BIOC

Question 1

BIOC

Answer 1

Takes FREE of security interest created by buyer’s seller, even if security interest is perfected and buyer knows of its existence
*Not IOC if buyer knows that sale is in violation of a term in security agreement

Question 2

BNIOC

Answer 2

Takes collateral subject to PERFECTED interest; takes free from UNPERFECTED interests unless they know of the security interest when they give value or take delivery

Question 3

Consumer to consumer sale (must be consumer goods in both hands of buyer and seller)

Answer 3

Buyer takes free of security interest even though it’s perfected if buyer buys:

(1) without knowledge of security interest
(2) for value
(3) for the buyer’s own personal, family, household purposes
(4) before financing statement covering goods has been filed

Question 4

BIOC Requirement

Answer 4

Good faith
No knowledge that sale violates rights of another person (can know about existence of security agreement)
Ordinary course of business (seller regularly sells these goods)