Ark. Code Ann. » Title 4 Chapter 02
Arkansas Code Annotated

Ark. Code Ann. § 4-2-403 (2026)

Power to transfer — Good faith purchase of goods — “Entrusting”

✓ current as of May 2026
Find cases: SyfertCases citing this section JustiaArk. Code CornellLII Search CasesGoogle Scholar
  1. A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased. A person with voidable title has power to transfer a good title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though
    1. the transferor was deceived as to the identity of the purchaser; or
    2. the delivery was in exchange for a check which is later dishonored; or
    3. it was agreed that the transaction was to be a “cash sale”; or
    4. the delivery was procured through fraud punishable as larcenous under the criminal law.
  2. Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business.
  3. “Entrusting” includes any delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor's disposition of the goods has been such as to be larcenous under the criminal law.
  4. The rights of other purchasers of goods and of lien creditors are governed by the chapters on secured transactions (Chapter 9 of this title), and documents of title (Chapter 7 of this title).

History. Acts 1961, No. 185, § 2-403; A.S.A. 1947, § 85-2-403; Acts 1991, No. 344, § 3.

Research References

ALR.

What constitutes “entrusting goods” to merchant dealer under UCC § 2-403. 59 A.L.R.4th 567.

Ark. L. Notes.

Laurence, Bona Fide Purchaser Analysis, Beverage Products Corporation v. Robinson and the Case against Very Short Opinion, 1990 Ark. L. Notes 85.

Ark. L. Rev.

Note, Act 401 of the Public Grain Warehouse Law: An Exception to the U.C.C. Concept of Voidable Title, 37 Ark. L. Rev. 293.

Nickles and Adams, Pawnbrokers, Police, and Property Rights — A Proposed Constitutional Balance, 47 Ark. L. Rev. 793.

U. Ark. Little Rock L.J.

Survey of Arkansas: Business Law, 6 U. Ark. Little Rock L.J. 73.

Note, Storers of Grain — Arkansas Stands Alone in Protecting the Rights of Depositors of Grain in Public Warehouses, etc., 9 U. Ark. Little Rock L.J. 699.

Adams, “Clear Title” for Farm Products: Congress and the Arkansas Legislature Attempt to Solve a Troublesome Problem, 10 U. Ark. Little Rock L.J. 619.

Case Notes

Entrustment.

The entrustment of possession provisions in subsections (2) and (3) of this section are most applicable to a repossessing lien holder with right of sale, and such a finance company had no right to complain as against the purchaser of a car it had repossessed and left in the hands of a dealer, whether it be considered as a consignor or a lender with a security interest. Commercial Credit Corp. v. Associates Discount Corp., 246 Ark. 118, 436 S.W.2d 809 (1969).

Although defendant-purchaser bought soft drink machine from seller in good faith, plaintiff was entitled to possession of the machine where plaintiff had originally entrusted the machine to a third party from whom it was seized and sold, in execution of a judgment against him, to seller, who sold it to defendant-purchaser; neither the third party or the subsequent purchasers had obtained title to the machine as plaintiff had never intended title to pass to the third party to whom the machine was originally loaned. Beverage Prods. Corp. v. Robinson, 27 Ark. App. 225, 769 S.W.2d 424 (1989).

Exceptions.

Four exceptions to the derivative title principle in subsection (1) have been recognized in this subtitle and at common law. Wood v. Corner Stone Bank, 315 Ark. 200, 866 S.W.2d 385 (1993).

The “preclusion exception” doctrine which is found at common law and equity, rather than in this subtitle, holds that irrespective of the property holder's actual title — void, voidable, or good — there will be times when the original owner's behavior does not justify allowing him to dispute the property holder's title; therefore, the purchaser of the property will win, not so much on his own behalf but rather due to the original owner's procedural inability to force the contrary results. Wood v. Corner Stone Bank, 315 Ark. 200, 866 S.W.2d 385 (1993).

Innocent Purchaser for Value.

Evidence was sufficient to support the trial court's finding that the defendant was not an innocent purchaser for value. Hollis v. Chamberlin, 243 Ark. 201, 419 S.W.2d 116 (1967).

Misconduct.

Defendants' conduct in removing trailer from bank's possession precluded them from disputing the bank's propriety interest in the trailer; thus, the trial court's finding of a conversion of property, and award of compensatory and punitive damages, was correct. Wood v. Corner Stone Bank, 315 Ark. 200, 866 S.W.2d 385 (1993).

Cited: Rex Fin. Corp. v. Marshall, 406 F. Supp. 567 (W.D. Ark. 1976); Sequoyah State Bank v. Union Nat'l Bank, 274 Ark. 1, 621 S.W.2d 683 (1981); Farm Bureau Mut. Ins. Co. v. Wright, 285 Ark. 228, 686 S.W.2d 778 (1985).

Part 5 — Performance

Effective Dates. Acts 2001, No. 1439, § 23: July 1, 2001. Emergency clause provided: “It is hereby found and determined by the General Assembly that the present Article 9 of the Uniform Commercial Code which exists in all fifty states, the District of Columbia, and Puerto Rico is obsolescent and is in need of significant expansion to cover new categories of collateral, to promote electronic filing, to reduce duplicate filing, and to resolve conflicting case law. The revisions contained in this Act will bring greater certainty to financing transactions, and will reduce both their cost and the cost of credit. Because current Article 9 is uniform throughout the United States, it becomes essential that the effective date for the substantial revisions contemplated by this Act be the same in every state. If Arkansas and all of the other states and territories do not act in concert and enact a common effective date, severe complications will arise. For example, the proper place to perfect a security interest depends on the law of the state where the issue is litigated. Therefore, the rules for filing must be uniform at all times. Because the several states are proposing that the revised Article 9 become effective on July 1, 2001 an emergency is hereby declared to exist and this Act being necessary for the preservation of the public peace, health, and safety shall be in full force and effect on July 1, 2001.”

Research References

ALR.

Inspection of goods under UCC § 2-513. 34 A.L.R.4th 698.

Cure of improper tender or delivery by seller under UCC § 2-508. 36 A.L.R.4th 544.

Place of buyer's inspection of goods under UCC § 2-513. 36 A.L.R.4th 726.

Computer sales and leases, time when cause of action for failure of performance accrues. 90 A.L.R.4th 298.

Am. Jur. 67 Am. Jur. 2d, Sales, § 446 et seq.

C.J.S. 77A C.J.S., Sales, § 234 et seq.

Notes of Decisions
Cited in 8 cases, 1988–2016 · leading case: Pine Meadow Autoflex, LLC v. Taylor, 290 S.W.3d 626 (Ark. Ct. App. 2009).
Sort: Relevance Newest Treatment
Pine Meadow Autoflex, LLC v. Taylor, 290 S.W.3d 626 (Ark. Ct. App. 2009). · cites it 14× “The trial judge found that appellee was a good-faith purchaser for value and thus was entitled to possession of the automobile under Arkansas Code Annotated section 4-2-403 (Repl.2001). Appellant argues on appeal that the trial court erred in finding that appellee was a…”
Midway Auto Sales, Inc. v. Clarkson, 29 S.W.3d 788 (Ark. Ct. App. 2000). · cites it 12× “Clarkson relies on Ark.Code Ann. § 4-2-403 (Repl.1991), which recognizes the legal distinction between a sale of stolen goods and a sale of goods procured through fraud.”
Ford Motor Credit Co. v. First Nat'l Bank of Crossett, 2016 Ark. App. 408 (Ark. Ct. App. 2016). · cites it 5× “However, that case discussed the applicability of Ark. Code Ann. § 4-2-403 , which is often referred to as the “entrustment doctrine”; it did not involve the statute at issue here, section 4-9-315.”
Tempur-Pedic Int'l, Inc. v. Waste to Charity, Inc., 483 F. Supp. 2d 766 (W.D. Ark. 2007). · cites it 10× “Ark.Code Ann. § 4-2-403. The good-faith purchaser exception is designed to “promote finality in commercial transactions and thus encourage purchases and to foster commerce.”
Farmers Rice Milling Co. v. Hawkins (In Re Bearhouse, Inc.), 84 B.R. 552 (Bankr. W.D. Ark. 1988). “This amendment was adopted in Arkansas in 1967, and A.C.A. § 4-2-702(3) (1987) now provides, in part, as follows: (3) The seller’s right to reclaim under subsection (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser under this chapter (§…”
Beebe v. MacMillan Petroleum (Arkansas), Inc. (In Re MacMillan Petroleum (Arkansas), Inc.), 115 B.R. 175 (Bankr. W.D. Ark. 1990). “§ 4-2-702(3) now provides: (3)The seller’s right to reclaim under subsection (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser under this chapter (§ 4-2-403). If MCorp has all the prerequisites of a good faith purchaser for value with a…”
Beverage Prods. Corp. v. Robinson, 769 S.W.2d 424 (Ark. Ct. App. 1989). · cites it 4× “Section 4-2-403 (1987) provides in part as follows: (1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased.”
Duke Wholesale, Inc. v. Pitchford, 56 S.W.3d 399 (Ark. Ct. App. 2001). · cites it 2× “ss Bank and Pitchford filed a complaint for declaratory judgement seeking a declaration that: (i) Duke sold and delivered to Woodall, or otherwise entrusted Woodall with possession of the automobile, (ii) at all times Duke was a merchant dealing in used automobiles, (iii) at all…”
— Ark. Code Ann. § 4-2-403(1) — 2 cases
Pine Meadow Autoflex, LLC v. Taylor, 290 S.W.3d 626 (Ark. Ct. App. 2009). “The trial judge found that appellee was a good-faith purchaser for value and thus was entitled to possession of the automobile under Arkansas Code Annotated section 4-2-403 (Repl.2001). Appellant argues on appeal that the trial court erred in finding that appellee was a…”
Tempur-Pedic Int'l, Inc. v. Waste to Charity, Inc., 483 F. Supp. 2d 766 (W.D. Ark. 2007). “Ark.Code Ann. § 4-2-403. The good-faith purchaser exception is designed to “promote finality in commercial transactions and thus encourage purchases and to foster commerce.”
— Ark. Code Ann. § 4-2-403(1)(d) — 1 case
Pine Meadow Autoflex, LLC v. Taylor, 290 S.W.3d 626 (Ark. Ct. App. 2009). “The trial judge found that appellee was a good-faith purchaser for value and thus was entitled to possession of the automobile under Arkansas Code Annotated section 4-2-403 (Repl.2001). Appellant argues on appeal that the trial court erred in finding that appellee was a…”
— Ark. Code Ann. § 4-2-403(2) — 1 case
Ford Motor Credit Co. v. First Nat'l Bank of Crossett, 2016 Ark. App. 408 (Ark. Ct. App. 2016). “However, that case discussed the applicability of Ark. Code Ann. § 4-2-403 , which is often referred to as the “entrustment doctrine”; it did not involve the statute at issue here, section 4-9-315.”
— Ark. Code Ann. § 4-2-403(l)(d) — 1 case
Pine Meadow Autoflex, LLC v. Taylor, 290 S.W.3d 626 (Ark. Ct. App. 2009). “The trial judge found that appellee was a good-faith purchaser for value and thus was entitled to possession of the automobile under Arkansas Code Annotated section 4-2-403 (Repl.2001). Appellant argues on appeal that the trial court erred in finding that appellee was a…”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.