(810 ILCS 5/9-320)
Sec. 9-320.
Buyer of goods and farm products.
(a) Buyer in ordinary course of business. Except as otherwise
provided in subsections (e) and (f), a buyer in the ordinary course of business
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.
(b) Buyer of consumer goods. Except as otherwise provided in
subsection (e), 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 |
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(4) before the filing of a financing statement
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(c) Effectiveness of filing for subsection (b). To the extent that it
affects the priority of a security interest over a buyer of goods under subsection (b),
the period of effectiveness of a filing made in the jurisdiction in which the
seller is
located is governed by Section 9-316(a) and (b).
(d) Buyer in ordinary course of business at wellhead or
minehead. A buyer in 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) Possessory security interest not affected. Subsections (a) and
(b) do not affect a security interest in goods in the possession of the secured
party
under Section 9-313.
(f) Buyer of farm products.
(1) A buyer of farm products takes subject to a
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| security interest created by the seller if:
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(A) within one year before the sale of the farm
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| products, the buyer has received from the secured party or the seller written notice of the security interest organized according to farm products that:
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(i) is an original or reproduced copy thereof;
(ii) contains: (a) the name and address of
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| the secured party; (b) the name and address of the person indebted to the secured party; (c) the social security number of the debtor or, in the case of a debtor doing business other than as an individual, the Internal Revenue Service taxpayer identification number of such debtor; (d) a description of the farm products subject to the security interest created by the debtor, including the amount of such products where applicable, crop year, county, and a reasonable description of the property;
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(iii) must be amended in writing, within 3
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| months, similarly signed and transmitted, to reflect material changes;
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(iv) will lapse on either the expiration
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| period of the statement or the transmission of a notice signed by the secured party that the statement has lapsed, whichever occurs first; and
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(v) sets forth any payment obligations
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| imposed on the buyer by the secured party as conditions for waiver or release of the security interest; and
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(B) the buyer has failed to perform the payment
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(2) For the purposes of this subsection (f), a buyer
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| of farm products has received notice from the secured party or seller when written notice of the security interest is sent to the buyer by registered or certified mail.
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(Source: P.A. 91-893, eff. 7-1-01.)
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