Exam 37: Secured Transactions and Suretyship

If a secured party moves within the state after filing the financing statement,the filing becomes ineffective.

A conditional guarantor of collection differs from an absolute surety in that the surety is bound with the principal debtor as a primary obligor.

Alice loans Grant $500 and Sue acts as surety under the loan agreement.When Grant defaults,Alice comes to Sue to collect the $500.Sue reaches a settlement to pay $400 to Alice in complete satisfaction of the loan.What recourse does Sue have against Grant?

Karl loaned Linda $100,000.Madeline agreed to act as surety for $100,000.Nora agreed to act as surety for $75,000,and Orville agreed to act as surety for $25,000.Linda later defaulted on the loan,and Karl is now demanding payment from Nora and Orville.What amount do Nora and Orville have to pay? If Nora and Orville pay,does Madeline have any obligation? Explain.

If a financing statement in movable property is properly filed and the debtor moves to another state,the security interest remains perfected if the financing statement is filed in the new state within four months of the move.

An undertaking by a surety to protect an employer against the dishonesty of an employee is a(n)____ bond.

"Perfection" is required in order for the secured party to enforce rights against the debtor.

Although in theory there is a distinction between a surety and a guarantor,in common usage the two terms are almost synonymous.

First Finance Company perfected its security interest in Donald's auto on March 1.Second Finance Company perfected its security interest in the same auto on April 1.If both parties have properly filed their finance statements,First Finance Company has a priority interest in the auto.

If the creditor refuses to accept tender of payment by the principal debtor,the surety remains liable until the creditor wants payment.

A debtor must sign a written security agreement for a pledge used to secure a loan.

Inventory items cannot be used as collateral.

First Bank loans Lila $1,500 so that she may purchase a computer for her office secretary.Lila signs a financing statement,which First Bank duly files within twenty days.After Lila purchases the computer,she takes out a loan at Valley Bank,gives the computer as collateral,and signs a financing statement,which Valley Bank then duly files.Her secretary never uses the computer,so Lila puts an ad in the paper and sells the computer to Angie.If Lila defaults on the loans,whose interest in the computer has priority? Explain,using correct terminology.

Under most circumstances,a creditor who files a completed financing statement can be assured that the security interest is perfected.

Glenn decided to borrow from Jones Bank since it promised that his loan interest rate would be systematically reduced every year when the board met.The loan rate was never reduced,but actually increased monthly.Glenn refused to pay the interest demanded and sued for rescission of the contract;thereupon,the bank attempted to collect from Lewis,a surety under the loan.Does Lewis have to pay?

A purchase money security interest in equipment takes priority over a conflicting security interest if the purchase money interest is perfected within thirty days of the debtor's receipt of the goods.

A perfected security interest has priority over:

Article 9 of the UCC would govern transactions involving which one of the following?

Willow Bank repossessed Parker's television after he missed his last two $50 payments on it.Parker came to the bank with the $100 plus service charges and expenses of repossession.The bank will have to give Parker the television as long as they have not disposed of the television or have not made a contract to sell it.

Because of the ____,the contractual promise of a surety to the creditor must be in writing to be enforceable.