Part IV Priorities, 15 Authorized Dispositions
Hugh Beale, Michael Bridge, Louise Gullifer, Eva Lomnicka
- Guarantees and security
This chapter examines the situation where A disposes of assets in which B has an absolute or security interest to a third party C. The disposition may be absolute or by way of security. Normally, in this situation, the priority rules would determine whether B or C has priority. However, where the disposition is made with the consent or permission of B, then C will always take free from B’s interest. Similarly, where a third party takes an interest in an asset subject to a security interest and the grant is made with the authority or consent of the secured lender, the third party will take free from that security interest. The extent of the authority or consent may be made clear in advance in the security agreement or may be given at the time of the grant of the interest.