Exam 37: Secured Transactions and Suretyship

Which of the following would not help a surety defend himself from payment of a debt?

Beth recently purchased a mood lighting system for her apartment and a new sailboat.She financed the purchases with WiBy Finance Co.Under the Code,these items are classified as:

A buyer in the ordinary course of business takes collateral free of a perfected security interest created by the buyer's seller.

The delivery of personal property to a creditor as security for the payment of a debt is:

Generally,if the creditor releases the principal debtor,then the surety is also discharged.

Dayton Hardware Store and Leighton Bank enter a loan agreement in which Leighton agrees to lend $10,000 on the security of Dayton's existing store equipment.A security agreement is executed and a financing statement is filed,but no funds are advanced.A week later,Dayton enters a loan agreement with Ramos Bank in which Ramos agrees to lend $10,000 on the security of the same store equipment.The funds are advanced,a security agreement is executed,and a financing statement is filed.A week later,Leighton Bank advances the agreed $10,000.Dayton defaults on both loans.In this case:

As a general rule,for purposes of attachment of a security interest,a debtor is deemed to have rights in collateral that she:

"Attachment" occurs when a secured party has given value,the debtor acquires rights in the collateral,and the:

A surety agreement must always be in writing to be effective.

A security interest in fixtures,such as furnaces,central air-conditioning units,and plumbing fixtures,may not arise under UCC Article 9 since fixtures have become so related to real property that an interest in them arises under real estate law.

In which of the following situations would the buyer not qualify as "buyer in the ordinary course of business"?

Inventory includes:

First Bank loaned $100,000 to Marlin's Store to purchase computers for its inventory.Marlin signed a financing agreement,which First Bank duly filed in the appropriate public office.Caroline came into Marlin's Store and purchased a computer that was subject to the security interest held by First Bank.Assuming that Caroline is a buyer in the ordinary course of business,whose interest in the computer has priority?

The same item may be classified as either equipment or consumer goods,depending on how it is used by the debtor.

If Sharpe Finance Co.has a secured interest in Jeff's car and Jeff is in default,in most states Sharpe may take the car from in front of Jeff's house without getting a court order.

Automatic perfection would occur in which situation (assuming a written security agreement)?

Dr.Wells purchased a refrigerator for use in his home.The refrigerator will be classified as:

Bella is considering the possibility of becoming a surety to Carl on a debt by David,but she would like more information on the relationship between Carl and David concerning the transaction.If Bella requests such information from Carl,he must disclose it,because his failure to disclose material facts will constitute fraud.

Revised Article 9 removes the requirement of ____ from the financing statement.

Article 9 applies to secured transactions in both real and personal property.