Exam 37: Secured Transactions and Suretyship

A dealer sells goods on credit to a buyer who uses the goods as equipment. The dealer keeps a purchase money security interest in the goods. The dealer then borrows against the security agreement of the buyer along with the dealer's security interest in the collateral. The collateral provided by the dealer to his lender in this type of transaction is:

Automatic perfection would occur in which situation (assuming a written security agreement)?

A bond, which is an evidence of indebtedness, may serve as collateral.

Under most circumstances, a creditor who files a completed financing statement can be assured that the security interest is perfected.

A purchase money security interest in equipment takes priority over a conflicting security interest if the purchase money interest is perfected within thirty days of the debtor's receipt of the goods.

Bill lends Harvey $500 and the loan is secured by Harvey's furniture. If Bill files a financing statement on January 30, 2010, how long will he keep his security interest?

UCC Article 9 defines a secondary obligor as being a consignee.

An undertaking by a surety to protect an employer against the dishonesty of an employee is a(n) bond.

As a general rule, for purposes of attachment of a security interest, a debtor is deemed to have rights in collateral that she:

Goods and other inventory items cannot be used as collateral.

If a secured party moves within the state after filing the financing statement, the filing becomes ineffective.

Ted cosigns a note for his son Junior. Ted is a surety on the note.

A conditional guarantor of collection differs from an absolute surety in that the surety is bound with the principal debtor as a primary obligor.

Beth recently purchased a stereo system for her apartment and a new sailboat. She financed the purchases with XYX Finance Co. Under the Code, these items are classified as:

Dr. Wells purchased a refrigerator to use for storing medications at his office. The refrigerator will be classified as:

Indispensable paper includes:

A surety agreement must always be in writing to be effective.

Article 9 of the UCC would govern transactions involving which one of the following?

Jack and Karin are cosureties on a debt owed by Lyle to Mike. If Lyle's debt becomes due and he and Karin both refuse to pay it, Jack may bring an action in equity against Karin to obtain an order requiring her to pay her share of the debt.

If a security interest has attached, it is enforceable against the debtor.