Priorities in a Nutshell

Question 1

Excluding investment property and nonconsumer deposit accounts in which the party with control generally has priority, the ranking is as follows:

Answer 1

…

Question 2

(1)

Answer 2

Buyers in the ordinary course of business who do not know the sale is in violation of the security interest.

Question 3

(2)

Answer 3

Holders in due course and the like of negotiable instruments

Question 4

(3)

Answer 4

Transferees of funds from deposit accounts

Question 5

(4)

Answer 5

Certain purchasers of chattel paper or instruments who have possession or control

Question 6

(5)

Answer 6

Possessory lienholders

Question 7

(6)

Answer 7

Article 2 claimants with possession of goods

Question 8

(7)

Answer 8

PMSIs

Question 9

(8)

Answer 9

Perfected security interests and liens that have attached to the collateral.

1. as between perfected security interests in the same collateral, the first to file or perfect has priority;
2. As between a perfected security interest and a lien, the lien has priority if it was created before the security interest was filed or perfected. Otherwise, the perfected security interest has priority

Question 10

(9)

Answer 10

Purchasers of collateral who buy for value and receive delivery without notice of any unperfected security interest.

Question 11

(10)

Answer 11

Unperfected security interests

Question 12

(11)

Answer 12

The debtor