Priority of a Buyer in the Ordinary Course of Business (BOCB)

This page includes a writing template for analyzing this topic and usage notes to guide its application. In general, the template is designed to serve as a starting point for your analysis. It should be adapted to fit the specific facts of your case and your professor’s preferences.

Writing Template

Issue

I: The issue is which party has priority.

Analysis

R: A BOCB takes the collateral free of any security interest in the collateral provided by the seller. A BOCB (1) buys the collateral by giving new value, (2) in the ordinary course, (3) from a seller in the business of selling such goods of that kind, (4) in good faith, and (5) without actual knowledge that the sale violates another’s rights.

A: Here, [apply rule elements 1, 2, and 3 to facts].

Good Faith

R: A BOCB must act in good faith, meaning honesty in fact and observance of reasonable commercial standards of fair dealing.

A: Here, [apply rule to facts].

C: Therefore, [BOCB condidate] [acted/did not act] in good faith.

Actual Knowledge

R: Knowledge means actual knowledge, not constructive knowledge or notice. For instance, knowing that a security interest exists (e.g., it’s perfected and filed) is not sufficient to prevent BOCB status. Actual knowledge that the sale itself violates the rights of the secured party (e.g., the seller is not authorized to sell the goods free of the security interest) is sufficient to prevent BOCB status.

A: Here, [apply rule to facts].

C: Therefore, [BOCB candidate] [did/did not] have actual knowledge.

Conclusion

C: Therefore, [BOCB candidate] [was a BOCB and has priority/was not a BOCB].

Usage Notes

JurisJotter templates synthesize legal principles into a practical format that supports the development of well-structured, point-rich analyses in a timed exam.

The template features (1) headers identifying the overall issue, analysis, and conclusion. If the analysis begins with an umbrella rule that identifies elements, factors, or steps of the analysis, it will be followed by subheaders that signpost the analysis of each component.

The template also features (2) IRAC labels at the beginning of each paragraph. These headers and labels are included for educational purposes, offering guidance on structuring your analysis. Your usage of the headers is optional but can be helpful to readers. We advise against including the IRAC labels in submitted work.

The templates serve as a general guide for writing and should be adapted to align with (1) your specific factual circumstances and (2) your professor’s preferences, particularly if your professor provides explicit formulations of rules or analyses. For example, you may add or subtract an element or modify its language. Regardless of whether your professor provides explicit formulations, (3) this template will assist you in crafting point-rich analyses.

Please note that these templates are writing aids and not finished products. They are efficiently designed for exam essays to demonstrate conceptual understanding; thus, they are not comprehensive outlines with historical context or dicta.

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