Buyers of Used Goods and the Problems of Hidden Security Interests: A New Proposal to Modify Section 9-307 of the Uniform Commercial Code

The Uniform Commercial Code protects a buyer in ordinary course of business from claims by third parties with security interests in the goods purchased, but only when the security interest was created by the buyer's immediate seller. Thus, buyers of used goods are not protected from assertions of security interests created by earlier owners. Up to now, only the courts have dealt with this problem, and they have done so on an ad hoc basis. This Article attempts to provide a comprehensive solution.

It examines the problem, evaluates the competing interests of the buyer and the secured creditor, and proposes an amendment to the Code that balances those interests.