Tennessee Code Annotated

Tenn. Code Ann. § 47-2-403 (2026)

Power to transfer - Good faith purchase of goods - "Entrusting."

✓ current as of May 2026

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(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:
- (a) the transferor was deceived as to the identity of the purchaser, or
- (b) the delivery was in exchange for a check which is later dishonored, or
- (c) it was agreed that the transaction was to be a "cash sale," or
- (d) 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 have 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).

Acts 1963, ch. 81, § 1 (2-403); 1998, ch. 641, § 3.

Notes of Decisions

Cited in 23 cases (4 in the last 5 years), 1972–2025 · leading case: Jernigan v. Ham, 691 S.W.2d 553 (Tenn. Ct. App. 1984).

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Jernigan v. Ham, 691 S.W.2d 553 (Tenn. Ct. App. 1984). · cites it 12× “T.C.A. § 47-2-403 provides: (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.”

Int'l Harvester Credit Corp. v. Hill, 496 F. Supp. 329 (M.D. Tenn. 1980). · cites it 8× “Under the doctrine of entrustment, codified as T.C.A. § 47-2-403, John Hatfield had the ability to pass, and the defendants to take, good title in the tractor and disc.”

Couch v. Cockroft, 490 S.W.2d 713 (Tenn. Ct. App. 1972). · cites it 6× “The defendant Cockroft asserts that, without knowledge of the plaintiff’s claim, he purchased the Cadillac from Sartain who was in the business of selling automobiles; the purchase was made in the ordinary course of business, and he therefore takes title free from the…”

Best Signs, Inc. v. Bobby King, 358 S.W.3d 226 (Tenn. Ct. App. 2009). · cites it 6× “The Uniform Commercial Code (UCC), specifically Tenn.Code Ann. § 47-2-403, governs the type of transaction at issue in this case.”

Liles Bros. & Son v. Wright, 638 S.W.2d 383 (Tenn. 1982). · cites it 4× “If Wright was not a good faith purchaser of the backhoe, then he only has voidable title to the backhoe pursuant to T.C.A., § 47-2-403(1), and Liles Bros, has the right to possession of the backhoe, under a repossession action.”

Butler v. Buick Motor Co., 813 S.W.2d 454 (Tenn. Ct. App. 1991). · cites it 2× “, codified as T.C.A. § 47-2-403, which reads in pertinent part as follows: 47-2-403.”

Marlow v. Oakland Gin Co. (In Re Julien Co.), 128 B.R. 987 (Bankr. W.D. Tenn. 1991). “(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 or lien creditor under this chapter (§ 47-2-403). Successful reclamation of goods excludes all other remedies with respect to them.”

Alsafi Oriental Rugs v. Am. Loan Co., 864 S.W.2d 41 (Tenn. Ct. App. 1993). · cites it 4× “This court held that the transaction was governed by T.C.A. § 47-2-403(1), which reads 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…”

Cowles Tool Co. v. Prod. Steel, Inc. (In Re Prod. Steel, Inc.), 21 B.R. 951 (Bankr. M.D. Tenn. 1982). “(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 or lien creditor under this chapter (§ 47-2-403). Successful reclamation of goods excludes all other remedies with respect to them.”

Greeneville Fed. Bank, FSB v. First Midwest Equip. Fin. Co. (Bankr. E.D. Tenn. 2025). · cites it 14× “” Tenn. Code Ann. § 47-2-403 (2), cited in Tenn.”

Ladon Relliford v. Jerry Burks (Tenn. Ct. App. 2025). · cites it 12× “Tenn. Code Ann. § 47-2-403 . CarMax argues, and the language of the trial court in its ruling most neatly fits with, a rationale for application of the UCC to allow transfer of valid title via subsection (1), which applies to purchases.”

Inryco, Inc. v. Eatherly Constr. Co. & Safeco Ins. Co. of Am., 793 F.2d 767 (6th Cir. 1986). “The defendants also rely on a provision of the Uniform Commercial Code found in Tenn.Code Ann. § 47-2-403(2) which provides: "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 entrustor to a buyer in…”

Show all 23 citing cases →

— Tenn. Code Ann. § 47-2-403(1) — 4 cases

Jernigan v. Ham, 691 S.W.2d 553 (Tenn. Ct. App. 1984). “T.C.A. § 47-2-403 provides: (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.”

Liles Bros. & Son v. Wright, 638 S.W.2d 383 (Tenn. 1982). “If Wright was not a good faith purchaser of the backhoe, then he only has voidable title to the backhoe pursuant to T.C.A., § 47-2-403(1), and Liles Bros, has the right to possession of the backhoe, under a repossession action.”

Alsafi Oriental Rugs v. Am. Loan Co., 864 S.W.2d 41 (Tenn. Ct. App. 1993). “This court held that the transaction was governed by T.C.A. § 47-2-403(1), which reads 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…”

Greeneville Fed. Bank, FSB v. First Midwest Equip. Fin. Co. (Bankr. E.D. Tenn. 2025). “” Tenn. Code Ann. § 47-2-403 (2), cited in Tenn.”

— Tenn. Code Ann. § 47-2-403(2) — 10 cases

Couch v. Cockroft, 490 S.W.2d 713 (Tenn. Ct. App. 1972). “The defendant Cockroft asserts that, without knowledge of the plaintiff’s claim, he purchased the Cadillac from Sartain who was in the business of selling automobiles; the purchase was made in the ordinary course of business, and he therefore takes title free from the…”

Int'l Harvester Credit Corp. v. Hill, 496 F. Supp. 329 (M.D. Tenn. 1980). “Under the doctrine of entrustment, codified as T.C.A. § 47-2-403, John Hatfield had the ability to pass, and the defendants to take, good title in the tractor and disc.”

Best Signs, Inc. v. Bobby King, 358 S.W.3d 226 (Tenn. Ct. App. 2009). “The Uniform Commercial Code (UCC), specifically Tenn.Code Ann. § 47-2-403, governs the type of transaction at issue in this case.”

Greeneville Fed. Bank, FSB v. First Midwest Equip. Fin. Co. (Bankr. E.D. Tenn. 2025). “” Tenn. Code Ann. § 47-2-403 (2), cited in Tenn.”

— Tenn. Code Ann. § 47-2-403(3) — 3 cases

Ladon Relliford v. Jerry Burks (Tenn. Ct. App. 2025). “Tenn. Code Ann. § 47-2-403 . CarMax argues, and the language of the trial court in its ruling most neatly fits with, a rationale for application of the UCC to allow transfer of valid title via subsection (1), which applies to purchases.”

Greeneville Fed. Bank, FSB v. First Midwest Equip. Fin. Co. (Bankr. E.D. Tenn. 2025). “” Tenn. Code Ann. § 47-2-403 (2), cited in Tenn.”

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