Also known as: entrustment of possession of goods · entrusting possession of goods · entrustment · UCC 2-403(2)
Written by attorneys · grounded in primary & secondary sources — see below
A delivery of goods or acquiescence in their retention by a merchant who deals in goods of that kind, empowering the merchant to transfer the entruster's rights to a buyer in ordinary course of business.
Eugene Ellsworth allows his minor son to take family-owned collectible watches to a local dealer for possible consignment sale. The son sells several watches to a buyer in ordinary course who pays fair value without notice of any ownership limits. The buyer obtains full title because the initial delivery of the watches to the dealer constituted entrusting that empowered the transfer of all rights.
Esther Eisenberg delivers her used sedan to Titus-Will Sales for repairs and leaves it on the lot for several days without retrieving it. A salesperson sells the car to a buyer in ordinary course who pays cash and takes possession. The buyer acquires good title free of Esther's interest because the delivery and acquiescence in continued possession qualified as entrusting to a merchant dealing in automobiles.
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Any delivery of goods to a merchant or any acquiescence in the merchant's retention of possession counts as entrusting, even if the parties attach conditions or even if the merchant later acts wrongfully.
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No. Entrusting occurs whenever possession is delivered or retained by the merchant regardless of any condition expressed between the parties, including conditions that the goods not be sold.
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The buyer receives all rights of the original entruster, including good title free of any interest the entruster held, even if the merchant lacked authority to sell.
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