70A-2-403 - Power to transfer -- Good faith purchase of goods -- Definition of entrusting.
70A-2-403. Power to transfer -- Good faith purchase of goods -- Definition ofentrusting.
(1) A purchaser of goods acquires all title which his transferor had or had power totransfer except that a purchaser of a limited interest acquires rights only to the extent of theinterest purchased. A person with voidable title has power to transfer a good title to a good faithpurchaser for value. When goods have been delivered under a transaction of purchase thepurchaser has such power even though:
(a) the transferor was deceived as to the identity of the purchaser;
(b) the delivery was in exchange for a check which is later dishonored;
(c) it was agreed that the transaction was to be a "cash sale"; or
(d) the delivery was procured through fraud punishable as larcenous under the criminallaw.
(2) Any entrusting of possession of goods to a merchant who deals in goods of that kindgives him power to transfer all rights of the entruster to a buyer in ordinary course of business.
(3) "Entrusting" includes any delivery and any acquiescence in retention of possessionregardless of any condition expressed between the parties to the delivery or acquiescence andregardless of whether the procurement of the entrusting or the possessor's disposition of thegoods have been such as to be larcenous under the criminal law.
(4) The rights of other purchasers of goods and of lien creditors are governed by Chapter9a, Uniform Commercial Code - Secured Transactions and Chapter 7a, Uniform CommercialCode - Documents of Title.
Amended by Chapter 42, 2006 General Session