#59 · 2026-10-04 · Legal term
Buyer in ordinary course of business
Answer: Buyer in ordinary course of business. Under UCC § 1-201(b)(9), this status requires buying goods in good faith, without knowledge the sale violates another’s rights, from a seller in the business of selling such goods. ([law.cornell.edu](https://www.law.cornell.edu/ucc/1/1-201)) Under § 9-320(a), such a buyer takes free of a security interest created by the buyer’s seller—even if perfected—subject to the farm-products exception. ([law.cornell.edu](https://www.law.cornell.edu/ucc/9/9-320))
Rule to remember
Buyer in ordinary course of business: a person who purchases goods in good faith, without knowledge that the sale violates another’s rights, from a seller in the business of selling goods of that kind. See UCC § 1-201(b)(9).
Key elements and checks
- Buys goods in good faith.
- Lacks knowledge that the sale violates another’s rights.
- Purchase occurs in the ordinary course from a seller of that kind (not a pawnbroker).
- Ordinary-course methods include cash, exchange, or credit; not bulk sales or transfers as security or in satisfaction of a money debt.
- Takes free of a security interest created by the buyer’s seller, even if perfected and known to exist (except farm products from a farmer).
In the source’s words
“buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods,”
§ 1-201. General Definitions. | Uniform Commercial Code | US Law | LII / Legal Information Institute
“takes free of a security interest created by the buyer's seller, even if the security interest is perfected”
§ 9-320. Buyer of Goods. | Uniform Commercial Code | US Law | LII / Legal Information Institute
States enact the UCC; wording and comments may vary by jurisdiction. Always check your state’s version and any nonuniform amendments, especially for definitions and exceptions.