Exam 37: Secured Transactions and Suretyship

The Code's classifications of collateral according to nature are: (a) goods; (b) tangibles; and (c) dispensable paper.

A security interest:

With the exception of pledges, a security agreement must:

Bill owns and operates a farm and a farm machinery dealership. Under the Code, a new tractor that Bill uses on his farm is classified as:

Possession is available as a means of perfecting a security interest in accounts and letter-of-credit rights.

Article 9 of the UCC applies to a security interest without consent that arises by operation of law, such as a mechanic's lien.

Automatic perfection means that:

Two or more sureties bound for the same debt of a principal debtor are known as:

Every consensual secured transaction involves:

Mary financed her 72" high-definition TV with a bank, but is now delinquent on her payments. The bank holds a security interest in the TV. In most states, when Mary is not at home and without her knowledge, bank personnel may enter Mary's home to repossess the TV.

A debtor need not sign the financing statement.

The principal debtor's lack of capacity due to his status as a minor may be used by the surety to avoid payment of the obligation.

Hank's tractor is collateral for a loan and Hank moves to the next county. In most states, the security instrument must be re-filed in the proper county or it will render the security interest ineffective.

A security interest is ineffective against the debtor until it "attaches."

Under the Code, collateral is classified according to:

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.

In states which have adopted certificate of title statutes for automobiles, trailers, mobile homes, and boats, perfection of a security interest must include both filing of a financing statement and notation on the certificate of title.

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

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

Under Article 9 of the UCC, a pledge is: