Priority Flashcards
What is the general rule about priority of security interests?
First in time, first in right.
What are the exceptions to the general rule?
The general rule does not apply to buyers in the ordinary course of business or to purchase money security interests.
What is a buyer in the ordinary course of business?
A buyer who purchases goods from the seller during the ordinary course of the sellers business, and good faith, without actual knowledge that they say it would be a violation of a security agreement.
Between a secured party and a judicial lean creditor, who has priority?
The secured party has priority if that interest is perfected before the judicial lean is leveed. If it is unprotected, the secured party will have priority only if the reason for no perfection was that the value had not been given.
Between a perfected secured party and an authorized buyer, who has priority?
The authorized buyer has priority if they secured party authorized the sale ,either expressly or impliedly.
Between a perfect and secured party in a buyer in the ordinary course of business, who has priority?
The buyer in the ordinary course of business.
Between a secured party with a perfected security interest and a non-buyer in the ordinary course of business, who has priority?
The perfected party has priority, but a buyer who is not in the ordinary course of business will take priority over a future advance given after the purchase.
Between a perfect and party and a garage sale buyer, who has priority?
The garage sale buyer.
What is a garage sale buyer?
A person who buys consumer goods for personal use from another consumer without knowledge. A purchase money security interest and consumer goods will have priority is a financing statement was filed.
Who has priority between an unprotected party and a buyer?
The buyer will have priority, if they purchased without knowledge of the security interest.
Between a secured party and an unsecured party, who has priority?
The secured party has priority.
Between a perfected party and on perfected party, who has priority?
The perfected party.
If both parties are unperfected, who has priority?
The first party to attach.
