Exam 28: Secured Transactions

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

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

Regarding the remedies of a conditional seller,she or he

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?

The first security interest perfected by a registration may lose priority to all of the following EXCEPT

When lending to farmers pursuant to

Sometimes a lease agreement can be construed as a security agreement rather than a true lease.Why is this distinction important for the lessor to determine?

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

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

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

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

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?

One of the rights of a lending bank in the event a borrower defaults is the right to sell the security without notice to the borrower.

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

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

Briefly identify two examples of conflict between personal property security interests outside the scope of the PPSA.

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?

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.

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

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