Exam 28: Secured Transactions

Use this fact situation to answer the related questions that follow. A purchases a video business from B,who takes back a chattel mortgage on the inventory,which is composed of DVDs.The chattel mortgage states that it covers after-acquired property.B then registers this mortgage under the provincial PPSA.A few months later,A needs to purchase more DVDs and goes to his bank to borrow the money for the purchase.In turn,the bank takes a chattel mortgage for the amount of its loan,registers its chattel mortgage,and gives A the money.A then buys the DVDs. In this case,under PPSA legislation,the bank has

Why do you think that provincial legislators have enacted personal property security legislation?

Where security devices are agreed to in advance as terms in the contract,they are often called

A properly registered security interest is generally effective against all third parties.

The Hendersons have purchased their new riding lawnmower on a conditional sale contract.They have just been notified that the contract was assigned to a finance company.The Hendersons may now

Which one of the following requires permission from the security holder before the item(s)used as collateral can be sold?

Use the fact situation in Q8 to answer the related question that follows. Also in this case,as between B and the bank,

How might the assignment of book debts (owed to the assignor)seriously prejudice the position of general creditors and prospective general creditors?

A,a manufacturer,enters into a conditional sales agreement with B,a retail seller of goods,under which A supplies 100 amplifiers to B.The manufacturer registers the agreement under provincial PPSA legislation.B now sells one amplifier to C and a few days later defaults on the conditional sales agreement.In this case,the manufacturer

Alvin Smith bought a car from XYZ Autos Inc.,a car dealership,for the price of $15 000.Alvin paid $5000 cash and entered into a conditional sales contract to finance the remaining $10 000.Alvin had obtained the $5000 from his bank and executed a chattel mortgage for $9000 in favour of his bank.This represented $5000 for the deposit and $4000 in existing indebtedness.After Alvin obtained the car,he provided the bank with a description and its serial number.The bank completed the chattel mortgage with this information and registered a financing statement under the prevailing personal property security legislation.XYZ Autos Inc.similarly registered a financing statement,but did this three days later than the bank.Alvin subsequently defaulted under both securities.Which of the creditors has priority to the car,and why?

What advantage does a secured creditor have over an unsecured creditor when they both are forced to collect an overdue account?

Regarding the remedies of a conditional seller,she or he

Which of the following is NOT a form of security for bank loans?

A bill of sale can be used as an instrument of credit.Which document is the bill of sale most like when it is used as an instrument of credit?

Self-liquidating financing is usually the best form of financing for

What is the difference between a chattel mortgage and a conditional sale contract?

An unsecured creditor is no different from a creditor who fails to register a security interest under provincial PPSA legislation.

Can the chartered banks require security for loans outside section 427 of the federal Bank Act?

Phillip,who has a loan on his car at the bank,has placed his car on consignment at the local used car lot.His law professor tells Phillip that consignments can amount to a secured type of credit.If this is true,who is the creditor?

Use the fact situation in Q2 to answer the related question that follows. In this situation,if B takes back a chattel mortgage on the inventory,title to the inventory