2006 Ohio Revised Code - 1302.43. (UCC 2-402) Rights of seller\'s creditors against sold goods.

§ 1302.43. (UCC 2-402) Rights of seller's creditors against sold goods.
 

(A)  Except as provided in divisions (B) and (C) of this section, rights of unsecured creditors of the seller with respect to goods which have been identified to a contract for sale are subject to the buyer's rights to recover the goods pursuant to sections 1302.46 and 1302.90 of the Revised Code. 

(B)  A creditor of the seller may treat a sale or an identification of goods to a contract for sale as void if as against the seller a retention of possession by the seller is fraudulent under any rule of law of the state where the goods are situated, except that retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification is not fraudulent. 

(C)  Nothing in sections 1302.01 to 1302.98 of the Revised Code shall be deemed to impair the rights of creditors of the seller: 

(1) under the provisions of Chapter 1309. of the Revised Code; or 

(2) where identification to the contract or delivery is made not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security, or the like and is made under circumstances which under any rule of law of the state where the goods are situated would apart from sections 1302.01 to 1302.98 of the Revised Code constitute the transaction a fraudulent transfer or voidable preference. 
 

HISTORY: 129 v S 5 (Eff 7-1-62); 149 v S 74. Eff 7-1-2001.
 

Analogous to former RC § 1315.27.

The effective date is set by section 4 of SB 74. 

 

Official Comment

To avoid confusion on ordinary issues between current sellers and buyers and issues in the field of preference and hindrance by making it clear that: 

1. Local law on questions of hindrance of creditors by the seller's retention of possession of the goods are outside the scope of this Article [Chapter], but retention of possession in the current course of trade is legitimate. Transactions which fall within the law's policy against improper preferences are reserved from the protection of this Article [Chapter]. 

2. The retention of possession of the goods by a merchant seller for a commercially reasonable time after a sale or identification in current course is exempted from attack as fraudulent. Similarly, the provisions of subsection (3) have no application to identification or delivery made in the current course of trade, as measured against general commercial understanding of what a "current" transaction is.