Priority of a Secured Party vs a Buyer of Collateral

The video tutorial explains the priority of a buyer of collateral compared to the rights of a secured party. It details how a secured party's interest remains superior even after the debtor sells the collateral. However, there are three exceptions where the buyer can take the property free of the security interest: if the secured party authorizes the sale, if the buyer purchases in the ordinary course of business, or if a consumer buys consumer goods from another consumer without a filed financing statement.

What happens to the security interest when a debtor sells collateral securing a debt?

What are the three broad exceptions to the rule regarding the priority of a secured party's interest?

Under what condition does a buyer take property free and clear of a security interest?

How does a buyer in the ordinary course of business protect themselves when purchasing collateral?

What occurs when a consumer purchases consumer goods from another consumer regarding security interests?