A secondhand buyer of consumer goods that were subject to a purchase money security interest while in the hands of the original buyer takes those goods free of the purchase money security interest:

Question

Quizplus · Accepted Answer

Under the Uniform Commercial Code, a secondhand buyer of consumer goods that were subject to a purchase money security interest while in the hands of the original buyer takes those goods free of the purchase money security interest if the secondhand buyer meets certain conditions. Specifically, the secondhand buyer must not have actual or constructive knowledge of the security interest, must give value for the goods, and must buy the goods for personal, family, or household purposes. If these conditions are met, the secondhand buyer takes the goods free of the security interest, even if the original creditor perfected by filing a financing statement. Therefore, the best answer is D.

A Secondhand Buyer of Consumer Goods That Were Subject to a Purchase