Exam 30: Secured Transactions

Under a consignment by a manufacturer, the goods remain the property of the manufacturer.

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

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.

Regarding security devices, in a the item remains the property of the vendor until the debt is paid, whereas in a _ the property is transferred to the buyer and immediately upon default re- transferred to the vendor.

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

Each of the following may create consensual security interests EXCEPT

Under the Bank Act, a bank may lend money to a list of borrowers. This list does not include Acquaculturalists.

How is it that security devices mislead innocent third parties?

This form of personal covenant must be registered pursuant to the provincial Personal Property Security Act. The recording ensures validity against a would- be purchase of secured assets. This could be in reference to

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

A financing statement under the PPSA, will usually include a statement of the events that constitute default.

Identify in relation to each of the statements below what security device is being described.

Once a security interest has been created by an agreement between creditor and debtor, what must be done in a "personal property security system" to protect the security of competing interests of third parties?

Which of the following is not including in the categories of persons to which a bank may loan money under the Bank Act?

Last Fall, Mrs. Edwards purchased two expensive dresses from Fashions Galore on a conditional sale contract, Now, five months later, she has defaulted on her payments. Fashion Galore should

Self liquidating financing is usually the best form of financing for

An interest in property of a debtor to which a creditor may look in the event of non- payment of the debt is called

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?

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

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?