US Law for Tough Times - Buyer in the Ordinary Course of Business
336.9-320 BUYER OF GOODS.
(a) Buyer in ordinary course of business. Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, 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.
DISCLAIMER - BEFORE I BEGIN, DO NOT RELY UPON OR ACT UPON ANYTHING I SAY HERE WITHOUT FIRST CONSULTING YOUR OWN ATTORNEY.
With the rash of business failures and forced closing in this economy, i am surprised that major media has not taken the time to address some of the most likely issues that the economic fallout is likely to cause. Though "goods" can mean any product, for this article we be addressing only goods that require titling. There are huge numbers of people who have bought vehicles from car dealers that are suffering financially or that have went out of business. This has left a lot of innocent consumers "holding the bag", unable to get title to vehicles they purchased.
Hopefully, what follows will provide some relief and guidance to those persons who find themselves in this circumstance. The above law applies not just to vehicles, but to any good, except farm products, intended primarily for personal family use.
The Uniform Commercial Code (UCC) law quoted above applies specifically to Minnesota USA, but it is likely it will also apply to any state in the Union.
The above law basically says that if you have bought any goods (cars, trucks, motorcycle, lawnmower, etc) primarily for your home use from a seller (dealer), but the seller still owed money to a vendor or a finance company (floor plan) and did not pay of the lien, you own the goods. The seller's lender cannot force you to pay or give up the goods, as long as you purchased the goods primarily for your own personal or your family's personal use.
This rule does not apply to sales that were not the "ordinary course of business" e.g. You are the dealers best buddy; he knows he is going out of business and he sells you a car with the intent that you and he will split the proceeds because the seller's lender must give you the title.
One more time, without all the caveats and generalities: If you bought a car, and the dealer went out of business but seller did not pay any person he owes money for the car, the seller's lender can not make you pay them the money the seller owed them nor make you return the car. (This does not apply to Farm Products.)
THAT DOES NOT MEAN THAT YOU DON'T HAVE TO PAY THE CAR LOAN YOU USED TO GET THE CAR!
If you bought something and can not get the title you can have the Court's force the transfer of the Car title into your name. Consult your own attorney!
May I suggest you find out the highest amount you can sue for in small claims court. If the amount you purchased your vehicle for is less than the maximum small claims court amount; sue the dealer in small claims court. Ask that the court force the seller refund all of your money plus expenses and damages or produce title to the vehicle in your name. Include a request that your state's "Department of Motor Vehicles" (or whatever the appropriate state agency for the unit in question is called it in your state) be court ordered to provide you a title to the goods in your name.(in some states, snowmobiles, atvs and boats are handles through the DNR) Take all of your documents that evidence the transaction with you to court. Make sure in your closing statements to the court that you reiterate that you want the judge to provide you an order forcing the state to put the vehicle in question into your name. ASK YOUR COURTS IF YOU CAN DO THIS IN SMALL CLAIMS COURT BEFORE TRYING.
If the purchase of your vehicle is greater than the small claim limit, you can do the same thing in district court, but it is more expensive to file and much more complicated and formal. Consult an attorney.
I hope that knowledge of a process to provide relief to your situation lowers your frustration level and brings you eventual resolution.
The Cyncial Patriot
There are a group of Federal Rules, Laws and Regulation designed to create a uniform standard for doing business in the USA. These rules were created long ago to address the enormous number of disputes in business transactions that were overwhelming the courts and regulatory agencies of the USA. These disputes were even more complex when transactions crossed state lines.
The Federal Uniform Commerical Code (UCC) was created to provide basic, uniform set of business principles and standards to simplify business trade. The states all adopted the Federal UCC but made some changes to them as they saw fit. Therefore, It is likely in the case of protections afforded an "Buyer in the Ordinary Course of Business" in Minnesota, also protect you in your particular state in the USA. But you will have to check yourself online or consult with your own attorney General.
PS, The State Legislatures have been watering down the consumer protection in the UCC, call your state representative and admonish them to stop watering down and removing consumer protection aspects of the Uniform Commercial Code.