{"data":{"id":"us-nj/n.j.-stat.-12a-9-203","jurisdiction":"us-nj","citation":"N.J. Stat. § 12A:9-203","heading":"Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.","body":"Attachment and Enforceability of Security Interest; Proceeds; Supporting Obligations; Formal Requisites.\n(a)\tAttachment.  A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.\n(b)\tEnforceability.  Except as otherwise provided in subsections (c) through (i), a security interest is enforceable against the debtor and third parties with respect to the collateral only if:\n(1)\tvalue has been given;\n(2)\tthe debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and\n(3)\tone of the following conditions is met:\n(A)\tthe debtor has authenticated a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;\n(B)\tthe collateral is not a certificated security and is in the possession of the secured party under 12A:9-313 pursuant to the debtor's security agreement;\n(C)\tthe collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under 12A:8-301 pursuant to the debtor's security agreement; or\n(D)\tthe collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under 12A:7-106, 12A:9-104, 12A:9-105, 12A:9-106, or 12A:9-107 pursuant to the debtor's security agreement.\n(c)\tOther Uniform Commercial Code provisions.  Subsection (b) is subject to 12A:4-210 on the security interest of a collecting bank,  12A:5-118 on the security interest of a letter-of-credit issuer or nominated person, 12A:9-110 on a security interest arising under Chapter 2 or 2A, and 12A:9-206 on security interests in investment property.\n(d)\tWhen a person becomes bound by another person's security agreement.  A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this chapter or by contract:\n(1)\tthe security agreement becomes effective to create a security interest in the person's property; or\n(2)\tthe person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.\n(e)\tEffect of new debtor becoming bound.  If a new debtor becomes bound as debtor by a security agreement entered into by another person:\n(1)\tthe agreement satisfies subsection (b) (3)  with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and\n(2)\tanother agreement is not necessary to make a security interest in the property enforceable.\n(f)\tProceeds and supporting obligations.  The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by 12A:9-315 and is also attachment of a security interest in a supporting obligation for the collateral.\n(g)\tLien securing right to payment.  The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage, or other lien.\n(h)\tSecurity entitlement carried in securities account.  The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account.\n(i)\tCommodity contracts carried in commodity account.  The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account.\n(j)\tBondable transition property. Bondable transition property is presently existing property for all purposes, including for purposes of subsection (b) (2), whether or not the revenues and proceeds arising under the property have accrued and notwithstanding that the value of the property may depend upon customer use of electricity or performance of service by electric public utilities, or both.\nL.2001, c.117, s.1; amended 2001, c.386, s.9; 2013, c.65, s.5.","path":["TITLE 12A COMMERCIAL TRANSACTIONS"],"source_url":"https://pub.njleg.state.nj.us/statutes/STATUTES-TEXT.zip","current_through":"P.L.2025, c.405, and J.R.22","vintage":"","retrieved_at":"2026-08-27T17:54:13Z","sha256":"085468b522c776af0333d2f38411efeee52088a67db7fb7116822bdcc12148d7","source_id":"us-nj","stale":true,"prev":"us-nj/n.j.-stat.-12a-9-202","next":"us-nj/n.j.-stat.-12a-9-204"},"notice":"GroundRules: Original legal text. Not legal advice."}