Exam 30: Secured Transactions

Loan Office Inc. has a security interest against Manufacturing Company that is enforceable. In other words, with respect to the collateral, the creditor's rights are said to

A security agreement determines most of the rights and duties of a debtor and a secured party.

In a financing statement to give notice of a loan to Lumber Yard Inc., Metro Finance Company wants to include a description of the collateral. A sufficient description would be

A security interest cannot become perfected without the filing of a security agreement.

To create an enforceable security interest for a loan, in terms of the collateral, the debtor must have

A debtor must have title to collateral to give a secured party a security interest in the property.

To pay tuition at City College, Dora borrows funds from Equity Credit and gives as security a note on which Dora is the payee. Equity Credit's loan officer agrees to hold the note as collateral. The lender does not file a financing statement. Equity Credit's security interest is perfected because

The UCC does not define the term default . This encourages the parties to a secured transaction to

Bayou Financial Corporation holds a security interest in property owned by Cajun Farms. Perfection of this security interest may not protect Bayou against the claim of

The UCC's classification or definition of collateral does not affect where or how to perfect a security interest.

Kiosk Jewelers borrows from Lender Inc. and Mortgage Company, using the same collateral. Only Mortgage Company has a perfected security interest. Kiosk defaults on both loans. The party with first rights to the collateral is

Ready Credit Inc. holds a security interest in inventory owned by Soy Products Inc. Ready Credit can protect its claim to the inventory in the event of Soy Products' default by

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by