Check whether a buyer of goods takes free of a security interest
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- The tool lists whether the buyer is a buyer in ordinary course, whether the goods are farm products bought from a person engaged in farming operations, the buyer's knowledge, value, and personal, family, or household use, and whether a financing statement was filed or the interest was perfected before delivery. It does not say the buyer takes free.
- What the lawyer must review
- UCC Sections 9-320 and 9-317. Except as subsection (e) provides, Section 9-320(a) provides that a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the interest is perfected and the buyer knows of its existence. Subsection (b) provides that a buyer of goods from a person who used or bought the goods primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys without knowledge of the interest, for value, primarily for the buyer's personal, family, or household purposes, and before the filing of a financing statement covering the goods. Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under Section 9-313. Section 9-317(b), except as subsection (e) provides, provides that a buyer of tangible chattel paper, documents, goods, instruments, or a certificated security takes free of a security interest if the buyer gives value and receives delivery without knowledge of the interest and before it is perfected. The lawyer decides which rule, if any, applies.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Consider narrowly defined preparation support after confirming the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Check the current court or regulator requirements, prescribed form and attachments for the intended document and filing.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.