A. What Is a Bulk Transfer

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Examlex · Accepted Answer

The Answer is a. A bulk transfer is a merchant's transfer, not in the ordinary course of the transferor's business, of a major part of his materials, supplies, merchandise, or other inventory at once.
b. The central purpose of bulk sales law is to deter two common forms of commercial fraud. One occurs when the merchant, owing debts, sells out his stock in trade to a friend for a low price, pays his creditors less than he owes them, and hopes to come back into business in the future. A second form of commercial fraud is when the merchant, owing debts, sells out his stock in trade to anyone for any price, pockets the proceeds, and disappears without paying his creditors.
c. The effect of a failure to comply with the requirements of Article 6 of the Code is that the goods in the possession of the transferee continue to be subject to the claims of unpaid creditors of the transferor.

A. What Is a Bulk Transfer

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