← Back to search

HRS §490:2-402

When a seller's creditors can take goods the buyer already bought

This section explains that a buyer's right to get goods they bought usually beats the seller's unsecured creditors. But creditors can treat the sale as void if the seller keeps the goods and that is fraudulent under state law. There are exceptions for normal business practices and secured transactions.

buyerscreditors

The statute, as written — Rights of seller's creditors against sold goods

(1) Except as provided in subsections (2) and (3), rights of unsecured creditors of the seller with respect to goods which have been identified to a contract for sale are subject to the buyer's rights to recover the goods under this article (sections 490:2-502 and 490:2-716). (2) A creditor of the seller may treat a sale or an identification of goods to a contract for sale as void if as against him a retention of possession by the seller is fraudulent under any rule of law of the state where the goods are situated, except that retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification is not fraudulent. (3) Nothing in this article shall be deemed to impair the rights of creditors of the seller: (a) Under the provisions of the article on secured transactions (article 9); or (b) Where identification to the contract or delivery is made not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security or the like and is made under circumstances which under any rule of law of the state where the goods are situated would apart from this article constitute the transaction a fraudulent transfer or voidable preference.
Read the official text at capitol.hawaii.gov ↗as published Jan 6, 2026our copy taken Aug 20, 2026

Sections this one refers to

§490:2-502 Buyer's right to get goods when seller backs out or goes broke

LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.