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S.D. Codified Laws § 57A-9-321

"Licensee in ordinary course of business"--Rights with respect to security interest--Rights of lessee in ordinary course of business

Known as the Uniform Commercial Code

The act spans §§ 57–57 (574 sections).

Source: SL 2000, ch 231.

"Licensee in ordinary course of business"--Rights with respect to security interest--Rights of lessee in ordinary course of business.

(a) In this section, "licensee in ordinary course of business" means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor's own usual or customary practices.

(b) A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.

(c) A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence.

Official source: South Dakota Legislature. Reproduced from public-domain South Dakota statutes; confirm against the official source for the current text. Not legal advice.