Exam 30: Secured Transactions

[Favi's Furniture] Favi took out a loan from First Bank and executed a security agreement which gave First Bank rights to any after-acquired property as collateral. A year later, Favi took out a loan with Second Bank and executed a security agreement with Second Bank using his new delivery truck as collateral. Favi eventually defaulted on both loans. -Which creditor has rights to Favi's delivery truck as collateral?

The property that is subject to a security interest is called vested.

How long does a secured party's interest in proceeds lasts after the debtor receives the proceeds, under the UCC?

________ is a writing that indicates both a monetary obligation and a security interest in specific goods.

A buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected, under the UCC.

Which of the following methods of perfection should a bank use if it wishes to ensure it will not have to expend efforts in repossession?

Assuming Constantine files a financing statement with the correct agency, how long is a financing statement valid under the UCC?

Which of the following was the result in Bayer CropScience, LLC v. Stearns Bank Nat'l Ass'n., the case in the text in which the court assessed proceeds after a lawsuit involving Bayer CropScience and the introduction of genetically altered rice that damaged equipment?

[Pottery Store] A&B Bank loaned money to Potter's Pottery Store to finance the purchase of several kilns, a delivery van, and pottery wheels. In return, Potter's granted a security interest to A&B Bank for "all equipment of Potter's". The kiln manufacturer also wants to place a security interest on the kilns and the delivery van for Potter's Pottery. -If the bank wants to have priority in its loan to the pottery store, how should the bank perfect its interest?

The buyer can obtain the good involved free of any security interest, if a buyer purchases chattel paper in the ordinary course of business and without notice of any prior security interest.

[Repo] Meredith sells used cars and trucks. She sold a used pick-up truck to Jill and a used convertible to Caleb. She properly obtained a security interest in both vehicles. Both Jill and Caleb defaulted on payments owed to Meredith for the vehicles. Meredith was under the belief that her only option was to take possession of the collateral. She decided to repossess Jill's pick-up at Jill's house. Meredith slipped into Jill's driveway after midnight and started the truck's engine. Jill immediately ran out and confronted Meredith. Meredith shoved Jill away and drove off in the pick-up truck. Meredith was able to repossess Caleb's convertible in a public parking lot with no altercation with him. -Which statement is correct regarding Meredith's repossession of the pick-up truck?

A purchase-money security interest is formed ________

Trevor goes to the AutoShop and purchases a new truck on credit for his business. He signs an agreement with AutoShop under which the truck is the collateral for AutoShop's loan to him. Trevor then goes to First Bank and signs an agreement for a loan so that he can buy supplies for his business. Do either of these agreements involve a purchase-money security interest?

Which of the following is false regarding a creditor's rights to collateral upon a debtor's default?

The creditor must perfect a security interest in the collateral of the debtor in order to become a secured party.

Which statement is correct regarding any compensation that Morgan is entitled to from the bank because the bank did not timely file notice that it had no interest in her goods?

An interest in personal property or fixtures that secures payment or performance of an obligation is ________.

[Favi's Furniture] Favi took out a loan from First Bank and executed a security agreement which gave First Bank rights to any after-acquired property as collateral. A year later, Favi took out a loan with Second Bank and executed a security agreement with Second Bank using his new delivery truck as collateral. Favi eventually defaulted on both loans. -If both First Bank and Second Bank had properly perfected their security interest, which creditor's interest would take priority?

Which of the following under the UCC is a good used or bought for use primarily for personal, family, or household purposes?

A pledge is the transfer of ________ to a secured party for the purposes of perfection.