53 Buyer or lessee of goods sold or leased in ordinary course of business takes goods free of certain security interests

(1)

A buyer of goods sold in the ordinary course of business of the seller, and a lessee of goods leased in the ordinary course of business of the lessor, takes the goods free of a security interest that is given by the seller or lessor or that arises under section 45, unless the buyer or lessee knows that the sale or the lease constitutes a breach of the security agreement under which the security interest was created.

(2)

This section prevails over sections 153, 154, and 297 to 300 of the Contract and Commercial Law Act 2017 where this section applies and any of those sections apply.

Example

Person A has a perfected security interest in person B’s (a car dealer’s) inventory (cars).

Person B sells a car to person C (a customer).

Person C takes the car free of person A’s perfected security interest in the car.

Compare: Personal Property Security Act 1993 s 30(2) (Saskatchewan)

Section 53(2): amended, on 1 September 2017, by section 347 of the Contract and Commercial Law Act 2017 (2017 No 5).