(1) Subject to this section, if an encumbered property is sold or transferred, leased or licensed while the security interest in that property is effective against a third party, the buyer, transferee, lessee or licensee acquires a right subject to the security interest.
(2) A buyer or another transferee of an encumbered property acquires a right free of the security interest if the secured creditor authorizes the sale or other transfer of the property free of the security interest.
(3) The rights of a lessee or licensee of an encumbered property are not affected by a security interest if the secured creditor authorizes the grantor to lease or licence the property unaffected by the security interest.
(4) A buyer of goods sold in the ordinary course of the business of the seller acquires a right free of the security interest, if, at the time of the conclusion of the sale agreement, the buyer does not have knowledge that the sale violates the right of the secured creditor under the security agreement between the seller and the secured creditor.
(5) The right of a lessee of goods leased in the ordinary course of the business of the lessor is not affected by the security interest, if, at the time of the conclusion of the lease agreement, the lessee does not have knowledge that the lease violates the right of the secured creditor under the security agreement between the lessor and the secured creditor.
(6) Subject to the rights of a secured creditor with a security interest in intellectual property under subsection (7), the rights of a non-exclusive licensee of an intangible encumbered property licensed in the ordinary course of the business of the licensor are not affected by the security interest, if, at the time of the conclusion of the licence agreement, the licensee does not have knowledge that the licence violates the rights of the secured creditor under the security agreement between the licensor and the secured creditor.
(7) Subsection (6) does not affect the intellectual property rights that a secured creditor may have as an owner or licensor of intellectual property.
(8) Where a buyer or other transferee of a tangible encumbered property acquires rights free of a security interest, a subsequent buyer or another transferee also acquires rights free of that security interest.
(9) Where the rights of a lessee of a tangible encumbered property or a licensee of an intangible encumbered property are not affected by the security interest, the rights of a sub-lessee or sub-licensee are also unaffected by that security interest.
(10) A buyer acquires rights free of, and the rights of a lessee are not affected by, an acquisition security interest in consumer goods unless the security interest is made effective against third parties other than under section 26 before the buyer or lessee acquires rights in the goods.