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From course:

Secured Transactions

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Question:

If unathorized sale buyer must in order to take free of

Author: Parker Kirkpatrick



Answer:

1) Buy in good faith 2) Buy in ordinary course of business o Buyer in ordinary course – buys goods in good faith and without knowledge that the sale to you violates the rights of a secured creditor in the goods, buys without knowing violates rights, buys from someone that sells in that type of goods ordinarily (cannot be in ordinary course if you know it violates rights but you can be if you know has a security agreement you just cant know that the purchase violates the creditors rights) 3) Doesn’t know violating secured creditors rights but can know of the security interest just cannot know violating the rights 4) Security interest was made by your seller o So buyer in the ordinary course of business takes free of security interest created by seller even if buyer knows security interest and even if knows perfected


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