Section 9--338. Priority of Security Interest or Agricultural Lien Perfected by Filed Financing Statement Providing Certain Incorrect Information  


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  • If  a  security  interest or agricultural lien is perfected by a filed
      financing  statement  providing   information   described   in   Section   9--516(b)(5)  which  is incorrect at the time the financing statement is
      filed:
        (a) the security interest or agricultural lien  is  subordinate  to  a
      conflicting  perfected security interest in the collateral to the extent
      that the holder of the conflicting  security  interest  gives  value  in
      reasonable reliance upon the incorrect information; and
        (b) a  purchaser,  other than a secured party, of the collateral takes
      free of the security interest or agricultural lien to the  extent  that,
      in  reasonable  reliance  upon  the incorrect information, the purchaser
      gives value and,  in  the  case  of  chattel  paper,  documents,  goods,
      instruments,  or  a  security  certificate,  receives  delivery  of  the
      collateral.