§9-1320. Buyer of goods
380 words·~2 min read·
/me/title-11-uniform-commercial-code/9-1320A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1). Except as otherwise provided in subsection
(5), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the security interest is perfected and the buyer knows of its existence.
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(2). Except as otherwise provided in subsection
(5), a buyer of goods from a person who used or bought the goods for use primarily for personal, family or household purposes takes free of a security interest, even if perfected, if the buyer buys:
(a). Without knowledge of the security interest; [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(b). For value; [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(c). Primarily for the buyer's personal, family or household purposes; and [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(d). Before the filing of a financing statement covering the goods. [PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(3). To the extent that it affects the priority of a security interest over a buyer of goods under subsection
(2), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by section 9‑1316, subsections
(1)and
(2).
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(4). A buyer in ordinary course of business buying oil, gas or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]
(5). Subsections
(1)and
(2)do not affect a security interest in goods in the possession of the secured party under section 9‑1313 .
[PL 1999, c. 699, Pt. A, §2 (NEW); PL 1999, c. 699, Pt. A, §4 (AFF).]