Article 9 — Secured Transactions · Section 9-330
UCC § 9-330 outlines the rights of a buyer in the ordinary course of business and how they relate to security interests.
Source: U.C.C. § 9-330
A buyer in the ordinary course of business buys goods and takes them free of a security interest created by the seller, even if the security interest is perfected.
UCC § 9-330 protects buyers who purchase goods in the ordinary course of business from being subject to existing security interests. This means that if a buyer buys goods from a seller, they can take ownership free of any security interest that the seller may have granted to a lender.
A person who buys goods in good faith, without knowledge that the sale violates the rights of another person.
An interest in personal property or fixtures that secures payment or performance of an obligation.
Example 1
A retail store buys inventory from a supplier who has previously taken out a loan secured by that inventory. The retail store can sell the inventory to customers without being liable under the supplier's security interest.
Example 2
A customer purchases a vehicle from a dealer who has a security interest in its inventory. The customer takes the vehicle free of the dealer’s lender's interest.