§ 2402 — Rights of creditors of seller against sold goods

(a) Priority of buyer over unsecured creditors.--Except as provided in subsections (b) and (c), rights of unsecured creditors of the seller with respect to goods which have been identified to a contract for sale are subject to the rights of the buyer to recover the goods under this division (section 2502 (relating to right of buyer to goods on insolvency of seller) and section 2716 (relating to right of buyer to specific performance or replevin)).

(b) Right to void sale upon fraudulent retention of goods.--A creditor of the seller may treat a sale or an identification of goods to a contract for sale as void if as against him a retention of possession by the seller is fraudulent under any rule of law of the state where the goods are situated, except that retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification is not fraudulent.

(c) Other rights of creditors unimpaired.--Nothing in this division shall be deemed to impair the rights of creditors of the seller:

(1) under the provisions of Division 9 (relating to secured transactions); or

(2) where identification to the contract or delivery is made not in current course of trade but in satisfaction of or as security for a pre-existing claim for money, security or the like and is made under circumstances which under any rule of law of the state where the goods are situated would apart from this division constitute the transaction a fraudulent transfer or voidable preference.

Legislative History

Cross References.Section 2402 is referred to in sections 1301, 7504 of this title.