Exam 28: Secured Transactions

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?

An acceleration clause permits a chattel mortgagor to pay off the mortgage more quickly.

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

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.

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

When may a secured creditor choose not to register its security interest?

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

Regarding the remedies of a conditional seller,she or he

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

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

In what way could a consignment contract be an indirect type of credit? Use an example to explain.

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

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

At common law,a bona fide purchaser for value without notice acquires ownership in goods from a seller who appears to own them,but does not.

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.

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

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

What is "perfection" of a secured interest under personal property security legislation? Why is "perfection" relevant to the rights of a secured lender?

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

Use the fact situation in Q6 to answer the related question that follows. Also in this case,B's security interest is perfected