Does abolition of notice protect purchasers participating in fraud?

• A. Yes
• B. No
• C. Only if the fraud is minor
• D. Only if the purchaser is a partner

Answer: (B)

The protection for a purchaser who takes title rests on acting in good faith and without knowledge of defects or fraud. Abolition of notice means you can’t rely on not having notice as a shield when you’ve participated in the fraud. So a purchaser who knowingly helps hide or perpetuate the fraud does not get the innocent-purchaser protection. In other words, the fact that someone is involved in the fraud wipes out the protection that would otherwise come from buying for value without notice. The size of the fraud or whether the purchaser is a partner isn’t the deciding factor—the crucial point is participation in the fraud.