What is required for after-acquired collateral in a security agreement?

For after-acquired collateral to be enforceable in a security agreement, particularly in the context of consumer goods, the description must indeed be specific. Under the Uniform Commercial Code (UCC), a security interest can be attached to after-acquired collateral only if it is described in a manner that reasonably identifies what is being secured.

In the case of consumer goods, the UCC has heightened requirements for the specificity of descriptions. This means that a vague description may fail to secure a security interest in after-acquired consumer goods. The intent is to protect consumers by ensuring that they are adequately informed about what collateral has been pledged and to ensure that lenders are clear about the scope of their security interest.

Therefore, a specific description is essential for consumer goods because it aligns with consumer protection principles while also providing clarity and certainty in commercial transactions. This further safeguards both parties involved in the agreement.