Exam 37: Secured Transactions and Suretyship

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

If Sharpe Finance Co.has a secured interest in Jeff's car and Jeff is in default, in most states Sharpe may take the car from in front of Jeff's house without getting a court order.

Upon the surety's payment of the principal debtor's entire obligation, the surety obtains all of the rights the creditor has against or through the principal debtor.The term for the surety's "stepping into the shoes" of the creditor is known as:

Laura is considering the possibility of becoming a surety to Carl on a debt by David, but she would like more information on the relationship between Carl and David concerning the transaction.If Laura requests such information from Carl, he must disclose it, because his failure to disclose material facts will constitute fraud.

"Attachment" occurs when a secured party has given value, the debtor acquires rights in the collateral, and the:

Dale defaults on a car loan secured by his car and guaranteed by both Sam and Dave.Subrogation would allow Sam, who paid Dale's full obligation, to:

If a principal debtor defaults on a loan, an absolute surety will have to pay upon demand of the creditor.

UCC Article 9 applies to secured transactions in which the debtor provides a security interest to secure payment of a debt, such as pledging warehoused goods to a creditor or the creditor's having a mechanic's lien against the debtor's property.

A buyer in the ordinary course of business takes collateral free of a perfected security interest created by the buyer's seller.

An automobile buyer in the ordinary course of business will take free and clear of a security interest created by the buyer's seller.

Revised Article 9 of the Code greatly complicates the provisions regarding the place(s) for filing a financing statement.

Max pressured Madeline to cosign his car loan, telling her he would otherwise reveal secrets about her that would taint her reputation for honesty.When Max defaults and the creditor tries to collect from Madeline, she:

Although in theory there is a distinction between a surety and a guarantor, in common usage the two terms are almost synonymous.

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

Alice loans George $500 and Sue acts as surety under the loan agreement.When George defaults, Alice comes to Sue to collect the $500.Sue reaches a settlement to pay $400 to Alice in complete satisfaction of the loan.What recourse does Sue have against George?

Revised Article 9 removes the requirement of from the financing statement.

Because of the , the contractual promise of a surety to the creditor must be in writing to be enforceable.

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

First Bank loans Lila $1,500 so that she may purchase a computer for her office secretary.Lila signs a financing statement, which First Bank duly files within twenty days.After Lila purchases the computer, she takes out a loan at Valley Bank, gives the computer as collateral, and signs a financing statement, which Valley Bank then duly files.Her secretary never uses the computer, so Lila puts an ad in the paper and sells the computer to Angie.If Lila defaults on the loans, whose interest in the computer has priority? Explain, using correct terminology.

The purpose of bail bond in a criminal proceeding is to assure the appearance of the defendant in court.