§ 26-1-2-403 — Power to transfer; good faith purchase of goods; "entrusting"

(1) A purchaser of goods acquires all title
which the purchaser's transferor had or had power to transfer, except
that a purchaser of a limited interest acquires rights only to the extent
of the interest purchased. A person with voidable title has power to
transfer a good title to a good faith purchaser for value. When goods
have been delivered under a transaction of purchase, the purchaser has
such power even though:
(a) the transferor was deceived as to the identity of the purchaser;
or
(b) the delivery was in exchange for a check which is later
dishonored; or
(c) it was agreed that the transaction was to be a "cash sale"; or
(d) the delivery was procured through fraud punishable as theft
under the criminal law.
(2) Any entrusting of possession of goods to a merchant who deals
in goods of that kind gives the merchant power to transfer all rights of
the entruster to a buyer in ordinary course of business.
(3) "Entrusting" includes any delivery and any acquiescence in
retention of possession regardless of any condition expressed between
the parties to the delivery or acquiescence and regardless of whether
the procurement of the entrusting or the possessor's disposition of the
goods have been such as to be theft under the criminal law.
(4) The rights of other purchasers of goods and of lien creditors are
governed by IC 26-1-9.1 on secured transactions and IC 26-1-7 on
documents of title.
Formerly: Acts 1963, c.317, s.2-403. As amended by
P.L.152-1986, SEC.143; P.L.144-1997, SEC.3; P.L.57-2000, SEC.20;
P.L.77-2007, SEC.3.