A buyer in the ordinary course of business takes collateral free of a perfected security interest created by the buyer's seller.

Question

Quizplus · Accepted Answer

According to the Uniform Commercial Code (UCC) Section 9-320(a), a buyer in the ordinary course of business takes collateral free of a perfected security interest created by the buyer's seller, unless the buyer has actual knowledge of the security interest or the security interest is properly noted on the collateral.

A Buyer in the Ordinary Course of Business Takes Collateral