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LSDefine

Simple English definitions for legal terms

good-faith purchaser

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A quick definition of good-faith purchaser:

A good-faith purchaser is someone who buys something for money or other valuable things without knowing that someone else has a claim to it or any problems with the seller's ownership. They are considered innocent and have a right to the property they bought. It can apply to buying things like property or securities.

A more thorough explanation:

A good-faith purchaser is someone who buys property for money or other valuable consideration without knowledge of any defects or claims against the seller's title. This means that they have no reason to believe that the seller does not have the right to sell the property.

For example, if someone buys a car from a dealership and later finds out that the car was stolen, they are not considered a good-faith purchaser because they should have known that the car was not being sold by the rightful owner. However, if someone buys a house from a seller who has a clear title and later discovers that there was a lien on the property, they are still considered a good-faith purchaser because they had no reason to know about the lien.

Being a good-faith purchaser is important because it gives the purchaser a superior right to the property over any claims by the seller's creditors. This means that if the seller owes money to someone else, the good-faith purchaser is still entitled to keep the property they bought.

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