"Bulk Transfer"; Transfers of UNIFORM COMMERCIAL CODE Equipment; Enterprises Subject to This Article; Bulk Transfers Subject to This Article
(1) A "bulk transfer" is any transfer in bulk and not in the ordinary course of the transferor's business of a major part of the materials, supplies, merchandise or other inventory (Section 9-109) of an enterprise subject to this Article. "Bulk transfer" shall also include a transfer out of the ordinary course of business of a major part of the goods, wares and merchandise of a restaurant, or other food dispensing establishment.
(2) A transfer of a substantial part of the equipment (Section 9-109) of such an enterprise or of the equipment of a restaurant or other food dispensing establishment is a bulk transfer if it is made in connection with a bulk transfer of inventory, but not otherwise.
(3) The enterprises subject to this Article are all those whose principal business is the sale or rental of merchandise from stock, including those who manufacture what they sell and restaurants or other food dispensing establishments.
(4) Except as limited by the following section all bulk transfers of goods located within this state are subject to this Article.
NOTES: UNIFORM LAWS COMMENT: Prior Uniform Statutory Provision: None. Purposes:
1. Much of the litigation under the existing laws has dealt with the kinds of businesses and the kinds of transfers covered. This section defines these matters.
2. The businesses covered are defined in subsection (3). Notice that they do not include farming nor contracting nor professional services, nor such things as cleaning shops, barber shops, pool halls, hotels, restaurants, and the like whose principal business is the sale not of merchandise but of services. While some bulk sales risk exists in the excluded businesses, they have in common the fact that unsecured credit is not commonly extended on the faith of a stock of merchandise.
3. The transfers included are of "materials, supplies, merchandise or other inventory" that is, of goods. Transfers of investment securities are not covered by the Article, nor are transfers of money, accounts receivable, chattel paper, contract rights, negotiable instruments, nor things in action generally. Such transfers are dealt with in other Articles, and are not believed to carry any major bulk sales risk.
4. The kinds of transfers covered are identified in paragraph (1). They are believed to be those that carry the major bulk sales risks. They are further limited by the section following. Cross References: Point 3: Articles 3, 4, 8, and 9. Point 4: Section 6-103.
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