§ 4-9-320 — Buyer of goods

(a) Except as otherwise provided in subsection (e)
of this section, 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.

(b) Except as otherwise provided in subsection (e) of this section, 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:

(1) Without knowledge of the security interest;

(2) For value;

(3) Primarily for the buyer's personal, family, or household purposes; and

(4) Before the filing of a financing statement covering the goods.

(c) To the extent that it affects the priority of a security interest over a buyer
of goods under subsection (b) of this section, the period of effectiveness of a filing
made in the jurisdiction in which the seller is located is governed by section 4-9-316
(a) and (b).

(d) 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.

(e) Subsections (a) and (b) of this section do not affect a security interest in
goods in the possession of the secured party under section 4-9-313.

Legislative History

Source: L. 2001: Entire article R&RE, p. 1356, � 1, effective July 1.