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This entry was published on 2014-09-22
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SECTION 2-403
Power to Transfer; Good Faith Purchase of Goods; "Entrusting"
Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 2, PART 4
Section 2--403. Power to Transfer; Good Faith Purchase of Goods;

"Entrusting".

(1) A purchaser of goods acquires all title which his transferor had
or had power to transfer except that a purchaser of a limited interest
acquires rights only to the extent of the interest purchased. A person
with voidable title has power to transfer a good title to a good faith
purchaser for value. When goods have been delivered under a transaction
of purchase the purchaser has such power even though

(a) the transferor was deceived as to the identity of the

purchaser, or

(b) the delivery was in exchange for a check which is later

dishonored, or

(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 criminal law.

(2) Any entrusting of possession of goods to a merchant who deals in
goods of that kind gives 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 possession regardless of any condition expressed between
the parties to the delivery or acquiescence and regardless of whether
the procurement of the entrusting or the possessor's disposition of the
goods has 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 the Articles on Secured Transactions (Article 9), Bulk
Transfers (Article 6) and Documents of Title (Article 7).