original security agreement for this to apply.