Priority

Question 1

Perfected security interest v. subsequent buyers - general rule

Answer 1

Generally, a perfected security interest in goods is good against subsequent buyers.

Question 2

Perfected security interest v. subsequent buyer - consumer-to-consumer sale exception

Answer 2

If a buyer of consumer goods resells them to another consumer for value, the second consumer takes free of security interests he has no knowledge of, provided he makes the purchase before any financing statement covering the goods has been filed.

Question 3

Perfected security interest v. subsequent buyer - authorization exception

Answer 3

If a secured party consents to a sale, lease, or other transfer of the collateral free of the security interest, the transferee will take free of the secured party’s perfected security interest.

Question 4

Perfected security interest v. subsequent buyer - BIOC exception

Answer 4

A buyer in the ordinary course of business buys goods from a seller engaged in the business of selling them. Buyers in the ordinary course of business can take goods free of nonpossessory security interests created by the seller unless they know the sale violates a security agreement.

Question 5

Perfected security interest v. perfected security interest

Answer 5

Between two perfected security interests, the first secured party to file or perfect has priority.

Question 6

Perfected security interest v. unperfected security interest

Answer 6

A perfected security interest prevails over an unperfected security interest in the same collateral.

Question 7

Perfected security interest in an accession v. perfected security interest in the whole

Answer 7

A security interest in the whole perfected under an applicable certificate-of-title statute has priority over the security interest in the accession.

Question 8

Perfected security interest v. judicial lien

Answer 8

A prior perfected security interest in collateral trumps a judicial lien.