Also known as:purchaser for value · purchaser for value without notice · purchasers for value without notice · bona fide purchaser for value
Written by attorneys · grounded in primary & secondary sources — see below
A buyer who acquires property or an interest in it by giving value in good faith and without notice of competing claims. The status shields the buyer from reformation of a mistaken writing or recovery by prior owners or beneficiaries when the buyer's rights would otherwise be unfairly prejudiced.
Sources & Authorities
How it applies
Common Examples
2
Reformation Blocked by Later Sale
Pedro Pacheco and Peak Performance signed a supply contract that both believed omitted an exclusivity clause. After discovering the mutual mistake, Pedro sought reformation. Before the suit concluded, Peak Performance sold the affected inventory to Prism Analytics for fair market value. Prism Analytics had reviewed only the recorded documents and possessed no knowledge of the drafting error. The court refused to reform the writing because the change would unfairly impair Prism Analytics's rights as a purchaser for value.
Execution Creditor Yields to Buyer
Preston Pratt obtained an unsatisfied execution against a debtor's equipment. The debtor had already sold the same equipment to Progressive Healthcare for cash in an arm's-length deal. Progressive Healthcare recorded its interest and had no notice of the execution. The bankruptcy court held that Progressive Healthcare's status as a purchaser for value gave it priority over the execution creditor's lien.
Put it into practice
Test Yourself
10
Practice Questions5
· 9 primary sources
Select any source to read its text and confirm it supports the definition.
Cases
Uniform Acts
Restatements
Casebooks
In re Global Serv. Group, LLC316 B.R. 451 (Bankr. S.D.N.Y. 2004)
Common questions
Frequently Asked
4
Does a purchaser for value lose protection if the seller later breaches a fiduciary duty?+
No. The purchaser remains protected so long as it acted in good faith, paid value, and lacked actual knowledge of the breach or restriction at the time of purchase. The remedy lies against the breaching seller, not the purchaser.
Supporting sources
Must a purchaser for value investigate the seller's authority beyond reviewing court letters or recorded documents?+
No. The law imposes no general duty to inquire into the existence or propriety of the seller's power when the purchaser relies on unrestricted letters or a clean record title and pays value in good faith.
Supporting sources
Does payment of fair market value alone qualify a buyer as a purchaser for value?+
Payment of value is necessary but not sufficient. The buyer must also act in good faith and without notice of adverse claims or restrictions for the protection to attach.
Supporting sources
Can a purchaser for value be charged with notice from public discussion of a partner's retirement?+
Possibly, if the circumstances would prompt a reasonable buyer to inquire further into authority. Mere community discussion, however, does not automatically defeat protection when the record title appears clean and the buyer conducted a standard title search.
Supporting sources
Trusts and Estates Trusts and Future InterestsTrusts · Powers and duties of trusteesUBEIntermediate