Exam 28: Secured Transactions

A mortgage on land gives the mortgagee security in the land in priority over other secured interests registered under provincial PPSA legislation.

A prudent creditor who has entered into a chattel mortgage will always conduct a search of title in the local land titles office.

Sometimes conditional sale contracts exist between the manufacturer and the retailer.How does the consumer know she or he is getting clear title to the goods purchased?

Which of the following is NOT included in the categories of persons to whom a bank may loan money under the Bank Act?

Jack and Reba purchased some furniture on a conditional sale contract.This couple carries no insurance on their household goods.The furniture is stolen one Sunday afternoon.Who will most likely take the loss?

Junior is interested in buying one of his neighbour's motor vehicles.They have agreed upon a price and Junior intends to ask his father for a small loan to assist in funding the purchase.Prior to completing the sale,it would also be wise for Junior to

Explain what is meant by the term "financing leases."

Use this fact situation to answer the related questions that follow. A enters into a conditional sales agreement with B,a truck dealership,for the purchase of a truck that B has ordered from the manufacturer but will not receive for another month,during which time A must make his first payment. In this case,under PPSA legislation,attachment occurs

Charles Brown,a fisherman,gave security to a bank under section 427 of the Bank Act in order to finance the purchase of a fishing boat from Triumph Ship Builders Ltd.The bank duly registered the standard form of notice with the Bank of Canada in relation to the fishing boat.A year later,Charles sold the fishing boat to Sea Traders Inc.,who were marine mercantile agents.Sea Traders were unaware of the bank's section 427 security and made no attempt at searching for encumbrances against the fishing boat.Sea Traders in the normal course of business sold the fishing boat to Harold Walker,a bona fide purchaser for value.Charles left the country permanently after his sale to Sea Traders.Discuss the bank's position against each of Sea Traders,Charles Brown,and Harold Walker.

Milton ordered a fancy telescope from a catalogue,using his bank credit card.When it arrived it seemed quite different from the telescope of the catalogue description.Neither the catalogue company nor the manufacturer would take the telescope back.Milton now wants the chartered bank that issued the credit card to reverse the charges.Does Milton have a legal claim against the bank?

Bill owns a small factory,which manufactures seatbelt parts for the automobile industry.Although business has steadily increased for the past two years,the company still owes the bank a significant amount of money.In fact,to secure start-up monies,the company was required to provide a chattel mortgage to the bank including an after-acquired property clause.Bill becomes aware that a machine used to manufacture seatbelt parts has become available from a local manufacturer.However,Bill's company cannot pay cash for the machine and cannot provide the manufacturer with any security in relation to its existing assets.A special priority can in fact arise if the manufacturer reserves a security interest in the seatbelt-making machine itself.This interest is known as

When dealing with security interest,the failure of a creditor to register

Banks that have perfected security for loans as required by the Bank Act always have priority over any other form of security registered under provincial PPSA legislation.

B,a car dealership,sells A a car on terms that provide that A will have possession of the car for a period of three years,during which A will make monthly payments; however,ownership in the car remains with the dealership until A makes the last payment.In this case,A and the dealership have effected

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

If an owner sells you goods that have been pledged as security for a loan,the claim against those goods is known as