A bulk sale is a sale of goods by a business which engages in selling items out of inventory (as opposed to manufacturing or service industries), often in liquidating or selling a business. This type of sale is governed by the bulk sales law which is Article 6 of the UCC. When merchants are about to transfer a major part of their materials, supplies, merchandise, or other inventory (not in the ordinary course of business), advance notice of the transfer should be given to creditors. This notice should be given by the transferee. If the notice required by Article 6 is not given, the creditors of the seller may enforce their claims on property in the hands of the buyer. Creditors may also reach the property in the hands of any subsequent transferee who knew that there had not been compliance with the UCC or who did not pay a reasonable value for the goods. This provision is designed to protect the creditors of a merchant from the merchant’s selling all the inventory, pocketing the money, and then disappearing, leaving the creditors unpaid.

Ordinarily, the bulk purchaser who receives the goods does not become liable for the debts of the bulk seller merely because the requirements of Article 6 have not been satisfied. However, if the buyer mixes the transferred goods with other goods so that it is not possible for the creditor to identify the transferred goods that are subject to the creditor’s claim, the bulk buyer is personally liable for the debts of the bulk seller, up to the value of the transferred goods.