Ohio Code 1309.320 – Buyer of goods – UCC 9-320
(A) Except as otherwise provided in division (E) of this section, a buyer in the 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 security interest is perfected and the buyer knows of its existence.
Terms Used In Ohio Code 1309.320
- Encumbrance: includes mortgages and other liens on real property. See Ohio Code 1309.102
- Farm products: means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and that are:
(a) Crops grown, growing, or to be grown, including:
(i) Crops produced on trees, vines, and bushes;
(ii) Aquatic goods produced in aquacultural operations;
(iii) Algacultural products as defined in section 901. See Ohio Code 1309.102
- Financing statement: means a record composed of an initial financing statement and any filed record or records relating to the initial financing statement. See Ohio Code 1309.102
- Goods: includes (i) fixtures, (ii) standing timber that is to be cut and removed under a conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes, and (v) manufactured homes. See Ohio Code 1309.102
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
- Secured party: means :
(a) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;
(b) A person that holds an agricultural lien;
(c) A consignor;
(d) A person to whom accounts, chattel paper, payment intangibles, or promissory notes have been sold;
(e) A trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or
(f) A person who holds a security interest arising under section 1302. See Ohio Code 1309.102
(B) Except as otherwise provided in division (E) of this section, a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:
(1) Without knowledge of the security interest;
(2) For value;
(3) Primarily for the buyer’s personal, family, or household purposes; and
(4) Before the filing of a financing statement covering the goods.
(C) To the extent that it affects the priority of a security interest over a buyer of goods under division (B) of this section, the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by divisions (A) and (B) of section 1309.316 of the Revised Code.
(D) A buyer in the ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.
(E) Divisions (A) and (B) of this section do not affect a security interest in goods in the possession of the secured party under section 1309.313 of the Revised Code.