An after acquired property clause is a provision in a legal
contract
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
that allows the agreement to cover property that may be acquired after the contract has been signed.
Examples of uses
In a
mortgage
A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners t ...
(of real property) or
security agreement
A security agreement, in the law of the United States, is a contract that governs the relationship between the parties to a kind of financial transaction known as a secured transaction. In a secured transaction, the Grantor (typically a borrower b ...
(of personal property), an after acquired property clause provides that any additional property acquired by the borrower after the mortgage or security agreement is signed will be additional
collateral for the obligation. While such provisions can help give these obligations a good
rating
A rating is an evaluation or assessment of something, in terms of a metric (e.g. quality, quantity, a combination of both,...).
Rating or rating system may also refer to:
Business and economics
* Credit rating, estimating the credit worthiness ...
, they make it difficult to finance growth through new borrowing.
In the
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...
industry, an after acquired property clause allows insurance coverage for property the insured obtains after ratification of the policy or contract. This clause may operate only for a temporary period of time during which the insured must notify the insurer of the property so that the insurer can adjust the premiums accordingly. An example is the purchase of a new vehicle; the clause allows the vehicle to be covered for a short period of time until the owner can notify the insurance company of the purchase and provide the vehicle information (along with any vehicles that were traded in and thus to be removed from the policy).
See also
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After-acquired property After-acquired property has multiple meanings in law.
Real property
In other areas of law
The term "after-acquired property" also arises in the context of bankruptcy, secured transactions, and the law of wills. In this context, "after-acquired ...
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Contract law
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...
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Prenuptial agreement
A prenuptial agreement, antenuptial agreement, or premarital agreement (commonly referred to as a prenup), is a written contract entered into by a couple before marriage or a civil union that enables them to select and control many of the legal ...
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Insurance law
Insurance law is the practice of law surrounding insurance, including insurance policies and claims. It can be broadly broken into three categories - regulation of the business of insurance; regulation of the content of insurance policies, especia ...
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Mortgage law
A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. '' Hypothec'' is the corresponding term in civil law jurisdi ...
References
Contract clauses
Insurance law
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